The Government today announced that it will go ahead with more than £70 million worth of investment in the UK offshore wind sector, but pulled the plug on an £80 million loan supporting the UK nuclear industry.
Business secretary Vince Cable confirmed this afternoon that four
offshore wind projects, including a
Mitsubishi R&D centre and giant blade and turbine testing facilities in the northeast, would secure the
investment they had been promised under the previous Labour Government. But he said the Coalition Government could no longer commit money to
Sheffield Forgemasters in its efforts to establish a manufacturing base for the nuclear industry.
The announcement follows the decision today by the Treasury to cancel or suspend £11.5 billion in projects that would have gone ahead under Labour.
Treasury Minister Danny Alexander said the decision to cancel or suspend 24 projects out of 217 re-submitted for approval was necessary to tackle the £155 billion public deficit.
"We are determined to tackle the unprecedented budget deficit and bad financial management we have seen over the past decade," Alexander told Parliament.
The Con-Lib Coalition has been reviewing all spending decisions taken since the beginning of the year to check whether they were affordable, offered value for money and that they fitted in with the priorities of the new Government.
No more money
Cable said Sheffield Forgemasters was a worthwhile project but the money had run out.
"Sheffield Forgemasters is an important part of the UK’s ability to develop a civil nuclear supply chain and its specialist forging skills are in demand globally.
"However, we have to find a balance between reducing the deficit while helping the economy to grow. Against a backdrop of reduced public
spending, the Government’s role is to create the right business environment and the right skills base. The Government cannot simply keep writing out cheques," he said.
On the other hand, it appears that at least four offshore wind projects have demonstrated value for money and that they do fit with the Coalition Government priorities.
In February, Mitsubishi Power Systems Europe (MPSE) signed a memorandum of understanding (MoU) with the UK Government expressing its desire to invest up to £100 million in a new offshore
research and development project in Britain, including a new Mitsubishi R&D centre, creating up to 200 jobs and potentially leading to a UK
manufacturing base and the creation of more than a 1000 'green' jobs. The MoU was non-binding, but was backed by £30 million of UK Government grants, which it was confirmed today will go ahead.
Funding was also confirmed for the National Renewable Energy Centre’s (Narec) Offshore Wind Blade Test Site in Blyth, worth £11.5 million, and its Offshore Wind Turbine Test Site (£18.5 million), as well as an Offshore Wind Demonstration and Development project ( £12.4 million).
The Natural Environment Research Council, meanwhile, had it confirmed that £75 million worth of funding for a new state-of-the art scientific research ship to the replace the RRS Discovery would go ahead.
Ford secures loan guarantee
In a related announcement, the Business Secretary confirmed a loan guarantee of £360 million to Ford to support its £1.5 billion investment in six projects for the development of lower carbon vehicle and engine
technologies. The project will safeguard 2,800 skilled workers, in Bridgend, Dagenham, Southampton and Dunton in Essex.
Last week, Prime Minister David Cameron confirmed a £20.7 million grant to Nissan to support its plans for a £420 million investment to build a battery plant and electric car production in Sunderland, securing and creating over 550 jobs.
Cable said all of the projects that were refused funding would either be wound up or the Government would seek alternative ways to ensure that they go ahead. He said he hoped Sheffield Forgemasters would secure private
investment for its project.
Review of 2010-11 spending commitments
Today, the Treasury also announced an urgent review of inherited spending commitments for 2010-11. "We have also found another spending black hole in the previous Government's plans – projects had been approved with no money in place to pay for them. I am determined to deal with this problem head-on and ensure we never see this kind of irresponsible financial planning in Government again," said Alexander.
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