Labour’s relentless pursuit of the cancelled Sheffield Forgemasters’ loan is finally paying dividends. The government maintain that the loan was cancelled because the directors did not want to reduce their shareholding. It has emerged that, possibly, the directors did in fact offer to reduce their equity – a point that Jack Straw attempted to make at yesterday’s dire PMQs.
Today brought more intrigue. A major Tory donor advised the government to cancel the loan, on the grounds that it was not necessary and possibly illegal on EU regulations. Pat McFadden, the sepulchral Shadow Business Secretary, has demanded answers from Vince Cable, trying to break the coalition’s united front at its weakest point. Nothing from Mr Cable so far, though the Deputy Prime Minister has described the allegations as ‘absurd’. The opposition can offer nothing more than innuendo at this stage, but the government must kill the sleaze operation in its infancy.