Willetts lets the cat out of the bag on Sheffield Forgemasters

21 06 2010

Universities minister David Willetts

Anyone who doubts the ideological nature of the government’s drive to reduce public spending should listen to David Willetts’ comments on the BBC’s Politics Show yesterday.

The minister for universities and science – and key Cameron ally – was fielding questions from Jon Sopel on the government’s decision to cancel or suspend more than £10bn worth of public spending projects last week.

He trotted out the government’s line on Labour’s unfunded spending commitments and value for money, but Sopel pressed him on the scrapped £80m loan to Sheffield Forgemasters. Given that this was a loan – not a grant – and the government would most likely get all its money back, surely Willetts’ comments about unfunded spending commitments didn’t apply?

For Willetts, however, the matter was not about economics. Instead, it was about that old chestnut, “the role of government”.

“We have to be clear about what the role of government is here,” explained Willetts. “Government absolutely have a role in investing in skills. Government have a role in universities, in backing R&D.

“I think it gets a bit trickier when governments go around making individual loans to individual companies that really ought to be able to finance themselves in the marketplace…”

And on he goes. “We do want to foster growth, but the way that governments foster growth is above all by doing things like holding down interest rates…”

The role of government. That’s not a matter of economics, of deficits, of profit and loss. That’s a matter of the government’s ideological view as to what role the government should play in reviving Britain’s economy. The Conservatives – and Orange Book Lib Dems – take the ideological view that government should stay out of the way.

Sheffield Forgemasters are the first victims of this debating society approach to cutting the deficit.

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