British Steel's furnace and the political spat over 250 jobs which don't yet exist
Plus: "Grey" Labour response to Houchen accusations of "surrender"
Writing last Wednesday’s edition of The Teesside Lead, I mentioned a touch of tonsillitis, but was unprepared for how ill it would make me for the remainder of the week. Thankfully, I’m back to full health (and got an incredible 10 hours’ sleep last night!) and here with the 23rd edition.
Huge thanks to Ed Walker and Luke Beardsworth for ensuring Sunday’s edition got sent!
Today’s another steel edition, as I look into the latest round of he-says-she-says Teesside politics, as well as providing an assessment of Labour’s tactics through the lens of what Newcastle-based author Alex Niven has called “Grey Labour”.
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The most predictable political argument has erupted on Teesside this week, after reports that British Steel had ditched plans to build an electric arc furnace (EAF) at its Teesside plant.
EAFs are seen as key to the steel industry’s decarbonisation plans. They are much less carbon-intensive than traditional steel manufacture, and melt old steel down to be re-used. British Steel intends to build them to replace their blast furnaces in Scunthorpe, in exchange for a cash injection from the government.
The original plan, announced in November 2023 to much fanfare, was for British Steel to close its Scunthorpe blast furnaces and replace them with EAFs - one in Lincolnshire, and another at its Lackenby plant on Teesside.
However, it’s now become apparent British Steel intends to build both EAFs at its Scunthorpe site, leading to the most inevitable outcome possible for Teesside.
British Steel’s Chinese owners, Jingye, have long been in discussions with the British Government about the scale of state support it should receive to help its transition to greener steel manufacturing. When the EAFs were announced, Jingye said at the time the plans were “subject to appropriate support from the UK Government.”
When the plan for EAFs was announced, Jingye’s CEO flew in from China for the announcement, not for a photocall in Scunthorpe, but for one in Teesside. It appeared the Teesside project was getting the full backing from British Steel’s Chinese owners.
However, things have since cooled off, with some suggesting the change of government has seen the Chinese engaging in a game of brinksmanship to get what it wants to continue operating British Steel. There was even an accusation that Jingye had purposefully damaged one of its Scunthorpe blast furnaces to make the business unviable.
It’s hard to say decisively what’s happened which has led to this point, but it appears to be political.
Before Christmas, Tees Valley mayor Ben Houchen offered a pragmatic voice on the suggestion that British Steel had changed its mind and decided to build only one EAF - and that being in Scunthorpe.
“The risk is [the government] don’t get [the transition] right,” he said, “and we lose potentially north of 5,000 jobs in Scunthorpe alone - communities devastated, people without work and we’re left without a steel industry in the UK.”
He’s since shifted his position and gone on the attack, with countless social media posts this week.
A Department for Business and Trade spokesperson said: “This government will simply not allow the end of steel making in the UK. That’s why we’ve committed up to £2.5 billion of investment to rebuild the UK steel industry and support communities now and for generations to come.
“We’re working across government in partnership with trade unions and businesses, including British Steel, to secure a green steel transition that’s right for the workforce, represents a good investment for taxpayers and safeguards the future of the steel industry in Britain.”
The line coming from the government is that the location of the EAFs is a commercial decision to be made by British Steel. However, the fact they’ve gone from planning two, to one, and then to two on a single site, suggests this is more than just a commercial decision. I’m struggling to see how the economics of the situation can change so drastically that only half of the initial proposal could be considered, before then being back on the table, but with the location changing.
There has been a failure, somewhere, in politics; which has scared Jingye off from investing in Teesside. Perhaps it’s at a national level, with discussions between the government and Jingye, or maybe there’s something about Teesside which scared the Chinese firm off after they visited.
When I asked British Steel about it, their spokesperson said: “We are in ongoing discussions with the government about our decarbonisation plans and the future operations of our UK business. While progress continues, no final decisions have been made.”
Regardless of the outcome, Ben Houchen has never been shy about making political capital from situations like these, and whether the EAF is built in Teesside or not might not matter for him politically.
Land the EAF, and it’s a victory for him. If it isn’t built, however, he has a stick he can use to hit Labour with until the next election.
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Teesside at PMQs…
During proceedings at the House of Commons, the normal order of things is that you stand to catch the Speaker’s attention if you want to speak. Because the whole house would rise during Prime Minister’s Questions, MPs are actually selected beforehand through a random ballot (it also ensures those with questions are given notice to actually attend).
In today’s PMQs, two of Teesside’s seven MPs will have questions to Sir Keir Starmer.
Both Tory MP Matt Vickers (Stockton West), and Labour MP Andy McDonald (Middlesbrough and Thornaby East) have been given the opportunity to scrutinise the PM.
McDonald has been selected a few times in the last few months, asking a question about Gaza at the end of November, as well as the routine question about the PMs itinerary a few weeks later.
There are a few topics Vickers could cover. One might expect him to ask about British Steel, but he’s also shadow minister for crime and policing - so perhaps he’ll ask about a new inquiry into grooming gangs.
A new job for Sir Simon Clark
From current MPs to those who are resigned to our memories… It’s been announced that ex-Middlesbrough South and East Cleveland MP Sir Simon Clarke - who lost his seat in July by only 214 votes - has a new job.
He has become director of the centre-right think tank Onward.
“This is a critical time for the future of Conservatism,” tweeted the former MP, “and I can’t wait to start work with a great team.”
He replaces Gateshead native, Sebastian Payne, who quit his job as a journalist for the FT in order to nail his colours to the mast (and some might argue undermine his entire body of work as a journalist over the previous six years), by joining Onward as director in 2022.
Payne unsuccessfully attempted to be selected as Conservative candidate in no fewer than six seats for July’s general election before leaving Onward to join The Times as a columnist last year.
Teesside Labour MPs’ letter a symptom of “Grey Labour”
When there were reports in November that British Steel was only going to build a single EAF, and that it would be in Scunthorpe, I wrote at the time of one of Ben Houchen’s favourite media tactics - the publicly-shared private letter.
He wrote to Teesside’s Labour MPs, urging them to lobby for the Teesside EAF. “We all have a collective responsibility,” he wrote, “for the sake of our communities and national security, to ensure that the blast furnaces in Scunthorpe remain operational until the EAF is built and running.”
The Labour MPs didn’t directly respond with a letter of their own, but they did release a statement in which they accused Houchen of playing politics.
This time around, the Labour MPs haven’t been as canny in dealing with Houchen.
On Sunday, Houchen wrote to the region’s MPs, saying, “I need your help.”
“Let’s speak with one voice to ensure Teesside remains at the heart of UK steelmaking. Time is running out,” he wrote.
The Labour MPs collectively replied with their own later in the day. By responding directly, they entered Houchen’s domain, and played his game according to the rules he set. They have nothing to gain by doing this unless they have a very clear message which is stronger than Houchen’s - something which is not very easy to do - or they fully support him.
In the event, their response was typical of what the author Alex Niven has described as “Grey Labour”.
Writing in Tribune magazine last February, Niven defined Grey Labour as “a right-wing Labour clique whose basic instinct is to manoeuvre itself into an ideological ambiguity bordering on total opacity, to define itself by stating what it is not rather than what it is, and to promise that it will maintain a holding pattern over national decline rather than doing anything substantive to renew a faltering, increasingly outmoded society and economy.”
Their letter offered nothing to anybody reading, besides Houchen, who has made total mincemeat of it.
“We are absolutely committed to the steel industry on Teesside and across the UK,” wrote the MPs.
They say the region was abandoned by the Tories when the Redcar steelworks closed in 2015, and point to Net Zero Teesside, carbon capture, and other green projects in the works since long before Labour got into power as evidence of Labour being “committed to making Teesside central to the UK’s industrial future.”
“We understand the Government’s determination to secure steel jobs in Scunthorpe through the Electric Arc Furnaces (EAFs),” goes the MPs’ letter, something Houchen immediately pounced on via social media as being a sign that Labour had “surrendered” in its efforts to bring an EAF to Teesside.
It may be the case that the government has had to abandon pushing for an EAF on Teesside in order to support jobs in Scunthorpe, or as Redcar MP Anna Turley has suggested, to even keep British Steel’s owners, Jingye, in the country. However, a group of local MPs producing a communication designed to be seen by their constituents in a war of words with their political rival should be writing on behalf of their constituents’ interests, not the government’s.
It’s such a basic principle when dealing with Houchen, but it appears they are so overcome with Grey Labour-brain that they are incapable of setting themselves up in conflict with the government. It’s the importance of relaying the message of the empty coffers inherited from the Tory government, and the importance of having “the grown-ups in the room” above the importance of offering anything resembling hope or a plan for renewal after a decade and more of declining living standards to their constituents.
Let’s be real, the Teesside EAF will only create 250 jobs when it’s operational, while Scunthorpe is facing the loss of more than 5,000. Scunthorpe faces the collapse of the town’s economy, similar to what Redcar went through a decade ago.
The argument for saving (or replacing) existing jobs in Scunthorpe is much more compelling than that of protecting jobs in Teesside which don’t even exist yet. But as local MPs the Labour cohort should under no circumstances be making that argument on behalf of the government, and especially not as part of a public dialogue with an operator as cut-throat and concise as Ben Houchen.
Niven (who, cards on the table, is a mate of mine) contrasts the Grey Labour project with that of the “modernising” spirit of renewal of the Blair years, saying Starmerism includes a “pathological denial of the possibility of meaningful change happening in the near future.”
In their letter to Houchen, the Teesside Labour MPs offer nothing tangible for the future of Teesside beyond the buzzwords repeated so frequently that those in the Tees Valley have become numb to their meaning.
The people of Teesside are tired of these empty platitudes from the traditional parties, and with a populist like Ben Houchen now unable to deliver on such evocative promises as “bringing back steelmaking” because of a loss of support from central government, it leaves the door wide open for Reform. They have over a year to campaign and build momentum before 2026’s local elections.
An NAO inquiry into Teesworks is the right thing to do to ensure public money is safeguarded, but unless Labour can provide a material difference to people’s lives in the next twelve months, Teesside is set to turn light blue next May.
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Thanks for reading!
Leigh