Grangemouth: Sir Keir Starmer announces £200m from wealth fund to kickstart Scottish hub's future

The announcement, as part of the UK government’s national wealth fund, will help fund nine projects contained in the blueprint to prepare Grangemouth for the future without relying on traditional oil and gas.

But leading trade unions warned the £200m investment would need to be “used correctly” if the funding injection was to have a “transformative impact”.

Nine projects are being drawn up in Project Willow, jointly-funded by Scotland’s two governments, to set out future manufacturing paths for industries at Grangemouth.

Earlier this week, SNP First Minister John Swinney announced £25m in a Grangemouth just transition fund to be put into the Scottish Government’s Budget for next year.

Mr Swinney branded Sir Keir’s announcement “a step in the right direction” and called on the funding to “be made available immediately”.

Scotland on Sunday reported the UK government’s national wealth fund was poised to be used to kick start manufacturing projects at Grangemouth. It comes after Scottish Labour leader Anas Sarwar promised “hundreds of millions of pounds” to save the oil refinery at Grangemouth from closure.

The UK government funding of £200m will be used to lever in an additional £600m of investment from the private sector.

READ MORE: Inside Project Willow: How trees, waste and wind will transform Grangemouth

Speaking at Scottish Labour conference in Glasgow on Sunday, the Prime Minister pointed to the energy transition being “a golden opportunity for Britain, especially for Scotland”. But he warned it would be “a transition that must be managed pragmatically”.

“Oil and gas will be part of the future of Scotland for decades to come,” he said.

Sir Keir said there also must be “a plan for Grangemouth’s future” and stressed he had been “talking to Anas about this”.

He said: “Grangemouth is such an opportunity. It could have a future in bioengineering, in biofuels or in hydrogen energy.

The Prime Miniser added: “But I promise you this – it will not lack ambition on our side. So I can announce today we will grasp the opportunities at Grangemouth, work alongside partners to develop viable proposals - team up with business to get new industries off the ground.

“And to attract private investors into the partnership we need, we will allocate £200m from the national wealth fund for investment in Grangemouth. An investment in Scotland’s industrial future - that’s the difference a Labour Government can make. “

Speaking to journalists after his speech in Glasgow, the Prime Minister said time had been taken to “work up a really credible opportunity” for Grangemouth after the general election win last year. He said the commitment of £200m was a show of “how important Scotland is to me and my government”.

Sir Keir said: “I was very mindful of the commitment I made going into the election about the importance of Grangemouth and that we would make sure we supported the brilliance of this industrial base in Scotland.

READ MORE: Two-thirds of Scots have 'lost trust' in Labour to kickstart the economy, tracker shows

“What I wanted to do is make sure that we took time to work up a credible proposal for the future. It’s very easy to put proposals on the table that don’t hold water. What I wanted to do was to take the time to do this properly.”

The Prime Minister stressed the announcement wasn’t “about what tides people over”, but was “a generational opportunity for Grangemouth”. He said: “That took time, that’s the right thing to do. What matters to me is that we’ve got this opportunity now on the table.

“This is going to be a partnership with the private sector. The way the national wealth fund works is that we work on the basis that we want to bring in three times the amount the government puts in. Here there’s £200m on the table from the government. That is to be a partnership with the private sector and we’re looking for three times that much coming in from the private sector.

“That is a huge investment in Grangemouth. That is the future of Grangemouth - an important part of Scotland for generations to come.”

Mr Swinney had called on the UK government to match his £25m of investment that will be put into next year’s Budget to fund Project Willow manufacturing streams.

He said: “I welcome this response from the Prime Minister to my call earlier this week for the UK government to provide its fair share of support for Grangemouth. It is a step in the right direction and this funding must be made available immediately.”

Mr Swinney added: “On Tuesday I announced that the Scottish Government is providing £25m to enable businesses to bring forward investable propositions for Grangemouth.

“Everyone working at Grangemouth’s refinery is a valued employee with skills that are key to Scotland’s net zero future. We will continue to work constructively with the UK government to secure the site’s future.”

Scottish Conservative deputy leader Rachael Hamilton accused the Labour UK government of a string of “betrayals”, adding “no one will have any confidence in the PM’s belated and extremely vague assurances of help for Grangemouth”.

She said: “Anas Sarwar himself says that the UK Labour government haven’t done enough, but he can’t give a single reason why anyone should trust them now.”

Trade unions welcomed the announcement, but warned more funding would be needed.

Roz Foyer, general secretary of the Scottish Trades Union Congress, said: "The Prime Minister’s announcement that £200m will be allocated from the national wealth fund to support the workers and community of Grangemouth cannot be dismissed lightly.

“However, this funding will only have a transformative impact if used correctly and is accompanied by even further investment from both governments.

“Ultimately, the announcement still neglects the clear plan set forward by Unite, which secures the jobs and the futures of the workforce in the here and now. This must be the priority from all governments, not retrospective action that assumes the closure of the site is inevitable.

"We'll continue to work with Unite the Union, the workers and their communities to provide a hopeful future that provides secure jobs and employment for all those impacted by the closure which, even at this stage, can be avoided.”

Unite had proposed the refinery, which is costing Petroineos around £385,000 a day, could be immediately converted into a plant for sustainable aviation fuel. But it is believed the idea is not realistic.

Unite general secretary Sharon Graham said: “This is welcome news after months of our campaign and supported by the community of Grangemouth, Keir Starmer and the UK government have finally listened.

“This needs to be the start, not the end, in delivering a real workers' transition for Grangemouth. Following this announcement, it is essential that all stakeholders come together to put the meat on the bones and that this investment counts for jobs and our security. Clear timescales will be important as well as details on jobs.”