Chancellor wants to bring more jobs and investment to the North East following multibillion-pound green pledge

The Government has committed nearly £22bn to two carbon capture projects, including one in Teesside

Chancellor Rachel Reeves says she wants a multibillion-pound green investment into the North East to be the first in a series of announcements for the region, ahead of the Government’s Investment Summit and Budget.

Ms Reeves was speaking on the back of the Treasury’s commitment to the Net Zero Teesside carbon capture and storage project that is said to have the potential to create 3,000 construction jobs and 1,000 long term jobs.

It is part of a near £22bn package promised to industry over 25 years to bring to fruition projects in the North East and North West. The first two schemes together promise to bring £8bn of investment and remove 8.5m tonnes of carbon emissions each year.

The £4bn Teesside scheme - led by energy giants bp and Equinor - aims to establish an industrial carbon capture, utilisation and storage (CCUS) facility at the Teesworks regeneration site which will produce 860 megawatts of gas fired power with CO2 from the process captured and transported by the Northern Endurance Partnership pipeline to be stored under the North Sea.

Ms Reeves said the backing would ignite growth in the industrial heartland of Teesside as she brushed off questions about the efficacy of carbon capture.

She said: “Some people say you can’t decarbonise an economy and keep good jobs in manufacturing but we believe the exact opposite. We can decarbonise the economy and invest in good jobs, paying decent wages, in places like Teesside and that’s incredibly exciting.

“But it’s also very important that the people who power our energy sector today and power our economy are also part of that future. This is about ensuring that jobs in energy intensive industries - like we’ve got lots of on Teesside - continue for decades to come. And, there are some parts of the economy that you can just move to electricity, but that is not the case for swathes of these energy intensive industries.

“I was at glass factory, there’s also cement, fertiliser, steel - if we want to keep those jobs in Britain, and we absolutely want to keep them in Britain, we’ve got to find a way of capturing the carbon and this partnership with bp, Equinor and ENI and others is really exciting. It’s about creating new jobs in a totally new industry - carbon capture - but also supporting jobs in the energy intensive industries of today that if we don’t do carbon capture, they risk going overseas and that’s why we doing this to invest alongside business.”

Business group the North East Chamber of Commerce welcomed the announcement, with chief executive John McCabe saying: “This investment places Teesside at the heart of the energy transition and presents a great opportunity to build a supply chain across the wider North East. We now need to see it backed up by proper funding for our further education colleges so they can deliver the skilled workforce required to make this work. This is a fantastic day for Teesside and the North East.”

With nine days to go until the Government’s set-piece Investment Summit, the Chancellor said she wanted to bring jobs and investment to places like the North East and Teesside - with the carbon capture funding, alongside the £10bn Northumberland data centre plans by US firm Blackstone, as the first of a series of announcement that will benefit the wider region.

She said: “I said in my speech at Conference last week that we’ve got to count the benefits of investment, not just the cost. That’s why I’m determined this Budget is going to be about investment and I think the divide in politics today is about investment and decline, because the Labour Party believes that if we invest alongside business, our best days are ahead, whereas the Conservatives, I’m afraid, were embracing the economics of decline and refusing to make the investments we need to grow our economy.

“They paid a price at the ballot box for that and we’re not going to make the same mistake otherwise we’re not going to bring those good jobs - paying good wages - to Teesside and other parts of the UK. That partnership approach with business that you’ve seen plenty of times when I’ve been up in Teesside is absolutely at the heart of our approach in Government.”