Exclusive: Top Tory donor in protest at steel firm £80m loan

THE Government axed the £80m loan to Sheffield Forgemasters weeks after a Minister was lobbied by another Sheffield industrialist and major Tory donor who branded the loan "probably unnecessary and possibly illegal under EU rules".

Ministers are now facing calls to launch a full independent review of the decision to pull the loan after it emerged Andrew Cook, whose company has donated 650,000 to the Tories since 2005, obtained advice from lawyers against the deal and sent it to Ministers.

He targeted Tory Business Minister Mark Prisk as Business Secretary Vince Cable "may find it a difficult nettle to grasp, being as (Deputy Prime Minister) Nick Clegg is a Sheffield MP", a series of dramatic emails reveal.

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In an email sent on May 25 and seen by the Yorkshire Post, Mr Cook, owner of William Cook Holdings, wrote: "The loan is probably unnecessary and possibly illegal under EU rules. I believe the private sector could provide the required finance without the taxpayer shelling out.

"The taxpayer has already shouldered the burden, wrongly, for Sheffield Forgemasters' 78m pension deficit and there is no business case for requiring the taxpayers to continue financial support. It is a typical Labour 'sacred cow'."

In another email on June 9, eight days before the Government announced the loan was being scrapped, Mr Cook – who made clear his company was not a rival to Forgemasters – offered Ministers his legal advice and wrote: "I believe the whole matter of this government loan has arisen due to a combination of the enthusiasm of the previous administration to be seen to support a heavy industrial project in an electoral heartland the reluctance of local management to accept outside equity investment."

Last night Mr Cook said in a statement: "I have long been a vocal campaigner against the misuse of public funds to support private business. I have not only spoken publicly about this on many occasions but have challenged these subsidies in the courts. So it is no surprise that I am strongly opposed to the previous government's hand-out to Forgemasters, particularly when I had already offered, as a local businessman, to help supply the funding they needed.

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"At my own expense I took legal advice which confirmed my view that this subsidy was illegal.

"As a taxpayer and a businessman I believed it was right to pass on this information to the Government which I did in my characteristically blunt way. My only intention was to highlight the illegal use of taxpayers' money by the previous Labour Government."

The emails emerged after weeks of pressure on the Government over its decision to axe the loan, which caused fury among Labour MPs.

The funding had been agreed after months of negotiations by then Business Secretary Lord Mandelson weeks before the General Election.

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Penistone and Stocksbridge MP Angela Smith and Sheffield South East MP Clive Betts last night jointly demanded an inquiry.

Forgemasters chief executive Graham Honeyman said: "I knew nothing about this, and do not know why anyone would want to object to it.

"He is not a competitor; in fact he operates off our site.

"I do not understand why the Cook Group would want to object to something that is so important for the steel industry."