Oil Refining Sector

Dave Doogan Excerpts

Wednesday 14th January 2026 Commons Chamber

[Martin Vickers]

I thank the hon. Member for his intervention. No debate would be complete without such an intervention. He is absolutely right that it is the United Kingdom’s energy security that we are referring to.

To turn to the future of the Lindsey refinery, which has been part of the local economy in my constituency for over 50 years, the closure is a tragedy not just for the immediate workforce, 124 of whom have already been made redundant, but for the area as a whole: the bars, restaurants, hotels, haulage firms, Humberside airport, catering suppliers—the list goes on. North Lincolnshire council receives around £2 million a year in business rates, which could steadily reduce over coming years. Needless to say, that would leave an enormous hole in its budget, which would have a consequent impact on the local community.

At last week’s question time, the Secretary of State said in reply to me that fault lay with the owner, Prax. I agree that the directors bear responsibility, but it is my constituents who are feeling the consequences. A Minister has previously stated that the Government are not in the business of saving failed businesses—even, it seems, when they are a vital national resource.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The hon. Member is right that the UK Government said that they are not in the business of saving failing businesses, but they have washed their hands of some of the key factors that contribute to those businesses failing. For example, they are signalling about new licences in the North sea, but these refineries use vast amounts of energy. In the UK, we enjoy the highest industrial energy prices in the developed world. That is the Government’s responsibility.

[Martin Vickers]

The hon. Gentleman is absolutely right that energy costs have played a major part not only in the struggles of Lindsey oil refinery, but in those of other businesses, particularly manufacturing businesses. The Government’s comment that they are not in the business of saving businesses seems rather strange coming from Labour.

Ministers have repeatedly said that there is a legal process that the insolvency practitioners must follow. Of course, I accept that. I have previously said that I feel that the Government are hiding behind the administrators, because they have refused to consider the wider implications of the refinery closure, for example on the local economy, the workforce and national energy security.

I have asked on more than one occasion if the Government would prefer a sale of the whole business that would allow it to resume production. Alarm bells rang for me when I received a letter from the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Leeds North West (Katie White), following my Westminster Hall debate. It said:

“The sales process remains ongoing, with the Official Receiver and Special Managers continuing to engage with all interested parties. However, they have confirmed that none of the credible”—

that is the important word—

“offers received would enable a return to refining operations within the next few years or allow all employees to be retained.”

I note that she refers to “credible” bids—so we have an acknowledgment that there were indeed credible bids—and to a timeframe. That contradicts the Government’s repeated statements that there were no credible bids. Either there were credible bids or there were not. Which is it, Minister?

In fairness to the Minister, when the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) and I met him last week, he did at least acknowledge that the Government would have preferred a sale of the business in its entirety.

--- Later in debate ---

[Dave Doogan]

The hon. Gentleman is being very generous in giving way again. He is setting out a seriously curious sequence of events for a well-intentioned Government relative to a vital industry. Is he concerned, as I am, that this is more about the beliefs of the Secretary of State than the industrial imperatives of these islands? The Government are failing in their pursuit of decarbonisation, but they are succeeding in deindustrialisation.

[Martin Vickers]

The hon. Gentleman makes an important point about the Government’s overall policies in relation to net zero.

Adam Wilson of Falcon Petroleum wrote to me describing

“the unsatisfactory experience we have had with the bidding process with FTI… We own and operate 4 refineries in Europe and the middle east. With advancement of technology we have been able to go carbon neutral at all our refineries. We had pledged to turn LOR carbon neutral within 2 years if we had successfully purchased it.”

I could give other examples, but what I have said so far makes it clear that the approaches to FTI from consortia that wish to purchase the whole business and continue production have been rebuffed. Potential investors, employees and all those affected have a right to know why. The Government have chosen not to get involved. Yes, they have offered a training guarantee, which is helpful, but much more is required. At a meeting with me and the hon. Member for Great Grimsby and Cleethorpes last week, the Minister suggested that the Minister for Investment, Lord Stockwood of Great Grimsby and Cleethorpes, and local authorities and all agencies could help to provide investment in the area. We must sit around the table with them at an early opportunity. We need better transport connections, and early decisions from the Government on the many proposals in their in-tray that could boost the Humber region economy.

To sum up, why did the Government not act to ensure that production continued, and engage more fully in the process to achieve that? When will the Minister and Lord Stockwood visit the area and put in place a structure that helps us to recover the local economy? How many jobs will be saved by the P66 deal? The receiver’s job is to ensure the best deal for creditors, so will the Minister explain why a sale of the assets rather than the business better achieves that? The Government are one of the creditors, so how much are they owed and how much of it will the P66 deal return to the Treasury? I look forward to his response.

[Melanie Onn (Great Grimsby and Cleethorpes) (Lab)]

I thank my hon. Friend the Member for Brigg and Immingham (Martin Vickers) for securing the debate and for being so gracious with his time.

For workers and their families across the Humber, the past six months have been bruising to say the least. People who have spent their working lives keeping a complex site safe, compliant and productive have faced prolonged uncertainty—and they have done so with dignity and professionalism. I put on the record my support for them and give assurances that they are always at the forefront of my mind when I am pushing for clarity in this House.

It is important that accountability matters in who is ultimately at fault for the collapse of the refinery. In September last year, the High Court froze about £150 million-worth of assets belonging to the former owner of the refinery, Winston Soosaipillai—also known as Sanjeev Kumar. This action will be welcomed by the workers and communities who have paid the price for Mr Soosaipillai’s reckless financial mismanagement, but what happens to those assets? For how long will they be frozen? Can they be used to support and develop the site, or support some of the interventions that the Government have discussed?

As the hon. Member for Brigg and Immingham has detailed, there are concerns about the official receiver process, and there is some justification for them. The whole process has been incredibly opaque, and it has been very difficult to engage in communications under legal frameworks that barred Government and elected representatives from having any kind of input. The targets that the official receiver was working to have not been clear at all. We are in the dark, as are the workers, and that has caused even more uncertainty and distress for people.

Is this really the best outcome for the site? I am encouraged by Phillips 66 taking on the site, but it cannot be ignored that ministerial correspondence has said that there were credible bids. We have heard the numbers; they are disputed—is it four, seven, one, or none? We do not know, because we cannot get any answers on that. The Government have shifted position, and now say that there were no credible bids, or certainly none that provided any immediate refining capacity, or allowed the site to be run as a going concern. We understand that there may well be commercial interests involved, but could we not open the books, and see the matrix that the official receiver used and how they reached their decision, under Chatham House rules? Then at least elected representatives would be able to make an assessment on behalf of their constituents. Surely the Government could do that.

[Dave Doogan]

The hon. Lady talks about our need to scrutinise what was deemed a credible bid. Will she ask the Minister whether the Government will apply “commercial in confidence” rules in order to cover their tracks when it comes to what was and was not a credible bid?

[Melanie Onn]

I disagree with that, but I urge the Government to be prepared to open up on some of the process. I understand that there will be commercial sensitivities, but I hope that a route can be found to enable us to scrutinise the information available.