Britain’s Industrial Future

Andy McDonald Excerpts

Tuesday 15th November 2022 Commons Chamber

[George Freeman]

Let me just deal with this point.

We are investing more than £600 billion to transform our country’s infrastructure—roads, rail, broadband and more—and we plan to procure 8.5 million tonnes of steel as part of that over the next decade; the hon. Member for Cardiff South and Penarth (Stephen Doughty) touched on procurement. We published an updated steel pipeline in June 2020, to help the industry plan ahead. The value of UK steel procured by the Government for major public projects in 2021, which I checked before coming to the debate, was £268 million—an increase of £160 million from the previous year. The steel procurement taskforce, which we set up as a joint working group between Government and the steel industry, published seven recommendations in February this year, and those are being implemented through updating the Cabinet Office procurement policy note. As the hon. Member will see—he asked a good question—we are taking serious steps on procurement.

In 2021, the Secretary of State for Defence acquired specialist steel producer Sheffield Forgemasters, with £400 million of investment over the next 10 years, and Sheffield Forgemasters is working with other companies, including Rolls-Royce and the Canadian company General Fusion, on the development of nuclear power generation. In March this year, we successfully secured an expansive removal of US section 232 tariffs on UK steel and aluminium products, which means that UK steel and aluminium exports to the US can return to levels not seen since before 2018. We have also extended our steel safeguard measures for a further two years. I simply do not accept, and I do not think anyone listening to the debate would say, that the Government have done nothing and are doing nothing on procurement. It is simply not true.

[Andy McDonald (Middlesbrough) (Lab)]

I am grateful to the Minister for giving way. I have heard what he has to say, but what does he say to the people of Teesside about his Government’s inaction in 2015? The Italian Government intervened at the Ilva plant in Taranto and came to the rescue of 25,000 workers. The French did the same in Florange, but this Government did absolutely nothing to protect our core industries at Redcar—and we have not forgotten it.

[George Freeman]

I would point out that last week, Green Lithium announced the UK’s first large-scale merchant lithium refinery and the first such refinery in Europe, to be built in Teesport, supported by the automotive transformation fund.

--- Later in debate ---

[Andy McDonald (Middlesbrough) (Lab)]

Thank you, Madam Deputy Speaker. In 2015, under the Tories, more than 150 years of steelmaking in my part of the world came to a shuddering halt with the closure of the SSI blast furnace in Redcar. The very concept of industrial strategy came to the fore in a unique and graphic manner. The received wisdom of Government Members meant that they had no truck with industrial strategy and they simply allowed markets to dictate and determine whether our industries, such as steel, survived.

We move on and look to the very lands on which the steelmaking industry sat for development now and in the years ahead. There is unanimity of purpose in securing the new industries of the future, focusing on renewable energy development, hydrogen, carbon capture, utilisation and storage, and offshore and onshore wind among many others. There has been much promise of creating 25,000 jobs. I regret to say that there is little evidence of that coming to fruition any time soon. However, the objective is the correct one. What is not correct is the way in which the Tees Valley Combined Authority under the auspices of the Mayor, Ben Houchen, has set about the business.

Vast sums of public money—some £375 million—have been expended on acquiring and remediating the land on the south bank of the Tees for development. No one objects to that ambition, but what happened was that a joint venture company styled under the title Teesworks was formed initially as a public-private partnership whereby the Tees Valley Combined Authority had a 50% share along with its private partner. The sad reality is that the private venture partner got involved only because of its acquisition of an option to purchase land—a ransom strip—which put it in the key position when the combined authority entered into the joint venture. There was no procurement or tendering process whatsoever. A marriage was made simply between the public and private sector in those ratios, but, as we approached the end of the available funding from central Government, a totally and utterly unacceptable decision was made whereby the 50:50 share was transferred to 90:10 in favour of the private sector joint venture partner. Those shares—public property—have been transferred for nothing. For nil. For zero. For zip.

There is a real sense on Teesside that these matters have been conducted in a clandestine manner and an atmosphere of secrecy, with a total absence of any proper, effective scrutiny and a distinct lack of accountability. There is also a sense of there being something unseemly about those benefiting directly from the contracts so massively.

All of that happened without a proper procurement process, and the Public Accounts Committee does not have the locus to investigate. The National Audit Office claims that it has no responsibility for those moneys and is content to leave it to external auditors. That means that Private Eye has been leading with its detailed and thorough examination. It comes to something when we have to rely on a satirical magazine to undertake forensic examination of how public money is spent, but we need only look at the Tees Valley Combined Authority’s website to see how its board minutes and agendas in respect of not only the South Tees Development Corporation but the freeport board are put beyond our gaze and deemed to be confidential. It is a common experience that freedom of information requests are met with resistance and obfuscation. We need to have a clearer look at these elements, but it is evident that any demand for better scrutiny and better governance is constantly met with cries of disloyalty and a lack of ambition. Nothing could be further from the truth. It is about progressing the agenda, looking after public money and pursuing development in the interests of the people, not simply enriching further the already extremely wealthy.

There will be a day of reckoning on these business transactions. We need to get to the bottom of how these things have been allowed to happen. There is a real challenge to central Government more broadly as to how they exercise control and scrutiny over the expending of such vast amounts of public money. I hope that day will come very, very soon.