Clegg forges new deal for steel firm

Mr Clegg was asked repeatedly whether the new loan was a U-turn as he toured Sheffield Forgemasters, as the Government announced £950 million of investment nationwide as part of the Regional Growth Fund.

The Deputy Prime Minister insisted the Government had always said it was willing to support Forgemasters, but the £80 million loan agreed by the previous Labour administration was judged unaffordable in the wake of the General Election.

He said: “Last year we came into Government and the outgoing Labour government wrote a little note - the Chief Secretary to the Treasury - saying there is no money.

“We had to take some incredibly difficult decisions and we’d inherited a decision from Labour for a loan to Forgemasters which in that context immediately after the General Election was judged to be unaffordable.

“We also said we would provide more support to Forgemasters as we got on top of the chaos in Labour’s finances and as we straightened things out. What we did was I oversaw the creation of a big pot of money - £1.4 billion - for companies like Forgemasters.”

Mr Clegg said: “Forgemasters is an absolutely brilliant example of how you can get behind a successful company so that they, not politicians, not bureaucrats, not a Government department, so they create the jobs of the future.”

Mr Clegg said the original £80 million had been for a specialist forge to make parts for the civil nuclear industry. On Monday, he said, Forgemasters’ management had told him their priorities in this area had changed in the wake of the Japanese nuclear disaster and decisions taken in Europe in its wake.

He said the new loan was for different equipment and projects which included supporting apprenticeships.