Sheffield Forgemasters

Lord Blunkett Excerpts

Wednesday 21st July 2010 Commons Chamber

[Mr Prisk]

This decision has got nothing to do with dilution of equity, which I shall come to in a moment in detail, if I may. The point we are trying to establish is that there is no question of dilution. The issue for us has always been commercial affordability.

Some people have said that the decision is somehow a reflection on the company, the project, its management or staff; in fact, quite the opposite is true. We fully recognise that the project is commercially worth while, but the key point here is that this Government are serious about addressing the deficit and rebalancing the UK economy so that it can recover and grow once more. We are absolutely determined to ensure that all companies, including manufacturers, can operate in the right long-term business environment, so they can thrive and grow.

As a result, the first priority for this incoming coalition Government has to be to restore confidence in the UK’s finances, because confidence is the bedrock of our future economic growth. That means that we have to get to grips with the record budget deficit that we inherited, in order to ensure that this country is once again a good place in which to do business.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

But if the reasoning is not the letter from Andrew Cook or some other spurious reason that has already been knocked down by my hon. Friend the Member for Sheffield South East (Mr Betts), and it rests solely on the budget deficit, why was Forgemasters one of only two projects reviewed that were refused by the Government, and 12 projects were not?

[Mr Prisk]

I am just about to come to that. I believe that the critical issue here is affordability. We have had to deal with very difficult circumstances, not least the fact that on taking office, it became clear that the structural deficit is £12 billion more than we were led to believe by former Labour Ministers. If apologies are due, in my personal opinion they should come from the former Labour Ministers who were in this Chamber and failed to be straight with the British people about the size of the deficit. That is the critical issue.

Of course, the ideal outcome would be for the project to proceed with private sector finance, and I very much hope that in the longer term, that will still happen. However, I must make it clear that, given the scale of the budget deficit that the country faces, we considered the issue from the point of view of unaffordability.