For the Tories, one of the standout successes in the recent round of elections was Ben Houchen, who was re-elected Tees Valley mayor with 74 percent of the vote. His ‘Tees Valley model’ has integrated direct state investment, public-private partnerships, neoliberal ideology, and grassroots campaigns, and has been centred around the redevelopment of Teesside International Airport. Run on these grounds, his success is a challenge to Labour and the Left more widely – but the model has its own tensions, too.
The story of the airport itself is an instructive one for both British politics and the politics of the region. Following the Airports Act of 1986, which led to the part or total privatisation of airports across the UK, Teesside Airport was established as a public company run by Cleveland and Durham councils. It increasingly played second fiddle to Newcastle Airport, which took the lion’s share of international passenger flights in the North East of England.
In a debate in 1993, Tory MPs demanded full privatisation to boost the airport’s business, blaming the ‘command and control’ approach of previous Labour governments (then out of power for 14 years) for its continued failures. The MPs would get eventually their wish: as local government privatisation and asset sales continued apace under New Labour, the local authorities sold off most of their stakes in the airport to Peel Airports in 2003 for £500,000, who controversially changed the name to ‘Durham Tees Valley Airport’.
Recently revealed documents show that the contract allowed Peel to redevelop the airport and sell it off (most likely for housing) if it proved unprofitable. Following the 2007 financial crash, passenger numbers declined, and the airport was sold to the owners’ partners (after most of Peel Airports was bought out), the Peel Group, which is led by billionaire businessman John Whittaker.
An ‘airport tax’ was introduced to generate revenue, and a new ‘master plan’ was released in 2017 which included using land to build houses to generate further revenues. This controversial plan provoked local residents to form a group to campaign to ‘Save Teesside Airport’, which has been vocal in its support for Houchen.
In his 2017 mayoral campaign, Houchen argued for ‘an airport owned by the people.’ He set out state investment plans, defending the use of public money by arguing that the worst case scenario was that the land would be sold to the benefit of local people, ‘not a private landowner.’ In contrast, then-local Labour MP Phil Wilson argued that the plans were ‘fanciful’ and that it was time for ‘grown up politics’ rather than public ownership.
Houchen was able to turn the abject failure of privatisation into a success story of state intervention, all the while opposed by the Labour old guard unable to understand changes in public attitudes. The re-renamed Teesside Airport was purchased by the public for £40 million after Houchen won office.
Earlier this year, the airport was included in the bid to turn Tees Valley into the largest freeport area in the UK. Freeport status recalls various Thatcherite interventions (enterprise zones, for example) which created areas with relaxed taxes, customs laws, and other regulations as a means of stimulating economic growth.
The various experiments of the 1980s along these lines were not particularly successful on economic terms, but the difference in this case is that the national government is more than willing to pump investment into an area where there is a Tory mayor, with further investment ongoing into Redcar steelworks, too. That was the implicit (and sometimes explicit) offer to voters last week: you need a Tory locally to get national investment. The bid for the Tees Valley Freeport was accepted within a month of submission.
Houchen has shown himself to be an adept campaigner, able to tap into existing local struggles; his willingness to embrace infrastructure spending as well as public ownership shows an almost New Labourish ideological flexibility. But the purchase and management of the airport is also one that mirrors a national approach: the tax-averse Peel Group were given public money for their failure when the public bought back the asset for £39.5 million more than it was sold in 2003. The management of the airport is carried out by the Stobart group, which has a 25 percent share, meaning this a public-private partnership like most of the previous iterations of the airport – albeit with significant involvement from the mayor’s office, too.
There are also other tensions at play. Attracting businesses with low taxes and deregulation is a drum neoliberals have been banging since 1979, with limited success, and of course lower tax revenues tend to lead to cuts to the public services which have already been decimated in the region. Investing in extra airport capacity, particularly for internal flights, is also clearly not a sound environmental move however it might be presented, and risks coming into conflict with future environmental legislation.
Perhaps the greater concern for the mayor will be the iron hand of the Treasury and its Tory budget hawks, who may have initially been relaxed about the Tees Valley model as a strategic electoral move, but are now getting worried that every region might start wanting similar investment.
The challenge for Labour is to get serious about identifying the weaknesses in the low-tax public-private model, which has repeatedly failed in the past, and make the case for investment in public services and goods. It’s not enough to argue for investment alone: we need genuine public models of ownership that aren’t premised on tax haven principles.
The airport may well turn out to be a vanity project, as some in the region have claimed, but alongside the steelworks redevelopment it shows a willingness to invest in Teesside which (largely thanks to the Tories) has been absent for years. It is clearly a problem that government gives preferential treatment to its own, but it is not enough to simply demand an equal pot of money for the same reheated neoliberal policies in Labour-held areas, too.
In the long term, it’s good for the Left that the notion public ownership is back on the table. The challenge is to articulate the differences between what’s happening in Teesside and what’s happening in Salford.
That said, it should be cause for serious reflection that a Tory has been the one to lead on public ownership and investment in Teesside, and there is a lesson for Labour in how Houchen’s campaign utilised community organising. Time will tell whether these projects are successful, but the Tees Valley model could be one we see the Tories push in other localities in the coming years: eye-catching infrastructure projects work nicely to mask the collapse of public services and rising poverty.
Many right-wing authoritarian governments have spent big in this way. But the Tories do not—and will never—offer a version of public ownership that truly works in the public interest. That is the gap that Labour must fill.