Labour has been accused of ‘deliberately’ crippling the oil industry as fears mount over Rachel Reeves‘ Budget.
Paul Greenwood, chairman of petrochemical giant ExxonMobil, blamed ‘undermining’ policies after confirming that an ethylene manufacturing plant in Fife will close next year.
He pointed to the decision to phase out North Sea activity, carbon dioxide levies and other cost burdens as factors making the UK industry less competitive.
Meanwhile, other business leaders have raised alarm about ‘crazy’ government announcements and warned of a brain drain as talented youngsters emigrate to look for a better life.
Ms Reeves has been facing a mounting backlash from economists and the private sector as she scrambles for more tax rises in her fiscal package next week.
The hike in employer national insurance, minimum wage costs and bolsters workers’ rights have all added to the burden for companies – with criticism that they have crushed growth.
Paul Greenwood, chairman of petrochemical giant ExxonMobil, blamed ‘undermining’ policies after confirming that an ethylene manufacturing plant in Fife will close next year
Labour has been accused of ‘deliberately’ crippling the oil industry as fears mount over Rachel Reeves’ Budget
Figures last week showed GDP effectively flatlining in the third quarter, having fallen in September, while unemployment is rising.
Speaking on the BBC’s Today programme, Mr Greenwood said there are ‘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.
‘I will be blunt – I have one of those keys to success in place, and that is a brilliant workforce,’ he said.
‘Two of those keys I deliberately do not have because of Government policy.
‘Take the ethane supply: you know what’s happening in the North Sea, we’ve had windfall taxes, we’ve had a ban on production licences – I need cheap sources of abundant ethane and I do not have them, because the North Sea – because of Government policy – is declining rapidly and that ethane is increasingly high price.
‘If I come to the second part, which is I need to operate at low cost, I have to have a burden put upon me of CO2 taxes – we paid £20million last year in CO2 taxes, that will double in the next four or five years. My international competitors do not have those costs.
‘I also have to deal with high energy costs and those kind of things, so these are deliberate Government policies that are undermining us.’
Separately, Sarah Barraclough, boss of developer Skipton Properties, told BBC Radio 5 Live’s Wake Up to Money: ‘At the moment the way I see it as a housebuilder, it has just been one big bad news story after Covid.
‘It is literally like managing in a war situation. There is ever-changing legislation, crazy announcements coming out of the government, immigration out of control… it makes me worry about the housebuilders of the future when we are flooding the country full of people not willing to work.
‘I am scared for our future, scared for my children’s future… we try to promote the youngsters coming through because it’s an aging workforce. But they are worried about it. They are wanting to go to Australia, they are wanting to travel the world and go somewhere else where this isn’t their reality. Because this is scary.’
The Mossmoran closure is expected after the company ‘considered various options to continue production and tested the market for a potential buyer’, he said.
The Scottish Government has already pledged it will ‘explore all options’ to support workers at the plant – but Deputy First Minister Kate Forbes also made clear it was ‘crucial’ that Labour ministers at Westminster ‘consider what more they can do for the workers at the plant and take urgent action’.
However, UK industry minister Chris McDonald has indicated the Government is not prepared to keep the site open.
Mr McDonald told MPs yesterday that ‘where Government has intervened in the past, it has been where there’s been a fundamentally sound business proposition’.
The SNP’s Scottish Deputy First Minister Kate Forbes said again she was ‘extremely disappointed’ by the decision to close the Mossmorran plant.
Ms Forbes however said that in discussions with the firm both last week and on Monday she had been ‘surprised by how quickly that conversation moved from them actively marking the plant to finding no viable buyer, and therefore moving to the news that they would begin closure in February’.
Speaking on BBC Radio Scotland’s Good Morning Scotland programme, Ms Forbes added: ‘You have to look at the reasons ExxonMobil have given for their decision, and I have pushed them on these decisions in our conversations.
‘But they have cited some of the policy and fiscal decisions that have been made in the UK that are making business less competitive.’
While she accepted there were ‘challenges’ for the company in terms of market conditions and high energy prices, she added: ‘That will be cold comfort to the 179 ExxonMobil staff and the 250 contractors who yesterday learned that their jobs are at risk.’
The Mossmorran closure is expected after the company ‘considered various options to continue production and tested the market for a potential buyer’
The Scottish Government’s priority is now to look at ‘whether there is an alternative future at the site’ as well as to support the workforce at a ‘really troubling time time’, she added.
Ms Forbes said: ‘What we want to be focusing in on is how we create new economic opportunities there, how we engage with the company, how even if they struggle to find a buyer whether there is other options for the site.
‘The workers at the site are extremely highly skilled, they are absolutely critical to any just transition we take in this country, so we can not afford to lose them.
‘And I think we need to do all that we can to retain that as a key employer and a key industrial site.’
