Sheffield Forgemasters, why no loan?

[s2art]

Sorry if repost.

What logic enables the government to throw billions in subsidies to useless windymills, but not take a small gamble on Sheffield Forgemasters?
Seems to me that this is exactly what any spare money should go on.

[TuxRacer]

I didn't think there was any spare money. What windmills?

[MX7]

They probably should have carried on with the loan, but if it's viable, I'm sure a private enterprise will fill the void.

[s2art]

TuxRacer said:

I didn't think there was any spare money. What windmills?

Read this;


http://www.telegraph.co.uk/earth/7823681/Does-mone...

'The total RO paid to the wind industry last year was £400 million. So each of Britain’s wind turbines earned, on average, £138,000 in subsidy last year – more than Mrs Clegg’s husband makes. Add in the profits from selling the electricity they generate and after construction costs are cleared, you will be making nearly £300,000 per year per turbine, half of it courtesy of the Government.'

[Bluebarge]

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

[s2art]

MX7 said:

They probably should have carried on with the loan, but if it's viable, I'm sure a private enterprise will fill the void.

Eventually, perhaps. But there is a shortage of investment money at the moment. It would be trivial to divert some of the windmill subsidy to this.

[s2art]

Bluebarge said:

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

Then why spend many times that in subsidies, not loans, to windmills?

[Fittster]

s2art said:

Bluebarge said:

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

Then why spend many times that in subsidies, not loans, to windmills?

It shouldn't do that either. 2 wrongs and all that.

[TuxRacer]

That money was from a different government? And I think it's the case that the cuts made so far have only been to possible future expenditure commitments rather than any that are ongoing, predetermined commitments?

[s2art]

Fittster said:

s2art said:

Bluebarge said:

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

Then why spend many times that in subsidies, not loans, to windmills?

It shouldn't do that either. 2 wrongs and all that.

If they didnt do that it would have been a lot easier for SF to get a loan. However, there is a strategic issue here. Getting the UK to be one of the few places in the world that can forge nuclear reactor vessels strikes me as having huge strategic importance. Not just for energy security, but also for the potential to make lots of export money and encouraging high tech manufacturing. Its not only reactor vessels that you can make with kit that big.

[hornetrider]

Any other private companies you care to list that should be subsidised by the Government?

[Fittster]

s2art said:

Fittster said:

s2art said:

Bluebarge said:

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

Then why spend many times that in subsidies, not loans, to windmills?

It shouldn't do that either. 2 wrongs and all that.

If they didnt do that it would have been a lot easier for SF to get a loan. However, there is a strategic issue here. Getting the UK to be one of the few places in the world that can forge nuclear reactor vessels strikes me as having huge strategic importance. Not just for energy security, but also for the potential to make lots of export money and encouraging high tech manufacturing. Its not only reactor vessels that you can make with kit that big.

What industries don't have strategic importance? I've send arguments that the following should all be supported by the state: Oil, farming, defence, banking, electricity generation, IT, aerospace, the list goes on.

If it really can lead to huge exports markets why can't SF get private sector funding?

Edited by Fittster on Tuesday 22 June 18:01

[s2art]

hornetrider said:

Any other private companies you care to list that should be subsidised by the Government?

Not off hand. Just those which have long term strategic value. And note its a loan, not a subsidy, unlike windmills.

[hornetrider]

s2art said:

hornetrider said:

Any other private companies you care to list that should be subsidised by the Government?

Not off hand. Just those which have long term strategic value. And note its a loan, not a subsidy, unlike windmills.

Maybe we should have a massive bidding process so all companies nationwide can bid. How much would you care to set aside in reserve? Or perhaps an X-Factor style competition to see who get's their greasy mitts on public funds?

[130R]

There's not much chance of them ever paying this "loan" back, hence why they can't get it from the banks

[s2art]

Fittster said:

s2art said:

Fittster said:

s2art said:

Bluebarge said:

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

Then why spend many times that in subsidies, not loans, to windmills?

It shouldn't do that either. 2 wrongs and all that.

If they didnt do that it would have been a lot easier for SF to get a loan. However, there is a strategic issue here. Getting the UK to be one of the few places in the world that can forge nuclear reactor vessels strikes me as having huge strategic importance. Not just for energy security, but also for the potential to make lots of export money and encouraging high tech manufacturing. Its not only reactor vessels that you can make with kit that big.

What industries don't have strategic importance? Oil, farming, defence, banking, electricity generation, the list goes on.

If it really can lead to huge exports markets why can't SF get private sector funding?

All the ones you mentioned do get subsidies in one form or another, with the possible exception of oil which is a mature and rich industry and needs no subsidy. SF are requesting a loan, not a subsidy. They need to do that because the current cost of loans are high, mainly due to government regulation of banks (forcing them to increase capital ratios), coupled to state borrowing hoovering up all the spare cash.
If they went to the marketplace the loan would be at something like 7-9%. This is a slightly artificial and temporary (could be years, but temporary) situation. Base rate at near zero, but commercial loans expensive.

[s2art]

hornetrider said:

s2art said:

hornetrider said:

Any other private companies you care to list that should be subsidised by the Government?

Not off hand. Just those which have long term strategic value. And note its a loan, not a subsidy, unlike windmills.

Maybe we should have a massive bidding process so all companies nationwide can bid. How much would you care to set aside in reserve? Or perhaps an X-Factor style competition to see who get's their greasy mitts on public funds?

Nope, just apply the same criteria for windmills to nuclear power. Make it a level playing field for low carbon energy generation.

[s2art]

130R said:

There's not much chance of them ever paying this "loan" back, hence why they can't get it from the banks

Arguable. If the nuclear industry takes off, just in Britain, they would be quids in.

[BrassMan]

Bluebarge said:

It's not the govt's business to lend taxpayers money to private enterprise - that's what banks are for. If SF had a credible business plan for this new bit of kit, they could finance it themselves. It was just a cash handout to a Labour stronghold. Not good government.

The governments job is to do things which are not necessarily economically viable, but still need doing. The list includes law and order, regulatory bodies and keeping key industries running during quiet times. Key industries would have to include heavy manufacturing, to keep control of the countries infrastructure.

So, yes, canceling the loan is foolish.

[grumbledoak]

BrassMan said:

The governments job is to do things which are not necessarily economically viable, but still need doing.

Nope. The government does do many such things, but that isn't it's job. It is exceptionally bad at private enterprise, and should not seek to do more of it with taxpayers money.