Prax Lindsey Oil Refinery

Andrew Bowie Excerpts

Tuesday 22nd July 2025 Commons Chamber

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

(Urgent Question): To ask the Secretary of State for Energy Security and Net Zero if he will make a statement on the closure of the Prax Lindsey oil refinery.

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

In my oral statement on 30 June, I informed Parliament of the deeply disappointing news that the Prax Lindsey oil refinery had entered insolvency and that the court had appointed an official receiver to manage the situation on the site and determine the next steps. Since then, we have worked urgently to ensure the safety of the refinery site and the security of fuel supplies, and to protect workers. That also allowed time for bidders to express an interest in the site. Following a thorough process, the official receiver has rigorously assessed all the bids received and concluded that sale of the business as a whole is not a credible option.

I visited workers at the site on 17 July, and I will be meeting them again shortly today. I know that this will be hugely disappointing news to them, their families and the wider community. They are all in my thoughts at this time. A package has been offered to all directly employed at the refinery which guarantees their jobs and pay over the coming months. Alongside the usual support that is offered to workforces in insolvency situations, the Government will also immediately fund a comprehensive training guarantee for those refinery workers to ensure that they have the skills needed and the support to find jobs in, for example, the growing clean energy workforce.

Furthermore, we understand that the official receiver continues to explore various proposals for assets on the site. I therefore remain hopeful that a solution will be found that creates future employment opportunities at the Immingham site. The refinery will continue to process crude for the rest of the month, and the official receiver will continue selling refined products for a number of weeks, giving buyers time to adjust their supply chains.

The former owners left the refinery in an untenable position and gave the Government little time to act. That is why the Energy Secretary immediately demanded an investigation into their conduct and the circumstances surrounding the insolvency, and why I have repeatedly called on the owners to do the right thing and provide financial support to the workforce at this difficult time.

[Mr Speaker]

I call the shadow Minister.

[Andrew Bowie]

When the Prax Lindsey refinery closes its doors in October, there will be only four oil refineries remaining in the United Kingdom, following the news about Grangemouth a few months ago. This is the second oil refinery to close in the United Kingdom in only six months, prompting serious questions about our energy security and resilience. In Immingham, people are waking up today to the reality that redundancies are now inevitable. It is estimated that about 625 jobs will be lost. For the community in Lincolnshire, that is seismic.

As the Minister said, we are aware of the long-standing financial issues with Prax Group, and I reiterate my support for the Government’s investigation into its directors. What progress has been made on that investigation? When does he expect the report to be made?

We cannot escape the fundamental crisis facing our manufacturing sector. As Jim Ratcliffe has said, the sector is “facing extinction” because of

“enormously high energy prices and crippling carbon tax bills.”

The Minister’s Department knows that to be true and has exempted some industry from paying the net zero levies, recusing specific businesses from paying the extortionate green subsidy costs. That is a ridiculous situation that sees subsidies being paid by the Government to businesses to exempt them from the charges being imposed by that very same Government—we are truly through the looking glass. The Department is wilfully talking down the oil and gas industry with hostile language and an impossible fiscal regime while overseeing the deindustrialisation of the United Kingdom through the perpetuated high cost of industrial energy. This is not simply managed decline; it is accelerated decline driven by ideology and steered from Whitehall.

Will the Minister tell us what work is being done to ensure the future of the four remaining oil refineries in the United Kingdom? What, if any, assessment has been made of the UK’s resilience, given the steep reduction in our refining capacity over the past six months? What, if any, assessment has been made of the increased reliance on imports that will be necessary as a result of the reduction in British refining capacity? Will he please change course and start speaking up for our oil industry—upstream and downstream—which sees from the current Government a disregard for it, its workers and the communities that rely most on it?

[Michael Shanks]

I agree with the shadow Minister, who was right to point out the impact that news like this will have on the workforce, who are hearing it this week, as well as the wider impact it has on their families and the community. That is why it is so important that we provide that support.

On the investigation, there is not much that I can update the House on at the moment. The Insolvency Service is carrying out that investigation, and it would be wrong for Ministers to interfere in that, but we have obviously given the direction that we expect it to be completed as quickly as possible. Given the mess we found the company in, I would not be surprised if it takes a bit of time for the investigation to get to grips with what was going on there, but that is for the Insolvency Service to resolve.

On resilience and fuel supplies, we have been really clear throughout that we have done everything we can to try to find a buyer to keep the site operating as a going concern, which is important for the workforce as well as for local resilience, but Prax Lindsey oil refinery comprises about 10% of our remaining refinery capacity; Phillips 66—a much larger refinery—is immediately next door. In the past few weeks, we have already seen fuel supplies adjusted and commercial contracts renegotiated. Although we clearly wanted the refinery to stay open, our assessment suggests that there is not an immediate risk to fuel supplies locally or in the wider area, but we will continue to monitor that.

On the shadow Minister’s wider points, I will first repeat what I have said on a number of occasions: we do support the oil and gas industry. I have spent a lot of time with the industry understanding some of its challenges, which are long standing, particularly around jobs lost over the past decade, and we consulted widely on what the future of energy in the north-east should look like to give confidence to the industry. We inherited the fiscal regime from the previous Government. We have consulted quickly on what the future of the energy profits levy should look like to ensure certainty about the fiscal landscape. The Treasury will respond to that consultation in due course. We want to give certainty, but we also want to recognise that this is an industry in transition, and burying our heads in the sand and pretending that that is not the case does nothing to protect the workforce in the long term. We will therefore continue to invest in the new industries of the future and in that wider strategy.

Refineries are important to our economy and will continue to be important. That is why I brought all of industry together in a roundtable to discuss the challenges facing the refinery sector. I was shocked to discover that that was the first time there had been such an invitation from the Government in 13 years. I ask the shadow Minister to reflect on who was in power for 14 years.