INEOS Chemicals: Grangemouth
Debate between Chris McDonald and Andrew Bowie(2 days, 9 hours ago)
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Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I thank the Minister for the advance copy of his statement. The steps announced today by the Government to secure the ethylene plant at Grangemouth are welcome news, especially for the workers at the site who can now look forward to the new year, assured that their jobs will remain at the strategically vital site—and Grangemouth is vital, as the UK’s last plant producing ethylene, a key ingredient in plastics used in advanced manufacturing and the automotive and aerospace sectors. To have lost domestic production capacity for such a core product would have been unconscionable.
However, this move, welcome as it is, demonstrates just how exposed sites such as Grangemouth have become under this Government. This Government’s policies are leading to the deindustrialisation of this country, with unemployment rates soaring and the economy shrinking as a result. From potteries in Stoke to the Prax Lindsey oil refinery in Lincolnshire and, most obviously and glaringly, our oil and gas industry in the North sea, this Government are not just overseeing but engineering the decline of energy-intensive industries in this country.
Of course, I am genuinely glad that 500 jobs at Grangemouth will be protected, but that will be cold comfort for the thousands of workers in and around the wider oil and gas industry who have already lost their jobs, or those who will spend Christmas next week not knowing whether they will have a job next year because of Labour party policy. Last week it was Harbour Energy, and before that it was the Port of Aberdeen, Apache and Petrofac. TotalEnergies has had to merge with NEO NEXT Energy to operate, while Shell has merged with Equinor.
Those businesses all say the same thing: the exorbitant taxation regime, increased and extended until 2030, is driving away investment. Couple that with the utterly astronomical cost of energy here in the UK, pushed ever higher by unnecessary green levies and carbon taxes, and it is no surprise that, in his response to today’s announcement, Sir Jim Ratcliffe said that
“high energy costs and punitive carbon”
taxes were
“driving industry out of the UK at an alarming rate. If politicians want jobs, investment and energy security, then they must create a competitive environment.”
Week after week, more jobs in the sector are lost and critical national assets shut up shop as a direct consequence of policy decisions made by this Government. Since Labour stepped into office, more than 15,000 manufacturing and industry jobs have been lost—that is the scale of the crisis we are dealing with.
Great Britain has a proud manufacturing legacy, but current Government policy towards energy is squandering that legacy, damaging Scottish jobs, and damaging an important national asset.
“There are 200,000 jobs in the UK associated with oil and gas, and they are all at risk unless the government changes course.”
Those are not my words, Madam Deputy Speaker, but those of the chairman of Ineos at Grangemouth.
Today’s announcement is timely, however, as tomorrow I will be visiting Mossmorran to meet the team following the news that the polyethylene plant there will be closing. ExxonMobil’s chairman there has explained that he does not have two of the keys needed for success because of Government policy. He said:
“We’ve had windfall taxes, we’ve had a ban on production licences—I need cheap sources of abundant ethane, and I do not have them, because the North Sea—because of Government policy—is declining rapidly…we paid £20 million last year in CO2 taxes, that will double in the next four or five years.”
What is shocking, though, is that for some inexplicable reason the Secretary of State for Scotland chose today to attack ExxonMobil when explaining why it was not receiving the same support as Grangemouth, saying that the management
“weren’t able to give us a pathway to profitability.”
Of course they cannot do that—at every turn this Government are putting up hurdles, shutting down the North sea and taxing these businesses until they burst. Honestly, this Government just do not get it. They are not listening.
Today’s announcement does not even scratch the surface when it comes to rectifying the damage and pain that this Government have inflicted on industry in this country. Given that this is the second time this Government have launched an unprovoked attack on a leading investor in the United Kingdom, does the Minister want me to pass on an apology from the Government when I visit Mossmorran tomorrow?
Today’s announcement is welcome, but this Government could do so much more. We should scrap the energy profits levy and remove the punitive carbon taxes—we are not getting an exemption to the EU emissions trading scheme anyway, according to the EU Commission. We should incentivise, not punish. A Conservative Government will do all this and more when we return to office in three years’ time—unfortunately, those are three years I do not think British industry has.
Chris McDonald
I start by thanking the hon. Gentleman sincerely for welcoming the support for Grangemouth—it really must be the season of good will. On this occasion, I can assure him that he is correct: this is the last ethylene plant, so we can agree on that this time.
The hon. Gentleman talked about the business environment for the chemicals industry. I thought I had set that out reasonably well in my statement, but perhaps not. I shall just say a bit more. On energy costs, we already have the energy-intensive industries scheme and, as I mentioned, we have increased the level of the supercharger. The British industrial competitiveness scheme will come in in 2027 with an additional 25% reduction. He may be interested to know that our electricity costs are already more competitive than many countries in Europe, but not France and Germany, which are the benchmark for me. That is why we are introducing the British industrial competitiveness scheme. On gas, after policy costs we are already competitive. These businesses trade internationally, and our success in striking international trade deals with the EU, the US and India, and with Korea just this week, means that there are more market opportunities all the time.
The shadow Secretary of State made the contrast with ExxonMobil. I reiterate the point that this Government —the Government would always do this, as I am sure he would expect—are investing in a business with a viable and sustainable future where there is a viable business plan, primarily because the owner of the business has invested in the business over time. As I said a few weeks ago in my statement on Mossmorran, ExxonMobil had failed to invest in that plant, and that is why it said that there was a £1 billion investment gap.
On jobs, in the clean energy sector we are creating 40,000 new jobs in Scotland alone and 800,000 jobs across the whole of the country. This is a transition that the Government are actively engaging in and managing. The shadow Secretary of State says that a Conservative Government would do something different from what they did last time, but they did not do anything last time. When Ineos announced in November 2023 that it was going to close its refinery, the Conservative Prime Minister at the time said, “That’s a commercial decision.” They did nothing about it—nothing at all.
Investment in this area is very important, so I refer the shadow Secretary of State to an article that was published this morning by my noble Friend Lord Stockwood, the Minister for Investment. He talked very carefully about the international investment environment and the performance of the UK economy and lamented the fact that so many people in this country—so many Cassandras, such as the shadow Secretary of State—are constantly talking the economy down and frightening investors away. I think it is about time he recognised the success of our clean energy industries and the success of this Government’s industrial strategy and stopped talking Britain down.
Oral Answers to Questions
Debate between Chris McDonald and Andrew Bowie(1 month ago)
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Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
Thank you, Mr Speaker.
“The skills, infrastructure and experience built by Scotland’s oil and gas sector are vital assets that must be safeguarded and redeployed as we accelerate the transition to clean energy.”
These are not my words, but the words of Scottish Renewables. Why are the Government pursuing a strategy that is decimating that very industry and costing jobs across the country?
Chris McDonald
The hon. Gentleman is indeed right that the skills of the North sea oil and gas workers are essential for the green transition. We will come forward with our North sea plan shortly. I am sure that he will want to take this opportunity to welcome our clean energy jobs plan, which highlights not only the many thousands of jobs across Scotland that the clean energy industries are creating, but the support that the Government are giving people in those industries to transfer across to new green energy industries.
Andrew Bowie
It is a bit rich for a Minister to come here, on the day that further jobs are being lost as a direct result of the Government’s policies, to talk about their clean jobs plan as if that will somehow mean anything to the workers at Mossmorran, Grangemouth and all the other sites that have lost jobs as a direct result of Government policies over the past few years. I understand why the Minister will not listen to me, but surely the Government must start listening to the renewables sector, the trade unions or their own Great British Energy, and use next week’s Budget to start reversing their damaging anti-growth, anti-jobs and anti-Britain tax and ban on North sea oil and gas.
ExxonMobil: Mossmorran
Debate between Chris McDonald and Andrew Bowie(1 month ago)
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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.
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?
Oral Answers to Questions
Debate between Chris McDonald and Andrew Bowie(2 months ago)
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Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
How many jobs have to be sacrificed on the altar of this Secretary of State’s vainglorious eco-zealotry before the Government acknowledge the utter destruction of the UK’s industrial base that is being wreaked by policies driven by an out-of-touch green lobby that has captured what is laughably still called the Department for Energy Security?
Chris McDonald
It is no wonder that there is so much laughter around the Chamber, because the policies of the previous Conservative Government saw industry decline. They were prepared to let industry decline because, fundamentally, they do not believe in industry, and now we find that they do not believe in climate science. We on this side of the House know that we can achieve decarbonisation in this country by winning investment from industry—investment that is coming in from all around the world. Our policies are giving industry the confidence to invest in creating jobs here in the UK.
Andrew Bowie
On their watch, two oil refineries have closed in just one year, with Jim Ratcliffe warning of a million job losses to come. Thousands are being laid off in the North sea, as companies divest themselves of assets and investment dries up. Factories are closing and plants are shutting down. It is no wonder that the head of Unite the union is calling for the Secretary of State to be sacked. We know that the Prime Minister tried to do that but failed, so, short of that, will they instead consider our plans, which would save industry and jobs: scrapping the Climate Change Act 2008, scrapping the levies, scrapping the windfall tax and putting cheap energy first?
Chris McDonald
I would like to thank the Minister for reminding the House of the litany of errors that we had to pick up when we came into office. My portfolio is filled with companies that have struggled so much over the past 10 years, but those companies now find that they have a partner in Government who will work with them to attract the investment to build jobs in the UK. If the Opposition do not like those jobs, they can continue as they are.