The Government has been urged to continue trying to secure funds for a company to build components for the nuclear industry after it controversially withdrew an £80 million loan.
The planned loan to Sheffield Forgemasters was cancelled after a number of projects were reviewed shortly after the coalition Government took office.
The Business Select Committee said axing the loan, which had been announced by Lord Mandelson when he was Business Secretary, was an “easy cost saving”, adding: “While this is a legitimate way to proceed, the department should have been more transparent in articulating this process and not hidden behind the simple defence of affordability.”
MPs on the committee, which has been reviewing the Government’s decision, said the UK would take a “significant lead” in the civil nuclear industry if Sheffield Forgemasters was able to build a 15,000-tonne press to make large components.
“For that reason we urge the Government to continue in its efforts to secure funding for this project, whether by public or private funds, so that an opportunity to take a lead in this important industry is not lost,” said the committee.
MPs said they welcomed an undertaking given by Business Secretary Vince Cable that he would “entertain” a fresh loan application from Sheffield Forgemasters.
“Should the company make a further application, we would expect the Secretary of State to honour that undertaking,” the committee added.
A Business Department spokesman said: “The Department welcomes the Committee’s recognition that budget cuts were unavoidable and that the Government had difficult decisions to make.
“Sheffield Forgemasters is welcome to apply to the Regional Growth Fund which is now up and running. The Government is keen to see applications to the RGF which will enable the private sector to invest in projects that can create jobs and secure long-term growth.”