Labour backer wants RBS-style government bailout for Grangemouth

The Unite union's general secretary Sharon Graham has issued the rescue package demand telling the Herald that the UK government must step in to prevent what she described as "industrial vandalism" over Grangemouth as the union prepares to stage a march and rally today (Thurs) in protest over the closure proposals first revealed by the Herald a year ago.

She has told the UK government that the closure should be paused to allow for an independent investigation over its future.

The Herald revealed how thousands of jobs, including those reliant indirectly on its existence in the supply chain, were at risk over plans to shut down Grangemouth owned jointly by the Ineos Group, the petrochemicals giant controlled by billionaire tycoon Sir Jim Ratcliffe and China’s state-backed PetroChina.

READ MORE: How Scottish oil made Grangemouth's closing refinery iconic

READ MORE: 'Grangemouth fraud': Ministers hopes of being 'world leaders' in green fuel in doubt.

And Unite is suggesting the UK government buy up the Chinese share of the company to make it part-UK state owned - in a similar way to how it intervened over the banking collapse of 2008 when it provided rescue packages to save the Royal Bank of Scotland Group plc, Lloyds TSB Group plc and HBOS. They all were brought into the public sector as public corporations.

“Unite is absolutely clear, if Labour here don’t don’t lift a finger to fight for Grangemouth then why should Unite be lifting a finger to support Scottish Labour at the 2026 elections. We demand that every Labour MSP should be furious about what’s going on instead of nodding in silent acquiescence, said Ms Graham.

Petroineos told the Herald that politicians and trade unions have left it "too late" to extend the refinery's life.

Bosses at the Petroineos plant in Grangemouth established almost a century ago, told staff that Scotland "simply won't be big enough to support a fuels refinery" due to falling demand sparking fears for thousands of jobs within the plant as well as outside contractors.

Staff were told that a start has already been made on projects that was to see the Petroineos plant transition from a refinery to potentially an imported fuels depot.

Petroineos indicated it would remain a refinery until spring 2025 although managers have indicated to staff the transition would take place over the following five years. They say the move will provide "greater operational flexibility and safeguard the site as a national fuel hub for decades to come".

In September, it Petroineos confirmed the refinery is to be closed in the second quarter of next year, with the loss of up to 400 jobs, as part of plans to turn the 100-year old plant into a fuels import terminal. It is to be subject to an employee consultation.

The refinery is symbolic of Scotland's 'black gold' which would be used by the Scottish National Party during the 1970s in making their economic case for independence from the rest of the UK. It was argued that North Sea oil would not benefit the nation to any significant degree while the nation remained part of the United Kingdom.

(Image: NQ)  

There remains concern that Labour's vision for the transition from oil and gas in the North Sea come despite fears over major job losses by 2030.

Unite sources said before the Labour manifesto was published that the Labour Party's plan to transition from oil and gas was "weak" and that a rebellious 'No Ban Without a Plan' campaign in Scotland which involved diverting funds that would be expected to be used to elect a Labour government would continue and will be stepped up.

Ms Graham has written to energy security and net zero secretary Ed Miliband calling for intervention and told the Herald she is suggesting that the government take part control.

She told the Herald: "The message to Ed is we will not allow Labour to create working class wastelands with jobs sacrificed at the alter of net zero.

"The Westminster government needs to stop acting like nodding dogs to what they are being told and independently review this site for the production of [green] Sustainable Aviation Fuel (SAF). [We need to] pause and do the review Scotland needs.

"Why is it a matter for national security? "This is the only refinery left in Scotland. Given geo- politics we leave ourselves open of we are not manufacturing our own fuel. SAF targets have been instructed by the Westminster government. Grangemouth alone could produce half of the government SAF target.

"China owns half this refinery. The UK could take that stake.

"It's a temporary stake."

She added: "The Chinese say Grangemouth is only worth pennies. Fair enough why don’t we buy it off them and make a state led transformation."

Unite's plan for Grangemouth involves conversion into an SAF facility before further developing into a full bio-fuels outlet.

And Ms Graham said she believes that the SAF facility would be a real money-maker and that a bail-out would be "far less expensive" than the government's RBS intervention.

(Image: NQ/PA)

"Clearly Petroineos's starting position is closure. That is not acceptable for jobs or national security," she said.

Unite’s research has found that converting an existing refinery is 30–70 per cent cheaper than building a new facility.

Petroineos has said that the closure decision would "safeguard fuel supply for Scotland" by converting the site into a terminal able to import petrol, diesel, aviation fuel and kerosene into Scotland - but would require a workforce of fewer than 100 employees compared to the current 475.

Despite pre-manifesto election assurances over the energy future from the now Prime Minister Keir Starmer, he has failed to roll back on a ban on new fossil fuel project licences in the North Sea.

Unite's campaign demanded that over £6.6bn must be committed over the next six years to save over 35,000 Scots oil and gas jobs by the end of the decade.

Labour's biggest union backer had targeted six key Scottish election constituencies that were heavily dependent on oil which the Labour Party hoped to seize at a forthcoming general election, calling for the party to reconsider its current policy banning new oil drilling licences.

Unite's oil and gas billboard campaign hit Glasgow earlier this year.

Ms Graham warned through the Herald that the nation's oil and gas workers were heading toward becoming "the coal miners of our generation" through the loss of jobs.

She told the Herald: "Let's be clear what is happening in Grangemouth is an act of industrial vandalism and the same could be said for the guillotine of oil and gas licenses and the lack of a plan post 2030. Unite has a clear plan that will create 36,000 jobs in Scotland, covering wind manufacture (building the turbines) carbon capture, hydrogen and decommissioning. Real jobs."

The Herald has previously revealed that the oil and gas industry in Scotland has shed nearly 40% of its jobs amounting to 50,000 in Scotland over a decade, according to industry figures - while the number gained from low carbon enterprises has risen by just 2,500.

Data gathered by the trade association, Offshore Energies UK working with the multinational data analytics and consumer credit analysis Experian found that the number of jobs directly and indirectly employed in oil and gas in Scotland crashed by nearly 40% since 2013 from 117,900 to just 74,100 in 2022. That includes 31,000 directly employed and 43,000 indirectly.

Hundreds of workers from Grangemouth and other Scottish oil and gas workplaces are expected to attend the march down the Royal Mile in Edinburgh and subsequent rally.

A Petroineos spokesman said: "The people who work at Grangemouth deserve a more intelligent debate about their future than the one being played out by some politicians and union officials, who are naturally defensive at having missed the opportunities we gave them several years ago to talk to us about an orderly and fair transition away from fossil fuels to cleaner energy.

"Meaningless statements about pausing the closure and confusing suggestions that the refinery can become a biofuels plant overnight don't mask the fact that politicians and trade unions have left it too late to extend the life of the refinery. But it is not too late for us all to co-develop a bright future for Grangemouth, producing low-carbon fuel and eventually creating hundreds of skilled jobs here again. The Project Willow work we are currently engaged in, which is now supported by governments at Westminster and Holyrood, is the only real option to create the conditions for that exciting future."

Energy Minister Michael Shanks said: "We have been very clear that Petroineos’ recent confirmation on the closure of Grangemouth oil refinery was deeply disappointing.

“Before July, there was no overall plan for the future of the Grangemouth refinery. Within weeks, we worked with the Scottish Government to put together an unprecedented £100m package to support the community and invest in the local workforce, along with tailored support to help those affected find good, alternative jobs. We are also jointly funding Project Willow with £1.5m to develop options for a sustainable industrial future at the site.”