Sheffield Forgemasters: 'Lots of questions raised' on how other businesses compete after Government acquisition
The Government needs to “put equal effort” into supporting other businesses the same way it has done for Sheffield Forgemasters, the city’s Chamber of Commerce has said.
This week, the 215-year-old manufacturing firm was bought out entirely by the MoD for £2.58m, with a pledge to support it with a further £400m over the next 10 years.
It marks an unusual move for the Conservative-led Government, which has historically spoken against privitisation.
Sheffield’s Chamber of Commerce has called on the Government to “put equal effort” into supporting businesses so they don’t have to “compete” with those with backing by No 10.
Co-executive director Alexis Krachel said: “This groundbreaking investment recognises the strategic importance of Forgemasters. It supports 600 highly skilled jobs in Sheffield City Region. The MoD’s intent to invest up to £400m over the next 10 years offers a promise that this vital business can keep investing in technology and skills to stay at the cutting edge of steel making.
“The deal also marks the beginning of a new period after Brexit where the government is freer to make investments like this.
"That freedom raises lots of questions about whether other companies now have to compete by those owned by the government and backed by taxpayers money.
“The news from Forgemasters is welcome but the government needs to put equal effort into creating the conditions for businesses to thrive without needing to be owned by tax payers. The government’s recent decision to ditch plans for a new industrial strategy will worry those who want to understand the UK’s long term approach to supporting manufacturing.”
Sheffield Forgemasters has historically made up to 50 per cent of its revenue from defence contracts. The acquisition by the Government is thought to be an effort to shore up its own manufacturing for projects such as the Trident nuclear submarine fleet and other Royal Navy vessels. However, the firm is set to use its Government contacts to expand into British nuclear power and offshore wind farming.
The MoD, which is now owns the firm in its entirety, says the acquisition will ensure its own "critical existing".