Blyth Decision Means UK’s Industrial Reboot Loses Another Site of National Importance

Northumberland County Council today approved plans to house a data centre on a site previously earmarked for a £2.6bn gigafactory. Chris McDonald, the former CEO of the Materials Processing Institute, outlines why the decision has the potential to create long-lasting economic damage for the region – and the country

FOR THOSE who do not know it, Blyth is an astonishing place. The town, built on mining and shipbuilding industries now long gone, is vital to securing the green industrial revolution that Britain so desperately needs. Driving alongside the docks, you can see enormous “bobbins” of subsea cables for offshore wind and as home to the National Renewable Energy Centre, part of the Offshore Renewable Energy Catapult, Blyth is the UK centre for the large-scale development of offshore wind and marine energy technology.

Blyth’s industrial legacy has gifted the town a remarkable range of assets in the form of skilled workers, industrial land, and high voltage power connections, ideal for locating the new industries we need to decarbonise our economy, secure our future energy needs, and rebuild our industrial base. More than this, the jobs that industry offers would mean a big boost to wages and the economic prospects of the northeast of England – the place where I live, and which has fared so badly in the deindustrialisation of the last 40 years.

Until recently, Blyth was destined to lead the development of a new green industrial sector, with the building of a £2.6bn (US$3.2bn) gigafactory, producing electric vehicles batteries. This is essential to the future of the UK car industry, with a general acknowledgement that this vital sector can only remain competitive with a domestic supply of batteries.

The failure of BritishVolt, the developer for the plant, is a blow to our automotive industry, but the consequences of the subsequent sale of the site earmarked for the battery factory to Blackstone, for use as a data centre, has the potential to create even longer lasting economic damage. The saga surrounding this site in Blyth, from coal yards to potential battery factory and now data centre, needs to be a wake-up call for how we, as a country, regard our key industrial land.

As the UK has deindustrialised over the last generation, we have given up prime industrial land in urban locations for redevelopment for housing, retail, and leisure. Combining this with a reliance on decades old infrastructure means that there are now only a handful of places where major industrial investments can be realised – sites that combine hundreds of acres of land with grid connectivity, port, road, and rail access, and a ready and skilled workforce. The challenge is that using this land for industry will never yield as high a profit as for housing, businesses, light industrial, or even data centres. Yet, large industrial sites are a rare and finite resource, the availability of which will determine whether our country thrives, or even survives, in the new industrial world of hydrogen, electrification and renewable energy.

We can see the risks to our larger industrial sites just a short trip down the coast from Blyth at Teesside. The development of the former steelworks site, Europe’s largest brownfield industrial redevelopment, is being led by property developers whose objective is to maximise their own financial gain rather than produce a return in terms of industrial renewal and national security that our country needs. As a result, a site perfectly suited to being the home of our hydrogen steel industry of the future has been divided up into areas of a scale too small to accommodate even the latest advanced steel mills.

We need a renewed recognition of the importance of our large scale, strategic industrial sites and to ensure that they are developed in the national interest, rather than in the narrow interest of their owners, or even worse, not developed at all. More than this, these sites are often located in areas where jobs are scarce and wages below the national average, with higher levels of poverty and poorer health outcomes. Industrial investment brings with it well-paid, secure jobs, having a positive impact on the national economy and a much bigger impact on local economies. The abundance of energy and land has certainly made Blyth an attractive location for a large data centre, the UK needs data centres, but one thing the data centre won’t bring are large numbers of high-paid jobs.

At a time of critical industrial renewal across the globe, it seems very much that the UK is choosing to place itself at the mercy of market forces and overseas governments. Instead, we should be seizing the day, deciding what we need and what we want to lead the world in and fighting hard to at least retain our seat at the top table of industrial nations. To do this requires a long-term industrial strategy for Britain and, I would argue, an industrial strategy that recognises, and appropriately incentivises the development of, our strategic industrial sites.