The news that Sheffield Forgemasters has suspended work on its giant nuclear-industry forge press marks a new low in a saga that continues to raise more questions than it answers.
Did the government really cancel its £80 million loan for the press because it simply couldn’t afford it? Would Lord Mandelsen’s cheque really have bounced? What role, if any, was played by Yorkshire businessman, Tory donor, and opponent of the loan Andrew Cook? And, as Nick Clegg has suggested, did Forgemasters only seek public funding in the first place because it didn’t want to dilute its own shareholdings?
But perhaps the biggest question of all is why have no private investors stepped forward to rescue a project which apparently has so much going for it?
When the loan was cancelled in June most misgivings over the government’s short-sightedness were tempered by the confidence that investors, spotting an opportunity missed by ministers, would step in to make up the shortfall.
Why have no private investors stepped forward to rescue a project which apparently has so much going for it?
The worrying fact that this hasn’t happened could mean a number of things: either the project is not as good as it sounds or private investors are as cagey as ministers. Perhaps they simply don’t understand the sector, or have been poorly briefed on the potential significance of the project.
Of all of these options, we would suggest that the first is the least likely. To help avoid economically and potentially socially catastrophic global energy shortages the world needs more nuclear reactors. If you want new reactors, you need new pressure vessels. And the Forgemasters press would have made the UK one of a tiny handful of places able to build these components.
Whatever the reason, the unpalatable truth seems to be that private investors are no more willing than government to invest in a key area of the UK’s future manufacturing base. And this adds some flesh to the bones of Labour’s warning that by pulling away state support too soon you risk halting economic growth.
But the Forgemasters fiasco looks set to rumble on a little longer yet, and with business secretary Vince Cable this week pledging to work closely with the firm when the future of public funds becomes clearer this autumn, there might just be final twist in the tale.