Steve Gibson talks Teesworks, the 90/10 deal and why he believes Ben Houchen must go

Steve Gibson has launched a scathing attack on the Tees Valley mayor Ben Houchen, accusing him of "giving away everything they had worked for" in the Teesworks joint venture deal.

Just over a week before the region elects its mayor, the chairman of Middlesbrough Football Club and former vice chair of the South Tees Development Corporation (STDC) board said the decision to hand over 90 per cent ownership of the former Redcar steelworks site to private partners was "stupid" and "unforgivable". He accused Lord Houchen of being "dangerous" for the economic wellbeing of the Tees Valley, adding: "He's given away hundreds of millions of pounds without any explanation."

In the explosive interview with the Local Democracy Reporting Service, Mr Gibson and his fellow former STDC board member and businessman Paul Booth shared their opinions on why they were both sacked from the STDC board in June 2021. They also spoke at length about the upcoming election, with Mr Gibson making it clear he was backing Labour's Chris McEwan.

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In response, Lord Houchen said politics can be "a nasty place" and he was "disappointed" by Mr Gibson's decision to support the Labour party. He also said Mr Gibson was "wrong about the facts" but maintained his former colleague was "a good guy" and thanked him for his work on the STDC before he was asked to step down.

The Teesworks inquiry and that 90/10 deal

In 2020, Teesworks and the joint venture partners JC Musgrave Capital and Northern Land Management teamed up with the STDC, a public body, to deliver the vast regeneration of the former SSI steelworks at Redcar.

The private firms first held a 50 per cent stake in Teesworks with the STDC holding the other half but it later emerged 90 per cent of shares had been handed to the private partners. By this point, Mr Gibson and Mr Booth had both been asked to step down from their position as board members.

Mr Gibson said, had he stayed on the board, he and Mr Booth would have fought to halt the 90/10 move. "I would have stayed but we would not have had the 90/10 conversation because we would have stopped it," he said. "If he went ahead with it, we would have had to leave. I was happy with 50/50, there was a fair basis for that, and I wouldn't have budged from it."

Mr Booth criticised Mr Houchen's apparent refusal to renegotiate the 90/10 deal. This week, he resigned from his position as a board member of the Middlesbrough Development Corporation, the determining authority for planning applications in the town centre. He said he believed continuing that role was "completely untenable" given his views on the deal.

An independent investigation was ordered last summer after Middlesbrough MP Andy McDonald used parliamentary privilege to make allegations of “industrial-scale corruption” surrounding dealings at the vast site. The review concluded there was no corruption or illegality found but it highlighted issues regarding transparency and governance.

Published in January, it also said the private developers put no money into the scheme, but made money on the back of public sector investment. Mr Gibson said: "There was an inquiry because this mayor decided and spent £560m of taxpayers money to move from a private/public sector partnership to move that to 90-10 in favour of the private sector. None of us can make sense of it."

The importance of the site "cannot be underestimated", he said, adding: "It's the biggest economic regeneration in Tees Valley in a lifetime. It's too precious and too great an opportunity to be in the wrong hands.

"It will transform the lives of as many people as possible and it's got to be fair - it can't be to make wealthy groups become more wealthy. Our vision, when we started this was to have a thing called a Sovereign Wealth Fund for Teesside that the elected members, knowing their own constituency demands, could use for the benefit of the people of the Tees Valley."

Lord Houchen previously said without the private developers, the scheme would have never happened and the site would have sat idle, costing the taxpayer £20m a year to stand still, "with no investment and not a single job in sight". He said the 90/10 move allowed them to secure private cash running into hundreds of millions of pounds, removed major liabilities from the taxpayer and put the burden on the joint venture partners.

In its 96-page report, the panel made 28 recommendations for improvement. Mr Gibson said Mr McDonald's accusations in Parliament had overshadowed those recommendations.

He said: "It was like there was no consequence of the 28. It got in the way because Houchen went 'I've got my piece of paper - I'm innocent'.

"I knew he was innocent, I knew Martin Corney was innocent and I knew Chris Musgrave was innocent. The sad thing for me is I watched two guys - really good, really clever, really hardworking guys who were an asset to the Tees Valley, almost get destroyed. They couldn't see, when they agreed the 90/10, the public outcry."

One of the recommendations said, if possible, the deal with the two businessmen should be renegotiated, to get “a better settlement” for taxpayers. However, when pressed about it on BBC1’s Politics North, Lord Houchen said he would not renegotiate an arrangement which was proving successful.

He said that around 9,000 jobs are being created with the Teesworks development with a potential of £2.7bn in business rates, and he failed to see how anyone could suggest it was not value for money.

"Houchen has gone public to say he will not renegotiate because it's admitting he was wrong," said Mr Gibson. "The people of Teesside are entitled to demand an explanation, he's never said why. I've got to emphasise the 90/10 was a stupid decision. How would you suddenly wake up and decide all of what you've got, all that everyone worked for, you're just going to give it away?

"There was a trigger point for him to do that, that we don't yet fully understand, but, again, whatever has caused it, the reaction of it is disproportionate. He should have been protecting that with his life."

Mr Booth said that, in the negotiations for the Freeport, there was an urgency to hit deadlines to secure grants and raising the cash was key. "Therefore you have to then involve the private sector more than they are already involved than the 50/50 because the authorities can't just go and raise cash on a whim. The private sector can do that.

"What I don't know is, given that there was a need to raise money, which other investors were talked to. Was there a process for understanding what the best outcomes and what the best deals were?

"And that 90/10 - was it the best? I don't know that, neither does anybody else and I don't even know whether that process took place or not and that is quite a serious point." Regarding Lord Houchen's apparent refusal to renegotiate the deal, Mr Booth said: "If his behaviour doesn't change and it doesn't look like it would, then he might just continue to be exercising bad judgement for the sake of the soundbite or the photo opportunity or whatever and not bother too much about the consequences."

Lord Houchen said he was pleased Mr Gibson had echoed his views regarding the importance of Teesworks, the creation of jobs and its impact on the local economy. "It’s good to see Steve repeat what I’ve been saying for some time now, that Teesworks is the biggest and most positive thing to happen since ICI," he said.

“Already around 1,000 people are working on site with a job being able to support and provide for their family, improving their lives. You won't read the truth of what's happening to Teesside from Steve Gibson's quotes on Labour leaflets - you'll see it with your own eyes on the ground at Teesworks or in the air at the airport.

“That's what politics is about for me, to be able to help the people of Teesside, Darlington and Hartlepool."

Sacked from the board 'over lack of respect'

When asked why he believed he was asked to step down from the board, Mr Gibson said they were never given an official reason but he believes some members of the board had lost respect for Lord Houchen. "He knew that so he got rid of us. We were the dissenters," he said.

"The way to keep your place on the board was not to dissent, but you weren't doing your job if you didn't challenge and you didn't question. When we needed cross party support, he gets rid of that knowledge, he gets rid of me who has built the biggest private business Teesside has ever seen. Paul [Booth], who knows that site like the back of his hand, Sir Alan Cockshaw who not only established himself as the chief executive of the biggest engineering firm in the UK at that time but was instrumental in redevelopment of other sites working alongside Lord Heseltine. And he gets rid of them."

Lord Houchen said: "Steve is a good guy, and I would like to thank him for all of his support during his time on the South Tees Development Corporation board before I asked him to stand down, and I’d like to thank him for his support in voting for the agreement with our private partners. If it wasn't for Steve we wouldn’t have the joint venture with our Teesworks partners.

"We didn’t always agree on everything, but there is no questioning his love and passion for Teesside and that's very much our common ground. Sometimes in business you have to agree to disagree."

"We are all anxious for change"

A recent poll of Tees Valley residents suggests the mayoral race is currently neck and neck with Conservative Ben Houchen and Labour's Chris McEwan tied on 47 per cent each.

Mr Gibson said he has met with the Labour candidate on several occasions and described him as honest and hardworking. "He's not a career politician, he doesn't want to be Prime Minister, he wants to do the best for his constituents and the people in the Tees Valley," he said.

"He will also have the support of a new dynamic Labour Government." In 1979, Mr Gibson became Middlesbrough's youngest ever Labour councillor when he was elected to represent Park End at age 21. Writing in May 2017, however, he urged people to vote Conservative.

He believes Labour will win the next general election and will remain in power for at least the next 10 years, adding: "I can't see how the Tories are going to come back in a generation, and they don't deserve to. I'm neither Tory or Labour, I'm a swing voter. I go with what I think is common sense."

Regarding the mayoral elections he said: "The best decision for Teesside is to make sure the mayor of the Tees Valley is Labour because we're going to have a Labour Government. The Labour Party, quite selfishly from my point of view, this is their territory, this is why they exist and they are going to do everything they can to improve it.

"Things will happen and what it will do is it will take time. We are all anxious for change."

When asked what he believes will happen in terms of the Teesworks inquiry if Labour wins the next general election, he said he believes the scope will be widened and the National Audit Office will be brought in. "I don't think it will hinder but will be a search for the truth of what really went on," he added.

Mr Booth said he believes Labour would continue to support any region that needs investment. Regarding the Teesworks site, he said: "I think it would be subject to far more scrutiny and would need a lot more transparency than we've seen thus far."

On social media, Lord Houchen said he was disappointed that Mr Gibson had decided to support the Labour party, and went on to say: "If there’s one thing I’ve learned in politics it’s that it can be a nasty place, particularly so close to elections when there’s lots at stake and people are manoeuvring for what they think might happen in Westminster.

"At times it can be lonely, but I do what I do every day to make a difference and deliver for the area I love, and will be for the rest of my life with my young family."

The mayor represents 670,000 people in the five local authorities of Middlesbrough, Stockton, Redcar and Cleveland, Hartlepool and Darlington. Any registered voter in those five council areas can cast a vote on Thursday, May 2.

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