Huhne under fire over Forgemasters loan

Chris Huhne came under fire yesterday from his predecessor as energy secretary, Ed Miliband, over the decision to scrap a loan to Sheffield Forgemasters, and in turn, Mr Huhne’s own […]

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By Kelvin Ross

Chris Huhne came under fire yesterday from his predecessor as energy secretary, Ed Miliband, over the decision to scrap a loan to Sheffield Forgemasters, and in turn, Mr Huhne’s own standpoint on nuclear energy.

Mr Huhne faced questions from MPs for the first time since his appointment as secretary of state for energy and climate change.

Would-be Labour leader Mr Miliband asked Mr Huhne if he could explain “why it was right to give a grant to Nissan to make electric cars but wrong to provide a commercial loan to help Sheffield Forgemasters to be at the centre of the nuclear supply chain”.

Mr Huhne said that the loan to Sheffield Forgemasters “was not a commercial loan. If it had been, it would have been arranged through the banks and not the government. It was precisely because of the public subsidy element and the fact that that was not affordable that the government decided not to proceed with it.”

However Mr Miliband maintained that the money was set aside from the strategic investment fund. “A process was gone through at the Department for Business, Innovation and Skills about whether the loan would give value for money and the Industrial Development Advisory Board concluded that it would be.”

Mr Miliband then said that “we have a combination of the short-sightedness of the Conservative party, which sees no role for government in creating the green industries of the future, and the prejudices of the right honourable gentleman against nuclear power”.

Mr Huhne hit back by saying that “my prejudices, whether they exist or not other than in [Mr Miliband’s] imagination, did not enter into this decision. It was simply unaffordable in the context of the fiscal legacy that he and his friends left this House. We have it on no less an authority than his colleague the former Chief Secretary to the Treasury that there is no money left.”

The energy secretary was then asked by Conservative MP Peter Lilley if he could reassure the Commons “that he will not be put off building nuclear power stations by exaggerated fears of the dangers of disposing of nuclear waste in one or two sites, especially as those who promote those fears seem to have no doubts about the problems of sequestering CO2 from carbon storage and capture in thousands of sites for thousands of years?”

Mr Huhne simply replied that “the government have that very much in hand”.