Exclusive: How firms are ‘blackmailing’ the govt growth fund
After revelations last month that the much hyped Regional Growth fund had yet to spend a single penny, the government faces further embarrassment as details emerge of projects eventually selected for funding.
The government said on Monday it planned to invest £1bn in 100 companies to create new jobs.
But some bids go as far as arm-twisting the government to hand over money in return for keeping jobs in the UK.
One of the first successful funding applications to emerge FOI requests undertaken by Liberal Conspiracy concerns Bridon International Ltd, successful in its application for £2.2 million.
Key sections of the application (some extracts at the end) indicate that Bridon regarded the grant as a ‘sweetener’ for them to remain operational in the UK, rather than as an additional investment in the UK economy.
Bridon have identified and investigated two viable locations for this facility, Neptune Energy Park at Newcastle and Gelsenkirchen in Germany. The final decision regarding the location of the proposed facility has not yet been taken and will be significantly influenced by the availability of grant support from the Uk Government. If the project were to proceed in the UK, it would entail capital expenditure of £17.3 million in addition to the annual lease cost of £1.1 million, and would creat 39 jobs. It would also safeguard the 150 existing jobs at the Willington Quay site.
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If the project proceeds in Gelsenkirchen, we will adjust our European operations accordingly, as Gelsenkirchen becomes Bridon’s main manufacturing centre…..Under this alternative the Willington Quay site will cease to be viable…. If the project proceeds in Gelsenkirchen not only would there be no private sector investment in the Uk and no job creation but the 150 existing jobs at the Willington Quay site would also be lost.
This effectively changes the fund from its stated purpose of job creation (in fact only 39 new jobs are projected to be created) to one which is focused almost exclusively on job retention.
Bridon isn’t alone in taking this approach either.
Another bid by the company Holroyd (owned by the Chinese company CQME) outlined a plan to establish a “brand new high–technology and research facility” for Holroyd and its sister businesses.
It is projected to bring in 130 to 150 new jobs, “including a substantial number of PhD and Degree leve positions,” says the application, to the Rochdale area.
The bid stated:
Without [Regional Growth Fund] support, the project will not go ahead in the UK as it leaves us with a shortfall of £2.82 million having taken account of a £17.625 million contribution from CQME and a £3.055 million comtribution from Holroyd Precision.
…
Without RGF support, it is a certainty that CQME will either move to Holland or Germany as an alternative or take the slower route in transferring the technology into China, with resultant slow loss of employment in the UK.
There is no suggestion that any of the companies have acted improperly.
Other problems with the RGF
And then there questions about the bidding process itself.
44 of the 50 round 1 applicants refused to release their applications to the RGF.
Other bids to the RGF, such as one by the Historic Buildings Trust (Prince’s Regeneration Trust spin off), are unclear about other public sources of funding (Euro money, English Heritage) rather than the private investment we were promised.
Yesterday, The Times also revealed that grants had been made to local councils in politically marginal areas and to companies who are significant backers of the Conservative Party.
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Note: Both the Times report and a piece on the Financial Times website used the above information.
Why Greece should default on its debts and leave the Euro
Last night the Greek cabinet backed PM George Papandreou’s proposal for a referendum on the bailout deal. Regardless of what bailout deal is eventually offered – the latest one hasn’t even been finalised yet – the public will very likely reject it.
No wonder the markets are in panic: they hate the uncertainty of public opinion and democracy.
It’s much easier for them to deal with stitch-ups negotiated by governments and IMF officials, forcing austerity on people than face the prospect of bank losses. Worse, the Greek problem isn’t even the worst calamity the Eurozone has to deal with.
continue reading… »
Times reports on RGF mess, with libcon info
I’m sure The Times won’t mind us re-producing their news story today, given they used info gotten from Liberal Conspiracy without attribution.
Robert Lea Industrial Editor
Last updated November 1 2011 12:01AMCompanies have warned the Government that they could leave Britain, with the loss of hundreds of jobs, unless they receive millions of pounds from Nick Clegg’s £1.4 billion Regional Growth Fund (RGF).
The Deputy Prime Minister publicised plans yesterday for the fund, which he said would create or save 325,000 jobs at nearly 200 companies, as part of a move to “jump start” the economy.
While the fund was derided by Labour as “too little, too late”, an investigation by The Times of winning bids showed that some companies appeared to have exerted emotional pressure on the Government. Grants have also been made to local councils in politically marginal areas and to companies who are significant backers of the Conservative Party.
According to bidding documents seen by The Times, CQME, a Chinese technology company, indicated that it would make its British subsidiary, Holroyd Precision, in Rochdale, the base for its European headquarters. It indicated, however, that if it were not to receive £2.8 million of government support, it would halt its planned expansion in Britain.
The bidding documents state: “Without RGF support it is a certainty that CQME will either move to Holland or Germany . . . with the resultant slow loss of employment in the UK.”
A second company, Bridon International, said that it had identified two viable locations for a new facility: one in Newcastle and another in Gelsenkirchen in Germany. Bridon’s bidding documentation for £2.2 million of support states: “The final decision regarding the location of the proposed facility has not yet been taken and will be significantly influenced by the availability of grant support from the UK Government.”
Mr Clegg, announcing a second tranche of £950 million of funding, on top of the £450 million granted this year, said that the fund would unlock private sector investment in which for every £1 of government grant, companies would put up £6.
The Government estimates that the £1.4 billion will create or maintain more than 65,000 jobs, which in turn will help to create or maintain another 260,000 jobs indirectly in companies’ supply chains.
It had been thought that funds would be aimed at specific businesses in deprived areas or manufacturing regions that had fallen on difficult times.
However, the latest funding decisions show that large amounts are bound for a number of local councils. They include £40 million for Derby City Council, once a Liberal Democrat stronghold, now split three ways with a Lib Dem-supported Conservative leader. It had been lobbying loudly for backing for an enterprise zone to offset the job losses in the city, including those at the Bombardier train plant.
There is also funding for Tory-led Southampton City Council, which has clashed with local trade unions.
Burnley Council is to receive £9 million to improve rail journey times to Manchester after a campaign by Gordon Birtwistle, its Lib Dem MP.
Among other companies winning funding is JCB, whose owners, the multimillionaire Bamford family, are among the Conservative Party’s biggest donors and who have also given money to David Cameron’s constituency party.
It is thought that some Labour MPs could raise questions over winning bidders at a parliamentary adjournment debate scheduled for today
Labour was scathing about the operation so far. Six months ago 45 projects were told that they would be receiving £450 million. To date only four have received their money. Ed Miliband said that the fund was “too little, too late”. Chuka Umunna, his new business spokesman, said it showed that the Government was “out of touch”.
Gordon Marsden, the Shadow Minister for Regional Growth, said that the operation of the fund had been “mired in chaos and confusion”. He added: “If they have managed to deliver the money for just four companies in the last six months, how long will it take to deliver on the 119 projects they announced today?”
John Longworth, director-general of the British Chambers of Commerce, said that the Government must move faster. “The speed at which this funding is delivered will be fundamental to the success of the Regional Growth Fund.”
Neil Bentley, deputy director-general of the CBI, said that the Government must go farther: “Despite its size, this fund does not have the capacity to plug the finance gap. The Government needs to look at other funding options to help these firms grow.”
Five ways the govt could help squeezed families
contribution by Mike Morgan-Giles
Earlier this month the IFS confirmed what was assumed already – that the Government’s policies will increase both absolute and relative poverty.
They forecast absolute poverty to increase by 600,000 children and 800,000 adults by 2012/13.
They also expect incomes to fall by 7%. Combine this with inflation at over 5% and you can understand the pressure families are under financially.
continue reading… »
Environmentalists to disrupt £1,500 event
Protesters plan to blockade a road and disrupt a conference tomorrow, to highlight the environmental impact of ‘fracking’, and hold a people’s assembly to discuss the issue.
They plan to meet outside the Copthorne Tara Hotel with gas masks, “fracked water” and noise makers tomorrow, Wednesday 2nd November at 3pm.
The £1,500-a-ticket summit is sponsored by a host of companies involved in the oil and gas industry and is described as an opportunity to examine the commercial and environmental issues surrounding Shale Gas extraction.
Protesters argue that the event is ‘Greenwash’, designed purely to attract investors.
National anti-fracking network ‘Frack Off’ have called for the UK’s first mass action against fracking at a Shale Gas Environmental Summit.
James Barnes, one of the co-organisers, said
Fracking is one of many desperate attempts to feed our society’s unsustainable addiction to fossil fuels. We need investors to focus on real alternatives.
We hear a lot about energy shortages, and we really need to be investing in researching sustainable energy sources, rather than finding tiny pockets of non-renewable gas and destroying our planet in order to get to them.
Hydraulic Fracturing, or ‘fracking’ is a controversial method of natural gas extraction, in which a mixture of water, sand and chemicals is injected into the ground at high pressure, cracking shale rock and releasing the gas.
It has been the subject of much contention due to numerous reports linking the method to water contamination, health problems and earthquakes. The industry is in its infancy in the UK, and there are plans for up to 800 wells in Lancashire alone.
Frack Off is a national grassroots anti-fracking network who launched their website by unfurling a banner 500 feet up Blackpool tower earlier this year.
See www.frack-off.org for more information.
No wonder the economy is stalling – the growth fund is a mirage
Yesterday morning the front-page of the Telegraph blared: ‘£1bn on 100 projects to kick-start the economy‘ – which revolved around the ‘Regional Growth Fund’ (RGF).
For two parties that vociferously attacked New Labour for ‘spin and gimmicks’ – the announcement illustrated how they are now willing to try the same tricks. And the Telegraph faithfully helped to prop them up.
Let me explain how.
continue reading… »
Watch: report from No To Hate Crime vigil
On Friday 28th of October an anti-hate crime vigil was held in Trafalgar Square.
The short video report has clips from the event and short interview with Brian Paddick, Peter Tatchell, Stuart Milk and Pink List winner Elly Barnes.
The event was hardly mentioned in mainstream press (let alone broadcast)
Watch
They have a YouTube channel and twitter accounts: and @mightyalz and @mjhwright
Today’s growth figures will show why we need a ‘Plan B’
contribution by Joe Cox
It probably isn’t necessary to tell readers of Liberal Conspiracy that the Government’s Plan A isn’t working. Today’s stagnating GDP figures will very likely confirm that.
Sky high unemployment, low levels of investment, low consumer confidence and stalled growth all indicate we’re on the verge of a double dip recession.
It’s also not surprising considering that the Government is basing its entire strategy on two falsehoods:
continue reading… »
35,000 people ‘to be homeless by Christmas’
An estimated 35,000 people across Britain face the prospect of losing their home between now and Christmas day, Shelter says today.
The warning comes as the charity launches its new advertising campaign showing that every two minutes someone faces losing their home.
This could mean an estimated 35,000 people – 630 people a day – will receive a letter threatening the loss of their home between now and Christmas which could see them ending up in court, fighting to keep their home.
New research by the charity which reveals 61% of people who have experienced homelessness or the threat of homelessness said that it directly led to a stress related illness, while 70% said they spent most of their time worrying about it.
Campbell Robb, chief executive of Shelter said:
This research shows the shocking impact that homelessness has on people’s lives. We know only too well that being made homelessness, or living each day under the constant threat of homelessness, is a horrific experience that can tear families apart.
And with someone facing losing their home every two minutes, the reality is this is a fate that could happen to anyone of us. All it takes is one small thing, such as an illness or financial trouble, and things can soon spiral out of control. Whilst this research shows people can barely comprehend having to go through this experience, it’s possible that 35,000 people could face this prospect between now and Christmas day.
Shelter’s new campaign features six people who were either homeless last Christmas or who are living under the threat of homelessness right now.
Through their personal stories the charity aims to show how homelessness, or living under the threat of homelessness, can tear families apart.
From a press release
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