The Minister for Industry (Chris McDonald)
With your permission, Madam Deputy Speaker, I wish to make a statement on the closure of the ExxonMobil Fife ethylene plant at Mossmorran in Scotland. I thank Mr Speaker for accommodating this statement today.
Like many Members of this House, I am saddened to learn of Exxon’s plans to close its Fife ethylene plant. This decision is of course extremely worrying news for those employed by Exxon, as well as for contractors who work at the plant, those employed by the companies who supply the site with gas, and those at the adjacent natural gas liquids plant operated by Shell. While this is no solace to those impacted at Exxon, Shell has confirmed that it does not see its workforce or operations being affected by this closure.
The Government and ExxonMobil have been discussing the operating environment of the plant since April, and my officials have endeavoured to meet Exxon every week since August. Ministers also met Exxon regularly this year, underlining our commitment to exploring every possible opportunity to retain the site’s operations. This afternoon, I spoke with Paul Greenwood, the chair of ExxonMobil. He assured me that Exxon is not suggesting that this closure was due to a lack of action or will on the Government’s part. It was a commercial decision made when the numbers simply did not add up. He reiterated to me that the site is 40 years old, inefficient and in dire need of modernisation to be commercially viable for the future.
The company estimates that it would have cost close to $1 billion in capital investment to bring the site to a point where it would be profitable. That fact, combined with a challenging petrochemicals market, including a sharp decline in ethane supply in the North sea, meant that the investment was likely to outweigh the return. ExxonMobil has already closed similar assets in Europe, and is divesting from activities where there is no short-term path to profitability. It explored alternative use cases for the site, but none offered a viable route to sustainable operations. As the site has been significantly loss-making for the last five years, and as it would take a further five years for the investment to reach its potential, Exxon decided against continuing operations. In those circumstances, the support from the Government that Exxon would need to change those calculations was beyond acceptable levels. Exxon was aware of this, and it has acknowledged that, even with support, the commercial circumstances were simply too stark, and the costs would have been too great. So despite tireless, inventive and determined work from both Government officials and Exxon, the challenges facing the site were ultimately insurmountable.
The decision that the Government would not provide financial or bespoke policy support was communicated to Exxon by my right hon. Friend the Business and Trade Secretary, but we have of course retained an open dialogue with the company throughout. This is not a decision that either the company or the Government have taken lightly. As hon. Members know, this Government have shown that we are prepared to step in and support industry when it is feasible to do so. We have stepped in to support businesses in the steel, shipbuilding and chemicals industries, protecting jobs and vital capability across the UK, including Scotland, but in all cases there was a fundamentally sound business proposition underpinning our investment. Sadly, here that was not the case.
I want to stress that, as disappointing and concerning as the closure of the Mossmorran site is, it is not symptomatic of UK industry as a whole. Our commitment to supporting UK industry is clear in the many steps that we have taken since coming into government last year. Our modern industrial strategy lays out a raft of policy interventions to ensure that British industry remains a world leader that is hugely innovative and investable—a strategy to cut red tape, lower energy bills and get spades in the ground. The fact that we have seen £250 billion of investment committed and over 45,000 jobs supported since July is testament to the strategy’s success so far.
The closure of the Fife plant is a commercial decision made by ExxonMobil, but of course it has a very human cost. There are 179 direct employees and 250 contractors employed, and there are more people in the supply chain. I know Members from across the House will be primarily worried about these individuals and the communities impacted. Let me assure the House that the Government stand ready to provide support through the Department for Work and Pensions rapid response service and its involvement in PACE—partnership action for continuing employment. The Secretary of State is meeting Unite tomorrow as part of a wider visit, during which he will discuss options for more support for the affected employees. I also met Unite earlier today, and I will meet GMB colleagues tomorrow.
I have been assured by the company directly that Exxon, as a responsible employer, will ensure that it properly supports its staff in finding alternative work, including at its Fawley site at Southampton, and will support those employees in their relocation. Our focus now is on helping the workforce through this troubling period, and ensuring that responsible next steps are taken for the decommissioning and remediation of the site. Long term, we are ensuring that UK manufacturing at large benefits from this Government’s growth mission. We want to create the right conditions for British manufacturers to properly compete in the global economy and win. Over the coming days, my Department will update the House on the progress that we are making, not least on energy costs.
Before I conclude, Exxon chair Paul Greenwood asked me to reiterate a message that he has given to all the employees at Mossmorran. It is a message that I am sure all Members of the House will agree with: the closure of this site is no reflection on them, their efforts, or their work. They should be proud of what they have accomplished in the last 40 years. As Industry Minister, I personally thank the employees at Mossmorran and the Fife community for their contribution to the UK industrial economy and, through decades of ethylene exports, to our balance of trade for over 40 years.
This is not the end of Fife’s industrial story. As Exxon gradually decommissions and remediates the site, the Government are committed to working with the local authority and the Scottish Government to promote the benefits of this location for future industrial investment. This Government are committed to supporting the workforce and the community over the coming weeks and months, during what I know will be a difficult and painful transition. I commend this statement to the House.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I thank the Minister for advance sight of the statement. Since the Government came to power in July 2024, over 15,000 manufacturing and industry jobs have been lost. Only this Labour Government would recognise that as a success. The Minister says that he is saddened. That is cold comfort to the workers losing their jobs today. Energy-intensive industries are in decline across the United Kingdom. Oil refineries and petrochemicals plants are facing the economic and fiscal realities of choices made by this Labour Government at Ineos in Grangemouth, at Prax Lindsey in Lincolnshire, and now at Mossmorran in Fife, where Exxon has told us that there is no competitive future due to the current economic and policy environment.
The Minister tells us that this was a commercial decision, and that the numbers did not add up. Er, yeah—due to Labour’s decisions. Honestly! He mentions the decline in the ethane supply in the North sea. He almost gets it. The Government’s destructive tax-and-ban policy in the North sea has led to disinvestment, and has undermined the petrochemicals industry and its ability to secure low-cost ethane. That is damaging our energy security, detrimental to our petrochemicals industry, and utterly devastating for Scottish oil and gas workers. The Labour party simply does not get it. Also, the carbon tax—£20 million per annum for the Fife ethylene plant alone—was crippling. We are suffocating industry in this country, and these are political choices.
Industrial emissions are mobile. If we decrease our domestic carbon emissions by crushing British industry, we are simply exporting our climate obligations and increasing reliance on imports of plastics, fuel, ceramics, glass, bricks, concrete and more. We must find a way to decarbonise without decimating our domestic industrial base. Simply forcing industry abroad does nothing to reduce global emissions; in fact, it does the opposite. The high cost of energy and this Government’s war on the North sea are killing industry in this country. We simply cannot afford this Labour Government.
Although the closure will be felt most acutely in Fife, the repercussions will reverberate across this country. For the first time since the UK invented polyethylene, we will not be manufacturing the primary component in this country. That is shameful. Industry has already warned that closures like Grangemouth, Prax Lindsey and now Mossmorran risk forcing downstream operators to import resources at higher cost, undermining their competitiveness. We are not just talking about 400 jobs at Mossmorran; the impact of this will cascade down the supply chain. The domino effect is taking place already. Altrad, Bilfinger and KAEFER all announced redundancies at Mossmorran when Grangemouth closed earlier this year. Allowing another major industrial plant to close sends the signal to investors that under this Government, UK plc is closed for business.
We are losing domestic industrial capacity at a terrifying rate. The Minister claims that this is not symptomatic of British industry as a whole, but the drumbeat of job losses and plant closures tells a very different story. He talks of support for jobs, but unemployment has risen every single month since this Labour party took office. The closure will be felt by workers in Fife, but make no mistake: the crisis facing industry is stamped “Made in Whitehall”.
The Government have said in the House that they are ready to provide assistance to workers at Mossmorran, yet we still lack clarity about the support for the future of Grangemouth, and the status of the National Wealth Fund moneys promised by the Prime Minister. Can the Minister update us on the £200 million fund for the future of Grangemouth? We have not seen one penny spent so far. The Prime Minister’s promise looks like empty words yet again. What proposals have been brought forward, and when will workers have certainty about the future of the site?
This Government are taxing jobs, increasing the cost of energy and driving British industry off a cliff edge. Britain cannot afford this Labour Government; frankly, Scotland cannot afford this Labour Government. I feel very sorry for the Scottish Labour MPs who have been whipped in to defend this Government’s position tonight.
This is not a just transition; it is anything but. This is the wilful de-industrialisation of the United Kingdom. The Government are offshoring carbon emissions and driving up reliance on imports, and British workers are paying the price. Will the Minister outline the support that his Department intends to provide for the workers at Mossmorran, and provide an update on the Nation Wealth Fund moneys for Grangemouth? Does he agree that British industry is at a competitive disadvantage, due to the crippling industrial energy costs, the jobs tax and the carbon tax? Will this Government finally see sense, see what everybody else sees, and change their policies on the North sea?
Chris McDonald
I would be very happy to take the opportunity to educate the shadow Secretary on some of these issues.
Chris McDonald
No; it is real. He will realise that soon. I was genuinely upset when the shadow Secretary of State described my words as cold; they were not. They were sincere and heartfelt, because I have been in this position myself. I really wish that the shadow Secretary of State and his colleagues had shown similar vigour when the steel industry in Teesside was collapsing around us, and my colleagues and I were at risk of redundancy. The Conservatives stood by, and left 10 days for a buyer to be found for the most efficient steel plant in the country before it closed.
I take the shadow Secretary of State’s comments about the uncompetitive business environment in the UK with a pinch of salt, because the plant has been significantly loss-making for five years. I wonder why that is. Could it be because of our high energy prices, resulting from the previous Government’s decision to tie us to international gas prices and put us at the mercy of Vladimir Putin?
The shadow Secretary of State talks about a transition. I know what a terrible transition is like, because I lived through one in the coalfield of County Durham. The Government are ensuring, in Scotland and throughout the UK, that the workforce in these industries have the benefit of a proper transition. That is why we have an industrial strategy, and why we have intervened in industry in the areas that I have mentioned.
Now we come to the point of education. Sometimes it is best to get our knowledge of industry, and industry in Scotland, from somewhere other than Twitter, because we do in fact still have ethylene production in the UK, at Grangemouth. I would have thought the shadow Secretary of State would have realised that. Perhaps he did not realise this, but none of the ethylene produced at Mossmorran was used in the UK anyway; 100% of it was exported to the EU. That was why I thanked the workers for their contribution to the UK’s balance of trade over so many decades.
Finally, the shadow Minister can debate the nuances of carbon taxes if he wants to, but this plant exports all its product to the EU. To do that, the plant needs to ensure that the product aligns with the market in which it finds itself, which obviously has the EU emissions trading system. If it received relief in the UK, it would have to pay that tax to the EU. Does the hon. Gentleman prefer that that money comes to the UK Government or that it goes to the EU?
The hon. Gentleman’s comments demonstrate that not only does he not understand this plant, but he does not understand the chemicals industry. I really wonder whether he cares for the workers at Mossmorran at all.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
This is devastating news for all the workers at the ExxonMobil Fife ethylene plant in Mossmorran, many of whom are my constituents. ExxonMobil must now be fully transparent and give proper clarity for the sake of all those affected.
This company made £25 billion in profits last year, yet over the course of multiple meetings with Ministers in recent months it failed to come up with any viable proposals to secure the plant and the jobs. In contrast, I have today met with representatives of Shell, which runs the adjacent Fife natural gas liquids plant, and it has confirmed that the jobs there are secure for the foreseeable future.
I am also in regular contact with trade union colleagues. Earlier today, both Fife council and I called for a new taskforce to be set up to explore future options for the plant and provide proper support to the workforce. Will the UK Government give full support and engagement to such a taskforce?
Chris McDonald
My hon. Friend is absolutely right that we need to focus on the workforce. Earlier today, I sought and was given reassurances by the company on the support that it will give to the workforce. Its expectation is that, of the 179 permanent employees, 50 of those will remain in employment until at least 2027-28 to support the safe decommissioning of the plant, and a further 50 will be offered relocation to its Fawley plant. I have also made inquiries about apprentices.
On her specific request for a taskforce, that would be usual in this situation. I absolutely support it, and I think a new and distinctive taskforce is required for this plant to address the very specific areas, not only for the plant but for the Fife community.
Madam Deputy Speaker (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Susan Murray (Mid Dunbartonshire) (LD)
I agree that this announcement is devastating for Mossmorran and for the communities around Fife. Hundreds of highly skilled workers now face an uncertain future and it is clear that the closure of this cornerstone facility reflects a deeper failure to provide the stable, long-term industrial environment that businesses need if they are to invest and grow in Scotland. For many years, the Liberal Democrats have warned that the absence of a coherent industrial strategy, first abandoned by the previous Conservative Government and then left to drift further by this Labour Government, has created damaging uncertainty for our manufacturing and energy sectors. Will the Minister assure this House that the energy sector is at the heart of the Government’s industrial strategy?
Exxon’s statement made clear that the current economic and policy environment has made continued operations uncompetitive. What steps will the Government take to ensure that the UK remains a viable place for energy production and to prevent further closures of major industrial sites?
We also cannot ignore the human impact. Many of the workers are among the most experienced and specialised in the sector, yet only 50 roles are being offered elsewhere and that is nearly 500 miles away. Can the Minister tell the House how many have been offered and accepted relocation, and what support has been put in place locally for those who simply cannot uproot their lives, families and communities?
Further, the Exxon closure will see many highly qualified and specialised workers laid off at a time of severe cost of living pressures. What immediate and long-term measures are the Government putting in place to ensure that those individuals can transition to appropriate, well-paid employment? Communities in Fife deserve clarity, certainty and a real plan for the future. I urge the Minister to act quickly, decisively and collaboratively to protect the workers and to ensure that Scotland’s industrial base has a sustainable future.
Chris McDonald
I agree with the hon. Member that at its crux there has been a failure of long-term planning in industry. We can see that when we contrast the two ethylene plants in Scotland. The plant at Grangemouth imports a lot of its ethylene from the US, which is in plentiful supply and comes at a much lower cost. That required a significant investment in the port infrastructure at that plant. ExxonMobil was aware that, in order to ensure that Mossmorran was sustainable, it would need to make a similar investment. It would have been possible for it to have made that investment some years ago, but at this stage, an investment of about $1 billion that would not come to fruition within the next five years is judged by the company not to be sustainable. Of course businesses require some certainty in order to invest; I made that point at Energy questions this morning. The certainty provided by our industrial strategy—in particular, this Government’s commitment to renewable energy technologies—is allowing investment to come in.
I agree with the hon. Member that our focus absolutely needs to be on the employees. I understand that no employees have been offered relocation yet, but it is the company’s view that 50 such posts are available and it is inviting expressions of interest from employees at this stage. I understand that the other plant is a very long way away, and that relocation will not be suitable for everyone—perhaps people do not want to uproot their families or they are embedded in their local communities—but if some workers want to take up that opportunity, I am pleased that it is there. With the offer of relocation for 50 employees and 50 employees being retained, we can see a way forward for about 60% of the permanent employees at the moment. Clearly, I would expect the taskforce to provide support for the other 40%, and the UK Government are working with the Scottish Government and the local authority on that.
We must not ignore the jobs that are being created every day and every week in Scotland in our new clean energy industries, with up to 60,000 jobs by 2030. Fundamentally, this is about supporting that transition. It is my expectation that, as these new jobs are created, people will transition across. As I have said, I lived through a terrible transition in the past. The mission of this Government is to ensure that we have a supportive transition for workers and communities in Scotland and around the UK.
Richard Baker (Glenrothes and Mid Fife) (Lab)
This decision by ExxonMobil, and the manner in which it has been taken and announced, is a very poor way to treat workers who have given so much to the company and their communities. Given that only last year the company was announcing four-year apprenticeships at Mossmorran, including for some of my constituents, will the Minister do everything in his power to ensure that those apprenticeships can continue and that the company, which has made record profits in recent years, recognises its duty of care to those young people?
Chris McDonald
I was pleased to meet my hon. Friend earlier to discuss some of these issues in detail, and I am pleased that he has raised the issue of apprentices. I raised that personally with the chairman of the company earlier today, and I have established that there are approximately six apprentices involved. It would be usual in this situation for those apprentices to be found positions in local industry, and that will certainly be a priority. With only six apprentices, I do not think it will be a problem. Local industry tends to respond very rapidly in these situations, and of course it is a priority for us to ensure that those apprentices can continue their apprenticeships.
Harriet Cross (Gordon and Buchan) (Con)
Exxon has said that the plant’s closure
“reflects the challenges of operating in a policy environment that is accelerating the exit of vital industries, domestic manufacturing, and the high-value jobs they provide.”
When are the Government going to take responsibility for the decisions that they are making? We see no prospect of energy prices reducing, while the ethane supply from the North sea is reducing at a huge rate. That is leading to these job losses and it will continue to lead to more and more job losses across Scotland, as the Minister knows, until policy decisions are changed and until the North sea is supported.
Chris McDonald
I am aware that that is what was reported in the press, but I actually spoke to the chairman of Exxon earlier and asked him specifically whether he could confirm that. He told me that there were a few issues, including the availability and cost of feedstock and the efficiency of the plant. He also said that without the $1 billion investment, he could not see a future for the plant in those circumstances.
Graeme Downie (Dunfermline and Dollar) (Lab)
I thank the Minister for his statement, and I thank my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) for exposing the frankly ridiculous lack of transparency from ExxonMobil. My constituents certainly know exactly where the blame for today’s announcement lies: with ExxonMobil.
I wish to bring one issue to the Minister’s attention. A constituent—one of a number who work at Mossmorran —has contacted me with their concerns about the effect on opportunities for young people in the area. Given that we have also seen the SNP’s shocking failure on skills, including its cutting of college budgets by up to 20%, will the Minister reassure me that he will do everything he can work with the Scottish Government, Fife College and others to ensure that skills in the area are maintained and young people in Fife have the opportunities they deserve?
Chris McDonald
I, too, was particularly disappointed that the announcement was made so close to Christmas. Anyone making such announcements should take that into account. My hon. Friend mentions opportunities for young people, and he is absolutely right to do so. Our clean energy jobs plan was launched just a couple of weeks ago. It highlights the opportunity to create five new regional centres of excellence for clean energy jobs. I know that there will be great demand for the skills of young people in Fife and across Scotland and the UK in those clean energy industries. We have set out the jobs and skills, and the methodology by which we will enable people to access them. The Prime Minister was very clear about that in his speech to the Labour party conference: opportunity for young people is a mission of this Government. Ensuring that young people can access high-quality jobs in the clean energy industries in Fife must be a priority for the taskforce.
Stephen Flynn (Aberdeen South) (SNP)
Unfortunately for the Minister, some of us have also spoken to Mr Greenwood today. Although the Minister argues that this decision has nothing to do with the Government’s policy on the North sea, that is certainly not what was conveyed to me, but I am sure that he will clarify that from the Dispatch Box. The Minister also says:
“Exxon are not suggesting that this closure was due to a lack of action or will on behalf of the Government.”
Meanwhile, Exxon’s statement says that the decision is down to
“the UK’s current economic and policy environment combined with market conditions”.
What we have tonight is 400 families knowing that they do not have certainty over their ability to pay their bills going forward, a whole community impacted as a result of this decision, and a UK Government Minister who is not being clear with them about why this has happened and why he is not helping them. He stated from the Dispatch Box just a moment ago that the Government have before chosen to intervene—we know that they chose to intervene in Scunthorpe—but they chose not to do so in Grangemouth, as Labour Members will recall, and the Minister is choosing not do so now in Mossmorran. The Government are sleepwalking into the deindustrialisation of Scotland. This is on them.
Chris McDonald
Maybe it would be helpful if I reiterated the direct quote from the chair of Exxon, who said that the closure was not due to a lack of action or will on the part of the Government. He was clear about the condition of the plant. As I said in my opening remarks, the Government have intervened in the past where there has been a fundamentally sound business proposition. The right hon. Member failed to mention—maybe he has forgotten it—the £200 million commitment that the Government have made to Grangemouth, and the 100 projects that are lining up behind it to support the people there. Obviously he did not want to welcome that. He talks about a strategy for industry. Well, I have not seen the SNP industrial strategy. Perhaps I missed it.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I pay tribute to the Minister for his work, and to my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) for hers, in trying to engage regularly with ExxonMobil for the last couple of months. However, they failed to extract any viable proposal from the company on a way forward. Sharon Graham, the leader of Unite, has described ExxonMobil’s decision to pull out as “a disgrace”. It is a £25 billion company walking away from 179 jobs and 250 more contractors. Will the Minister ensure that, despite the axe-grinding that we hear from the Opposition, he works with the Scottish Government, Fife council and the community when he sets up the taskforce, to ensure a future for those workers?
Chris McDonald
I spoke to Unite representatives today and heard directly from the workforce of their experiences. ExxonMobil tried, prior to announcing its closure, to effect a sale of the plant, but it was not able to find any interest. I have been informed this afternoon that, as a result of the announcement of the closure, there may be some interest in the plant. Of course, we will explore every possible avenue for that and to ensure that the employees receive support, but if there are interested companies, we would be very happy to explore that, in working with the Scottish Government and the local council.
Wendy Chamberlain (North East Fife) (LD)
I agree with the hon. Member for Cowdenbeath and Kirkcaldy (Melanie Ward): this is devastating news for Fife. Although the Mossmorran plant is not in my constituency, I know that I will have constituents who are affected. I note what the Minister said about this decision not being due to a lack of action or will on behalf of the Government, but his statement was pretty silent on the economic circumstances referred to in ExxonMobil’s public statement—in what I saw when this closure was announced, there was certainly an attribution to the UK Government’s failures in that regard.
I am a bit disappointed that the first mention of the Scottish Government was at the very end of the statement, in looking forward. The Scottish Government have a responsibility for the economy and jobs, and taking an approach that does not involve the Scottish Government allows the SNP Government to blame the UK Government when such things happen. Although today’s announcement is not a surprise to the Government, will the Minister outline what conversations were being had with the Scottish Government in advance of this decision?
Chris McDonald
The hon. Lady points out that the plant is not in her constituency, but clearly the effects run far wider than the individual constituency concerned, particularly for a plant of this size, and we need to think carefully about the impact on the supply chain. I apologise for the fact that the Scottish Government are mentioned towards the end of the statement. That is in no way intended to imply that the Scottish Government have not been or are not involved. There have been meetings at the highest level in the Scottish Government. In fact, the Secretary of State for Scotland has also been involved in discussions with ExxonMobil, as we have tried to find any possible measure to avoid this decision. Ultimately, it was a decision for the business, and our focus now is on how we can move forward for the workforce and for the future of Fife. As I said, the industrial story of Fife is not over. There is excellent opportunity to bring new investment to that site in the future, and that sort of industrial regeneration is exactly what I want to see.
Madam Deputy Speaker (Caroline Nokes)
I call the Chair of the Scottish Affairs Committee.
Patricia Ferguson (Glasgow West) (Lab)
I thank the Minister for his statement this evening. I share the concern of colleagues, particularly those based in Fife, about the effect the closure will have. The news that contract workers were locked out of the plant this morning is a major concern, as is the news that staff—many of whom have worked in the company for many decades—have not yet been given information about what redundancy packages may be available. That is very worrying. What engagement is the Minister having with trade unions on this troubling development, and does he believe the trade unions have been properly consulted, as they should be in a situation such as this?
Chris McDonald
I thank my hon. Friend for raising those two issues. I raised the issue of redundancy packages with the company earlier, and it assured me that such packages had been made available. I then raised the same question with Unite the union, and it has undertaken to go away and confirm that for me—I want to do my own due diligence and make sure that is true.
I am particularly pleased that my hon. Friend raised the issue of contract workers. It was reported that they were locked out of the site, but the actual situation is slightly more complex. Contract workers had their permits revoked this morning, which I realise sounds rather dramatic, but for a COMAH—control of major accident hazards—site, that is a normal procedure in certain circumstances. In fact, the workers themselves believed it was due to weather conditions this morning. It was actually to ensure that all workers on the site—either direct employees or contract workers through their contract managers—could be briefed at the same time on the issue. Contract workers were then allowed to return home or to resume work, recognising that not all of them would want to stay on the site at that time, having received such shocking news. Hopefully, that helps to explain the situation. Of course, I will ensure that I continue to ask these questions of the company and engage closely with both Unite and GMB on these issues.
John Cooper (Dumfries and Galloway) (Con)
On the Business and Trade Committee, we hear all the time that energy costs in this country are unaffordable, and it puts industry of every kind at a disadvantage. We are seeing the results of that today. The other issue is the perverse carbon border adjustment mechanism, which actually makes imports of ethylene cheaper. The Minister referred to imports. Is it not the case that we need to look at all these policies in the round? We are crippling British industry.
Chris McDonald
I am committed to looking at the entire business environment for our-energy intensive industries—our heavy industry—because I want to improve the competitiveness. Perhaps I have an ally across the House who might help to point out areas that we could look at; I would certainly welcome that in the future.
I can perhaps provide a bit more detail on the two issues the hon. Gentleman raised: energy costs and the CBAM. On electricity costs, which are not the major factor for this site, the Government have introduced a range of measures to try to improve the cost competitiveness of the UK versus Europe, and we could talk about those in more detail at some other point. On gas, the UK is competitive with Europe; it is certainly cheaper than Germany and the Czech Republic, and it is slightly more expensive than Italy and Spain. The issue here is fundamentally the cost of gas in the USA, which is considerably cheaper, and we all understand why that is.
The CBAM issue is a bit more complex, because 100% of the material goes into the EU, so there is an issue around EU market alignment. Again, we could talk through that in more detail, but it means it is not quite as straightforward as if a domestic producer were asking for some relief from measures.
Brian Leishman (Alloa and Grangemouth) (Lab)
Sadly, this is an all-too-familiar story: private capital closing industry, leaving workers as disposable commodities to be tossed aside, and a community devastated. It is a carbon copy of what happened with Ineos and PetroChina and the Grangemouth oil refinery.
The Government stepped in at Scunthorpe, but they did not at Grangemouth and it looks like they will not at Mossmorran. Why not? Because Scotland is once again the victim of chronic deindustrialisation. For the sake of Scottish workers and communities, let’s get the £200 million spent, let’s get Project Willow going, let’s get new companies in, let’s get the good-paying jobs that my community and my town desperately need—and, for goodness’ sake, let’s have a bit of common sense and take some form of Government ownership in what comes next at Grangemouth.
Chris McDonald
I wholeheartedly reject the implication that there is some sort of anti-Scottish bias in this Government. I stand at the Dispatch Box as a McDonald, flanked by three Scottish Ministers. We all think very keenly about these issues in Scotland.
My hon. Friend made a point about British Steel at Scunthorpe. I mentioned the steel and shipbuilding industries, as well as other aspects of the chemicals industry, in my statement. The fundamental point was about having a sound business proposition. In this case, there was not a sound business proposition. The amount of money being asked for by the company, and the fundamental lack of profitability of the business over such a long period of time, meant that it was not a viable opportunity. That is why we need to look forward to how the workforce, in Fife and elsewhere, can transition into our new green economy.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The Minister draws attention to the five Scottish Ministers on the Government Front Bench, but not one of them has said anything about the crisis facing those 400 families making a living from Mossmorran. The Minister seeks to hide behind the company’s statement that there was no lack of enthusiasm by the Government to find a solution, but that is not the point. The point is about what led the business to get into that situation in the first place, which is a direct consequence of Labour Government policy.
For the hard of thinking, those policies are: the carbon tax, at £20 million for Mossmorran alone; the cost of UK energy, which Labour cannot fix; the supply of ethane feedstock from the North sea; the energy profits levy, which this Government backs; the Government signalling an artificially accelerated decline in the North sea; and, of course, the national insurance raid on employers, taxing every job across the United Kingdom. This is industrial illiteracy and regulatory incompetence writ large. What does the Minister say to that?
Chris McDonald
I thank the hon. Member for his question, but it is a shame that he did not attend Energy questions this morning. If he had, he would have heard the Minister for Energy express those exact concerns for the community around Mossmorran. I also think it is slightly bizarre that the hon. Member would say that this closure is a result of Labour Government policy. The plant has been loss-making for five years, so unless he thinks that the Labour Government have invented a time machine, then clearly it is not our responsibility. What I was most startled at was the implication that it is now SNP policy to abolish the emissions trading scheme—is that the case?
Chris Kane (Stirling and Strathallan) (Lab)
Does this decision not just underline the urgent need for a robust industrial strategy in Scotland that protects jobs, strengthens the supply chain and ensures a manufacturing basis that is fit for the future?
Chris McDonald
My hon. Friend is absolutely right. In our industrial strategy we point to the eight core sectors, including clean energy and defence—all areas in which Scotland is incredibly strong, and that are underpinned by our foundational industries. Our industry is a great strength of the UK—in Scotland, England, Wales and Northern Ireland—and one that for the first time in a generation is receiving a significant amount of attention from Government.
Dr Andrew Murrison (South West Wiltshire) (Con)
The company has been absolutely clear that this is the result of the economic and policy environment that it found itself in—it is as plain as a pikestaff. The Minister said that he has been in discussion with Exxon, including today, when presumably he discussed what it meant by “policy”. Will he please say clearly what policy issues Exxon has had that has led to this decision?
Chris McDonald
The company was quite clear that this is a commercial decision, based on investment and a lack of performance of the plant. If the company had wished the plant to compete, it would have made the decision that was made at Grangemouth and created a port for the importation of raw material. It did not do that, and it judges that that is an investment from which it will not generate a sufficient return.
Dr Scott Arthur (Edinburgh South West) (Lab)
I grew up just four or five miles from the plant, and I have to say that it is an area still recovering from Thatcher’s economic vandalism. I thank the Minister for his statement and for the work he has done over many months, as well as my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) for her work. She stands in solidarity with these workers, and we should stand in solidarity with her, no matter which party we are from.
On 1 September we learned that it had been almost a year since any Minister from the Scottish Government had contacted the management team at Mossmorran—almost a year. It had been four years since any Minister from the Scottish Government had contacted the Scottish Environment Protection Agency or the Health and Safety Executive about the management of the site. On 29 July, the Scottish Government were asked when they last proactively contacted the UK Government about the operation of the Mossmorran site, but they could not name a date, and going back to 2020 there was no evidence of any proactive engagement. We have heard bluster from the SNP this evening. Have the Scottish Government approached a Minister with any kind of coherent plan to support these workers or save the plant?
Chris McDonald
What my hon. Friend identifies is the different approach under this Government—a Government who have an active industrial policy and work in partnership with industry, in the same way that I saw other European Governments did when I worked in industry. He tells a sorry tale about the lack of involvement and engagement of the previous Westminster Government and the SNP Scottish Government regarding the ownership of the plant. That is in stark contrast with my predecessor in this role and the previous Secretary of State, as was also highlighted today by the Energy Minister with regard to the refining sector—another sector about which we are desperately concerned. Until this Government took action to meet the management, there had not been a meeting with a Westminster Government Minister for 13 years.
Kirsty Blackman (Aberdeen North) (SNP)
We are seeing 400 jobs go, and we saw jobs go at Grangemouth. Is the Minister surprised that people in Aberdeen and the north-east of Scotland, who are arguing for a just transition and being promised 60,000 jobs five years hence, have no faith in this Labour Government?
Chris McDonald
I am grateful for the opportunity that the hon. Lady has given me to clarify some words I said earlier. I did talk about 60,000 jobs by 2030, but it is actually 23,000 jobs in the industry by 2023, and new jobs are being created every day as a result of our investments in renewable clean energy. Beyond 2030 we can see that the clean energy industry is motoring ahead, but these few years are a really difficult transition and we need to work together. Jobs in the clean energy industry are being created every day, but a situation like Mossmorran obviously involves a significant number of jobs all at once. As I said earlier, we can see a way forward for 60% of the direct jobs at the site, and it is important to me that we also work with the other 40% to ensure that they are placed to get good jobs in the local economy.
Frank McNally (Coatbridge and Bellshill) (Lab)
This is devastating news for the Kingdom of Fife. May I pay tribute to my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) for her diligent work today and over a period of time on this issue?
Does the Minister share my frustration that despite attempts to fully engage with ExxonMobil over recent months, including through multiple ministerial engagement sessions, the Government were presented with no viable plan to save the plant by the company—despite, as has been highlighted, a £25 billion profit having been made by ExxonMobil last year? Will he outline what steps he will take, working with colleagues both in Scotland and other Government Departments, to ensure that the workforce receives all necessary support through the Department for Work and Pensions rapid response service and Partnership Action for Continuing Employment?
Chris McDonald
I pay tribute to my hon. Friend and colleagues for how they have engaged so carefully on this issue for such a long period of time. I look forward to working with them in supporting the workforce. He makes an important point that alludes to the strategy of the company. The company did not present the Government with a viable investable proposition. It has also closed a chemicals plant in France and has confirmed that it is reviewing its European assets. I think we have reached a point where we have to accept that the company has made its decision. However, even though the company could not find a buyer, as I have said, I understand that some expressions of interest have been made and we would be happy to work with anyone who is interested in the plant. We have vehicles such as the British Business Bank and the National Wealth Fund that stand by to support any viable business proposition in our industrial strategy areas.
Sir Ashley Fox (Bridgwater) (Con)
The closure of the ExxonMobil plant is bad news for the whole of the UK economy, and it is the direct result of Labour’s economic and energy policies. Does the Minister accept that by pushing up taxes and energy prices, his Government are making the UK an uncompetitive environment for energy-intensive industries? What policy changes will he make to ensure that this is not the first of many such closures?
Chris McDonald
As I pointed out earlier, the business has suffered from a lack of competitiveness for the last five years, in part due to the relative lack of competitiveness of UK energy prices, and it is important to point out the things that we have done and are doing to address that. We have the energy-intensive industries support scheme and the supercharger scheme, which is providing up to 90% relief. We also have the British industrial competitiveness scheme, which will reduce prices for over 7,000 businesses by £40 per unit of power over a period of time. Of course, with this business, the energy input was gas. We are competitive on gas with Europe, but the issue has been the much cheaper gas prices in the US; the ethylene imports coming into Europe are primarily coming from the United States of America. On that basis, as an exporting business in the UK, the competitiveness issues are fundamentally why the business does not see a future in the plant.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
I think any of us who represent an industrial constituency cannot help but feel a tinge of sympathy for my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) this evening. We have all seen factories and manufacturing businesses in our constituencies close. While I accept what the Minister says about the fact that we are competitive on gas price with Europe today, the reality is that the gas price today is significantly higher than it was three, four or five years ago. Often the products that are being made in these places cannot absorb those overheads, which makes us uncompetitive on the world market. We have to look at how we can subsidise those costs here.
On industrial electricity, we are out of step with the rest of the world and we need those prices to come down. The Minister mentioned the British industrial competitiveness scheme, but that will not come online until 2027. He mentioned the energy supercharger scheme, but that does not include whole swathes of industry, including ceramics. Is there anything that the Minister can do in the short term to ensure that we end up with help today for those sectors that need it, so we can prevent future closures of big manufacturing sites?
Chris McDonald
I know that my hon. Friend is particularly concerned about the ceramics sector, but his comments could read across to other energy-intensive sectors. I said that once quality costs have been taken into account, UK gas prices are competitive with the rest of Europe, but in the sector that he mentions, many of those imports come from Turkey. In some other sectors in the chemicals industry, the issue is about over-capacity, over-supply and the dumping of products in the UK that have been produced in the far east—there are quite a number of issues, and I continue to work on all of them across the heavy industry sector to ensure that we can improve the business environment as a whole.
Richard Tice (Boston and Skegness) (Reform)
Another week, hundreds more jobs slaughtered on the altar of net stupid zero. It is leading to high energy costs, high policy costs and high taxes, and making this business—along with so many others—completely unviable. How many hundreds of thousands of other industrial workers are terrified that they are next? Can the Minister confirm to this House whether any discussions have been had with ExxonMobil, or whether any indications or concerns have raised by that company, about any other plants, businesses or refineries in the United Kingdom?
Chris McDonald
I know that the hon. Member takes a keen interest in the carbon prices for industry, and it is worth looking at the particular situation of this plant, as it exports all of its products to the EU. It receives a carbon allowance for its emissions that is slightly higher than 50%, and the reason why it does not receive a higher level of allowance is that it reflects the inefficiency of the plant. Fundamentally, the free allowances are set against a benchmark—a plant that receives 50% is one that is inefficient.
As I know the hon. Member will appreciate, given his business background, the intention behind that policy is to incentivise the owner of the plant to invest in order to reduce their carbon emissions, and then they would be able to sell the carbon credits on the open market and generate further profit for the plant. That has worked very effectively in the advanced manufacturing sector. For whatever reason, the owner of this plant chose not to invest, and it has suffered the carbon penalty as a result. The community of Fife has suffered as a result of its decision as well, and we are now in a position where a $1 billion investment cannot be sustained.
As I mentioned earlier, this company is exporting its products. It would be very difficult for it to find any way to exempt itself from carbon policies, because of course the EU has a carbon mechanism too, and that is the market into which it sells. Fundamentally, that carbon cost has to be paid, either here in the UK or to the EU. I am sure that as a good supporter of the UK and of Britain, as opposed to the EU, the hon. Member would prefer that His Majesty’s Treasury receive any taxation income, rather than sending that money to the EU.
John Slinger (Rugby) (Lab)
Could my hon. Friend set out what more the Government can do to engage with multinational investors and demonstrate that, from Rugby to Fife, the UK is an attractive environment for investment under this Labour Government?
Chris McDonald
As I set out in my statement, we have managed to attract £250 billion of investment. That investment is coming to the UK because we have policy certainty around industry through our industrial strategy, and it is delivering jobs across the whole of the country.
Christine Jardine (Edinburgh West) (LD)
The Minister referred earlier to the jobs that are coming in the renewables industry. That will be no consolation tonight to the 400 families who do not have that future within their sight. He also rhymed off the Government’s policies for supporting energy-intensive industries, but those policies did not help Mossmorran—the company has cited the policy environment as a cause of its decision. Can the Minister please reassure the House that, before the Budget, the Energy Minister and his colleagues will impress upon the Chancellor the idea that perhaps new and more effective policies are needed to support energy-intensive businesses?
Chris McDonald
I am grateful to the hon. Member for her question, and particularly for reminding us all about those families. She is right that they are in an extremely difficult position, and while it is incumbent on me to point out some of the opportunities, I do not want to in any way diminish the real pain and distress that I know—I know personally—those families will be going through. I have strived to strike a balance on that, and I hope the hon. Member feels that I have managed to do so this evening.
The hon. Member mentioned, in particular, some of the policy situation relating to Mossmorran, and I refer her to the answer I gave a short while ago when talking about the impact of carbon taxes on Mossmorran arising directly as a result of the inefficiency of the plant. That is a consequence of previous decisions and a failure to invest in that plant. It ultimately means that the plant appears to be, in and of itself, not commercially viable. If companies that think they could make the plant commercially viable come forward, clearly we would want to work with such organisations.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
I thank the Minister for his statement, and I share his concerns about the loss of jobs and the impact on the families affected and the community in Fife. Does he also share my concern that the Deputy First Minister of Scotland refused to take a call, I understand, from the Secretary of State for Scotland tonight? If that is true, will the Minister please let us know what actions could be taken to remedy that situation for the families involved?
Chris McDonald
All I will say is that in a situation like this, I would expect every part of the governance system in the UK, whether that is the Westminster Government, the Scottish Government or local authorities, to act with a single-minded interest in the workforce and the communities affected.
Dr Ellie Chowns (North Herefordshire) (Green)
Today’s announcement by ExxonMobil—a company that made £25 billion of profit last year—will be devastating for the workers, their families and the communities in and around Mossmorran. Does it not just show that ExxonMobil does not give a fig for its workers; it just prioritises profiteering? Does the Minister agree that the fossil fuel giants cannot be trusted to protect jobs or the planet? Will he commit to investing new resources to ensure a genuinely just transition in which the voices of workers are central to the debate, so that they are not left to the whims of these profiteering fossil fuel giants?
Chris McDonald
I point the hon. Member in the direction of our clean energy jobs plan, where we set out how that transition can be effected. There is also the £5.8 billion that we have committed to the National Wealth Fund to support investment in new projects. The transition of workforce and communities is very important to me and to this Government. Not all companies are the same; many different companies operate in different ways. This Government are absolutely committed to working with the private sector to achieve this transition, but in a way that is a partnership between Government, industry and trade unions. We are committed to that.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
We are talking about 400 direct jobs at Mossmorran, more in the supply chain, hundreds more at Grangemouth and a thousand a month out of Aberdeen. Those are independently assessed figures and figures that we know from the statement today. As somebody whose father worked at Ravenscraig in the 1980s, I know very well the impact such things have on families. The Minister has talked a lot about commercial decision making, but it does not happen in a vacuum; it is done on the basis of the policy environment and legislative environment in which companies are operating. He is not addressing that key issue, which is making a just transition unviable as it stands. Will he address those points?
Chris McDonald
I am pleased to meet another Member from a steelworker family. In fact, Ravenscraig is a plant that I never had the opportunity to work on, but I worked with many people who did, and they always spoke of the great sense of camaraderie among the workforce there. I absolutely refute the suggestion that this Government are not attracting investment. In fact, for Scotland alone, we have seen £800 million of investment in battery storage projects by Copenhagen Infrastructure Partners and £55 million has been awarded to the port of Cromarty Firth for small floating offshore wind. These are the industries of the future and the industries in which people in Scotland will be able to work in—in fact, they already are. The real responsibility of Government is to ensure that we help people to transition across into these industries. Fundamentally, that is the difference between this Government and every previous Conservative Government—and certainly the one in office over the past 14 years.
Sammy Wilson (East Antrim) (DUP)
The Minister says that he and the Government have no bias against the people of Scotland, but they certainly have not done very well out of this Government—1,000 jobs being lost a month in the North sea, and now today’s announcement. He attributes it all to a commercial decision. That commercial decision was made in a hostile economic environment. He has told us some of the factors there: carbon taxes imposed by this Government, lack of supply as a result of the reduction in North sea production, and the energy prices as a result of the increasing reliance on wind energy. The common thread through it all is the Government’s net zero policies. Why can they not be honest with us and just tell us that these net zero policies are robbing the United Kingdom of all its energy-intensive industries and that this will not be the last job loss announcement that we will hear in this House?
Chris McDonald
The right hon. Member speaks of 1,000 jobs a month being lost in the North sea oil and gas industry. That is not a figure I recognise, so I would be happy if he would share the source of that figure with me. However, I have some figures of my own to trade, if he wishes to know them. We are expecting 800,000 jobs to be created in the clean energy industries. We have attracted £52 billion of private sector investment since July 2024, and £5 billion per year of gross value added to the UK economy from carbon capture and storage alone by 2050.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his statement and wish him well in his endeavours. Anybody in this place would be churlish not to wish him well in his endeavours to try to do better—
Jim Shannon
Expect there might be one or two to my left-hand side, but that is by the way.
It is sad to hear of yet another large UK company closure next year, this time in Mossmorran. I have seen and experienced similar stories in Northern Ireland, and what springs to mind is always the impact that this will have on the workers. Alongside the Scottish Government, can the Minister provide an assurance that this Government will do all they can to protect the livelihoods of those workers and, indeed, all workers who face redundancy as a result of not being able to find solutions to keep such plants open? We all recognise that these workers need help, and they need it today. What can be done to assure them of a future for their families, their mortgages and the debts they owe?
Chris McDonald
I thank the hon. Member for his contribution, which is always sincerely and kindly made. I agree that what will be precisely on the minds of the workforce at Mossmorran right now will be how they will manage in the run-up to Christmas. They will be thinking about whether they will be able to pay an instalment on their holiday in January. The plant is set for closure on 16 February, so there is a bit of time in terms of, as I mentioned, the 40% of the workforce for whom who we will need to find alternative employment.
I mentioned in my statement that the DWP is ready to stand by to help—I appreciate that could sound quite cold, but it does stand ready. Combined with the Scottish Government, the local authority and the support from the UK Government, including the taskforce, that is the support that we will give directly to the employees and their families.
Andrew Bowie
On a point of order, Madam Deputy Speaker—I promise I will not make a habit of this. I am a bit worried that the Minister may have inadvertently misled the House, because he said that in his earlier conversation with the chairman of ExxonMobil, Paul Greenwood, he had pointed to no policy decisions by this Government as reasons for closing the plant. I and other Members also had the opportunity to speak to Paul Greenwood today, and he did give four reasons for the closure. The first two—the market and the cost of running an old plant—were, he said, not policy decisions, but the third and fourth certainly were. The third was the carbon tax, which is costing that plant £20 million, and the fourth is the sharp decline in ethanol production in the North sea due to the accelerated downturn directly due to Government policy. Will you give me some advice on how the Minister might go about correcting the record?