Listening to the news tonight on Radio 4, I heard the report about the cuts announced by the Danny Alexander on behalf of the government today that total about £2 billion of spending. There are various things included in the mix but I want to focus on the one that seems to have yielded the strongest political reaction. That is the withdrawal of the loan for Sheffield Forgemasters.
The coverage on the news included Labour politicians strongly denouncing the move and claiming Nick Clegg (a Sheffield MP) would not be able to show his face in Sheffield again as well as an interview with the landlord of a local pub who was devastated about the loss of jobs he said this would cause and how he thinks workers at the plant with mortgages today would end up losing their homes.
However this is not true. The measure that was pledged (but crucially not funded) by the previous government in March was for a loan to expand the business. There are also suspicions that it was pledged to win electoral support for Labour in Sheffield just ahead of the election. Irrespective of whether this is true or not what has been "cut" today was a loan to fund expansion. Current jobs at the plant should not be affected by this. Indeed at the end of the news report after all the hyperbole this was made clear by the reporter. Anyone who had tuned out before the end of the report however would have been left with a very different impression.
Let's be clear about this, what was announced today for the Sheffield plant is not a cut. It is a withdrawal of a loan for expansion of a private company.
Also, as Chris Huhne has pointed out, the expansion plan seemed like a good one to him and he sees no reason why it could not be funded from the capital market. I absolutely agree. It is not the job of government to be stepping in to support this expansion of a private firm at a time when we have such a huge deficit, despite the outrage expressed by Labour politicians.