Swinney calls for state ownership of Grangemouth – Daily Business

First Minister John Swinney today joined the call for the Grangemouth oil refinery to be nationalised after years of Scottish government calls for action that fell short of state ownership.

Mr Swinney, whose acting energy minister Gillian Martin has been actively involved with UK ministers on the site’s future, stepped in to the debate as the Labour government passed emergency legislation to safeguard British Steel’s Scunthorpe plant.

“If British Steel is to be nationalised to protect it, then so too should Grangemouth,” said Mr Swinney who urged the UK government to “get serious” about Scotland’s economic future..

Until now no SNP minister has called for nationalisation of Grangemouth. The party’s Westminster leader Stephen Flynn has led the party’s demands for Westminster to take control of the refinery which is due to close within weeks.

However, his attempts to persuade Labour to replicate its rescue plans for British Steel failed to secure support as Business Secretary Jonathan Reynolds declared that the two situations were “not comparable”.

Labour’s position has been criticised by nationalists who claim it is further evidence of a southern bias in policy-making, following investment in the golden triangle around Heathrow, Oxford and Cambridge, including support for Luton Airport and a new tunnel under the Thames.

Yesterday the UK government seized control of China-owned British Steel after emergency legislation was rushed through Parliament in a single day.

Mr Reynolds told MPs the government’s likely next step would be to nationalise the Scunthorpe plant, which employs 2,700 people.

He said he was forced to seek emergency powers to prevent the owner Jingye shutting down its two blast furnaces, which would have ended primary steel production in the UK.

Several Conservative MPs spoke in favour of nationalisation, as did Reform UK. Liberal Democrat Treasury spokeswoman Daisy Cooper said recalling Parliament had been “absolutely the right thing to do”. Green MP Ellie Chowns said steel is integral to the “green industrial transformation” – including making wind turbines, trains and tracks – and nationalisation would give the UK the control it needs to renew the industry.

However, Plaid Cymru’s Westminster leader Liz Saville Robert said it was a “bitter day for the people of Port Talbot”, as she urged the government to change the legislation to take control of what is left of the steelworks there.

The SNP’s Westminster leader Stephen Flynn asked why the legislation only applies to England, when a Scottish oil refinery is facing closure.

“Why is this not being extended to Scotland? Why is Grangemouth not being included?” he asked Reynolds, adding the UK government was “not interested in Scotland”.

Mr Reynolds said Grangemouth was “not comparable” with the situation at Scunthorpe, which he said was “unique”.

This also drew criticism from those who say the two sites are only incomparable because they are on different sides of the border.

However, while both are heavily loss-making, Scunthorpe is the UK’s only primary steelmaking facility and at a time of international tensions it is regarded as a vital source of supply to key industries such as vehicle manufacture and wind turbines.

On the other hand, even without Grangemouth, the UK has enough refining capacity for oil which is also in a declining market, partly a result of policies led by the SNP, Labour and the Greens.

Iain Hardie of Petroineous, the site owner, told a meeting of the Scottish Affairs Committee earlier this month that the Grangemouth refinery is losing $1.5m a day and that politicians had been told of its problems five years ago.

He said there had been only rhetoric but no firm proposal to invest in the facility which they knew was destined to close and needed a new purpose. The arrival of Ed Miliband as Energy Secretary last summer had helped move things on as “transactional pace” because he “got it”.

Project Willow, a cross-party inquiry into the future of Grangemouth, has proposed nine alternative uses in the renewables sector. It has been backed by £200m from Labour’s National Wealth Fund and £25m from the Scottish government which is dependent on private industry investing in the site. One of the consultants behind the plan said it presented Grangemouth with an “exciting” future.

In the Commons yesterday, Mr Reynolds said the government would “pay the fair market rate” to shareholders in British Steel in the event of nationalisation but added: “In this case the market value is effectively zero.”

Keeping a loss-making plant open could come at a high cost to taxpayers, but he insisted it was in the “national interest” to retain the ability to make steel from scratch and he believed the company had a future, particularly as the government was boosting infrastructure spending.

“Steel is fundamental to Britain’s industrial strength, to our security, and to our identity as a primary global power”, he told MPs.

He said he had been forced to take over the running of the plant because Jingye, which bought British Steel in 2020, had rejected the government’s offers to buy raw materials to keep the blast furnaces running.

There were chaotic scenes at the Scunthorpe plant as a delegation of “six to eight” Jingye executives managed to gain access, despite their security passes being revoked.

The Chinese officials then barricaded themselves in a room. “There was a lot of screaming and shouting,” according to a company source. Humberside police were called but there were no arrests.

Swinney demands policy changes

In a statement issued today on the UK government’s response to global trade issues, Mr Swinney said the Scottish Government will take steps to ensure Scotland is as “resilient as we can possibly be”.

He called for a UK Government response that reflects the fact that “the world is changing around us” which meant a reversal of government policies.

“My view is that UK response should include removing the self-imposed economic straitjacket of the Chancellor’s fiscal rules and reversing the job – and growth – destroying increase in employers’ National Insurance contributions. The world is changing around us and quite simply, the UK government needs to change too,” he said.

“It should include closer alignment with the European Union. If trade barriers are being constructed across the Atlantic, they must be swept away in the Channel and North Sea.

“And it should include investment in Scotland’s green industrial future.  If British Steel is to be nationalised to protect it, then so too should Grangemouth.

“If a supercomputer is to be built in the London-Oxford-Cambridge triangle, then the cancelled supercomputer for Edinburgh should be restored.

If carbon capture and storage is to proceed on Tyneside and Merseyside, it should be given an immediate green light for the north-east of Scotland too.

“This is what it means to get serious about Scotland’s economic future. Given the scale of the threat, anything less is not good enough.”