Fight goes on to reverse axe on Forgemasters loan

A string of senior shadow ministers lined up in the conference hall yesterday to attack the decision to cancel the loan in order to tackle the deficit.

Shadow Business Secretary Pat McFadden branded the decision "stupid", while Shadow Chancellor Alistair Darling warned it would damage this country's ability to compete against international rivals.

The 80m loan, which would have enabled Sheffield Forgemasters to make components for nuclear power plants and was agreed shortly before the General Election, was cancelled as the Government claimed it was unaffordable in the face of spending cuts.

Mr McFadden insisted it "wasn't a waste of money" to offer the loan, which he said would make the UK a world leader in the civil nuclear supply chain.

"Last week Vince Cable made a speech attacking the banks and arguing for corporate change. Fine. We can agree on a lot of that. But in denying this loan the Government behaved just like the banks they like to attack for not supporting industry," he said.

"So together we will keep up the fight to reverse this decision."

He also said the 1bn Regional Growth Fund – to be targeted at creating private sector jobs in areas like Yorkshire which have large numbers of public sector jobs – should be used to "reinstate the loan to Forgemasters and put this stupid decision behind us once and for all".

Meanwhile, Mr Darling, who is standing down from the Shadow Cabinet, also tore into the decision, highlighting the lobbying of Ministers to axe the loan by Sheffield industrialist and Tory donor Andrew Cook shortly before the decision was announced.

He said: "It speaks volumes for both the attitude of this government, the impotence of the Liberal Democrats, but also it speaks volumes for the fact that they will not accept what I think is important that we will not be able to adapt for the future, to make the changes together, unless you've got both the private and public sector working together."

Sarah Cullen, a party member in Sheffield South East, also addressed delegates, saying: "The money was there. They just didn't want to give it, because they don't care."