A North East MP has called for a full investigation into what he called “industrial scale corruption” at Teesworks.

Andy McDonald, the Labour MP for Middlesbrough, was reacting to a series of articles written in Private Eye magazine, the latest of which revealed that the private South Tees Development Corporation (STDC) paid only £96.79 (plus VAT) for the freeholds for the future site of a wind turbine factory from the public sector.

But Tees Valley Mayor Ben Houchen disputed the statistics that the satirical magazine cited. When questioned at Redcar and Cleveland College today, he said that they had not “given the site away” to the private sector, and that profits totalling £30 million per year would be split equally between Redcar Council and STDC.

Read more: Tees freeport: Call for transparency on Teesworks site ownership

The Northern Echo: Tees Valley Mayor Ben HouchenTees Valley Mayor Ben Houchen (Image: The Northern Echo)

In a statement, Andy McDonald said: “I raised the issue of Teesworks with the Leader of the House of Commons today. Private Eye magazine has revealed shocking practices happening right here in Teesside. The huge site acquired by South Tees Development Ltd for £12 million in 2019 has since seen hundreds of millions of pounds of taxpayers’ investment.

“Any future sale had to be on market terms, but we know that private developers exercised their option to purchase a huge swathe of that land for £1 plus inflation per acre being some £96.79.  

“The only discernible economic benefit is being accrued by the private sector joint venture partners while the State remains on the hook for all ongoing environmental costs.

"It’s been de-risked for their benefit and profit. I have asked for a full-scale investigation into what is happening and will be writing to the Secretary of State on this matter. 

Read more: Ben Houchen responds to Teesworks ‘crony contracts’ claim

“What we could have had was a sovereign wealth fund for Teesside and what we have ended up with is a honey pot for rich developers to become even richer.”

Speaking to The Northern Echo, Mayor Houchen said: “This site is independently valued at minus £482million - at the time of the steelworks closure it was costing the taxpayer £20million per year forever.

“Trade Unions and local Labour MPs were calling on Government to stump up £500million of taxpayer’s cash, it was a huge liability and there was a real concern by the Teesside local authorities that it would bankrupt the councils. The suggestion that we’ve given away a site worth millions is demonstrably untrue.

“If it wasn’t for this public-private partnership, we would not have touched a single part of the steelworks, we wouldn’t have landed a single investment, we would not be seeing construction underway and we wouldn’t be able to look people in the eye and say we’re creating thousands of good-quality, well-paid jobs for local people… and it would still be costing the taxpayer £20million per year.”

The Northern Echo: A drone image of Teesworks. A drone image of Teesworks. (Image: NORTHERN ECHO)

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He stressed the deal was reviewed and scrutinised by the TVCA Cabinet on March 17 and was then unanimously approved by the cabinet - which is made up of Mayor Ben Houchen (Conservative), Cllr Bob Cook (Labour), Middlesbrough Mayor Andy Preston (Independent), Cllr Shane Moore (Independent), Cllr Mary Lanigan (Independent) and Cllr Jonathan Dulston (Conservative).

Speaking in parliament today (Thursday, April 20), Mr McDonald said: “The only economic growth being delivered is into the accounts of Ben Houchen’s pals, Messrs Musgrave and Corney, who for a bargain of £100 will benefit to the tune of £100million, all the while the state remains on the hook for the ongoing environmental costs.

"So will the Leader of the House ensure the DLUCH Secretary sets out what plans the government has for a full investigation into this industrial-scale corruption?”

Responding Penny Mordaunt, leader of the House of Commons, said: “The mayor has been doing an incredible job. He has been regenerating that part of the country and making it a world leader in clean energy.”

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Alex Cunningham, the Labour MP for Stockton, supported McDonald’s calls for an investigation, adding: “If the allegations in the media have foundation, it is time for a full enquiry into the matters raised on everything from the asset transfers and use of public money – to the benefits derived by private companies and the taxpayer.

“Every week we see more revelations about the way business is being conducted by the Tees Mayor and those he has chosen to work with.  It is extremely worrying that so much is done in secret and no one can see where public money has gone, and how, why and at what cost, public assets have been transferred to private ownership.

“There is no doubt that a comprehensive impenetrable web of business arrangements has made it all but impossible to get answers to these questions – and all at a time when very few of the tens of thousands of promised jobs have materialised with no contracts in place to deliver them.”

Simon Clarke, MP for Middlesbrough South and East Cleveland also chipped in, saying: "Remediating the vast Teesworks site so that it can become a home to thousands of good new jobs in the clean energy sector is one of the most complex challenges underway in the whole of the UK and requires hundreds of millions.

"Ben Houchen has rightly used his powers to leverage investment from the private sector so that this work can be delivered as successfully and swiftly as possible. 

"The attitude the local Labour Party has taken to this project since the beginning has been desperately disappointing. Andy McDonald has resorted to desperate innuendos and smears to try to tarnish what is happening in the eyes of the public ahead of the May local elections, but he is of course also damaging Teesside's image in the eyes of the world. 

"If Mr McDonald is so confident in his allegations, he should make them publicly rather than hide behind the cloak of parliamentary privilege as he has so often done in the past."