I didn’t vote Libdems for this


12:42 pm - June 18th 2010

by Claude Carpentieri    


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Axing hospitals, jobs, help for the unemployed, manufacturing projects and front line services: this cull is coming straight from the most ideological right-wing hymnsheet

Commenting on cuts and “difficult budget decisions”, Deputy PM Nick Clegg said recently that his government would “not” do it “the way we did it in the 80s”. “We’re going to do this differently.”

The acute observer, however, may have learnt the bitter way that, whatever the Lib Dem leader says, the exact opposite is true. In fact, his public declarations read in reverse should be coveted as the best way of predicting government policy.

And so, yesterday’s announcement that projects worth £2bn are getting axed (with another £8.5bn suspended) is a clear sign that, for all Clegg’s posturing, the 80s are actually back with a vengeance.

To quote Chris Dillow, “[W]hen Clegg says he’s going to do things differently from Thatcher, he’s right – he’ll cut overall spending by much more than she did”.

The significance of yesterday’s cuts is immense. It offers a clear glimpse of the ideological direction taken by the Con/Dem administration.

The Coalition are not cutting back on things such as council-funded festivals, public-funded anti-obesity ads or – even better – the salaries handed on a tray to the Chief Executives of Network Rail or the Royal Mail.

No. The axe is falling on public projects which were crucial in both the public and private sector. Cuts are going to affect job creation (mostly in the private sector), 21st century manufacturing, the health service and measures to help the unemployed.

Those include scrapping a much needed new hospital in the North-East and cutbacks on the Future Jobs Fund, a scheme that was created during the recession to help the long-term unemployed with jobs or training.

But probably even more significant was the massive blow dealt to manufacturing firm Sheffield Forgemasters.

Their £80 million loan would have created skilled jobs and stimulated the supply chain in low carbon power generation. It was a good investment both in terms of future green technology and long-term support of a specialised UK company with only one direct competitor in the field of heavy steel forgins and steel castings – in Japan. Other foreign companies will soon be vying to fill the gap.

Quite clearly this government is not interested in diversifying the economy away from the financial sector. They are repeating the short-termist mistakes that led us to the crisis in the first place. They are not interested in a forward-thinking manufacturing base and they have no plan for growth other than praying that their Ideological Hymnsheet may deliver the goods.

And the 11th Chapter, first epistle to the Free Marketeers, Verses 2-16 states clearly that the government shouldn’t invest in manufacturing and that mass unemployment is a price worth paying. Amen.

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Claude is a regular contributor, and blogs more regularly at: Hagley Road to Ladywood
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Reader comments


“And so, yesterday’s announcement that projects worth £2bn are getting axed (with another £8.5bn suspended) is a clear sign that, for all Clegg’s posturing, the 80s are actually back with a vengeance.”

Not honouring future spending commitments does not equate to making cuts. People need to get real about this.

Is this really right wing cuts from an ideologically right wing hymnsheet or instead perhaps the hard rational cuts that sadly need to be made. These cuts do not seem to be targetting the public sector or opening up the Avenues for free marketeers to work their illustrious magic. We need a voice from the left to critique the cuts and offer the alternatives, not the shouty ‘look how anti working class these cuts are’ from the Unions.

We need a voice from the left to critique the cuts and offer the alternatives

There was an article yesterday saying exactly that:
http://liberalconspiracy.org/2010/06/17/why-were-making-the-case-against-government-cuts/

4. journeyman

Look on the bright side. The foreign aid budget is going to be increased massively. How are poor countries like India supposed to send probes to the Moon , build aircraft carriers and atomic submarines if they have to pay for all of it themselves.

With all the huffing ‘n’ puffing, the present coalition government can’t ignor this deficit and pretend it isn’t there:
http://www.statistics.gov.uk/cci/nugget.asp?id=277

The yield gap between 10-year German government bonds and 10-year UK government bonds is widening = 2.66% v 3.53%
http://www.economist.com/node/16379995

Alistair Darling, the previous Chancellor, was quoted in March saying: “we will cut deeper than Margaret Thatcher”
http://www.guardian.co.uk/politics/2010/mar/25/alistair-darling-cut-deeper-margaret-thatcher

As part of the government cuts, Sheffield Forgemasters have lost an £8bn loan (note loan) to expand their business into making parts for new nuclear power stations. Its quite ironic that Nick Clegg is the MP for Sheffield Hallam, an area most likely to hold key workers needed within this industry.
It may be premature to be thinking about the next election, but just as an aside, the said Nick Clegg made a speech prior to the last election expressing positive comments about the way Thatcher dealt with unions. Unsurprisingly, the lib-dems lost Chesterfield, the home of Markham Colliery, which, over the years, had seen its’ fair share of mining deaths.
Beware lib-dems, we up north don’t forget very easily.

7. John T. Capp

“Not honouring future spending commitments does not equate to making cuts. People need to get real about this.”

I would have thought that this was the only way to cut – I mean, you can’t go back in time and change the budgets for 2009 can you? You can only change future budgets based upon presumed future spending commitments.

Either way, this discussion becomes quite academic when we witness the brutal effects these “cuts” or “non-honoured future spending commitments” will wreak on communities. Could Nick Clegg perhaps provide a “Portillo moment” at the next election?

Although I agree with most of your article, the cutting of the Sheffield Forgemasters loan isn’t that suprising considering the LibDems’ strong anti-nulcear stance. (I find it more suprising that the Tories agreed to it.)

Sorry I mean “surprising”.

Why can’t Sheffield Forgemasters borrow the finance on the capital market like other businesses have to?

@10
Because there’s a crisis and lending to manufacturing firms is just not happening Bob…I don’t know if you’ve heard.

steveb, @6: “As part of the government cuts, Sheffield Forgemasters have lost an £8bn loan (note loan) to expand their business into making parts for new nuclear power stations.”>

Not £8 billion, £80 million. Still, what’s 2 orders of magnitude between friends?

@11: “Because there’s a crisis and lending to manufacturing firms is just not happening Bob…I don’t know if you’ve heard.”

So I’ve read – but that doesn’t explain why Sheffield Forgemasters should have preferential treatment over other manufacturing businesses, does it?

The timing is important to minimise risks of another recession, a stagnant economy or deflation but sooner or later there will have to be some cuts in public spending as well as some tax increases to reduce public borrowing which is not sustainable on the current scale.

Independent commentators – such as the IFS – were warning about the structural deficit in Britain’s finances as far back as 2001:

“The Institute for Fiscal Studies (IFS), an independent thinktank, said it would cost the equivalent of 6p on the basic rate of income tax for Labour to match the average European Union health spending, introduce new tax breaks for the working poor and repair the damage to the public finances caused by economic slowdown.”
http://www.guardian.co.uk/politics/2001/nov/29/uk.budget2002

For all the post-coital, sorry coalition, talk that the LibDems would reign in some of the worse Tory excesses it looks like there’s not even a cigarette paper between Clegg and Cameron. All the more need for Labour to get its act together when it elects a new leader, no matter who that leader is.

15. Luis Enrique

anybody know why Sheffield Forgemasters cannot raise funds from private investors / get loans from banks?

A point of possibly some topical historic interest, Sheffield Forgemasters was implicated in the forgeing of parts for a supergun for Saddam Hussein prior to the first gulf war in 1991:
http://www.sheffieldforum.co.uk/archive/index.php/t-158445.html

As I recall, the DTI civil servant who signed off the forged parts for export – reportedly the parts were intended for a chemical works – got sacked. Apparently, the supergun, which was never assembled, had been designed to land shells on Israel.

isn’t that suprising considering the LibDems’ strong anti-nulcear stance.

The Libdems have just signed up to a govt agreement that nuclear plants building needs to expand massively.

Not that I think Labour is any better – they’re also pro-nuclear energy 🙁

“Axing hospitals, jobs, help for the unemployed, manufacturing projects and front line services: this cull is coming straight from the most ideological right-wing hymnsheet”

I thought the Tory right were supposed to have been neutered?

“anybody know why Sheffield Forgemasters cannot raise funds from private investors / get loans from banks?”

Any loan is at relatively high commercial risk since the Forgemasters project is to make parts for nuclear reactors. The LibDems are opposed to nuclear power on principle and are placed to vote against government approval for nuclear power.

Those now pressing for the loan to Forgemasters are implicitly backing nuclear power generation but will they admit to that when the time comes?

Btw I favour nuclear power, not least because of its success in France where it generates over 70 per cent of electricity. I don’t read of complaints by the French, understandably so since nuclear power has brought cheap electricity.

21. Luis Enrique

yes but £80m for a high risk commercial venture is nothing unusual, is it?

The acute observer, however, may have learnt the bitter way that, whatever the Lib Dem leader says, the exact opposite is true. In fact, his public declarations read in reverse should be coveted as the best way of predicting government policy.

As I believe was said about Clinton: the left gets the rhetoric, the right gets the results.

@21: “yes but £80m for a high risk commercial venture is nothing unusual, is it?”

I can’t see any persuasive reason why Sheffield Forgemasters should have preferential treatment over other manufacturers. This project is fairly obviously a potential candidate for a venture capital investment – always providing the CGT rate isn’t hiked up too much in the budget on 22 June.

A leader in Saturday’s The Economist is clear that the emphasis should be on spending cuts to rein in the deficit:

“given that spending has risen by ten percentage points to almost half of GDP in less than a decade, there is scope for cutting.”
http://www.economist.com/node/16377180?story_id=16377180

“expressing positive comments about the way Thatcher dealt with unions”

He was never positive about the way she dealt with the unions, he was positive about the fact that the unions needed to be defanged for the good of the economy. He also said the state Thatcher left Britain in was terrible. This myth of him praising Thatcher needs to stop.

Lee,

Not honouring future spending commitments does not equate to making cuts.

John T Capp

I would have thought that this was the only way to cut – I mean, you can’t go back in time and change the budgets for 2009 can you? You can only change future budgets based upon presumed future spending commitments.

I think a distinction can be drawn between a new wedge of, say, £80m promised to something, and an ongoing wedge of £80m over N years for something else. I think Lee is talking about the former.

Sunny,

Not that I think Labour is any better – they’re also pro-nuclear energy 🙁

That’s a Good Thing – assuming you want electricity, that is.

@22: “As I believe was said about Clinton: the left gets the rhetoric, the right gets the results”

C’mon. Clinton administration was very successful in turning around an inherited fiscal deficit to a fiscal surplus as this chart shows:
http://www.usgovernmentspending.com/federal_deficit_chart.html

Sadly, that was all thrown away by the incoming Bush administration which cut taxes mainly for the better off. By 2007, Warren Buffett was quoted saying:

“Warren Buffett, the third-richest man in the world, has criticised the US tax system for allowing him to pay a lower rate than his secretary and his cleaner.”
http://www.timesonline.co.uk/tol/money/tax/article1996735.ece

“Either way, this discussion becomes quite academic when we witness the brutal effects these “cuts” or “non-honoured future spending commitments” will wreak on communities. ”

The money isn’t spent, it won’t “wreak” anything on communities that have not yet received any benefit from the spend that has not occurred. It’s not really academic, it’s a really important practical point about what the government is currently saying.

Criticism of cuts where people actually currently have jobs and services are currently being offered…fair play, they need to be scrutnised…but claiming that these IDEAS and PLANS being abolished are of themselves hurtful to society or communities is plainly false.

Speaking of cuts, the impression is being created that the coalition Treasury team is cutting capital projects indiscriminately. Not so, as these projects show:

“A £500,000 grant to refurbish St Raphael’s hospice has been granted. The Chief Secretary to the Treasury Danny Alexander announced the news in Parliament yesterday.”
http://www.suttonguardian.co.uk/news/8225881.Hospice_revamp_to_go_ahead/?ref=eb

“The go-ahead was given to three other hospital projects: the £454m Royal Liverpool rebuild; a £231m rebuild at St Helier in Surrey; and a £90m redevelopment of the Royal National Orthopaedic.”
http://www.ft.com/cms/s/0/d9380640-7a4c-11df-aa69-00144feabdc0.html

@ journeyman

How are poor countries like India supposed to send probes to the Moon , build aircraft carriers and atomic submarines if they have to pay for all of it themselves.

The Indian’s have the franchise to build Russian nuclear subs, the design is the most quiet nuclear sub ever designed. Now they have built one, I am sure that India can build more much cheaper than the cost of the replacement for Trident. So the Cons (the Dems will abstain) can save a lot of money by buying the replacement for Trident off the Indians. Consider the foreign aid payment as a down payment.

BobB – I’m thinking more in terms of the triangulation.

@ 2

Is this really right wing cuts from an ideologically right wing hymnsheet or instead perhaps the hard rational cuts that sadly need to be made.

No cuts need to be made.

i can’t believe anyone was so gullible as to buy into the idea that the libdems would restrain the tories. the lib orange bookers are more economically right wing than cameron.

12 Correction accepted,
24 ‘He was never positive about the way she (Thatcher) dealt with unions’
This is what Nick Clegg said “I’m 43 now. I was at university at the height of the Thatcher revolution and I recognize now something I did not at the time, that her victory over a vested interest, the trade unions, was immensly significant”
However you intepret this statement, it cost the lib-dems Chesterfield and this recent episode with Sheffield Forgemasters will not do bode well for him either.

Correction to 34 – ‘..this recent episode with Sheffield Forgemasters will not bode well for him either’

36. George W Potter

Sunny @ 17 Yes we have signed up to a programme of nuclear power station building but what we have done is guarantee that the taxpayer won’t be subsidising their construction like they did in the past. A small victory I’ll admit but a victory nonetheless.

The Coalition are not cutting back on things such as council-funded festivals, public-funded anti-obesity ads or – even better – the salaries handed on a tray to the Chief Executives of Network Rail or the Royal Mail.

It might not be obvious to everyone why why they are targeting cuts in this way.

The issue is that the deficit can only, in the short or medium term, be paid for by tax raises. In a time of recession, cutting some government project, even one doing literally nothing useful, ends up pretty much increasing net spending by the time you count up all the knock-on effects (lost tax, early retirement, benefits, welfare bureaucracy, etc.).

This is not remotely controversial – ask any economically literate journalist who isn’t being paid to lie about it.

So in order to get the LibCon supporters to accept those inevitable tax raises, it becomes politically necessary to inflict some savage, painful and pointless cuts on symbolic targets.

Useless services are useless for the purpose of inflicting visible pain. So even in the extreme case when simply getting rid of a service would, in the long term and after time for adjustment, actually be a good thing, that becomes a lower priority.

And while not every service is of equal value, very few are _entirely_ pointless.

Obviously, in itself that is bad enough for those people whose lives will be wrecked to appease a few Daily Mail editorials. But that’s not even the worst case: it assumes they are competent. It assumes they won’t cut to deep, won’t break any of the public-sector institutions that allow the UK to operate at the level of a developed nation.

38. Stuart White

Lee @ 1: ‘Not honouring future spending commitments does not equate to making cuts. People need to get real about this.’

I must remember to try this line on my son when I decide to reduce his pocket money.

Perhaps Lee means that not honouring future FRESH spending commitments isn’t a cut. So I do cut my son’s pocket money if I reduce it below its current level, but not if I renege on a promise to increase it by a certain amount from a certain date.

Hmmm.

Take a more serious – and, at the moment, hypothetical – example. Imagine a parent, Jo, who has a child, Steve, who currently gets 15 hours per week of 1-to-1 support at school as part of a Special Educational Needs package. Imagine there has been an agreement to raise the hours of support for Steve, for excellent educational reasons, to 25 hours per week in the next academic year. Now imagine that when Jo and Steve turn up for the new academic year they are told that the school can’t afford the extra 10 hours after all. The extra money hasn’t been allocated.

Lee’s logic is that we should not regard this as a cut because it is not a denial of funds or service relative to the existing level of service/funding. But so what? It is, by assumption, a denial of something the child needs. It will inflict a real cost, a real harm in terms of his educational development.

In short, it would be a cut relative to the morally relevant baseline: what Steve needs and ought to get.

I insist that Lee Griffin ‘get real about this’.

The Coalition are not cutting back on things such as council-funded festivals, public-funded anti-obesity ads or – even better – the salaries handed on a tray to the Chief Executives of Network Rail or the Royal Mail

Presumably it would be councils that would have to cut back on “council funded” spending. And when the Taxpayers Alliance compalined about the size of the salaries of governement and quango executives last year, I remember being told that those salaries were essential to attract talent – by this very website.

If you believe that all the things the last government spent money on were useful, you must also believe that the retrenchment, that would be forced on the government whoever won the election, must hurt.

#38 Stuart White (in reply to Lee Griffin)
Spot-on. These are cuts. And by the way, for the record, the Future Jobs Fund was already running and had been so since last year. It wasn’t a “future” project, an idea, or a plan.

#39 ad
Surely you must know that a chunk of local government revenues comes from a variety of grants from central government funds.

And don’t despair, councils are already doing their bit to cut spending. Ask Birmingham City Council.

“Beware lib-dems, we up north don’t forget very easily.”

The you’ll remember the loss of Laird’s Swan Hunter, the Redcar steel works and tens of thousands of smaller firms — all under Labour’s watch.

Claude, grow up. I know you were wetting your pants to vote Labour, but they promised massive swingeing cuts too. Liam Byrne admitted there’s no money left. So cuts have to fall somewhere. There is no evidence that the previous government’s future spending plans, which had not yet been implemented, would’ve made a difference to youth unemployment.

When you’ve stopped jerking off into Labour’s ears, perhaps you’ll stop whining about how the nasty Lib Dems stole your heart.

43. Andy Mayer

I’m quite puzzled, after the credit crunch and bank failures were caused by reckless lending, why you think the taxpayer should extend a loan of £80m to a high-risk venture like nuclear parts manufacturing.

Your jobs argument makes little economic sense. 180 jobs might have been created. This amounts to £450,000 per job. Even on the left this must be considered wasteful, or at the very least a highly regressive transfer of income from the general public to elite technicians and the owners of the company.

It is also almost exactly the same cost per job as in the highly subsidised Spanish solar industry which has entirely failed to turn Spain into a global leader in green manufacturing. Predictably most of that capacity is going to China.

Industrial policy can’t buck the market for long, and particularly not when the state has little free cash-flow. And if as you say the business benefit of this opportunity is so good, private money will fill the hole.

The Future Jobs Fund is a political con. It’s passing off public sector spending on temporary jobs no one wants to pay for without a large subsidy, as a job creation scheme. This is just shuffling money about, not helping the long-term unemployed and the money isn’t there.

The hospital faced significant local opposition and would have been smaller than the two hospitals it replaced. More modern maybe, but hardly a growth strategy. The North East is not exactly underburdened by the current size of their public sector services relative to private.

As to the rest of the partisan commentary. Perhaps you could explain why David Miliband refused to answer which of these schemes he would pledge to restore on Newsnight last night.

44. Charlieman

A couple of points about Sheffield Forgemasters.

SF want to build a huge press that will cost £140 million. UK government was expected to loan £80 million, so presumably SF have raised the other £60 million already. Westinghouse, who would be a major customer, are mentioned as one of the investors.

If the press is not built, it is likely that components will be made in Japan. My guess is that these will be fully finished components (ie that the really skilled work is done in Japan, not just the pressing).

I initially thought that there would be applications for the press to make components for other energy plants (coal, gas etc). What I have read suggests that the components would be nuclear power generation specific, with possible military applications.

SF’s target market is not just the UK. They wish to sell nuclear components wherever they can underbid the Japanese.

Overall, I think that SF may be able to create a sound business using this press. But it is not the job of government to pick industrial winners so the coalition is correct to cancel the loan.

45. Hodge Podge

@6 Sheffield Hallam is full of rich people and students, they won’t be affected by the cuts. However, the Lab/Lib marginal Sheffield Central, which was almost taken by the LD’s in this election, will be Labour for a long time now.

@45: “Sheffield Hallam is full of rich people”

Absolutely. Sheffield Hallam is one of the most affluent constituencies in England outside London and the South East – see this listing of the 100 most affluent constituencies in 2007 before the financial crisis:
http://www.dailymail.co.uk/news/article-477325/League-Wealth-Tables.html

What’s a bit curious is that Leeds has no correspondingly affluent constituency even though income per head across Leeds is higher than in Sheffield. Evidently, affluence is more evenly spread across Leeds whereas in Sheffield, the better-off mostly choose to live in one constituency. I wonder why that is?

45
The citizens of Chesterfield were not materially affected by Clegg’s remark about Thatcher and the unions but it cost the lib-dems that seat.

In case anyone has missed the wider context of the cuts so far announced – they appear caclulated to hit the urban poor hardest so as to ensure it is largely the Labour vote who suffer.

The Hospital being cut in the North East is a cut in health spending. It will hurt services. And it will hurt services for a largely urban, working class population facing relative health inequality already.

Likewise cutting a loan to a hi-tech manufacturing firm that would have created jobs and training opportunities for working people in Sheffield is smart. Obviously it isn’t great for our advancement of skills and employment and in a sector likely to see growth in the future. But Urban sheffield is unlikely to return many Tory or Lib Dem MPs anyway so why worry. (Note that although the name “Sheffield” is in Clegg’s constituency title, his is a largely rural and middle class constituency that bounces between the Tories and Lib Dems traditionally – and where unemployment is low)

The same is true of cutting jobs programmes. Those who suffer will be the relatively low skilled, seeing relatively low wage jobs as a step back into, or into for the first time, the workplace. In otherwords, probably only Labour people.

Which brings be back to what my grandad used to say.

If the Liberals had ever meant a word they said about us, we wouldn’t have needed to start a Labour Party. They didn’t so we did.

BTW

My main prediction about the Tory government is to expect Crossrail to be cut too.

Particularly the branch that runs through East London. East London voted heavilly for Labour, so the need for and return on improved transport connections in an area of low employment and in need of economic regeneration will probably be overlooked.

My main prediction about the Tory government is to expect Crossrail to be cut too.

Unlikely, given that even Clarkson-loving Phil Hammond has repeatedly spoken in its favour since taking the DfT job.

Particularly the branch that runs through East London.

That’d be, err, both of them. They obviously aren’t going to cut the Canary Wharf branch, because Mrs Thatcher etc etc; and they can’t cut the Shenfield branch, because relieving capacity out of Liverpool Street is the reason why the line actually needs building.

John b

They could cut the docklands branch through places like Custom House quite easilly – and simply not upgrade stations on the somewhat further north eastern branch, which goes through places like Manor Park.

And despite Hammond’s apparent enthusiasm, there has still been no commitment from the new government. It may go ahead in some form, but not the project as we know it now.

But that prediction is just that – a prediction. The cuts to working people’s services are already fairly solid.

@44: “it is not the job of government to pick industrial winners”

Picking winners?

Perish the very thought. Picking winners has a bad history – witness ICL and the Rover Group, into which taxpayers sank £3.4 bn before it was privatised in 1988.

But how about nationalising Rolls Royce aeroengines in 1971 to save the company from collapse, turning it around and then privatising it in 1988? Concorde, anyone? What of the continuing regional aid for Nissan in Sunderland? What of launch aid for Airbus? What of current government aid for the UK Centre for Medical Research and Innovation?
http://www.nature.com/news/2010/100618/full/news.2010.307.html

What of financial support from the Lottery Fund for the London bid for the Olympic Games in 2012? I’m sure Seb Coe and Paul Deighton will be eternally grateful:

“In the past year, board members of the Olympic Organising Committee received £1,000 per two-hour meeting and the chief executive, Paul Deighton, a former Goldman Sachs banker with a personal fortune of more than £100m, was paid a salary of £557,440. The committee chair Lord Coe splits his time between his Olympic work, for which he receives more than £250,000 a year, and managing the Complete Leisure Group, a sports marketing company he established, with the former bankrupt and tax exile Peter Abbey, a month after Britain won the 2012 bid.”
http://www.independent.co.uk/sport/olympics/london-2012-a-gold-medal-muddle-968634.html

In America, the early commercial and technical risks of developing and making silicon chips were underwritten by military spending by the Pentagon and NASA. Who complains now about that?

It is possible for any government to justify cuts in spending, but sticking with the op, we are really talking about what was expected of the lib-dems and what has been delivered since they entered a coalition with the tories.
This will undoubtably affect support for them in the future and particularly in the north and mainly working-class areas in other parts of the country. I am very aware, from speaking with friends and colleagues who voted for lds in the last election, that they will never support them a again in the future. And it’s not only about those areas that are directly effected by the material consequences of the proposed cuts, it’s about feeling betrayed by the promise of a fresh new approach.
The Sheffield Hallam constituency may or may not be directly effected in the material sense, but as an area that supports a population where 2 out of 3 people hold degrees, and who are likely to be politically aware, the lds will lose support.
And the loss of support doesn’t mean that voters will choose nulabour?/labour (I doubt if Sheffiled Hallam would), why vote for ld to get tory, they’ll vote tory.

@53

That rationale is no more than pure pork barrel stuff.

If potential loss of LibDem votes at the next election is the compelling reason for the government to make a £80 million loan to Sheffield Forgemasters that really doesn’t make much of a substantive case based on the merits of extending preferential treatment in this particular instance. And it’s a good reason why floating voters should avoid voting for Labour again except, perhaps, in extreme circumstances. As Disraeli said, never say never in politics.

55. Shatterface

‘Those now pressing for the loan to Forgemasters are implicitly backing nuclear power generation but will they admit to that when the time comes?’

I will. The alternatives are environmentally ruinous fossil fuels which make us dependent upon – and complicit with – oppressive regimes abroad, or harnessing the power of rainbows and magic moonbeams

56. Shatterface

‘The Future Jobs Fund is a political con. It’s passing off public sector spending on temporary jobs no one wants to pay for without a large subsidy, as a job creation scheme. This is just shuffling money about, not helping the long-term unemployed and the money isn’t there.’

It’s also backed up with economic sanctons for unemployed people who don’t accept FJF ‘offers’.

57. Charlieman

@52 Bob B: “But how about nationalising Rolls Royce aeroengines in 1971 to save the company from collapse, turning it around and then privatising it in 1988? Concorde, anyone? What of the continuing regional aid for Nissan in Sunderland? What of launch aid for Airbus? What of current government aid for the UK Centre for Medical Research and Innovation?”

Rolls Royce aero: that was in an era when certain industries were viewed as economically or militarily vital. Thus Rolls Royce was propped up. In a similar situation today, who knows what the decision might be?

Concorde: clever stuff, but did it make a profit? Were there cheaper ways to operate a technological test bed that benefitted other industries?

Regional aid for Nissan: my heart says yes. My intellect questions whether it is/was the right thing.

Airbus: a good example of government trying to pick industrial winners. Thankfully they got it right.

UK Centre for Medical Research and Innovation: research centres contribute towards a public good. Government funding of them is optional but wise.

In the Sheffield Forgemasters case, the company has spotted an opportunity to expand the business. They asked for a government loan to get bigger, not to defend existing jobs or to protect a strategic asset. If you believe in picking winners, SF is a good bet: they have one competitor who cannot supply existing demand. They don’t need to approach government with a begging bowl, assuming that the opportunity is so good.

But the previous government did not see it any sensible way. If government expects that SF are going to make a profit, government should seek a share of the company for their investment. If government doesn’t know, why offer them a loan? It could be £80 million going down the toilet

@56

The sanctions were crucial too as that was what could make it work – along with the use of proper but temporary jobs rather than traditional workplacements.

Work placement schemes often fail because it doesn’t impress on a CV to include a work placement. A temporary job is a real job and so can help assure a future employer that the person has done a real job.

But why waste time finding out if it can work well and provide value for money? Scrap it before it has time to impact – and pretend that’s value for money. Much easier.

The Forgemasters thing appears to mean that it is now the Government’s policy to build new nuclear power stations, through a department headed by someone who doesn’t support nuclear power, and to make sure we have to import the reactor vessels from Japan.

60. Charlieman

@59 Alex: “…and to make sure we have to import the reactor vessels from Japan.”

Not necessarily so.

If Sheffield Forgemasters can raise £80 million, it is possible that SF will get the business. Not just in the UK, but across the EU. Perhaps the east coast of North America. In the context of the nuclear industry, £80 million is not a lot of money.

Charlieman

It is a lot of money for a company working in a sector where government policy is both uncertain and critical to its prospects for revenue. If the Tories decide against Nuclear power then commercial loans to the firm will start to look weak.

Granted thanks to Huhne’s affair (The Lib Dems are better Tories than actual Tories for scandalous hypocricy it seems) his position is now so weak with his own leadership that he probably can’t really force the government not to subtly subsidise nuclear power.

But the banks don’t want to bet on that.

So you voted Lib Dem to IGNORE what our manifesto said, and are disappointed that a loan to make NUCLEAR REACTOR PARTS was cancelled? Sheesh…

Noeticat

you may have missed a lot of the article if you think the Lib Dems only gained support because it was against support for nuclear industry.


Reactions: Twitter, blogs
  1. Chris Williams

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  2. Don Paskini

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  3. Greg Eden

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  4. Pete Phillips

    Whatever Clegg says the exact opposite is true. http://liberalconspiracy.org/2010/06/18/i-didnt-vote-libdems-for-this/

  5. P. S. Wong

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  6. Liberal Conspiracy

    I didn't vote Libdems for this http://bit.ly/9QETNR

  7. Matthew Rees

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  8. jack booth

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  9. Jasper Sharpe

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  10. Emma Jackson Stuart

    RT @libcon: I didn't vote Libdems for this http://bit.ly/9QETNR

  11. David Lewis

    This neatly sums up my feeling about the spending cuts in a much more eloquent way than I can http://bit.ly/9QETNR

  12. Lib Con Trick

    RT @libcon I didn’t vote Libdems for this http://bit.ly/98jqI5

  13. Jackie

    RT @libcon I didn’t vote Libdems for this http://bit.ly/98jqI5





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