Teesside dreams of a green revival

From The Sunday Times
August 16, 2009
Danny Fortson
Walk into the Redcar working men’s club on a Tuesday night and you might feel as though you had been transported back in time. As 8.30 approaches, the room fills as more than 200 people take their seats, marker pen in one hand, a pint of Theakston’s bitter or John Smith’s Magnet in the other.
It’s bingo night and, after several weeks without a winner, the jackpot, at £2,700, is the biggest it has been in a long while. The atmosphere is jovial but Jeanette Harper, 72, said such a turnout was rare these days. “People are out tonight because the jackpot is big,” she said. “In a desert like this, everyone comes out for the bingo hoping they can change their dreams.” Sitting next to her, Christine Hill, 42, nodded in agreement: “We’re suffering. It’s a disgrace.”
Redcar, at the mouth of the River Tees, is on its knees. The high street is full of boarded-up stores but it was once a bustling company town, built in the shadow of British Steel’s imposing blastfurnace.
Like other cities in the northeast, its fortunes rose and fell with the “smokestack” industries — steel, coal, shipbuilding and chemicals. Today it is at the hard edge of the recession. Recent figures show unemployment in Redcar is already at 10.5%, well above the national average. But there is also hope of a rebirth. The government claims that new industries, many of them in the low-carbon green sector, will rise to replace Britain’s withering industrial legacy and drag the country out of recession. It is here that the Great Green Experiment will be truly tested.
Three months ago Corus, the owner of Teesside Cast Products, said it was going to mothball the plant. The closure would put 2,000 steelworkers out of a job, not to mention several thousand more who work in companies dependent on the site, which once employed more than 30,000 people.
The pain did not end there. Nearby is Wilton, the site originally built by ICI to process oil piped from the North Sea. In the past two months three companies — Dow, Croda and Artenius — have announced plant closures. Before the year is out, another 1,000 jobs, plus several thousand support workers, will go.
After years of steady decline they are blows Redcar cannot afford to take. “Save our Steel” posters hang in the windows of pubs and living rooms. The once vibrant seafront is dotted with empty pubs and a handful of arcades. “It’s a ghost town,” said Andy, a 45-year-old steelworker.
Some local business leaders caution against writing off the area. “Twenty-five years ago we had coal, we had shipbuilding. And we recovered. We’re pretty good at dusting ourselves off and coming back fighting,” said Ian Williams, head of business and industry at One North East, the regional development agency. “If Corus goes, we’re going to have to replace 4,500 jobs. Are we going to do that overnight? Of course not. But over time? Absolutely.”
In Redcar, however, few hold out much hope that the green revolution will come to their rescue. “Wind turbines? Bollocks. They won’t replace the jobs lost here,” said Andy. “The government has stabbed the working man in the back."
Standing on the south bank of the Tees, David Robinson watches a pair of cargo ships passing each other through the channel. “We have to reinvent ourselves,” he said. “Otherwise, this river will die.”
As chief executive of PD Ports, owner of the docks at Teesport and Hartlepool, few know better the damage caused by the recession. In the past year, cargo traffic has dropped by a fifth. If Corus closes, another quarter of his business will disappear.
Robinson is preparing for the worst but he is not without hope. With the industrial infrastructure, the port and a skilled workforce, northeast England would seem the natural home for the government’s green industries. An impressive number of projects are in the works
In the next few months Ensus, a local start-up, will fire up a £300m bioethanol plant at the Wilton complex. It will convert wheat into fuel, animal feed and carbon dioxide for the soft-drinks industry, and will be the largest of its kind in Europe.
MGT Power received planning approval last month to build Europe’s largest biomass plant on a vacant riverside plot. Gaia Power, a year-old start-up, hopes to hear by October whether a £200m waste wood burning plant will be built across the river at Billingham. At the Centre for Process Innovation, located at the old ICI laboratories, workers have a spring in their step after the government last month gave a £17m grant to expand its activities into new processes, such as turning algae into fuel.
Redcar residents will soon be able to see another sign of the promised future. EDF Energy plans to start construction of a 30-turbine wind farm a few miles offshore this year. Robinson hopes others will follow. “The offshore wind market is a huge opportunity,” he said. “There is going to be an entire new industry to build and support these big farms.” Indeed, local companies such as JDR Cables and CTC Marine are looking at gearing up to provide the cables and pilings that will be needed.
Nobody believes that turning Teesside green will be easy — retraining redundant workers, for one, remains a huge challenge. The business community here, though, is tight-knit and has swung behind the effort to reinvent the region.
Vera Baird, the local MP, said: “It was only a year ago when I was giving speeches about the new green revolution and how it will be led from Teesside, just like the iron and steel revolution was led by Teesside.” She added: “There are a lot of projects but they all have question marks over them.”
Two years after the credit crunch began, the good times are back for the City of London. In recent weeks banks have announced a return to profits and huge bonuses. For them, the worst seems to be over. On Teesside the effects of the financial meltdown continue to reverberate.
At the Wilton petrochemicals complex 54 projects worth more than £6.4 billion are in the works, according to Stan Higgins, chief executive of Nepic, the regional chemicals industry group. Most are still searching for financial backers. It is not easy. “Why is it that a company building a plant for 400 people to stitch handbags gets more help than a plant employing 100 highly skilled workers?” said Higgins. “It doesn’t make sense.”
And that is the problem. The jobs crunch is biting hard. Plans that take years to materialise will do little for the residents of Redcar, Cleveland, Stockton and Middlesbrough who are suffering now. After the bailout of flagship industries such as cars, or “too-big-to-fail” sectors such as banking, the government has nothing left to give. Many here feel deserted.
Alwyn Hughes, head of Ensus, can count himself lucky. “There are a lot of plans but we are the only ones that have raised the funds,” he said. “We did it three years ago when credit markets were much friendlier. With the credit crunch, the hurdles to raising money are much, much higher.”
Meanwhile, Wilton is bleeding jobs. Invista shut its nylon plant in January. In June, Dow announced plans to close its ethylene oxide plant, no longer able to compete with the Middle East. Croda, whose plant received its feedstock from Dow, soon followed. Then came Artenius, though there is talk that a new buyer may take over its plant. At Corus, the day of reckoning has been put off until the end of September thanks to a modest recovery in the steel price and a few short-term orders. The fight for survival goes on.
Kevin Ball, who was recently laid off from Artenius, said: “One of the young guys with us has an £800 mortgage and £400 car payment. Now he is on £65 a week. That’s why we are fighting. Because once the jobs go, they won’t come back.”
Back at the working men’s club, nobody shouted “house” as the caller read out the last of the numbers. Another week without a winner. They will surely come again next Tuesday, hoping for better luck.