Tees Valley mayor Lord Ben Houchen has attempted to get a House of Commons committee to disregard evidence submitted to it by a Private Eye journalist about what one MP called a “dodgy” deal at the Teesworks site. Houchen has written to the Business and Trade Select Committee (BTC) calling the evidence submitted by journalist Richard Brooks irrelevant.
He argues that the BTC should stick to its remit, which is to inquire into investment zones and freeports, but not the South Tees [mayoral] Development Corporation (STDC) or Teesworks Joint Venture (JV), which he says are different entities. This would leave inquiries into allegations of corruption, made in the House of Commons by Middlesbrough MP Andy McDonald on 20 April 2023, to a separate review set up last May by levelling up secretary Michael Gove and headed by Lancashire County Council’s chief executive Angie Ridgwell.
South Tees DC, Teesworks, and Teesside Freeport
Houchen’s letter says neither STDC nor Teesworks is the same as Teesside freeport. They have separate boards, their own individual governance structures, and provide two separate and very different functions.
“To treat STDC or Teesworks under the umbrella of freeports is factually incorrect.” He adds, “Though we could spend considerable time disputing and disproving the ‘so-called evidence’ submitted to the committee by Mr Brooks, I do not wish to waste the committee’s time with this, as the accusations he levels have nothing to do with the roles or functions of the Teesside freeport. As far as I am aware, this committee is looking into freeports, not mayoral development corporations, and therefore what Mr Brooks has submitted is irrelevant and should be disregarded by the committee.”
The BTC set up its inquiry into the performance of investment zones and freeports in England on 9 June 2023, two weeks after Gove set up an independent review of Tees Valley Combined Authority (TVCA) oversight of STDC and Teesworks following “serious allegations of corruption, wrongdoing, and illegality”. The committee published written evidence submitted by Richard Brooks of Private Eye on 12 December, followed on 9 January by the letter from Houchen dated 4 January. Gove appeared before the BTC on 10 January.
Gove expresses confidence
Houchen’s attempt to get MPs to distinguish between the STDC, Teesworks, and the freeport, and steer away from corruption allegations, failed at the BTC’s session on 10 January, published on its website five days later. Opening his questioning of Gove, Wansbeck MP Ian Lavery jumped straight in:
“Can I focus on the Tees Valley freeport, which has caused so much controversy since the beginning of the development? It appears to be the only one to have done so. It appears to be a bit of a secretive, murky, dodgy, backroom deal with cronyism of the highest order and people making fortunes at the expense of the taxpayer. I think that needs to be proved wrong.”
Gove responded by expressing confidence in Houchen’s conduct in the matter but refused to pre-empt the findings of the independent inquiry he had established. He wanted its report published as soon as possible but would not commit to it before the mayoral election on 2 May.
He said he had not seen the inquiry report, though officials in his department would have held discussions about it. He could not believe they would dilute it.
The Teesworks accounts
Liam Byrne MP (Labour), the BTC chair, turned to the Teesworks accounts: “One hundred and ten acres have been bought by a company which is 90% owned by friends and close associates of Lord Houchen, at £1 an acre … There was then a leasing deal and there were some rights over scrap metal on the site. Together that means that the company, which is 90% owned by these associates, has a turnover of £143mn, and about £50mn profit in one year has largely now gone out to these private shareholders.”
“In your view,” he asked Gove, “at first blush, does that sound like best value was secured for taxpayers?” Gove said he could not answer because the inquiry was ongoing.
He repeated his praise for Houchen more than once. “I have the highest regard for Ben in all my observations and dealings with him. I think he is a first class public servant who has been responsible for the economic transformation of the Tees Valley, and he is a great and visionary leader in local government.”
Byrne told North East Bylines: “There are clearly questions to answer here about whether taxpayer interests were safeguarded, which is why it is vital Mr Gove now ensures the inquiry report is published as soon as humanly possible.”
Richard Brooks of Private Eye said: “It’s nonsense to say that the South Tees scandal has nothing to do with freeports. Phenomenal profits are being extracted by private interests under agreements made even more generous because of the freeport status. It’s a case study in what this government’s freeports policy can mean in practice.”
Mayor Houchen and Teesworks Joint Venture have been approached for comment.