Middlesbrough Development Corporation

Andy McDonald Excerpts

Tuesday 14th March 2023 Westminster Hall

[Ian Paisley (in the Chair)]

I will call Andy McDonald to move the motion and I will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up; that is the convention for 30-minute debates, as he will no doubt be aware.

[Andy McDonald (Middlesbrough) (Lab)]

I beg to move,

That this House has considered the Middlesbrough Development Corporation.

It is a pleasure to see you in the Chair, Mr Paisley.

On Friday 24 February, Middlesbrough Council held an extraordinary general meeting, convened by the monitoring officer, to determine whether the council supported the proposal to create a Middlesbrough development corporation. The proposal was put to the vote, and 13 councillors voted to approve and 17 voted against. Many councillors from the ruling Tory-independent coalition did not attend, although they were all given proper notice of the meeting. Obviously, not all councillors can be expected to turn up for every single meeting and there will be good reasons for some absences, but, quite frankly, the appallingly low turnout for such an important vote was pathetic.

The council decided not to approve the MDC, but three days after the council had made that decision, 25 councillors, led by the elected Mayor, Andy Preston, wrote to the Government saying that the council decision should be ignored and the Minister should instead accept their letter of acquiescence as being the true position of the council. I do not need to stress just how ridiculous it is that the Government, in their determination to overreach local democracy, are prepared to ignore the formal council decision.

Indeed, the Secretary of State for Levelling Up, Housing and Communities has subsequently written a letter in which he outrageously describes the vote of the local authority as being born of “misinformation and mischief making”. That is incredibly partisan language from the Secretary of State, but perhaps we should not be surprised.

[Alex Cunningham (Stockton North) (Lab)]

Does my hon. Friend share my concern that this sets a precedent for Tory Mayors or Tory Governments to ride roughshod over local democracy and local decision making in our local authorities? There could be more land grabs elsewhere in the Tees Valley, such as in Darlington and in Stockton.

[Andy McDonald]

My hon. Friend and neighbour makes a very valid point. That is one of the facets of the debate that I have sought today; I want to stress that that is a danger.

We all want to see good development in our towns, but how that development is done is important. Over the years, Middlesbrough Council has acquired and assembled assets using public money, and it holds those assets on behalf of all of us in Middlesbrough. The proposal is that if the council transfers these assets to the MDC, the MDC will, in turn, use money from central Government for development. Councillors were not elected to give our town away, but we now know that money is available. The bargain proposed is that if—and only if—the council gives up those assets and planning powers to the MDC, £18 million will be released for development.

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

I am grateful to the hon. Member for giving way, and I am conscious that he has given me his consent to speak momentarily. Does he recognise that the planning powers and funding have been made available precisely because the Government have confidence that the development corporation will be a vehicle for regeneration and renewal of a sort that Middlesbrough Council has, I am afraid, sadly not proved capable of offering for too many years?

[Andy McDonald]

The right hon. Gentleman makes an interesting point. I do not share his confidence, and I will set out the reasons why the structure that has been set out is incredibly dangerous. I share his observations about how Middlesbrough Council has been run of late. I will come back to that, but perhaps it is shared territory for us.

Critically, however, the council will have no say on how any development goes ahead or how decisions are made. That is more akin to a protection racket than to good government. Those decisions about development will be made not by the council, but by an unelected board appointed by Ben Houchen, the Conservative Tees Valley Mayor. He will decide who goes on the board, not the people of Middlesbrough or its elected council.

Much is said about devolution, whereby power and resources should be pushed down and be in the gift of the most local possible form of democratic representation. Here, the opposite is being proposed. This is not devolution; it is gangster politics, taking power and control away from the people, while the elected independent Mayor of Middlesbrough and his Tory deputy will be on the board. It seems—

[Jill Mortimer (Hartlepool) (Con)]

Will the hon. Gentleman give way?

[Andy McDonald]

Let me finish the point. It seems that they will be there in a personal capacity, whether they remain in office or not; it is not clear. The Mayor of Middlesbrough, Andy Preston, did not attend the vote by which this decision was made. He was advised by the council’s monitoring officer that he could not attend because of his own personal pecuniary interests.

[Jill Mortimer]

Will the hon. Gentleman give way now that he has made his point?

[Andy McDonald]

I am only halfway through, but—

[Jill Mortimer]

I thank the hon. Gentleman for giving way, but I want to correct what he has just stated. He has described this as gangster politics. In actual fact, those places on the board will belong to whoever is democratically elected as Mayor and deputy Mayor. If a Labour Mayor and deputy Mayor are democratically elected come May, they will take those places on the board.

[Andy McDonald]

Let us deal with all the rest of them; I am just about to do that very thing.

I was talking about a conflict of interest that the Mayor of Middlesbrough now has. The geographical boundary of the MDC takes in an area called Middlehaven and vast swathes of the town centre, and it includes an area of the town where Mr Preston owns or has owned property. According to the latest Tees Valley Combined Authority register of members’ interests, Mr Preston owns vast swathes of land and properties on both banks of the River Tees—well over 50 properties in total. Clearly, the decisions that the MDC board makes could have a direct bearing on any increase in value of any such interests, and they could potentially directly and financially benefit him.

In local government and in all public institutions, the greatest of care has to be taken regarding such potentially conflicting pecuniary interests. That is why Mr Preston was advised not to attend a vote at the crucial meeting. There is an obvious conflict of interest, and the question arises: if he cannot vote on the creation of such a corporation, how can he possibly lead on a letter to countermand that very vote and then serve on the board? It is utterly farcical; it is almost as though we have gone back to living in medieval times, with wealthy feudal landlords controlling political power over their lowly subjects without any proper democratic processes of accountability.

[Alex Cunningham]

My hon. Friend clearly shares my concerns about how development corporations are being managed on Teesside, with joint ventures being created and then used as vehicles to transfer hundreds of millions of pounds-worth of public assets to private companies, and all behind doors and in secret. Does he fear, as I do, that the new Middlesbrough and Hartlepool development corporations could see more of the same—deals made in private to transfer public assets to private companies?

[Jill Mortimer]

Will the hon. Gentleman give way?

[Andy McDonald]

No, I am afraid that that is not how it works; I respond to interventions.

[Jill Mortimer]

I wanted to intervene on the hon. Member for Stockton North (Alex Cunningham) because he mentioned my constituency.

[Ian Paisley (in the Chair)]

Order. The hon. Member for Middlesbrough has the floor, and he will speak and not be interrupted. If he wishes to give way, he will indicate that he will give way.

[Andy McDonald]

Thank you, Mr Paisley.

Other people have been proposed to serve on this board as well. They include Paul Booth—a former executive of SABIC, the Saudi Arabian petrochemical company—who will be chair. I have known Paul for years. Although he is not a resident of Middlesbrough, he undoubtedly has well-intentioned views about what he thinks is in Middlesbrough’s best interests—but no one has elected him.

Other non-elected appointees include the chief constable of Cleveland, who does not even live in the Cleveland police force area, let alone in Middlesbrough. He is, of course, a senior police officer, but I am not sure what experience he has of urban regeneration. His best contribution to our town would, in my view, be to do his job and make our streets safe for residents and businesses.

Similarly, another board member will be the Conservative police and crime commissioner for Cleveland, Steve Turner—a man who, let us not forget, received a caution from Cleveland police for theft from his employer. Again, he does not reside in Middlesbrough, I am not aware that he has any urban regeneration experience or expertise, and that is not his job.

I have significant concerns about the basis on which the Tees Valley Mayor, Mr Houchen, will select board members. He will have the power to appoint and dismiss them, much as we have seen him do at the South Tees development corporation. That has been evidenced in a raft of investigative articles by Private Eye, which he dismissed as a comic book. Private Eye has unearthed, in great detail, squalid and questionable dealings at the South Tees development corporation, and it has exposed the squandering and misuse of hundreds of millions of pounds of public money. That money was primarily deployed to make the private joint venture partners even wealthier beyond imagining. In respect of that, there will one day be a reckoning.

[Peter Gibson (Darlington) (Con)]

I refer back to the point that the hon. Gentleman made about the involvement of the police and crime commissioner and the chief constable. We in Tees Valley understand the challenges and difficulties that antisocial behaviour brings to the regeneration of a town. The hon. Gentleman has significant antisocial behaviour issues in his constituency and, in my view, the involvement of the police and crime commissioner and the chief constable on the board is really important.

Just last week in Darlington, Labour councillors voted against planning permission for investment in Teesside International airport. What is it about the Labour party in Teesside that means it has to oppose and stop every investment?

[Ian Paisley (in the Chair)]

Order.

[Andy McDonald]

On the point the hon. Gentleman made about Darlington, the Labour party often gets the charge that it is somehow anti-growth. That is utter tosh. It is the most pathetic jibe, and Conservative Members would be better served by engaging in intelligent debate.

On his original point, if the hon. Gentleman genuinely wants to talk about crime, disorder and public order on our streets, I suggest that that is what the police should be doing. I do not expect them to be serving on regeneration boards. They should get out, do their job and ensure they have people on our streets looking after our businesses and making sure people are safe. Serving on regeneration boards is not their function, and they should get on and do the job they were put there to do.

There are lots of questions emerging about how the South Tees development corporation and others have operated. My clear preference would be for the much-needed urban regeneration in central Middlesborough to sit with the elected council. In turn, the council can rely on its internal officer expertise, and, where necessary, external expertise from established professional organisations with track records of successful urban regeneration. Dealing with regeneration in that way ought ordinarily to ensure accountability and transparency.

Although I share the concerns expressed by the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) about how duties have been discharged by the current political leadership of Middlesborough Council, which runs until May of this year, I fear that the likelihood of there being proper scrutiny and accountability of the proposed MDC is very low. Yet again on Teesside, a board made up of hand-picked individuals will be making important decisions about how valuable public funds are used without any meaningful accountability or scrutiny. Indeed, the MDC will acquire planning powers that currently—and rightly—belong to the council, which will now lose valuable fee income and business rates. That will inevitably place more pressure on the council, which could lead to further cuts.

[Mr Simon Clarke]

Will the hon. Gentleman give way?

[Andy McDonald]

No; the right hon. Gentleman will get his say. He asked me if he could participate in the debate, and I said yes. I will not give way any further, because I want to give him the opportunity to make his contribution.

Those pressures could lead to further cuts in Middlesbrough. We could be walking into yet another public-private joint venture that will end up transferring assets out of the domain of the MDC and into private hands, as per the recent shenanigans at the South Tees development corporation.

Of course I want investment in Middlesbrough. After 13 years of this Government, almost half the children in our town live in poverty. The town mayor and the executive have just voted through a budget that will turn off the street lights, reduce our libraries and seriously deplete our warden service. I see economic growth and development as one of the key levers to turn that around. In addition, we need a more equitable settlement from central Government, but that is a debate for another day.

We have done some great work in Middlesbrough, despite difficult economic times. Here are some examples of the significant successes. TeesAMP, next to Newport bridge, is a state-of-the-art advanced manufacturing park. It hosts many high-quality businesses at the cutting edge of their respective industries, providing high-quality, high-wage jobs. Boho Digital City is a great success story, with over a decade of starting up and sustaining digital businesses. Centre Square in Middlesbrough brings in the likes of GB Bank and AXA UK, to name but two. The historic quarter around Exchange Square works with Historic England, which has funded some wonderful work. The regeneration and redevelopment of our railway station—a subject very dear to my heart—brings better connections and opportunities for the much-needed economic growth of our town.

All those achievements were begun under previous administrations. The clear evidence is that we already have the systems in place to make this work and to enable Middlesbrough to attract investment. It makes little sense, in my mind, to create another layer of bureaucracy. All those achievements were made by people working together through the various democratic institutions. In particular, they were often in partnership and co-operation with the Tees Valley Combined Authority—from when it was set up before Mr Houchen was elected by what were then five Labour councils across the Tees valley, and continuing subsequent to his election.

There is no reason to suppose that those sorts of arrangements could not work again. We should deploy funds in a way that works, and that holds in our institutions of local democracy. All too often, the rules on good governance, integrity and sound money are undermined, with democratic and accountable control taken away from the people and given to chosen individuals to enable them to use vast quantities of public money as they see fit. I fully anticipate that the Government will plough on regardless, but they need to know that the MDC, despite the absence of transparency and democratic integrity within its structure and architecture, will be held to account by the people of Middlesborough for its decisions. I look forward to the Minister’s response.

[Ian Paisley (in the Chair)]

In line with protocol, Mr Simon Clarke sought permission from the mover of the motion and myself to make a short speech. I will give you about four minutes to make that speech, Mr Clarke. The Minister is being very flexible with you as well.