Labour turns up Forgemasters heat on Clegg

LABOUR has stepped up its attack on Deputy Prime Minister Nick Clegg over the axing of the 80m Sheffield Forgemasters’ loan after official documents showed he backed the deal before the General Election.

Accounts of meetings with company bosses by civil servants as they thrashed out the deal claim Mr Clegg told Forgemasters it was “just the sort of thing we should be doing”.

The documents, released to Penistone and Stocksbridge MP Angela Smith under the Freedom of Information Act, reveal the deal – axed as part of a move to save billions of pounds soon after the coalition Government was created – also had Conservative support, undermining subsequent criticism from Ministers over the way the deal was structured.

Their release has reignited the row over the pulling of the loan only days before Business Secretary Vince Cable is grilled by MPs on Thursday over the decision, which has hampered the firm’s chances of becoming a world leader in manufacturing components for new nuclear power stations. The comments were made in a memo by civil servant Janice Munday after a meeting with Forgemasters chief executive Graham Honeyman in April, shortly after the loan had been offered.

In the memo, Ms Munday wrote: “I stressed nothing certain until we had the chance to revert to Ministers post election. But SFIL [Sheffield Forgemasters International Ltd] sanguine – pointing to positive statements from the Conservatives and rather [more] surprisingly Nick Clegg who had told them this was just the sort of thing we should be doing and saying he wants to bring his wife on a visit.”

The following day, the person to whom Ms Munday emailed the report – whose details have been blocked out – replied: “The Nick Clegg comments are interesting.”

Ministers have insisted the deal was only axed because it was unaffordable in the current economic climate, although at one point they claimed company bosses were unwilling to dilute their control of the company, a claim later disproved.

Ms Smith said: “I’m concerned that Sheffield really can’t trust Nick Clegg on this issue any more. We’ve had statements that have turned out to be less than accurate and this really confirms the degree to which he’s turned his face on the city in the interests of being part of the coalition Government.”

But a spokesman for Mr Clegg, MP for Sheffield Hallam, said Mr Clegg would love to be able to support Sheffield Forgemasters and had always said it was an excellent company.

“It wasn’t until after the election that we saw just how catastrophic a state Labour had left the public finances in. The Forgemasters decision was based on affordability.”