Teesworks: Accountability and Scrutiny

Simon Clarke Excerpts

Wednesday 7th June 2023 Commons Chamber

[Lisa Nandy (Wigan) (Lab)]

I beg to move,

That an humble Address be presented to His Majesty, that he will be graciously pleased to give directions that the Secretary of State for Levelling Up, Housing and Communities provide all papers, advice and correspondence involving Ministers, senior officials and special advisers, including submissions and electronic communications, relating to the decision by the Secretary of State for Levelling Up, Housing and Communities and the Prime Minister to commission a review into the Tees Valley Combined Authority’s oversight of the South Tees Development Corporation and the Teesworks joint venture, including papers relating to the decision that this review should not be led by the National Audit Office.

Let me start by saying that I am really disappointed that it has come to this. Devolution was meant to empower people in every part of Britain to “take charge of their own destiny”. This Government were elected on exactly that promise and exactly those words, and here we are standing in the House of Commons trying to persuade the Government to come clean about why they have chosen to block an independent inquiry that would help us get to the bottom of the use of public assets and funds on Teesside in the wake of some of the most serious allegations I have ever seen in my time in Parliament.

For nine years, since the Government accepted Greater Manchester’s case for greater devolution, I and many others on all sides of this House have been pressing the Government to respect the right of people in every part of Britain to know how their assets and money are being used and to close the gap that currently exists by inviting people back into the conversation, and by building a system of local and national scrutiny and accountability that is fit for purpose, backed by a Government who are willing to open the books.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I think the key point in this debate was aired in what the hon. Lady said a moment ago, when she said that some of the most serious allegations she has ever heard aired in this House have been made. Will she stand with those allegations? At the moment, the hon. Member for Middlesbrough (Andy McDonald) has alleged “industrial-scale corruption”. The hon. Lady has been very careful in all her public utterances, as indeed has he outside this Chamber, to avoid repeating that claim. Does she agree with him, or does she not?

[Lisa Nandy]

The problem, as the right hon. Member well knows, is that Members of this House and, more importantly, people on Teesside simply do not know the answer to that question. Serious allegations have been raised not just by Members on the Opposition Benches, but by respected national journalists who have conducted meticulous investigations, and the point of holding an independent inquiry is that these serious allegations and the questions that have been raised need to be answered.

At every juncture and at every level of Government, when it comes to fair and reasonable questions about the South Tees development corporation, accountability, scrutiny and democratic control have broken down. It is only because of my hon. Friend the Member for Middlesbrough (Andy McDonald) and some tenacious, meticulous journalists, such as Jennifer Williams of the Financial Times, that we even know the bare facts of what has unfolded. People on Teesside should not have to rely on a national newspaper to discover what has been done with their assets, their community and their civic inheritance.

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[Lisa Nandy]

The hon. Gentleman might want to take that up with his colleague, the Mayor in question, who has referred himself and asked for a National Audit Office investigation. I do not know why Members on the Government Benches think his judgment is so poor that he should not have done that, but we believe he is absolutely right to have done that and we stand firmly behind him in asking for a proper investigation.

Incredibly, even by the standards of this shambolic Government, the terms of reference and the names of the panel members for this inquiry were sent to me seven minutes before this debate began. That genuinely is no way to conduct government. I assume that is where the Secretary of State is right now: sitting behind his desk knocking out terms of reference on the back of a fag packet. Clearly, I have not had much time, Madam Deputy Speaker, to read them, but on first sight what he has sent me looks like a system-focused review, rather than an investigation into what has happened. Ministers have still failed to give us an explanation as to why the National Audit Office cannot conduct its own investigation, a body that has capacity, resources and expertise, and is widely respected across the political spectrum. Instead, we are having a bizarre argument about the remit of a respected organisation that is patently able to conduct the investigation required. Can the Minister not see why the public would rightly raise an eyebrow?

It is completely unacceptable for the Government to hide from proper scrutiny. I remember a time when the Secretary of State could not wait to get to his place in this House. Nowadays, we barely see him. Where is he today? There is no clear justification for not ordering a comprehensive independent investigation from the National Audit Office. It cannot be right that hundreds of millions of pounds of public money have been handed over to a company that is now 90% in private ownership, and it appears that the Department has handed over that money and then simply walked away. This is a matter that has profound implications for people on Teesside, who rightly expect this site, through which they contributed so much to our country over so many years, to continue to benefit them and their community for years to come.

There is much we do not know about what has happened—that is the reason we need an independent investigation—but here is what we do know. When the 140-year-old steel industry on Teesside collapsed in 2015, thousands of jobs were lost along with a key political, social and economic asset for the communities of the north-east of England. In 2017, the South Tees Development Corporation began to collate over 4,500 acres of industrial land, including the site of the former steelworks, off the back of a Conservative Government promising hundreds of millions of pounds in taxpayer funding for the project, something we had championed and welcomed. In the face of losing that key economic and social asset, it is absolutely right that all options were considered about how to build a wide programme of regeneration around the site and that the combined authority was given the autonomy to determine the strategy to regenerate the site. Even where we have strong disagreements about policy, strategy and direction, that point is not, and will never be, in dispute.

However, in May, an extensive report by the Financial Times detailed how the Government had spent hundreds of millions of pounds of taxpayers’ money to support a project in which two private developers now hold a 90% stake. The deal never went through a public tender process. There was no consultation. There was no announcement. It also reports that those developers have secured £45 million already in dividends, despite failing apparently to invest a single penny of their own money in the project. In return for their role in securing the site, the South Tees Development Corporation awarded companies owned by the developers a 50% stake in the joint venture that would operate the project—a share transfer that also took place without any public tender. The new operating company, eventually named Teesworks Ltd, controlled the entire 4,500-acre site and its assets, including 500,000 tonnes of scrap metal. It was also given the option to buy any parcel of land on the site at market rate.

The announcement that freeport status was being awarded led the South Tees Development Corporation to fundamentally change its business model, according to documents obtained under freedom of information laws and published by Private Eye. Following that, in a complex two-stage process, the two developers ended up with a 90% stake in the project, also without ever going through public bidding. According to emails received again under freedom of information from the Department for Business, Energy and Industrial Strategy—the Department with responsibility for the project in Government—one official only became aware of the deal via the media in January 2022 and expressed “concern” and “surprise”. The Financial Times reports that an official at the Department’s office in the north-east responded that he had received “verbal” assurance locally that the deal was value for money. Can the Minister see why such serious concerns have been raised on both sides of the House, including by respected Members such as the Chairs of the Select Committees?

It is at this point that we called for the National Audit Office to investigate this matter in its entirety, to restore confidence for investors and the public in what was an increasingly murky affair. Indeed, the former chief executive of the Audit Commission, a public body that examined local government entities before it was disbanded by the Conservative Government, says the evidence

“calls for a full and thorough investigation by the National Audit Office and the Public Accounts Committee, as the situation now appears far remote from the business case originally agreed with Government”.

[Mr Simon Clarke]

It is important to be clear that he is himself a former Labour councillor. The point in this debate is that we are offering an independent inquiry. As we have heard, an inquiry is under way and the reasons the NAO is not the appropriate body were set out very clearly by the Secretary of State in his letter.

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[Mr Simon Clarke]

Will the Minister give way?

[Lee Rowley]

I will give way to my right hon. Friend, who actually knows what he is talking about on this issue.

[Mr Clarke]

My hon. Friend is right to highlight the fact that it is Labour’s own regime that we are applying, but can we also get on record the fact that Department for Levelling Up, Housing and Communities officials do not believe that the threshold for a best value investigation has been met in this case? That is to say, the civil service does not believe that such an investigation is merited. We are doing it to dispel the allegations and smears from the Opposition.

[Lee Rowley]

I am grateful to my right hon. Friend for clarifying that important point, particularly in respect of the Department.

It is important, given the inferences by the Opposition, to highlight what has actually been put in place. The specific terms of reference and the announcement that was made long before today are clear about the intention of the Government to clarify this matter. The review will be led by Angie Ridgwell, who is currently chief executive of Lancashire County Council and has over 30 years of experience across local government, central Government and the private sector. She will be supported by Quentin Baker, a qualified solicitor and director of law and governance at Hertfordshire County Council, and by Richard Paver, who brings significant financial experience and knowledge of combined authorities from his previous role as the first treasurer of the Greater Manchester Combined Authority. They bring significant experience of senior public leadership, specific financial and legal expertise, and confidence of detailed scrutiny. All Members of the House should support their important work so that they can proceed quickly and free from partisan comments.

There is still time for Labour Members to articulate why they are suddenly so keen on NAO-led inquiries in local government when they have not been keen on them before. When there are challenges or potential questions, there is a long-standing precedent of someone other than the NAO reviewing and assessing those concerns. Why should Labour Members know this? Because, as I said, they endorsed this process in the Local Government Act 1999. They confirmed that the Secretary of State could determine the approach where there were questions about local government bodies, and as far as I am aware, they have not critiqued the use of those powers when they have been used multiple times before, including in the last few weeks. Perhaps Labour Members could tell me which parts of the Local Government Act 1999—their Act, their decisions, their choices—they have randomly, abruptly and arbitrarily decided, simply for the purposes of an Opposition day debate, that they no longer wish the Government to apply.

If Labour Members are deciding that they no longer want to use the established regime, perhaps they could tell me which of the established reviews, inquiries, panels or commissioners they wish to switch into their newly preferred process. I do not remember this being requested when the Secretary of State intervened following an external review of Labour-led Sandwell Council in 2021, following allegations of serious misconduct by members and officers that painted a deeply troubling picture of mismanagement. Should we move that to an NAO review?

I do not remember Labour suggesting this approach when the then Secretary of State determined to appoint experts to carry out an inspection at Labour-led Liverpool City Council in 2020 as a result of arrests made on suspicion of fraud, bribery, corruption and misconduct in public office. [Interruption.] There is a lot of chuntering on the Opposition Benches, but are they seeking to bring the NAO into that? The hon. Member for Wigan talks about hand-picking, but the Labour party appointed its own inquiry into the wrongdoing. That inquiry was led by a former Labour MP, supported by a peer newly ennobled by the right hon. and learned Member for Holborn and St Pancras (Keir Starmer). And I cannot remember the Labour party requesting an NAO review of Labour-led Croydon Council after a number of serious concerns about the council’s governance and risk management were outlined in a public interest report by external auditors in 2020.

The cold, hard facts are these: the Mayor of Tees Valley has had much success over the past half a decade in bringing jobs, growth and economic development to an area that is now on the up and thriving again, thanks to its Conservative leadership and its engaged and constructive Conservative Members of Parliament. On this specific issue, the Government agreed to a request from the Mayor for a review, which is being set up in a similar way to other reviews. Those who will be involved have been appointed as others have been appointed in the past. The terms of reference have been published using a similar process and, if there is an issue, we will deal with it in the normal way. The experts who are giving of their time and expertise should now be given the time to get on with the job, in the normal way, and to present their conclusions when they are ready.

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[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

I am proud to speak today in support of Teesworks and our Tees Valley Mayor, Ben Houchen, as well as the process that the Government have put in place, of which more in a moment.

Teesside is being transformed, from our airport, saved after Labour let it drift to the brink of closure, to our town centres of Middlesbrough, Guisborough and Loftus benefiting from tens of millions of pounds of direct investment. We have the new mayoral development corporation to turbocharge the regeneration of Hartlepool. We have the Treasury’s northern campus in Darlington and we have the UK’s largest freeport on the Tees. Overshadowing, and indeed uniting, all of this is Teesworks, the largest brown-field remediation project in the country, and the beating heart of our industrial future. The site of the former Redcar steelworks was costing the taxpayer £1 a second as long as it stood idle. It is right that the Government and our Mayor have brought it back to life. Government investment of £246 million has been put in, but as we know, the cost of total remediation is some £482. 6 million, as independently assessed. That is the reason for the joint venture established with the private sector.

It is important to clarify exactly what has happened. The first point is that the site has never been a public asset. The private sector Teeswork partners brokered a deal to take back control of the land from the Thai banks. It brought the deal and the land to the South Tees Development Corporation, not the other way round. That is why the Opposition’s talk of no public tendering process having taken place is such a red herring.

The public-private partnership was agreed, moreover, by the TVCA cabinet, the STDC board, the Department for Business and the Treasury. Bob Cook, the Labour leader of Stockton council, voted in favour. The hon. Member for Middlesbrough (Andy McDonald) stated on the BBC’s “Sunday Politics” that he understood the reasons for a 50:50 split. A lot of revisionism is going on now.

[Alex Cunningham]

I have spoken to the leader of Stockton borough council and he has had no part in any decision relating to the transfer of those assets from the public to the private sector. He is a member of the combined authority, not a member of the STDC board. It is important that the right hon. Member recognises that.

[Mr Clarke]

The hon. Gentleman is completely wrong. Mr Cook voted for this structure and he cannot change that vote.

There is no credible suggestion that wrongdoing has occurred. Teesworks is double audited, first by Mazars and then by Azets, two separate auditors. There is then an audit committee for Teesworks. Here we come to the truly jaw-dropping fact that that audit committee is chaired by none other than Councillor Matthew Storey, the leader of Middlesbrough Council’s Labour group and the head of the parliamentary office of the hon. Member for Middlesbrough. He chairs that audit committee —what concerns has he raised? He is part of the audit structure that is now being cast into doubt.

It is noteworthy that in the speech by the shadow Secretary of State we heard nothing that amounted to a substantive allegation. We heard a series of inferences and questions that amount to nothing more than the same tittle-tattle that has characterised this process, with the exception of the allegation of industrial-scale corruption that has been made but never substantiated, because the hon. Member for Middlesbrough knows that he would be sued for libel if he repeated it.

[Clive Efford]

On a point of order, Mr Deputy Speaker. Could you confirm the rules regarding declarations of interest? If a Member has a declaration of interest on the register, should they not refer to it when they stand up and take part in debates in this House?

[Mr Deputy Speaker (Mr Nigel Evans)]

It is up to each individual Member to determine whether their declaration of interest should be made during a debate. Clearly, processes are available should a Member not do so and other Members believe that they should have.

[Mr Clarke]

Thank you, Mr Deputy Speaker. I can confirm that no such interest exists, despite desperate attempts to insinuate to the contrary.

Who speaks for the Labour party in this debate? We have the shadow Secretary of State, the hon. Member for Wigan (Lisa Nandy), clear that she is making no allegations, but we had the hon. Member for Middlesbrough making very pointed, very serious allegations of criminal wrongdoing. There is a yawning gulf between the two.

The next key point I wish to raise is about the process that the Government have adopted to set up the independent investigation that has been announced this afternoon. As the Minister set out very clearly at the Dispatch Box, that is the legal structure for investigating when a best-value investigation is triggered. The irony here, of course, is that the civil service does not believe that that threshold has been met and has advised Ministers to that effect. [Interruption.] I have spoken to Ministers about this point and, as Ministers have made clear, that is the case. It is not Ministers asserting that this threshold has not been met: the civil service does not believe that that standard has been met.

As both the former Secretary of State and the former Minister of State for Local Government, I can say with total assurance that this process is normal and straightforward. In his letter to Ben Houchen a fortnight ago, the Secretary of State set out why one would not want to seek to extend the remit of the NAO in the way that is being proposed. We have the long-standing, Labour-instigated system of commissioning these independent inquiries under the Local Government Act 1999. The key point here, of course, is that it is not just public confidence but investor confidence that is being undermined by the Labour party. It is doubly ironic, therefore, that we have never seen Labour calling for a similar process anywhere else— as we heard from the Minister, not even in Labour-run Liverpool when actual criminal wrongdoing had taken place. To add insult to injury, was the Labour party’s own investigation into its people’s conduct in Liverpool independently led? No: it was investigated by one of Labour’s own former MPs and a former council leader.

So we return to the purpose of this campaign—this vendetta. It is an attempt to systematically smear Ben Houchen, destroy Teesworks and make Teesside poorer. We have seen this movie before: earlier this year, not one but two independent reviews led by some of the most eminent scientists in the country thoroughly rebutted the idea that marine deaths were anything to do with the dredging at Teesworks, but just moments ago, we heard the hon. Member for Sunderland Central (Julie Elliott) again dredging up those allegations—you will pardon the pun, Mr Deputy Speaker—knowing full well that they are baseless. Labour will seize on any excuse and take any chance to try to talk down my region. I am sick to death of it, and so are the people of Teesside, because it is not in the public interest: it is in the Labour party’s interest. That is why Labour pursues these wrecking campaigns.

Teesside has been rescued from a cycle of secular decline with some bold leadership and private sector investment, and the public back it. That is why, in 2021, Ben Houchen received 73% of the vote to carry on with his mission. I ask shadow Front Benchers to confirm whether they will respect the impartiality of the senior officials from the local government family who have now been tasked with conducting this investigation, and I ask the hon. Member for Middlesbrough to confirm that in his speech, too. If they do not respect the integrity and impartiality of those officials, why do they not do so? What is wrong with the investigation that has been instigated this afternoon?

I directly challenge the hon. Member for Middlesbrough on this point, too—if it is established by that inquiry that his allegations of “industrial-scale corruption” are baseless, as I firmly believe them to be, will he come to this House and withdraw the allegations that he has made here? If he does not, it will amount to one of the most flagrant abuses of parliamentary privilege that I can conceive of, and I believe that he should be ordered to this House by Mr Speaker in the event that he declines to do so.

This is a cynical, shameless, seedy attempt to talk down Teesside, to imply wrongdoing and to damage the interests of the very deprived communities that I am proud to represent. I look forward to the report of the independent inquiry. I will be voting against Labour’s motion today. It is time to draw a line in the sand against this game playing by the Labour party. Labour Members have done it before—they have done it on the crabs, they have done it with the Teesside police and crime commissioner, and they have done it to the former Mayor of Middlesbrough. They know full well what they are doing. They abuse this place to make allegations, rely on others to amplify them outside and then feed off the clouds of suspicion and miasma of doubt that they create. All they have to offer is slander, negativity and decline—all the hallmarks of their toxic legacy on Teesside. Enough.

[Several hon. Members rose—]

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[Alex Cunningham (Stockton North) (Lab)]

Secrecy is a disease that is threatening a once-in-a-lifetime opportunity for the people of Teesside—an opportunity of thousands of high-quality jobs and a share of the dividend from hundreds of millions of pounds of taxpayers’ money. It is secrecy that drives the suspicions, questions and doubts about how the Tory Tees Valley Mayor, Ministers and their cronies do business not just at the Teesworks site, but at our publicly owned Teesside International airport, which continues to lose millions of pounds and has twice been bailed out to the tune of £10 million using taxpayers’ money.

Tomorrow will be the 13th anniversary of my maiden speech in this House. I was happy that day to tell the world how proud I was to be an adopted Teessider, and that remains very much the case today. We have a wealth of resources, from our people to our amazing cultural offer. We have our beautiful countryside, our coast and our amazing industrial base, which has created so much of our country’s wealth, but we deserve so much more.

My hon. Friend the Member for Middlesbrough (Andy McDonald) and I have been consistent in demanding openness and comprehensive scrutiny of decisions and the use of hundreds of millions of pounds of taxpayers’ money by the Tees Mayor and his close-knit band of supporters and partners. The fact that several national newspapers, led by Private Eye magazine, have made front-page news of how business is done on the mayoral projects on Teesside warrants a completely independent investigation not by a group appointed and favoured by the Secretary of State, but by the National Audit Office, which has confirmed that it could do one if given the green light by Ministers. The Tees Mayor is up for it; why are the Government not?

Similarly, I hope to see Ministers withdraw their opposition to the inquiry proposed by the Select Committee on Business and Trade, which would have the power to scrutinise in a way so far denied by all those concerned. It could also summon people here to give evidence. I have had all manner of concerns over the years as the Mayor has been aided and abetted by Ministers as senior as the Prime Minister himself, hiding not just the decisions made about the airport and the Teesworks site, but how those decisions were reached, who was involved and who was excluded.

I do not know whether you have heard of the Darwin’s bark spider, Mr Deputy Speaker. It weaves the largest and most dense webs in the world. They can be as large as 28,000 sq cm, but that spider has nothing on the Tees Mayor when it comes to creating dense webs of secrecy, with organisations, companies and even charities created in an attempt to dodge full and proper scrutiny of how he and his mates do business and spend public money on what is referred to as the UK’s biggest levelling-up project.

As has been alluded to, things came to a head last year when a record posted with Companies House showed that the once public asset that is the Teesworks site is now 90% owned by a small group of local businessmen, the shares having been transferred to them by the Tees Mayor and the board of the South Tees Development Corporation, but we still do not know why such a decision was taken and who exactly was party to it. For certain, it was not taken by the Tees Valley Combined Authority, made up of the elected Mayor and the elected leaders of the five local authorities. They were not even consulted, as far as I know.

The Mayor thinks he had to do business with two men in particular, Chris Musgrave and Martin Corney, because they owned what can only be described as a ransom strip of land on the Teesworks site and they would take on the liability of the hundreds of millions still needed to remediate the site. I have an issue with both his reasons, or perhaps “excuses” is a better word. The Tees Mayor took on the might of the Thai banks, which owned most of the site after SSI walked out on Teesside and ended over 100 years of steel production. He decided he would go as far as a compulsory purchase order, and to his credit, he acquired the site for the public. Why, then, did he not take similar action against the two local businessmen who were holding the public to ransom? He will not answer that question, but perhaps the Minister can help.

The Minister may also be able to help over the costs of the remediation of the site. The Government get no accolades for allowing the steel industry to die on Teesside, but I do give them credit for agreeing to fund the remediation of the site so it could be fully developed. During his short-lived tenure as the Government investment tsar for the Tees Valley, Lord Michael Heseltine—I am quoting him directly—said:

“The money to clean up the site will be what it costs. No-one knows what the condition of the site is and although there have been estimates, they are estimates based on guess work. So it is much better to make it clear”—

and I agree that it is much better to make it clear that—

“central government will pay the clean-up costs and underwrite them whatever the bill comes to.”

Successive promises were made by Government Minsters that the Treasury would fund that work, so there was never any need to find private capital.

We have heard the Tees Mayor claim that he may have been naive in some of his dealings, but never did anything illegal. That may well be the case, but that naivety has cost our communities on Teesside the chance to share the dividends from the site and the public money invested in it. Sadly, however, we go back to the word “secrecy”. Were other companies and organisations considered for partnering with the Teesworks site? Were other offers made for the land? I have heard of one, and that was increased. What were the criteria and business case for selecting partners? It is all very much a secret, and none of the decision-making bodies is subject to the Freedom of Information Act.

I do not want to repeat all the accusations laid at the doors of the Mayor and his friends by the FT, The Times, the Daily Mirror and The Guardian, but I do hope we can get a fully independent investigation by the NAO into the wholesale transfer of assets, including the tens of millions of pounds of on-site scrap, to the private sector. That includes the Private Eye claim—a claim yet to be denied by the Mayor or anyone else—that Orion Kotrri, Mr Musgrave’s son-in-law, has been running the scrap operation. The South Tees Development Corporation has refused to say why he was selected for the role, who employs him or how he is paid. It is no secret that the business is being kept in the family.

The media and others are right that there are critical questions over how a bunch of local businessmen could already have extracted around £50 million in cash and assets from Britain’s biggest levelling-up project before a single business has begun operating on the site, and apparently without investing themselves. Perhaps all those concerned with the scrap should meet the challenge from The Northern Echo, which has said:

“There must be a ledger showing how much scrap has been sold which can put the facts in the open and enable people to judge whether there is any truth in the rumour”—

that is, the rumour of poor management.

[Mr Simon Clarke]

Will the hon. Gentleman give way?

[Alex Cunningham]

I will not.

Is the Minister aware of any such ledger of what are public assets, of where they have gone, and of what cost and value? Private Eye has established that decisions have been pushed through a board of the South Tees Development Corporation dominated by Houchen placemen and women in unrecorded discussions. Surely Ministers will recognise that they have some cleaning up to do. All we are seeking is for the truth to come to light. If the claims are not true, why is the Mayor not coming forward to publish all the relevant documents? Why is he not challenging, through the courts if necessary, all these media claims that he simply dismisses?

I would love to see the promises made by the Tees Mayor come to fruition. I want our communities to benefit from the jobs, but from much more than that too. Just as London boroughs benefit from the massive council tax base, those on Teesside could benefit from the dividends from Teesworks, and goodness knows we need it. Our community in the Tees Valley faces soaring levels of hardship compared with the national average. Research released on Monday by the End Child Poverty coalition showed that, in Stockton-on-Tees alone, over 40,000 children are living below the poverty line.

The picture is the same across all of the constituencies of Members from Teesside represented in the Chamber, but time and again we have seen the Mayor and his Government fail our area. They failed to do anything to retain steelmaking on Teesside. Despite claims of help on the way, they allowed our historic and world-leading Cleveland Bridge and Engineering Company to go to the wall, with the loss of hundreds of highly skilled jobs. When the Sirius mine got into cash-flow difficulties, the Mayor promised help, but his Government brokered a deal for a multinational company to take over, leaving thousands of local investors with very little. Many of them were former steelworkers who had invested their redundancy pay in the venture. Who knows what could have been done if business had been handled in a different way on Teesside, with public benefit being the focus.

We need assets on Teesside. We need investment. We need to know what is going on with people’s existing assets and how they are being disposed of. If there are huge profits to be made from Teesworks—the scrap alone is said to be worth £100 million—surely they should be going into our communities for development and quality services and not almost exclusively into the pockets of private companies. We need answers. We need openness and transparency. We need to see an end to this secrecy.

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[Ian Lavery (Wansbeck) (Lab)]

I start my brief contribution by congratulating my hon. Friend the Member for Middlesbrough (Andy McDonald) on his forensic representation of this murky saga at Teesworks. The abuse and attacks will not deter him from unearthing the answers, as we can see from his fantastic speech. People need to back off and treat this issue extremely seriously. I give thanks and credit to Private Eye and the Financial Times for their fantastic journalism.

[Mr Simon Clarke]

Will the hon. Gentleman give way?

[Ian Lavery]

I will give way if the right hon. Gentleman says whether he or his party will seek recompense from Private Eye, the Financial Times and, perhaps, The Northern Echo for libel.

[Mr Clarke]

It would be helpful if the hon. Gentleman clarified that every single person cited in that Financial Times report, on which so much credence is being placed, is a Labour politician.

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[Ashley Dalton (West Lancashire) (Lab)]

In autumn 2021, the Secretary of State for Levelling Up, Housing and Communities, on a visit to Teesside, said:

“If you want to see what levelling up looks like, come to Teesside.”

So let us have a look. Hundreds of millions of pounds of taxpayers’ money has been invested to bring forward local regeneration and jobs creation. The Tees Valley Mayor says that £2 billion of private sector investment has been leveraged and that almost 3,000 jobs have been created. What we do not yet know is how the joint venture partners in Teesworks were selected, why they were selected, and how or if any other potential joint venture partners had the chance to express an interest in being selected.

What outputs projects may have delivered is not the subject of this debate. What matters here is whether this is value for money, who is benefiting and how. It seems to have gone quite well for the joint venture partners. In the space of a few years, they have gone from having a 50% stake in the company to having a 90% stake. According to the Financial Times, they have also received £45 million in dividends and, as far as we can tell, they have not had to invest any of their own money in the project yet. The initial share transfer of 50% took place without any public tender process; the decision to transfer a further 40% stake also took place without any public tender process.

None of that is sure-fire evidence of anything untoward having happened. However, although we cannot demonstrate that anything untoward has taken place, there is inadequate transparency and accountability to give the people of Teesside, and taxpayers across the country, any confidence whatever that their money and their assets have not been inappropriately or unfairly spent.

I spent 25 years as an officer in local government and it was impossible to buy a ream of paper without a transparently awarded procurement framework, never mind appoint regeneration partners and transfer public assets worth millions of pounds. In my personal experience, the procurement and partnership rules in local government, and the need for open and transparent public tender processes and procedures, often draw groans of frustration from officers. However, it is also my personal experience that local government officers are acutely aware of the responsibility upon them not only to spend public money appropriately, but to be explicitly seen to do so.

Arguably, Teesside is the Government’s beacon of levelling up. South Tees Development Corporation was the first ever mayoral development corporation to be set up outside London. More recently, the Tees Valley Mayor has been entrusted with another new development corporation, in Hartlepool, and, despite opposition from Middlesbrough Council, a new development corporation in Middlesbrough. So can we take it that the Secretary of State has confidence in the ability of the Tees Valley Mayor to set up and work with mayoral development corporations?

[Mr Simon Clarke]

On that point—

[Hon. Members]

No.

[Ashley Dalton]

I will give way. Go on—I am intrigued.

[Mr Clarke]

I am grateful to the hon . Lady for giving way because it has been reported this afternoon that the Middlesbrough Labour party is pulling the rug from under the Middlesbrough Development Corporation, which was established just a few weeks ago. Can she explain why that is the case and why it is forgoing the £18 million of Government support that that would bring, as well as the private sector support it would unlock? That seems to be a profoundly retrograde step for my town.

[Ashley Dalton]

It seems that quite a few of us believe that we should be looking far more into a wide range of these development corporations.

--- Later in debate ---

[Alex Norris (Nottingham North) (Lab/Co-op)]

It is a pleasure to close for the Opposition in this debate.

Let me start by bringing us back to first principles. The Mayor of Teesside himself has requested a National Audit Office investigation into the Teesworks joint venture. That is backed by the Chairs of three parliamentary Select Committees. The Opposition, as hon. Members have heard, support it. The media support it. The only people who disagree with this are Ministers on the Treasury Bench and their Back Benchers. The purpose of the motion and the debate is to establish why the Government have taken the eccentric course of rejecting an NAO-led review. Is there a sound public policy reason or is it a partisan decision?

My colleagues have made very strong cases. My hon. Friend the Member for Sunderland Central (Julie Elliott) set out in significant detail the pain the north-east has felt over 30 years of austerity; I would have thought that Conservative Members would have reflected on that, but they did not. My hon. Friend the Member for Stockton North (Alex Cunningham) reflected on the region’s potential, which makes that pain doubly saddening. My hon. Friends the Members for Washington and Sunderland West (Mrs Hodgson), for West Lancashire (Ashley Dalton) and for Warwick and Leamington (Matt Western) raised a range of very serious questions that simply must be addressed by a review that everybody can have confidence in.

I associate myself with what my hon. Friend the Member for Wansbeck (Ian Lavery) said about journalism and the courage of those various journalists who have taken this issue on. Despite all the criticism they have had from the players involved, they have stood up, done their job and shone a light on the issue, and we are having this debate today in part because of that.

My hon. Friend the Member for Middlesbrough (Andy McDonald) set out an extraordinary, deep and detailed case, worth listening to by those colleagues who have sought to shout him down, both today and previously. He has shown incredible courage, knowing what is right for his constituents and doing what is right for his community when it would have been easier for him not to. There will have been days when he got out of bed, knowing the barrage that he was going to face, and it would have been easier not to, but he has too much courage to do that, and I salute that.

I turn to colleagues on the Government Benches. The hon. Member for Sedgefield (Paul Howell) said it was inconvenient that we were bringing this motion today. I understand that, but I gently say that it is for the Opposition to ask the questions and for the Government to answer them—they cannot ask the questions as well. The hon. Member for Hartlepool (Jill Mortimer) hit the nail on the head when she said that the Mayor has asked for this audit. It is not so unreasonable that we should ask for such an intervention when the Mayor himself has done so.

The hon. Member for Stockton South (Matt Vickers) asked, as did the Minister in his opening speech: why are we departing from established practice? This is the first time such a thing has happened. We have never had such an incident involving an elected Mayor or a mayoral development corporation. Of course whatever we do will be a new and novel approach, because we have never done it before. Falling back on false equivalence simply does not work.

I turn now to the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), who made a bombshell contribution to this debate when he made it clear that he was basing his decision today on the discussions he has had with civil servants and the advice they were able to give him as a Back Bencher—advice that he knows we have not had any access to. At the root of the motion is the point that we need to know the information that is clearly available to some but not to others.

[Mr Simon Clarke]

I am afraid the hon. Gentleman has misunderstood what I was saying. I was saying that Ministers have not been advised by the civil service that the threshold has been met. That is a matter of public record. It is in the letter the Secretary of State sent to Ben Houchen at the end of last month and it was repeated by my hon. Friend the Minister at the Dispatch Box during his opening remarks. Ministers have been advised by the civil service that no such threshold for a best-value investigation has been met. That is not our view; it is the civil service’s view.

[Alex Norris]

I chirped during the right hon. Gentleman’s earlier contribution to ask him how he knew. I took from that—if I am wrong, the record will show otherwise—that he had had those conversations. Frankly, I think that that muddle is at the root of the issue.

Of course, this issue cannot be decoupled from the Government’s supposed commitment to levelling up the country—a commitment on which, as has become increasingly clear over the past 18 months, the Government cannot and will not deliver. We have seen a levelling-up White Paper which talks more about a Medici-style renaissance that a real commitment to our communities; a bodged levelling-up fund that locked deprived areas out from getting the money that they need; and much-heralded levelling-up directors quietly canned even though they were supposed to champion the revitalisation of our nations and regions. What a waste. What a waste of the pent-up potential of our regions, towns and cities which is waiting to be unleashed if only the Government were serious about delivering on their promise. Once again from this Department, it is all press releases, no delivery.

Teesside was supposed to be the flagship, the proof of concept, which makes the concerns expressed today all the more crucial. If this is what levelling up is, who benefits from it? Who is it for? The questions keep mounting up, as colleagues have said. Reports in the media outline how millions of pounds of taxpayers’ money have supported a project in which two private developers now hold a 90% stake despite seemingly never having entered a competitive process, and how those developers have taken significant dividends, outsizing their investment in the project. People rightly wonder how that has happened, who sanctioned it, whether value for money has been delivered, whether these concerns are legitimate, and if so, why has it taken dogged reporting on the issue, and colleagues in this place, for them to come to light?

Those are crucial questions that require answers, but rather than call in the National Audit Office, as the Mayor himself asked for, the Secretary of State has chosen to set up his own review, set the terms of that review and appoint the panel himself. We are now in the ridiculous situation where a flagship Government project that is facing serious allegations of failures in accountability is subject to a review set up and appointed by the Government themselves, and we are told that that will give the public the reassurance that they need. How can the Secretary of State expect the public to have confidence in that process? It is no wonder he did not come today and stand up for it, and instead sent the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for North East Derbyshire (Lee Rowley), whom I hold in high regard, into an impossible situation.

Let us face it: the Government are on their way to court for a statutory review that they themselves set up, because they are doing anything they can to avoid being candid in it. Now, they ask us to trust them and put our confidence in a review that has not even those safeguards and powers, and they are surprised when we, the media and the public say that that is simply not good enough. We have waited for the answer today; it has not been forthcoming.

It is critical to public trust that the Government are transparent about the decision making that led to this process being adopted. The motion before us seeks to do just that by calling on the Government to release correspondence and communications pertaining to the decision not to order an independent NAO-led investigation and instead to commission their own review. For the sake of public confidence that all decisions have been made in good faith, and with the express intent to get the answers that the people of Teesside deserve, the Government should be open about how they reached their decision. That is all the more important because this does not relate to Teesside alone; it is the first project of its kind, with far-reaching implications for Mayors, combined authorities and development corporations. We need to know the truth now so that we can learn the lessons later.

The Government have had the chance today to establish a credible public policy reason why the Mayor’s own self-referral to the NAO, supported by everyone but the Government, was rejected. We did not hear any such reason from the Minister; we heard false equivalence about processes pertaining to different public bodies. Unless the Under-Secretary of State for Business and Trade, the hon. Member for Thirsk and Malton (Kevin Hollinrake) takes this opportunity to change course, we must use Parliament to compel the release of the information behind the decision. We must vote for the motion.