Baggs
I knew I'd seen this use of 'that' instead of 'who' in "proper literature". It's in Coleridge's ^Rime of the Ancient Mariner^:
"Under the keel, nine fathom deep,
From the land of mist and snow
The spirit slid, and it was he
That made the ship to go."
Perhaps the actual grammatical instances where this occurs are quite subtle but clearly it has been, and still is if that Beeb quote is true, actual "usage". Or, as one language teacher of mine said: "If it's what people say, then it's correct." Idiomatic.
I cannot come up with a rule, but would any of you say "It was he who made the ship to move" rather than "he that"?
To me there is nothing wrong here, as "he" "it" and "the spirit" are the same entity.