Materials Processing Institute

Chris McDonald is Chief Executive Officer for the national research and innovations centre for the steel and metals sector, the Materials Processing Institute on Teesside. Yesterday (6th December) he delivered the 69^th Hatfield Memorial Lecture in Sheffield where he argued the case for a manufacture-led industrial strategy

We need Billingham to boom. As a town known for producing chemicals for explosives, we need places like this to succeed if the UK is to have a fair and green economy.

Billingham is nationally important, with The Northern Echo reporting last year a £400m investment by Fujifilm, for vaccine production. Its residents are rightly proud of their history, with local football team, Billingham Synthonia, named after “synthetic ammonia,” the precursor to fertiliser made here.

But we must ask whether Billingham’s contribution to the UK has properly been recognised. Have the people of Billingham, Teesside and the North East, received a fair share of the prosperity that they have made possible? The answer to this is clearly no.

Over the last decade, the UK has become one of the most unequal and poorest performing economies in the developed world. The consequences are being felt not only in boardrooms, but in living rooms too. In 2005 the average Briton was better off than those in France and Germany, but the last 10 years has seen the wealthiest get richer, whilst those on average wages are forecast to fall behind Poland by the end of the decade and Slovenia shortly after.

This is a human tragedy - with half of the children aged under five in our region now living in poverty and when I talk about this, it is from personal understanding. My family are more fortunate now, but as we go into this winter, I know what it is like to grow up in a cold house and how physically and emotionally wearing it is, when no matter how hard you work, there still isn’t enough to go round.

Doing something about this has become a personal mission for me, because like so many local people I was determined to live, to work and to bring up my family here. That’s why I set up the Materials Processing Institute, why I chair the Redhills charity in Durham, and why I set up scholarship schemes for students from Teesside.

I’ve worked in the Teesside steel and chemicals sector for more than 20 years, but every time I drive North over the A19 viaduct it takes me back to being a child when the sight of the tower emblazoned with the letters ‘ICI’, meant I was nearly home. The branding of the Imperial Chemical Industries has long been removed following the breakup and sale of what was once the bedrock of the UK’s industrial economy and that is a big part of the problem.

A recent report by the Resolution Foundation found that the inequality is a consequence of our services focussed economy. The best thing that we could do to raise living standards, strengthen our national resilience, boost exports and pay down our national debt, would be to increase manufacturing.

Our region is the only part of the UK paying our way, with our advanced automotive and chemicals sectors, plus newer industries, such as offshore technologies, creating a positive balance of trade. But levelling up seems to have stopped before it started, to be replaced by more austerity, ignoring the fact that many nations that are wealthier than the UK are also more equal. With economic growth for the UK forecast to be worse than every G7 nation other than Russia, we need to reflect on what makes our economy so uniquely fragile.

The root cause of this problem is industrial decline. In the last 40 years, UK policy makers have turned our national economy from manufacturing to services and financial services. But where was the democracy in this decision, what agreement was reached, with the people of Billingham, Teesside, or manufacturing centres around the country, to pursue a policy of removing major industries that were both large employers and part of our sense of identity? There was of course no consensus. The policy of deindustrialisation, of offshoring, was one visited uncaringly on people in our industrial heartlands.

Places like Billingham can feel remote from power. Yet these are the places that hold the keys to unlock green economic growth. What is our response to warnings of a UK food shortage, as reported in The Northern Echo this week? Surely it must be to increase fertiliser production. Yet instead, we read about businesses such as CF Fertilisers pausing production, or Mitsubishi Chemicals considering hundreds of job losses.

Whilst other nations are seeing record levels of government investment in hydrogen and energy technologies, the UK’s hands off approach has seen our first major gigafactory flounder and our steel sector shrink to the size of Belgium’s, while this winter, blackouts are forecast as we rely on imports of gas and electricity from Europe.

We need a national plan, as part of an industrial strategy, to redevelop the hundreds of acres of land at the Billingham chemicals complex, to become the epicentre of a new green industrial revolution, producing energy, chemicals and hydrogen for industry and exports. Doing this will have a profound impact on the lives and life opportunities of our young people. Where now they may be forced to leave their homes and families, to find work outside our region, instead they can study and work in their hometowns, reinvigorated with a new economic purpose.

What I want for our young people, is no more than I was offered myself, when British Steel supported both my education and my career, and to know that a true measure of levelling up is one where your life chances, and your life expectancy, are not determined by the place of your birth.

If there is one town in the UK that we desperately need to do well to deliver the green economy, then it is Billingham and any proper national industrial strategy would recognise that and the wider contribution that we can make across Teesside and the North East, through manufacturing and exporting. This is how we can create a more resilient British economy, whilst at the same time dealing with our longstanding issues of inequality, poverty and poor health and wellbeing.

Our goal though, first and foremost must be to increase fairness, to be sure that this time the benefits of industry are properly shared with those who work in it.