MP reacts to ‘bizarre’ Ben Houchen ‘outburst’ over Teesworks saga Teesside Live

Tees Valley Mayor Ben Houchen has branded Labour MP Andy McDonald a "liar and a coward" as the row over Teesworks rages on.

Appearing on BBC^[1] Radio 4's World at One, Mr Houchen challenged the Middlesbrough^[2] MP to repeat his allegations of "truly shocking, industrial-scale corruption" made in the Commons earlier this year. Mr Houchen claimed he would "never repeat" it without the protection of parliamentary privilege, labelling him a "liar."

Mr McDonald branded his statements as "bizarre" - alleging that he was "determined to deflect attention by his outlandish comments." This latest development of the Teesworks saga^[3] comes just one week after it was confirmed that ministers would be launching an investigation into the project following mounting pressure from MPs.

In April, Mr McDonald said the site acquired by the public body South Tees Developments Limited for £12m in 2019 subsequently received hundreds of millions of pounds of taxpayer investment, but "private developers exercised their option to purchase for a mere £1 an acre plus inflation, paying £96.79 in December 2022".

Mr Houchen told the BBC: "The reason for the investigation is because Andy McDonald^[5] lied and said that there was corruption. He has no evidence, he's produced no evidence, he didn't even give any examples or evidence within Parliament."

He said the site was "never a public asset," adding: "They had control of the site and they transferred 50% to us, as the public sector. There was no tender process because it was never owned by the public."

In response to this statement, a spokesperson for the South Tees Development Corporation, said: “The former steelworks site was privately owned by SSI. After the CPO in 2020, the site was bought by the Joint Venture Partners Teesworks Ltd and the STDC in a 50/50 split. The site was never wholly publicly-owned.”

'Bizarre'

In a statement responding to Mr Houchen's comment, Mr McDonald branded the mayor's appearance on Radio 4 as a "bizarre performance."

He said: "Instead of obsessing about me, we’d all be better served if the Tees Valley Mayor instead addressed the very serious and concerning issues that have been well documented, around the South Tees Development Corporations and the Teesworks Joint venture.

"I know Ben is determined to deflect attention by his outlandish comments, but whilst he wants to make this a personal issue, these substantive concerns are not going to go away. 'Dead cat' tactics won’t work.

"Trying to silence me will not mean this matter is resolved and, in any event, it is my job to voice the concerns of Teessiders and stand up for UK taxpayers. It’s their money and they are entitled to know how it has been spent.”

'There's a great deal to see here'

However, Mr McDonald declined to repeat his corruption allegation outside of Parliament when he followed Mr Houchen onto the World at One radio show. Instead, he said: "Well, this doesn't pass the smell test, any of it. There are so many elements to this that warrant very close scrutiny and investigation."

Interrupted and asked if he would repeat the comments outside of Parliament, Mr McDonald replied: "Well, I'm quite happy to sit down with Ben and go through my concerns with him."

Told that it was interesting he would not repeat the accusation when he does not have legal protection, Mr McDonald noted there will be an independent investigation which will "opine on these various elements".

Pressed further and asked if he made a mistake with the "corruption" allegation, Mr McDonald said: "I think it's absolutely right that these matters receive attention."

Asked if his language was wrong, the MP said: "I think it has gained attention for these very serious issues that have been raised by Private Eye and by the Financial Times and I think hitherto the Government has been quite happy to go along with the hard hats and promises approach of Ben Houchen and just say: 'Nothing to see here.'

"There's a great deal to see here."

Teesworks saga

This interview comes just one week after Levelling Up Secretary Michael Gove announced the review^[6] of the former Redcar steelworks site. Mr Gove will appoint a panel to carry out an "independent external assurance review."

Mr Houchen said he "welcomed the review" in a bid to show there is "no corruption, wrongdoing, or illegality" in the project. However, others hit back, with Mr McDonald saying that this could "never be viewed as independent" due to it being "set up by a Conservative Minister to look into the way a Conservative Mayor conducts his business."

This prompted a fresh batch of calls for the National Audit Office to carry out the inquiry, which stated that the government had "decided to make alternate arrangements" when news of Mr Gove's probe broke. This was despite the NAO being able to carry out an investigation if requested by a government minister.

Teesside Live contacted the Department for Levelling Up on Wednesday, which stated that there was no update on the selection of the "independent" panel and that it would be announced in due course.

Concerns about Teesworks began following a share transfer from companies owned by developers Martin Corney and Chris Musgrave.

JC Musgrave Capital and Northern Land Management and the South Tees Development Corporation initially had a 50-50 share agreement - but the joint venture partners increased their shares in Teesworks Ltd from 50% to 90%, leaving the STDC with 10%.

Responding to accusations of "dodgy deals" in the area by Stockton^[7] North MP Alex Cunningham, Mr Houchen said the deal removed liabilities for the site from the taxpayer and allowed the freeport to secure hundreds of millions of pounds of private cash.

A valuation, which was seen by the Local Democracy Reporting Service, puts the cost of remediating the site, excluding the 90-acre SeAH plot, at £482.6m and a nominal value of £1 was placed on the entire site.

Teesworks was set to develop 20,000 jobs over 25 years, with public money being used to remediate some parts and cash from investors being re-invested to remediate the next plot.

Mr Houchen said the remediation work needed to be sped up to allow investors to make use of time-limited freeport tax breaks, which will be reviewed in 2026.

The argument is that the 90/10 share split allows private investment to be brought in quicker. Teesworks Ltd is currently entitled to buy land at the site for £1 an acre, with the STDC borrowing money to remediate plots and Teesworks Ltd paying it back with interest. Without paying it back, Teesworks Ltd will not be able to acquire the land.

Teesworks Ltd is also eligible for half of the income of the scrap from the site, with the most recent figure suggesting the total amount is at £93 million. Mr Corney and Mr Musgrave did not take part in a public tender process to acquire shares in Teesworks in the first place, or when the shares were increased.

Mr Houchen said without the developers, the scheme would not have happened. When Redcar^[8] Steelworks went into liquidation back in 2015, the STDC tried to buy the site. It had to negotiate with Sahaviriya Steel Industries (SSI) and three Thai banks - the banks were owed around £800m because they held the former steelworks site.

The STDC eventually applied for a compulsory purchase order to take over the site after it became clear that negotiations were not going to result in a deal. Mr Musgrave and Mr Corney are said to have swept in at the eleventh hour to offer a deal, according to Mr Houchen, who said it was clear they were going to lose.

This came after their company DCS Industrial Limited signed a three-year lease for a 70-acre site on the Redcar Bulk Terminal. The SSI agreed to stop trying to block the compulsory purchase order in return for the site, with Mr Corney and Mr Musgrave getting brought in as development partners on the Teesworks scheme for brokering the deal.

References

1. ^{^} BBC (www.gazettelive.co.uk)
2. ^{^} Middlesbrough (www.gazettelive.co.uk)
3. ^{^} the Teesworks saga (www.gazettelive.co.uk)
4. ^{^} OPINION: Big questions to be answered on Teesworks - don't let the people of Teesside down (www.gazettelive.co.uk)
5. ^{^} Andy McDonald (www.gazettelive.co.uk)
6. ^{^} Levelling Up Secretary Michael Gove announced the review (www.gazettelive.co.uk)
7. ^{^} Stockton (www.gazettelive.co.uk)
8. ^{^} Redcar (www.gazettelive.co.uk)