Wednesday, 15 December 2010

Nick Clegg wants government to u-turn on Sheffield Forgemasters loan

There's lots of top-notch politics in the new Prospect, about to hit the newstand. Next Left hopes to return to James Purnell's case for re-examining Marxism, and an unintentionally amusing political parable from George Osborne, because top billing goes to some little local difficulties for deputy Prime Minister Nick Clegg.

With Bronwen Maddox now the new editor of the cerebral monthly, her predecessor David Goodhart takes advantage of his new roaming editor-at-large brief by taking the temperature of Nick Clegg's Sheffield. [The full piece should appear on the Prospect website Wed lunchtime: we'll also add a link here].

It is not difficult to see why these are tough times for the LibDem leader on the home front, even in leafy Hallam. Clegg has become perhaps the most prominent advocate for a government promoting deep cuts which are bound to affect "a city where the state counts for well over half of GDP", as Goodhart reports. Throw in 60,000 students at the two universities - ("I haven't been in hiding. I've been in contact with student leaders, who have of course taken it pretty badly. I want to address a group of students, but at present the police are not keen", says Clegg) - and another 7,000 16-18 year olds who are losing their educational maintenance allowances, along with a host of other spending impacts feared, it isn't surprising that Unison's Cleggzilla posters of the deputy PM wreaking havoc on Sheffield have proved a local hit.

In a Prospect interview, Clegg does not think it is tuition fees that have gone down worst in his adopted city, instead citing the cancellation of the loan to Sheffield Forgemasters.

[Clegg]: "For many people in Sheffield there is a suspicion of the Tories that runs deep. They believe the Tories destroyed the city in the 1980s. So it was the coalition agreement itself that was my original sin. I got a lot of emails and letters from people asking 'How could you do this to us?' The other unpopular things - tuition fees and so on - are a kind of add-on to that.

How about the cancellation of the £80 million loan to Sheffield Forgemasters which would have let it expand in the nuclear industry?

[Clegg]: "That decision has played worse in Sheffield than the tuition fees decision partly because it links into that anti-Tory feeling, the belief that northern industry was abandoned".

But wasn't it an odd decision, given that Britain needs to rebalance its economy from financial services towards manufacturing?

[Clegg}: "I agree. The trouble is the money that Labour had provided came from a budget in the business department that was running on empty. The treasury and Vince Cable felt it was wrong to take the money from somewhere else. But the whole issue could be revisited".

This is not a promise to reverse the decision, or even a firm commitment to reopen it. Yet what could reasonably be concluded from Clegg endorsing the idea that the decision was "odd" is that he thinks not just that the decision could be reopened, but that it should be reversed too.

In a separate development, the Business Select Committee yesterday called for a government rethink specifically rejecting several of Nick Clegg's claims about why the loan had been cancelled. In this context, Clegg would be risking further - and unforced - errors were he to be publicly floating hopes of a change of approach if he does not know yet if he can follow through on it.

The LibDems will surely lose control of Sheffield Council in May, despite local LibDem council leader Paul Scriven doing his best to empathise with the discontented, telling Goodhart

"Of course, the national mood music is not very good for us, some people do feel do let down, but it is my job to say where I think the government has got things right and where it has got things wrong - over tuition fees and council tenancies for example - and to focus on what we have achieved locally.

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