Mossmorran closure by ExxonMobil blamed on UK Government policies
The UK Government has also confirmed it will not be stepping in to save 400 at risk jobs at the Fife site
Prime Minister Sir Keir Starmer claimed every “possible, reasonable avenue” had been explored to save a Fife industrial plant from closure after the facility’s owner accused the UK government of “undermining” the business.
ExxonMobil announced on Tuesday it would shut the Fife Ethylene Plant at Mossmorran in February, with more than 400 jobs put at risk.
The company has blamed the UK government’s policies for the site’s closure, with ExxonMobil saying the UK’s “current economic and policy environment”, along with challenging market conditions, meant there was no viable future for the facility.
This comes after the UK Government confirmed it would not be stepping in to save the 400 jobs at risk at the Fife plant.
Speaking in the Commons on Wednesday, the Prime Minister claimed the plant was losing £1 million per week.
On Wednesday morning, Paul Greenwood, chairman of Esso UK at ExxonMobil, told BBC Radio 4’s Today programme the closure was partly down to “deliberate” decisions taken by the UK government.
He said there were “four keys to success” in the sector – a cheap and abundant supply of ethane, along with low-cost operations, good market prices for ethylene and a skilled workforce.
Mr Greenwood said: “I will be blunt – I have one of those keys to success in place, and that is a brilliant workforce. Two of those keys I deliberately do not have because of government policy.”
Tory leader Kemi Badenoch launched an attack over the issue at Prime Minister’s Questions, saying: “All of this speculation is having real-world consequences. Just this morning, the UK chair of ExxonMobil said, and I quote: ‘The government needs to understand that the whole industrial base of the UK is at risk unless they wake up and realise the damage their economic policies are doing’.
“Can the Prime Minister tell us is the loss of UK industry the price the country has to pay for having a clueless Chancellor?”
The Prime Minister replied: “It is a difficult time for the workforce there and we must focus on supporting them. We’ve been meeting the company for over six months and explored every possible, reasonable avenue.
“They have been facing losses for the last five years – it’s best to do the detail before you chunter – and they’re currently losing £1m a week.
“But she talks about policy and approach on energy policy, she follows Reform on the European Convention. She follows the man who wants her job.”
Speaking at an event held by the Institute for Government in London on Wednesday, First Minister John Swinney said the Scottish Government had been brought into the talks only recently.
“We were brought into the Mossmorran discussions very late in the day, just in the last ten days or so,” he said. “I understand the UK government has been talking to ExxonMobil for some significant time.”
The Mossmorran facility opened in 1985 and makes raw material for plastics, but will now close in February.
ExxonMobil said: “Fife Ethylene Plant has been a cornerstone of chemical production in the UK for 40 years, and its closure reflects the challenges of operating in a policy environment that is accelerating the exit of vital industries, domestic manufacturing, and the high-value jobs they provide.
“We assessed various options to continue production and tested the market for a potential buyer, but the UK’s current economic and policy environment combined with market conditions, high supply costs and plant efficiency do not create a competitive future for the site.”
This comes just months after PetroIneos made similar criticisms following the closure of the Grangemouth oil refinery.
It is expected that 179 direct jobs and 250 contractors will be affected by the Mossmorran closure, although 50 employees will be given the option of transferring to ExxonMobil’s Fawley petrochemicals site in Southampton.
On Tuesday night, UK business minister Chris McDonald confirmed the UK government would not offer any financial support to keep the plant open.
Speaking in the House of Commons, he said there was no realistic business plan to go with investment. ExxonMobil had told him the plant was inefficient and would need nearly £1 billion of spending to make it profitable.
A UK Government spokesman had said: “We know this will be an incredibly difficult time for workers and their families.
“This is, of course, a commercial decision for the company to take. The UK government explored every reasonable avenue to support the site, but Exxon has had significant global challenges, and this move comes on the heels of closing another chemical plant in France.”
Shell, which processes natural gas liquids at the site, is unaffected by the closure.
Deputy First Minister Kate Forbes said she was “extremely disappointed” by the decision to close Mossmorran.
She told the BBC she was “surprised” at how quickly ExxonMobil moved from actively marketing the plant to deciding to close it down.
“You have to look at the reasons ExxonMobil has given for their decision, and I have pushed them on these decisions in our conversations,” she said.
“But they have cited some of the policy and fiscal decisions that have been made in the UK that are making business less competitive.”
She said the Scottish Government’s priority is to look for an “alternative future of the site” and to support the workforce.
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