Miliband attacks cancellation of Forgemasters loan

The Government was wrong to cancel an £80m loan to a firm to make components for new nuclear power stations, Labour leader Ed Miliband said yesterday as he visited the plant.

His comments came after Business Secretary Vince Cable said the loan to Sheffield Forgemasters was not affordable.

Mr Cable told MPs on the Business Select Committee yesterday that the coalition inherited a “very difficult” financial position when it took over from Labour and had to make early decisions on cuts.

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But Mr Miliband, visiting the steelmaker in Sheffield, said: “I think they made the wrong decision, absolutely. It was a loan, it was a loan that would have been paid back.

“They have made the decision and I hope they continue to think about how they can help in the future from the funds available.

“I hope they can get the kind of investment they need. It is a fantastic British company and I was incredibly impressed by what I saw there today.”

Business Select Committee chairman Adrian Bailey (Labour, West Bromwich West) said there was “bafflement” among MPs over the loan decision.

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The committee heard that of the 241 projects reassessed by the Government, 217 were going ahead, 12 were postponed and just 12 were cancelled. The cuts would save between 1bn and 2bn, it was told.

Mr Cable previously agreed the loan to Forgemasters was good value for money. But he stressed yesterday that the scale of the cuts the Government needed to make was because of the state of the economy it inherited.