Houchen: 'Large fight inside Government' over Teesside AI growth zone

Lord Houchen told the Politico Pub at the Conservative Party Conference in Manchester yesterday that there was a “power struggle” between Sir Keir Starmer and Energy Secretary Ed Miliband over the future of the site.

The mayor originally backed a blue hydrogen project from BP, called H2Teesside in 2021, which has the support of Mr Miliband due to its focus on net zero.

However, Lord Houchen said this “now looks very shaky”, and claimed that the energy giant is “going back to the drawing board and redesigning the whole thing”.

As such, he said he would now prefer to have Europe’s largest data centre on the Teesworks land which had been set aside for the BP project, and he has been working with the Prime Minister on this plan.

Lord Houchen wants Teesside to follow the North East as one of the Government’s new AI growth zones, which will allow companies to receive rapid planning approval and preferential energy access.

North Yorkshire has also bid to become one, pitching a data centre at Drax power station near Selby, however Lord Houchen claimed “Teesside is, frankly, the only place that can do it at scale if we want to be internationally competitive”.

Mr Miliband was due to make the development consent order (DCO) decision for H2Teesside in August, but instead pushed it back to a later date.

“I am confident in saying that there are large parts of the government that would prefer the AI project to go ahead, and do not want the BP DCO to be granted,” Lord Houchen claimed.

He revealed that the Prime Minister was getting weekly updates on the policy, while the then-Technology Secretary Peter Kyle sent a letter to the Tees Valley Mayor giving him his support.

“It's currently sat on Ed Miliband's desk,” Lord Houchen continued, “and I am acutely aware that there is a large fight inside the government where Ed Miliband seems to have set himself up against not just the Prime Minister, but a number of secretaries of state.

“That resulted in the decision being deferred because the Prime Minister and his team, for whatever reason, didn't feel like they could tell Ed Miliband what to do.”

He described this as "frustrating for us”, before adding: “There's clearly a power struggle going on there, which infuriates me, that a Prime Minister, for whatever reason, doesn't seem to have a grip over some of the secretaries of state on a project.

“There is a decision due on 30 October. Hopefully it goes the right way and we can deliver something that's truly transformational for this country with a Labour government, which would be great.”

A Department for Energy Security and Net Zero spokesperson said: "The statutory deadline for the H2Teesside application development consent order decision has been extended.

“All infrastructure planning decisions this government makes will be in the national interest – helping deliver the Government’s plan for change.”

A BP spokesperson said: “We continue to work with government to progress options for the development of H2Teesside.”