Tees Valley Inward Investment Initiative

Lord Wharton of Yarm Excerpts

Wednesday 15th June 2016 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

I congratulate the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) on the broad thrust of his speech. I think we can all agree that Teesside is a wonderful place that provides incredible opportunities, and that we should now focus on how those opportunities can best be delivered.

The Tees valley has many great strengths. Teesside contributes more than £12 billion to the national economy each year. Its rate of new business creations is higher than the UK average, and unemployment has fallen from about 31,400 in December 2014 to 27,000 in December 2015. However, that does not mean that it has not faced real challenges, of which the hon. Gentleman gave specific examples. He also gave us his thoughts on both the work that has been done and the work that still needs to be done to overcome some of the difficulties that our economy has faced.

The Tees valley economy has been growing for some years, but it has certainly faced difficulties. We must now focus on what is great about the area—what we can sell and what we can talk about, and how we can promote the economy to those who might wish to invest in it—but also on how we can gain the maximum benefit, and unlock the potential that exists. There is some good news. In February, Lord Heseltine and I attended PD Ports’ launch of its new £35 million redevelopment and expansion. In March, Cavitech opened its new office. Nifco, a company in my constituency, has expanded into two new facilities over the past four years. On Friday I opened the new offices of Odyssey Systems in Stockton, which means the provision of IT services, the creation of jobs, and investment in the Tees valley. There is, in fact, a great deal of good news, but there are also those challenges, which still need to be addressed.

Lord Heseltine’s report is an important part of the process. It is an important step in the journey towards both identifying opportunities and addressing them when we are able to do so. It is an independent report: although it was commissioned by the Government, it does not set out the Government’s position any more than it sets out the position of the local authorities, businesses and universities that contributed to its production. It contains a wide range of recommendations, many of which have been broadly welcomed, although there is, of course, debate about how some of the challenges that it identifies should be addressed. That debate is welcome.

The hon. Gentleman made clear his views about what night be done in future. I shall be happy to work with anyone who has the best interests of Teesside and the Tees valley at heart, to consider any specific recommendations and work with the Government to establish whether they should be delivered, and, if we conclude that they should, to ensure that that happens whenever possible.

Teesside has a complex local economy. We have experienced the great shock of the loss of SSI in Redcar and its impact on the economy—not just the impact on those who were directly employed, but the impact on those in the supply chain. We are left with a site which is in itself challenging, given the need for remediation, investment and support to bring employment back to the area, but which is also part of a bigger picture along the banks of the Tees, speaking not just to a glorious industrial past but to the incredible potential for a brighter future. That is why I very much welcome and support the establishment of the mayoral development corporation in its current shadow form. It is populated by some well-informed and capable business people and the leaders of our local authorities. It is bringing together many of those who want to make a contribution to the future of the Tees valley economy, and it has a remit that stretches further than the SSI site, which looks down the banks of the Tees, to what can and needs to be done.

The hon. Gentleman is right that a great deal needs to be done. We are still in the early stages of dealing with the official receiver, who has a job to do. Government and the board and the GovCo that sits under the Department for Business, Innovation and Skills are talking to the official receiver about the best way through the process, to give us the best chance of making a success of the site that is left at the end of those discussions and, at the end of that, when it is handed over fully to Government. We are in talks with local businesses about identifying opportunities, and work needs to be done to understand the needs of that site and to understand the clean-up, the infrastructure potential and the opportunities to attract investment. That stands at the heart of the issue we are here to discuss today: the investment we want to attract to Teesside.

In Lord Heseltine’s work in the Tees valley in recent months, he has worked with UK Trade & Investment to identify where Government can assist in bringing investment to the area, and to identify those potential investments that will help to drive regeneration and create jobs. I welcome that work and I know he is looking to support it where he can, and I have had discussions with a number of potential international company investors who could bring jobs and work to the Tees valley. I know that work will need to continue if we are to ensure employment is brought to that former site and into the broader area over which the development corporation will operate. This will go hand in hand with the Government’s programme of devolution.

Tees valley is at the forefront of the devolution agenda and will be one of the first areas to have elected a new metro-mayor, in May next year. It has agreed a deal with Government, but I want it to go further—to agree more, to take more control and to take more powers from central Government so they can be exercised closer to the people who are affected by the decisions the new mayor would be able to make for that local economy. None the less, it is on that journey and those talks are under way.

The hon. Gentleman spoke of areas of industry that he felt needed more attention than they have perhaps been given in the past. I can assure him I have had numerous meetings with Sirius to talk about the mining potential not just from its investment in north Yorkshire, but also through into the Tees valley, and the difference that can make to our economy locally and the jobs it can create.

The hon. Gentleman talked about logistics, which offer a huge opportunity for the Tees valley. The port is a great asset, is one of the largest and most successful in terms of tonnage in this country, and it is already making a significant contribution, but I have no doubt that it can do more and should be supported to do so.

[Mr Iain Wright]

The Minister mentions industries and sectors and I want to mention two more in which we have comparative advantage: the processing chemicals industries, with NEPIC leading; and the great potential in the offshore wind supply chain cluster. What tangible steps will the Minister and Government take to ensure we can accentuate the positive and fulfil the potential of these industrial sectors?

[James Wharton]

The hon. Gentleman makes an important point. Teesside is of course internationally respected for the chemical processing industry; not just NEPIC but CPI and the work done in that sector provide good jobs, long-term investment and real opportunity to attract more. We always want to continue to support that. As part of the process of looking for international investors, we are looking to support those organisations to see where more investment can be brought in. The chemicals and processing industry will form part of the story going forward of the sites that the MDC will become responsible for and the work it is doing.

[Tom Blenkinsop]

The Minister mentions CPI and its importance to the local and national economy. Can he comment on my question about MPI and the steel catapult: do the Government intend to go forward with that? In our area we have the capability of R and D closely associated with the former blast furnace. That could provide the inward investment necessary to get that industry going again in our locality.

[James Wharton]

I will come on to talk about that. I just want to address the second part of the question from the hon. Member for Hartlepool (Mr Wright). He asked about offshore wind, and significant approvals have been given for offshore wind not far off the coast of Teesside. This will present a real opportunity to bring investment to our area. I know that live discussions are taking place with companies in the Tees valley about how they can be part of that supply chain and bring jobs and investment to our area through being part of the processes of delivering that potential driver of our economy. I have had discussions with some of those local companies, and I am supporting them as far as I can. Some of the discussions are of course commercially sensitive, but I also want to extend a direct offer, particularly to the hon. Gentleman, given his constituency’s interest in the matter. If there is something specific that a company in his constituency would like to see done, if there is a meeting that it would like the Government to attend, or if there is any assistance that I can give, he need only call on me to arrange it. If the Government can support or help, I will join him and do everything I reasonably can to persuade people to take the right decisions.

The hon. Member for Middlesbrough South and East Cleveland asked about the Materials Processing Institute. There is a bid from that organisation for a catapult similar to the one we have already mentioned, but my understanding is that that bid is not sufficiently strong at this time. However, despite that having been the initial decision and recommendation by officials, it is my intention to ask the Secretary of State for Business, Innovation and Skills to look personally at that and to ask officials whether improvements or changes could be made that would enable that to be delivered.

The Government have to take these decisions on a sound basis, and they have to assess things fairly, wherever in the country they might be, but if there is potential and opportunity, it is important that we ensure that that has been explored to the fullest degree. If there is something that can deliver benefits and improvements to our area and bring investment and jobs to our communities, I want to see it explored and every avenue considered—certainly before any negative decision is made—in the hope that a positive decision might be forthcoming. I am happy to give a commitment to ask for that work to be undertaken, and I will do so following the debate this evening. I do not know what the outcome will be, but whatever happens with the individual projects of which we have spoken and with the individual recommendations in Lord Heseltine’s report on the economy of the Tees valley, we have great potential and I am confident that we have a great future.

The Evening Gazette newspaper is running an Invest in Teesside campaign, recognising that the more we talk up our area and highlight the opportunities that exist there, the more we can jointly achieve and drive forward for the benefit of its economy. I look forward to working with hon. Members across the House—indeed, I have little choice other than to make that offer in relation to the Tees valley. I look forward to working with the Evening Gazette, with local businesses, with the local enterprise partnership, with the new combined authority and with the mayor—when they are elected next year with the exciting range of powers that they will have, whoever they might be—to drive forward investment in Teesside.

Our area is very well placed to profit from many of the exciting things that are happening in the world and from the great skills of the people who live in our communities. We have a duty to work together to deliver on that, but that does not mean that the Government will acquiesce in every request, or that we will do everything that is asked of us immediately. It means that we will properly assess and consider the situation, and think long and hard about the right approach to take. We will build a broad consensus on what can be done for the good of the economy of our area. That work is well under way, as we can see in the mayoral development corporation and in the devolution deal that has been agreed. I hope we can also see that in the tone of this evening’s debate.

[Tom Blenkinsop]

I repeat a question I asked in my speech about an investigation into the remaining assets on site at SSI, including the continuous casting and basic oxygen steelmaking equipment. I also asked whether there would be an investigation into the blast furnace itself. This is important because it would enable us to establish the degree to which the assets might be redeemable or saleable. It would also give the official receiver an instruction about how those assets could be used in future.

[James Wharton]

Given the specific nature of the hon. Gentleman’s question, I will seek to address it. The site is in the hands of the official receiver, and the Government are talking to them. We are working to ensure that the site is handed over in the best possible circumstances that can be achieved, given its sad recent history, and when that happens we will of course seek to maximise the use of all the site’s assets and the land, including any assets that remain on it. That will primarily be channelled through the development corporation, which will drive that process. It is in all our interests that that proper work is done in the appropriate way and at the appropriate time.

I am absolutely confident that the Tees valley has a bright future ahead of it. We have the most incredible people, businesses and opportunities. Given the things those people and businesses are doing and the way in which the leadership in the private and public sectors is pulling together in the interests of the broader local economy, these could be exciting times. We have faced a difficult year, but I hope that by working together we can ensure a brighter future for all our constituents.

Question put and agreed to.