Westminster Hall

Thursday 11th December 2025 Westminster Hall

Thursday 11 December 2025

[Wera Hobhouse in the Chair]

Backbench Business

Thursday 11th December 2025 Westminster Hall

Fairtrade Certification

Thursday 11th December 2025 Westminster Hall

00:00

[Martin Rhodes (Glasgow North) (Lab) [R]]

I beg to move,

That this House has considered the role of Fairtrade certification in UK business and trade. 

It is a pleasure to serve with you chairing for the second time in a fortnight, Mrs Hobhouse. I draw attention to my entry in the Register of Members’ Financial Interests: I was employed by the Scottish Fair Trade Forum prior to my election, and am currently chair of the all-party parliamentary group on Fairtrade.

Can we all honestly say we know who made the clothes we are wearing? When we buy a chocolate bar, do we always consider who grew the cocoa and under what conditions they worked? With every drink of tea, do we consider whether the tea farmer was paid adequately for us to enjoy our brew? Even as morally conscious as many of us would like to consider ourselves, the answer to those questions is very likely no. In this deeply globalised world, it is not possible for individuals to investigate the ethics of every product they buy.

Equally many corporations use their market power to exploit farmers and workers, suppliers of tea, cotton, and cocoa, with little regard for the environment and human wellbeing. That is why certification standards are important: they empower individuals to make informed purchasing choices through visible certification symbols, while also transcending the individual by helping to create a more ethical system of supply and demand, often by offering fair prices for products, financing for farmers, independent auditing of farming practices, transportation of goods, and processing to ensure high standards for people and the environment.

Not all certification standards were created equal. Some schemes can be used for greenwashing or to hide unethical practices through poor auditing standards. We must continue to champion independent certification standards and verification systems, and challenge those who opt for less demanding alternatives or no standards at all. I welcome the Government’s responsible business review, which I believe provides an opportunity for the UK Government to learn from certification standards as a way of delivering ethical business practices. I would welcome the Minister’s reflections on this in his response.

With that, I come to the main focus of this debate: the Fairtrade certification mark, which is one of the most recognised and effective certification standards. It is a household name, with an estimated 91% of UK consumers recognising the Fairtrade mark and some 78% caring about it. The blue, black, and green mark has come to be synonymous with certification standards. What really makes the Fairtrade mark so important is not just its public recognition or popularity, but the impact it has had and continues to have for farmers and communities globally.

Fairtrade guarantees a minimum price for farmers, provides a Fairtrade premium, ensures labour and environmental standards, and provides support and training. In practice, that means there is a price safety net enabling farmers to sell their products to cover the average cost of sustainable production. That income goes directly to farmers to increase their income, improve their livelihoods and increase wages for their workers.

The premium is paid directly to farmers via co-operatives; for every kilogram of produce sold, the funds must be spent democratically to invest in a community development project. It has been estimated that over the 25 years to 2019, Fairtrade farmers and workers have received around €1 billion in Fairtrade premium as additional funds to be invested in their communities and businesses. In 2023 alone, producers earned more than €211 million in Fairtrade premium. The projects and numerous types of training on the ground, including improved agricultural practices, climate resilience, business management, literacy and gender equality, have been supported by the premium.

Although the Fairtrade Foundation here in the UK does more than just implement its certification processes, there will always be limits to how much such an approach can deliver improved conditions for people and the planet, due to structural barriers and the imbalance of power in the competitive market system. This is why Fairtrade’s advocacy is so important. It helps producers, particularly smallholder farmers and workers, who usually are not given access to participate in public debate or to influence legislative and policy frameworks for the benefit of people and the planet.

The certification scheme is one part of the work of the Fairtrade Foundation, and the foundation in turn is only part of the global Fairtrade movement, bringing together consumers, producers, businesses and campaigners in a unique global movement for change.

[Liz Twist (Blaydon and Consett) (Lab)]

I thank my hon. Friend for securing this debate. Through their pioneering work, the Fairtrade movement and other organisations, such as Transform Trade, have demonstrated that we can have a real impact on human rights abuses and working conditions abroad by upholding standards in our own supply chains. Does he agree that we should work with big companies to incentivise best practice and transparency, protecting small and ethical businesses in the process?

[Martin Rhodes]

I agree that it is important that we look at reforming global trade in different ways depending on the particular context. One of the great successes of Fairtrade in the UK has been getting products into mainstream retail, where most people do their shopping. When it comes to quantity, that is where those products need to be. However, it is also important that the Fairtrade movement has supported other Fairtrade businesses to do all of their business Fairtrade and provided an alternative model of doing business. Both approaches are why Fairtrade has been so generally successful, accepting the current situation and how we make it better while also looking at how we build a better system overall.

[Andrew George (St Ives) (LD)]

I congratulate the hon. Member on the way he is articulating the case for Fairtrade. It is important that it is robust and traceable and has strong integrity, but if we are to scale up, should we not also integrate international Fairtrade standards into the Groceries Code Adjudicator, which is part of UK legislation? After all, the GCA is looking only at the final supplier to the large supermarkets in this country. If we can establish a strong relationship between international Fairtrade and the Groceries Code Adjudicator, which is currently under review, would that not be another step forward?

[Martin Rhodes]

The hon. Member’s highlights that certification schemes, important though they are, are not the only answer; we need to look at legislation and statutory guidance that will drive change in the system overall. I will speak later about what we can do in legislative terms to ensure that all the supply chains involved in goods and services sold in the UK are properly regulated and that we have a system in place to look at standards in the UK and elsewhere in those supply chains.

A recent example of the advocacy work of the Fairtrade Foundation is its “Brew it Fair” campaign, which called for greater accountability and responsibility in the tea sector. Some 13 million people source employment from the tea industry, and 60% of the world’s tea is produced by smallholder farmers. Regrettably, this market is made up of a high number of farmers and workers with low incomes and wages, working in the context of increasingly difficult conditions for farming due to climate change. This campaign called on the Government to do more to collaborate with the industry to deliver living wages and incomes for those in the tea sector and to be bolder in how we approach supply chain due diligence, and called for the UK to continue to honour its international climate finance commitments. During Fairtrade fortnight, at the end of September, around 117,000 people across the UK engaged with more than 1,000 local grassroots activities in support of the “Brew it Fair” campaign. Many of them were Fairtrade communities, a network of local campaign groups across the UK.

My hon. Friend the Member for Lancaster and Wyre (Cat Smith) wished to speak today but is unable to do so due to prior commitments. However, she told me she wants on the record her recognition of the hard work of the Garstang Fairtrade community—passionate campaigners on these issues in the world’s first Fairtrade town.

Support for Fairtrade cuts across communities and generations, from faith communities who see it as an important part of their social mission, to student activists inspired by its empowering impact, to rural communities who know through lived experience where power lies in agricultural supply chains. When Fairtrade hosted tea farmers from Kenya and India to speak directly to politicians and policy makers, that demonstrated exactly why advocacy is so important: it closes the vast proximity gap, often spanning cultures and oceans, between those who make decisions in this place and in boardrooms and those working at the very beginning of supply chains to deliver so many of the goods we enjoy.

Yesterday, Fairtrade’s “Brew it Fair” campaign culminated in a cross-party group of MPs, activists, and representatives from business and the Fairtrade Foundation handing a petition in to Downing Street, signed by over 21,000 people, containing the main asks of the campaign. The petition calls on the Government to introduce a law on human rights and environmental due diligence to oblige the public sector and businesses to prevent human rights abuses and environmental harms across their supply chains. I look forward to the Minister reflecting on the asks of the campaign in his response. In particular, I ask that he updates us on the Government’s position on human rights and environmental due diligence. The petition’s ask is the most important of the campaign, and the clearest ask of this debate.

[Andrew George]

I am dreadfully sorry to ask, but is the hon. Gentleman aware that those who are campaigning for Fairtrade believe that it can succeed properly only if this Government lead the way with their official development assistance budget, which has been severely cut? Does he agree that to achieve the aims that we all want to achieve, the Government need to look at their ODA budget? I cannot see how we can help countries enough if do it purely through trade.

[Martin Rhodes]

Trading relations become more important in the context of cuts to aid budgets, not just here but elsewhere in the world. Trade and business become more important as means of supporting and helping countries, and of narrowing gaps of inequality globally. There is a separate debate, which we might have at another time, about the levels of aid from the UK and elsewhere, but in the current context, trade becomes more important, not less.

In recent correspondence I had with the University of the Arts London, it highlighted structural challenges that are particularly clear in the fashion and textile sector. The debate so far has concentrated on food, but the university’s analysis shows that, despite strong consumer demand for ethical clothing, uptake of standards such as Fairtrade remains limited because of the lack of regulatory pressure, opaque multi-tiered supply chains and the competitive disadvantage faced by responsible brands. Its research underlines exactly why certification alone cannot fix a market that rewards the cheapest, rather than the fairest, production. We need human rights and environmental due diligence legislation to create that system change.

Some may worry that such legislation is a recipe for more red tape that will hamper growth, but that need not be the case. Many UK businesses already have to follow EU directives because that is where a large part of their market is. We risk becoming a dumping ground for unethically sourced products while our own British companies, following best practice in order to trade with our closest and largest neighbours, are undercut. Some 50 global businesses have already signed statements calling for human rights due diligence legislation, including UK brands such as Tesco, Twinings and John Lewis. Organisations such as the Corporate Justice Coalition are working hard to advocate on the issue by proposing a business, human rights and environment Act.

Current legislation on supply chain transparency lacks effectiveness. Section 54 of the Modern Slavery Act 2015 requires companies only to report on their operations, but not necessarily to take responsible actions to address and prevent the problems. Having met the Independent Anti-Slavery Commissioner, I am aware that they are pushing for mandatory human rights due diligence legislation in the UK. I would appreciate the Minister making reference to the commissioner’s work in his response.



Fairtrade shows that ethical trade can deliver; human rights and environmental due diligence would take it from optional to systemic. That said, the lessons of this debate for the Government are not just about the Fairtrade mark, a more ethical tea industry, or even important changes in due diligence laws. As we face a world of pressures and reductions in aid budgets, including our own, it places on us a greater and more urgent responsibility to use progressive approaches to trade and business and to promote progress on human rights, the environment and economic growth concurrently.

I shall conclude on that wider context. With the reductions in UK official development assistance, we should be viewing ethical trade and responsible business as cost-effective ways to put our principles into practice. Principles such as poverty reduction, gender equality and environmental sustainability can all be advanced through strong due diligence laws, and by growing our trade with allies that share the same high standards. But we are also required to take proactive action against regressive trade policies—most notably the use of investor-state dispute settlement provisions, which are mechanisms to allow overseas investors to sue Governments for taking legitimate regulatory decisions in the public interest.

The Government’s recent trade strategy contains very welcome and strong commitments to embedding human rights and environmental practices into our trade policy. I similarly welcome the Government’s responsible business conduct review, which shows their commitment to tackle the issues we are addressing in this debate. Such Government engagement, led by the Minister, is welcome.

The Labour Government was elected on an ambitious programme for workers’ rights and environmental sustainability. This is now an important opportunity for us to put those priorities into practice, not just here in the UK but in our global supply chains. I look forward to the Minister’s response and the rest of the debate.

[Wera Hobhouse (in the Chair)]

I remind Members that they should bob if they wish to speak. I am going to call the Front Benchers at 2.25 pm at the latest. I do not think I need to impose an official limit on speeches, but it would be brilliant if Members keep their remarks within eight minutes.

13:47

[Jim Shannon (Strangford) (DUP)]

It is always a real pleasure to serve under your chairship, Mrs Hobhouse. I thank the hon. Member for Glasgow North (Martin Rhodes) for excellently setting the scene, for his contribution today and for his hard work on this subject over the years, which is not forgotten about and provides extra context to the debate and to his speech.

The fairtrade system sets standards across the globe on ethical sourcing, fair wages, safer working conditions and proper environmental practices—four things that probably all of us in this Chamber would fully support. Fairtrade is a well-known organisation and it plays a key part across the United Kingdom of Great Britain and Northern Ireland, including in schools, so I am pleased to participate in this debate. In Northern Ireland— I hope this is true on the mainland too—children are very much aware of the Fairtrade organisation at an early age. As a result, they are well placed to tell their parents and other adults and remind them of the role they can play. The Minister is not responsible for education, but perhaps he can give us some idea of what is done to encourage schools more strongly?

[Phil Brickell (Bolton West) (Lab)]

The hon. Member is making an important point about young children in schools. Last month, Joshua, Leyla and Elizabeth from St George’s primary school in my constituency wrote to me about their campaign to promote sustainable palm oil labelling. They are carrying on a fine tradition in Bolton, where one of the first Fairtrade shops in the country, Justicia, opened in 1985. Does the hon. Member agree with Joshua, Leyla, Elizabeth and myself that sustainable palm oil labelling is crucial for informing consumers and promoting ethical businesses, alongside greater Fairtrade initiatives?

[Jim Shannon]

I certainly do. I am greatly encouraged by what the hon. Gentleman said, and by those three young children in particular in relation to their work on palm oil. That is one of the campaigns that school children in Northern Ireland are also part of. The hon. Gentleman is right to highlight that, and I am sure that the children he mentioned will be given a copy of Hansard, where their names will be printed for posterity. I thank them for all that they are doing—well done! That encourages me when it comes to the greater picture for children.

UK businesses use Fairtrade to demonstrate commitment to ethical practices. Northern Ireland has held Fairtrade status as a region since 2004. It is something we are greatly committed to and have a great interest in. The NI Fairtrade forum works with councils, schools, businesses and communities to increase awareness. One of my staff members remembers that in primary school they celebrated a Fairtrade week, when all pupils had to bring in the labels of any foods or packaging they could find in their homes that were Fairtrade. I can imagine children scouring their cupboards to find something in their house—hopefully there were plenty of products that represented Fairtrade.

Fairtrade products are widely available in supermarkets across Northern Ireland. The hon. Member for Glasgow North referred to some of the businesses that carry Fairtrade products. I am glad to report that the likes of Tesco, Asda, Sainsbury’s and the Co-op all carry Fairtrade products that are sourced globally. Those shops are making these products practically and physically available across Northern Ireland, and they take in a large proportion of shoppers—although not all of them, of course.

Let us honest about the situation: some smaller, perhaps family-run, businesses will struggle slightly more because producers are paid a fair minimum price and premium. Smaller businesses with tight margins and sometimes unpredictable cash-flow will struggle to source Fairtrade products, for fear of passing the cost increases to customers. It is not possible for everyone to source Fairtrade products, but for those who commit to it and wish to do it, there is a way of making it happen. The smaller businesses in my constituency rely on the local wholesalers and independent distributors which, again, may not carry a whole range of Fairtrade products. Some of those suppliers perhaps need a greater awareness, so they can do more. People want to do their best, but in terms of finance they must work with what is available to them.

The hon. Member for Glasgow North also referred to the role of churches. I am pleased to say that in my Strangford constituency there are a great many churches and churchgoers—those who practice their faith in a very practical and physical way. They are committed to Fairtrade because of their beliefs. They also want to do their best to help in a physical way, which they do by purchasing available Fairtrade products so that the money goes to people who need it in the right places. It is a pleasure to thank all the people in Northern Ireland who buy from and support the Fairtrade networks. Northern Ireland has some strong Fairtrade networks, and we should be proud of that, but of course people want to do more. The hon. Gentleman was right when he said that people want Fairtrade. I think most people I meet, if not every person, wants Fairtrade, but some may be restricted by what is available on the shelf or where they shop.

I am so proud of the education on Fairtrade in schools and universities—the very thing referred to by the hon. Member for Bolton West (Phil Brickell) in his intervention. It is really encouraging to know that our children probably know more about it than their parents, and that they want to do something about it. There is an innocence that children have, where they see the good—things can be very black and white for them, but it is good that they have that.

The United Kingdom Government can do more to incentivise public bodies such as schools and hospitals to consider options for Fairtrade, such as tea and coffee, or prioritise ethical trade standards to make procurement easier for small public bodies. I should have welcomed the Minister to his place; it is always a pleasure to see him. He has been a busy man today—he has been in the Chamber and now he is here, so he has definitely earned his money today. Can he indicate what has been done to encourage public bodies to purchase Fairtrade goods? I know there is a campaign, but for those who are maybe hesitant, is there is a follow-up to encourage them?

Fairtrade plays a positive role by promoting ethical standards in Northern Ireland and further afield in the United Kingdom. It strengthens our commitments to human rights. I am a great believer in and a huge supporter of human rights, and Fairtrade helps us to support human rights across the world. We can make an impact through everyday purchasing, and to build on that I ask the Government again to do more to make the procurement process easier. If that is possible, it would be a step in the right direction. I thank all Members for their participation in advance of the debate, and I look forward to the other contributions and to the Minister’s response.

13:55

[Warinder Juss (Wolverhampton West) (Lab)]

It is a pleasure to serve under your chairship, Mrs Hobhouse. I thank my hon. Friend the Member for Glasgow North (Martin Rhodes) for securing the debate. I also thank the team at Fairtrade UK for their incredible work; it was a pleasure to attend their festive reception in Parliament yesterday afternoon.

I have been a supporter of Fairtrade for some time, inspired by some of the wonderful activists in my home city of Wolverhampton. I am very proud that recently the Wolverhampton City Fairtrade Partnership celebrated Wolverhampton’s 21st year as a Fairtrade city, showing the care and compassion of my constituents in Wolverhampton West and others in the city. I recently attended a tea party at the City of Wolverhampton College to celebrate Fairtrade fortnight, and it was a joy to see that the students had baked delicious cakes to promote the event, and to hear more about the work that Wolverhampton Fairtrade has been doing. I continue to work with the group on a regular basis to support the consumption of Fairtrade products in our city.

As we know, Fairtrade is much more than just a label: it is about justice, equality, humanity and sustainability. Fairtrade benefits the planet by helping the fight against climate change. Fairtrade certification enables farmers to respect human rights and tackle environmental risks, including by banning toxic pesticides, protecting biodiversity and encouraging sustainable organic farming practices that are free of hazardous waste and use water efficiently.

Shoppers in the UK know that when they purchase Fairtrade products they are making an ethical purchase, supporting fair, sustainable farming practices around the world. Most importantly, Fairtrade helps farmers across the globe who would otherwise live in deep poverty and very poor conditions to receive guaranteed minimum prices, with improved working conditions and a proper say in how decisions are made. On top of that, Fairtrade certification offers an additional financial premium that allows farmers to democratically decide how to invest the money in community development projects, such as schools, training and water treatment systems, thereby actively improving local communities and securing their livelihoods.

From my constituents who are choosing which teabags to buy, to major UK retailers and brands, to the more than 2 million farmers and workers across more than 70 countries in Africa, Asia and Latin America, Fairtrade ensures that human rights and environmental risks are taken seriously throughout the supply chain. From protecting the climate to ending child labour and supporting farming communities around the world, Fairtrade does it all, with Fairtrade community development premium funds being used to reinvest in education, healthcare, housing and environmental initiatives. As parliamentarians, we must continue to champion Fairtrade and the farmers and workers it supports, for the present and the future. Our planet and its people depend on it.

13:58

[Dr Ellie Chowns (North Herefordshire) (Green)]

It is a pleasure to serve under your chairship, Mrs Hobhouse. I pay tribute to the hon. Member for Glasgow North (Martin Rhodes) for presenting the case for Fairtrade, and for fairer trade practices overall, so compellingly. I also pay tribute to everybody who has been part of the Fairtrade campaign for many decades. I have been involved in it for at least 30 years, and it is a fantastic example of a widely supported public campaign that has, as the hon. Member for Strangford (Jim Shannon) said, found its way into our schools and communities, and also into our supermarkets, making it easy for people to choose Fairtrade products. That is fantastic and to be celebrated.

This is not just about individual shopping choices, important though they are; it is also about ensuring a level playing field for all producers, so that good environmental, human rights and workers’ rights practices are not an optional add-on but fundamental to the way we do business. That is why I warmly welcome the Brew it Fair campaign and the petition handed in at Downing Street yesterday. I was involved in the delivery of a similar petition a few months ago with the Corporate Justice Coalition. Again, that had well over 100,000 signatures from citizens across the country calling for mandatory human rights and environmental due diligence legislation. We have to ensure that the positive practice encapsulated by Fairtrade is not just an optional extra, but how business is done.

More than 80 MPs have signed an early-day motion in support of the Fairtrade tea campaign and mandatory human rights and environmental due diligence legislation. The reasons for supporting such legislation are clear. Introducing that horizontal legislation that obliges all UK businesses to take steps to prevent human rights and environmental risks in their supply chains, all the way down to smallholder farmers and workers, is the single most cost-effective measure we could take to support sustainability in the food system and to improve the UK’s international reputation for action to create a climate- compatible, sustainable, rights-supporting economy.

We have some legislation on supply chain transparency, but it is insufficient and riddled with loopholes. Section 54 of the Modern Slavery Act 2015 requires companies to report on their operations, but not to take reasonable steps to address and prevent the problem—and prevention must be central to this. Schedule 17 to the Environment Act 2021 applies only to commodities identified as key drivers of the UK’s deforestation footprint, such as cattle products excluding dairy and cocoa, palm oil and soy. That is important, but it is narrow in scope.

Human rights and environmental due diligence should not be addressed in silos, where businesses often face the challenge of potentially trading off one sort of risk against another. If we had mandatory requirements on human rights and environmental due diligence, that would provide the consistency and level playing field that businesses need. Businesses that already source their food responsibly—whether voluntarily or because they are covered by the direct scope of the European corporate sustainability due diligence directive—would not be put at a competitive disadvantage by mandatory human rights and environmental due diligence legislation in the UK.

If the legislation were designed correctly, it would reduce the risk of abuses or poor practices in supply chains, put farmers and workers on track to earn a decent livelihood to keep their families’ heads above water, and help end issues such as gendered, racial and pay discrimination, forced labour, child labour, undignified and unsafe working conditions, the denial of workers’ rights to freely associate, and lack of care and consideration for water sources and biodiversity. All those problems could be better prevented if we made such a change in the law.

I warmly welcome the Department for Business and Trade’s responsible business conduct review. It is a critical opportunity to introduce comprehensive, inclusive and enforceable legislation on human rights, labour rights and environmental protection in supply chains, and it is crucial that we take it forward.

Finally, I want to echo a point that a couple of other Members have made. We need to ensure that trade is fair. We need to ensure that these fundamental rights are built into the normal way of doing business. The UK’s foreign aid budget is a crucial element in supporting this work. It is vital that we restore it, so that we play our part in supporting and enforcing human rights globally. Will the Minister tell us whether the responsible business conduct review will include mandatory human rights and environmental due diligence legislation, and will he respond to my point on the aid budget?

14:04

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

It is a pleasure to serve with you in the Chair, Mrs Hobhouse.

Picture the scene: Downing Street in December and jolly Christmas trees sparkling away. No, it is not “Love Actually”, but the moment—exactly 24 hours ago, I think —that my hon. Friend the Member for Glasgow North (Martin Rhodes), other officers of the all-party parliamentary group and I handed in the petition of 22,000 constituents. Such was the volume of names, the petition was in a blue cardboard box, carrying the logo that my hon. Friend described, with the distinctive swirly light-green and blue with a dot connoting a person. It was the Fairtrade logo, which people trust. It is like a kitemark.

When we buy stuff with the Fairtrade logo—bananas or whatever it is—we know what it means. As people have described, there is a minimum price guarantee for the farmer, and there is the Fairtrade premium—the financial bonus for community projects. Certification is a two-way bargain. On their side, the person being supplied has to provide transparent contracts. There are lots of things that these smallholders—they are often tiny farmers—find difficult, like getting finance up front, before the harvest season. Under the Fairtrade scheme, they can get money up front.

The scheme is about people, sustainability and community first, before naked transactional profit. Smallholding farmers can club together and get a lot more access to international markets than they would be able to get on their own. The scheme increases their bargaining capacity. It is also democratic and run on co-operative—I am a member of the Co-operative party—principles. The premium could go to football pitches, tuition fees or classrooms; that is decided by the community.

I do not know whether I am the only one in the room old enough to remember the 1980s and the advert with the man from Del Monte. Do you remember him, Mrs Hobhouse? He was a little bit neocolonialist in his hat and linen suit, and he swooped into a paradise-like community. Well, it was not all paradise, was it? He was on a plantation somewhere or other—it was an unnamed location—stroking his beard and inspecting fruit produce. It was some far-off location—somewhere in sunny climes. He was this western impresario and the community were all there, with their great expectations. In the end, the cliffhanger was resolved with a thumb up—“The man from Del Monte, he say yes!”, as one of the urchin children said. I like to think that in this day and age, it would be a certified, kitemark-able, Fairtrade business and the little urchin would be going to a school provided by this system and enjoying kicking a ball about on a pitch built with these community funds. That is what we would like to think, but it is an uneven playing field, as people have described.

The Minister is wearing a jolly waistcoat himself for this debate. It is very festive—I like it.

[The Minister of State, Department for Business and Trade (Chris Bryant)]

It is British.

[Dr Huq]

It is made in Britain, but not everything can be. Bananas, coffee, chocolate—that is what we are talking about. The man from Del Monte said yes. In the time that has elapsed since the mid-’80s, when that advert was first shown, British consumers have become more demanding and sought more reassurance. My hon. Friend the Member for Bolton West (Phil Brickell) referred to palm oil. In 2018, there was the advert for Iceland—not the country; the frozen food giant—that showed the orangutan who was sad that his habitat was disappearing because of palm oil. People are becoming more and more discerning. There is a worry, though, because we are in a cost of living crisis and people are looking for cheaper alternatives, which are not necessarily the ethical things, if the prices of those things are too many multiples of the cost of the standard-price item.

The petition that we handed in says that manufacturers should not be penalised for doing the right thing. We should not always be rushing to a lowest common denominator situation. This campaign for fair trade, which all our constituents are behind, links to concerns about deforestation and about fast fashion. Is it worth getting something for £4 from Primark if it comes with a real cost of many litres of water and hardship?

The petition looks particularly at tea, the national drink—we all enjoy a cuppa. At a time when the UK is seeing the biggest uplift to workers’ rights ever, in one go, this debate is about those things we cannot get at home: bananas, coffee, chocolate, flowers, tea, cotton and gold. They are all implicated when we hear of a dark side of undesirable practices in businesses’ supply chains: human rights abuses, environmental damage, child labour—all sorts of things. We are now outside the EU—something that I regret—and we are looking for free trade agreements. In that pursuit, let us not forget fair trade. We do not want farmers to be subject to naked exploitation—modern slavery.

The indicators are good. Quarter 3 of this year spanned Fairtrade fortnight, which was the end of September to the beginning of October, and figures from the Fairtrade Foundation show that Fairtrade tea sales were up by 40%—it was a record quarter—confectionary up 20% and coffee up 15%. All the polls show that 95% of shoppers believe that businesses should take responsibility for upholding human rights throughout their supply chains. What we were all trying to say with the petition is that those who already invest in ethical sourcing should not be penalised. Introducing mandatory human rights and environmental due diligence would level the playing field so that those operating responsibility are not undercut by those cutting corners and exploiting loopholes. Such legislation would be the single most cost-effective way to enhance the UK’s reputation as a champion of net zero, too.

At the moment, we have a fragmented system, with different logos, such as the swirly one I mentioned and those of the Rainforest Alliance, Red Tractor and so on. It is a little inconsistent. We should have one system for all, with an enforceable and consistent framework to protect people and planet. We should protect small-scale farmers and workers worldwide against a race to the bottom with fair prices. When we delivered the petition yesterday, I found out that Sainsbury’s has a human rights department—that I did not know. Other supermarkets are available, of course—Waitrose, the good old Co-op and so on.

We also want to continue our transition to net zero. The hon. Member for St Ives (Andrew George) has gone—that’s Lib Dems for you—but he mentioned the aid budget cut. It was in our manifesto that we will work towards restoring that budget, so I hope that we will be able to do that when time allows. The main asks of the petition are a UK law on human rights and environmental due diligence; encouragement of multi-stakeholder collaboration in the tea sector, progressing towards living incomes and living wages for tea growers; and honouring of our climate finance obligations and, when time allows, restoration of our aid budget.

This is not just something for far-off places and the man from Del Monte. In 2003, Ealing council passed its first fair-trade measure and the Ealing Co-op was very active in Fairtrade fortnight, garnering some of those 22,000 signatures. My alma mater, Notting Hill girls’ school, is apparently now a Fairtrade school. St Stephen’s church and many other faith communities locally have also campaigned for fair trade.

If you want any more persuading of the good souls behind this cause, Mrs Hobhouse, as my hon. Friend the Member for Glasgow North can attest, yesterday our cardboard box attracted a lot of attention from, if not Downing Street’s most famous inhabitant, certainly the most consistent one in my time in this place, which has spanned six different Prime Ministers: the contented purring that we heard proved to us that Larry the cat is on side as well.

14:13

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)]

It is a pleasure to serve under your chairship, Mrs Hobhouse. I thank my hon. Friend the Member for Glasgow North (Martin Rhodes) for securing this debate. Clearly, fair trade matters, and it does to all of us. I will spend a little time outlining why it matters so much to me and where I first came across it. Too often in global trade, people who grow and produce the food that we enjoy here in the UK take all the risks—unstable prices, poor conditions, climate pressures—while others further up the supply chain take the reward.

Nearly 20 years ago, I was fortunate enough to be part of a delegation organised by Banana Link, where we met those working on the plantations that produce the majority of the world’s supply of bananas for export, across central and South America. Yes, among those exporters and suppliers was Del Monte. We saw at first hand the exploitation that the banana workers experience: the complete control by the companies and multinationals, the non-payment of wages, the non-provision of healthcare—healthcare is provided only by the plantation owners—and products being sold only in the stores of the companies that people get their wages from. I live close to Robert Owen’s New Lanark, and I was reminded of the things that we got rid of 200 years ago at the beginning of the co-operative movement.

We saw the effect of the environmental pressures. Banana plants showed ash from volcanic eruptions hundreds of miles away. We also met small producers. The good companies—ironically, the ones that had leadership from Scandinavian countries—saw that treating workers fairly is important, that it is good to pay good wages and that Fairtrade is worth shouting about.

Although Fairtrade is important for bananas, it is also important for tea, coffee, cotton, wine, cocoa and sugar cane. Millions of people around the world depend on those products for their livelihoods, yet only a tiny shave of what consumers pay for them reaches those who grow and pick them. That imbalance is not accidental but a result of supply chains that prioritise low prices over fair outcomes. Fairtrade challenges that model and proves that there is a better way.

It is not all international; hon. Members have talked about the choices that we make here at home. I am proud that those values are being lived in my constituency. North Lanarkshire council, which covers Cumbernauld and Kilsyth, is a recognised Fairtrade zone. That reflects a commitment across schools, community groups, workplaces and public services to choose Fairtrade, and the steering group has recognised North Lanarkshire as one of the major distribution hubs in Scotland. Working with the wholesale market on Fairtrade is just as important, so we must ensure that all companies, including small businesses, are able to do that. In Kirkintilloch, East Dunbartonshire council has made similar commitments. The School Yard Kitchen, which is just over my constituency boundary, specialises in how to grow a community between Kirkintilloch and Ghana through chocolate.

Fairtrade is not abstract. For UK businesses, Fairtrade certification makes absolute sense. Colleagues have expressed that in much greater depth. Support for Fairtrade across my constituency shows that the public already understand that, but the Government and business must keep pace and ensure that Fairtrade certification plays a central role in building a fairer, more resilient and more responsible UK trading system.

14:18

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to see you in the Chair, Mrs Hobhouse. I thank the hon. Member for Glasgow North (Martin Rhodes) for his work in securing this debate and for his authoritative opening speech, which set out the case for Fairtrade with clarity and thoroughness. It was very impressive.

Fairtrade is a global system that connects farmers and workers from developing countries with consumers and businesses across the world to change trade for the better. For more than three decades, Fairtrade has been having an impact on the way that trade works. Fairtrade believes that every farmer and worker should have access to a better way of doing business and a better way of living. As a leader in a global movement to make trade fair, Fairtrade supports and challenges businesses and Governments, and connects farmers and workers with the people who buy their products. It has been a real pleasure to hear from the hon. Members for Ealing Central and Acton (Dr Huq) and for Cumbernauld and Kirkintilloch (Katrina Murray) about their experiences of being active in that movement.

Fairness is an important principle for the Liberal Democrats, and that should apply to the way that supply chains are managed by big companies working abroad. In our recent manifesto we committed to introducing a general duty of care for the environment and human rights in business operations and supply chains. Businesses are the principal engines of growth and prosperity in the UK. When businesses succeed, our communities succeed. We must work in partnership with business to provide stability, encourage investment and help maximise opportunities for growth and employment across the country. In return we ask that businesses not only commit to promoting skills, equality and good governance, but protect human rights and the environment in the communities where they work, whether at home or in the global supply chains on which they depend.

The Liberal Democrats support the introduction of a business, human rights and environment Act to require companies to take adequate measures or conduct due diligence to manage the impacts of their activities on people and the environment both in the UK and globally. We would also introduce a duty of care for the environment and human rights, requiring companies, financial institutions and public sector agencies to exercise due diligence in avoiding specified activities such as child labour or modern slavery in their operations and supply chains, and to report on their actions. We would ensure that all large companies have a formal statement of corporate purpose, including considerations such as employee welfare, environmental standards, community benefit and ethical practice alongside benefit to shareholders, and that they report formally on the wider impact of the business on society and the environment.

If we are to take tackling climate change seriously, businesses must play their part. That is why the Liberal Democrats would require all large companies listed on UK stock exchanges to set targets consistent with achieving the net zero goal and to report on their progress. We would reform the regulation of our services sector to encourage climate-friendly investments, including requiring pension funds and managers to show that their portfolio investments align with the Paris agreement and creating new powers for regulators to intervene if banks and other investors fail to manage climate risk properly.

Ethical supply chains and Fairtrade certification do not exist in isolation. They connect directly to our responsibilities in development and reducing global poverty. For that reason, we have called for the immediate restoration of UK aid spending at 0.5% of GNI and a road map to restore 0.7% of GNI as soon as possible within this Parliament. We would ensure that the UK’s international development spending is used effectively, with a primary focus on poverty reduction, including by putting the United Nations sustainable development goals at the heart of the UK’s international development policy, funding genuine partnerships that are rooted in local needs and developed on grounds of mutual respect, and tackling the growing global crisis of food insecurity and malnutrition by increasing the proportion of ODA committed to delivering lifesaving nutrition interventions.

Fairtrade certification has shown time and again that when we create systems that empower producers, protect rights and support sustainable agriculture, everybody benefits: farmers, consumers and business alike.

14:22

[Rebecca Paul (Reigate) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Hobhouse. I begin by congratulating the hon. Member for Glasgow North (Martin Rhodes) on securing today’s informative and thoughtful debate. All the contributions have been insightful, but I particularly enjoyed the speech by the hon. Member for Ealing Central and Acton (Dr Huq) who spoke about the man from Del Monte, taking me back down memory lane. I had not thought about him for a long time, probably not since the ’80s.

This is a timely debate. It rightly draws attention to a topic that has relevance to how the UK positions itself as a responsible trading nation and global partner. Fairtrade certification schemes have become a visible and recognised feature of British consumer life. They are well understood by the public, well supported by major retailers and increasingly used by UK businesses to demonstrate transparency and ethical practices across global supply chains. This debate invites us to reflect on how Fairtrade sits within the wider landscape of British trade and business policy, and how it might continue to support responsible sourcing, environmental sustainability and long-term development goals.

At its core, Fairtrade is a voluntary certification scheme applied to consumer goods such as bananas, cocoa, coffee, tea and sugar. It sets minimum prices for producers, offers a Fairtrade premium to be invested in community projects, and lays out standards on labour rights and environmental protection. The scheme is built on a partnership model between producers in the global south and businesses and consumers in the global north. Over time, Fairtrade has come to play a role in supporting responsible UK sourcing practices. The UK has long been a leading market for Fairtrade goods, and British supermarkets were among the first in the world to adopt the Fairtrade label at scale. The distinctive mark is now found on thousands of product lines sold in every part of the country, from major supermarket chains to small independent stores.

Beyond consumer familiarity, the benefits of Fairtrade certification also flow into business practices here at home. For British companies, certification helps to meet environmental, social and governance expectations from investors and consumers alike. It offers reassurance on the ethical provenance of goods and helps to reduce reputational risk in complex and sometimes opaque global supply chains. More broadly, Fairtrade fits into a wider framework of responsible sourcing in which UK firms are increasingly engaged. For example, the cocoa industry has seen significant improvements in transparency and long-term planning due to Fairtrade and similar voluntary schemes. British food and beverage companies, in particular, have drawn on Fairtrade principles to strengthen resilience and quality across key import lines.

There is also a trade policy angle. Fairtrade is not only about individual transactions; it reflects a broader outlook on how the UK interacts with developing markets. As the Government have observed in the recent trade strategy, trade and development are not mutually exclusive goals. We can support UK business while also encouraging more ethical, sustainable and secure supply chains. The developing countries trading scheme, launched in 2023 under the last Conservative Government, is one such example. It reduces tariffs on goods from low and middle-income countries and allows for easier trade in value-added products, helping to support economic diversification.

The previous Government were also clear that they recognised the role that voluntary schemes like Fairtrade play in complementing formal legal frameworks, such as the Modern Slavery Act 2015, which continues to apply to large UK businesses. In this context, Fairtrade certification can be seen as one of several tools that enable the UK to act as a responsible trading nation, championing higher standards while maintaining competitive access to key goods.

One of the great strengths of Fairtrade is the strong grassroots support that it enjoys. I saw that at first hand earlier this year when I was contacted by my local Reigate Fairtrade steering group to draw my attention to the “Brew it Fair” campaign. The campaign highlighted that, while the Government have committed to protecting human rights and environmental standards by endorsing the UN guiding principles on business and human rights, and by passing the Modern Slavery Act, wages, incomes and working conditions remain inadequate for the majority of the people involved in tea farming. As such, the Fairtrade Foundation called on the Government to introduce a law on human rights and environmental due diligence.

Again, good work was done in that space under the previous Conservative Government. The UK was the first country to create a national action plan to implement the UN guiding principles on business and human rights, which are widely regarded as the authoritative international framework to steer practical action by Governments and businesses worldwide on this important and pressing agenda. More recently, the UK has taken a number of steps through the Modern Slavery Act to ensure that no British organisation—public or private, and unwittingly or otherwise—is complicit through their supply chains in human rights violations. I am sure that the Minister will have more to say on that in a moment.

I conclude by noting that this has been an excellent debate, and I repeat my thanks to the hon. Member for Glasgow North for securing it.

[Wera Hobhouse (in the Chair)]

There is plenty of time, but I remind the Minister to leave a couple of minutes for the hon. Member for Glasgow North to wind up.

14:28

[The Minister of State, Department for Business and Trade (Chris Bryant)]

I am not sure how long you think I will go on for, Mrs Hobhouse, but I will take that admonition in the way I think it was intended. It is obviously an enormous delight to have you in the Chair, notwithstanding your admonition. It is also a great delight to have this debate, which plays an important role in the Government coming to a view on responsible business conduct.

I warmly congratulate my hon. Friend the Member for Glasgow North (Martin Rhodes). He would have been my mother’s MP if she was still with us, so I know his patch very well. My grandfather also lived in his constituency when he played for Glasgow Rangers. That was a very long time ago, so I am terribly sorry if my hon. Friend hates Glasgow Rangers—it has nothing to do with me.

My first point is that the world is fundamentally more connected, or even interconnected, than ever. I particularly feel that at the moment, as in the few weeks I have been in the job, I have been to Brazil, Argentina, Germany, Switzerland, Kuwait, the United Arab Emirates, Australia, New Zealand, Spain and, arguably, Singapore— I was also in Brussels yesterday, so there have been quite a few. The truth is that, while in the past people might have only considered a holiday in France or Spain, even under Franco, their opportunities for holiday travel around the world are now much more extensive than ever before.

Exactly the same is true of supply chains. It might well be that the clothes we wear were stitched and made here—although they might have been stitched and made on the other side of the world—but the cotton or silk might have come from another part of the world entirely. The same is true of our furniture, tea and coffee, sugar and bananas. Even the glasses we wear are often not entirely sourced here in the UK. Neither are the medical instruments used when we are operated on by a surgeon, nor the medicines that we receive. All those supply chains are interconnected around the world.

Perhaps the most obvious instance of this is our choice of music. In the past, when we were young, we thought mainly about British music. There was perhaps a bit of alternative music from Latin America, Africa or wherever played by a few DJs late at night, but nowadays K-pop, African music and stuff from all around the world form our earworms.

In many ways, that interconnectedness is a good thing, but it also has potential downsides, because the arc of trade does not necessarily always bend towards justice. Quite often, because of price competition, the arc of trade can lead to quite the reverse—the abandonment of justice. I have always felt that the concept of fairness is a fundamental element of being human. It is why children will often shout and scream, “That’s not fair!” when they are told to go to bed, when they are not allowed to play with their tablet, or when they see their brother or sister staying up later than them.

We need to build on that sense of fairness in international trade. We need to make sure that the arc of trade bends towards justice and fairness. I have therefore always argued that we should strive for free and fair trade, not just free trade. Interestingly, the very word “boycott” springs from a moment in Ireland in the 1880s when a pretty awful land agent called Captain Charles Boycott was turfing people off their property on behalf of a pretty awful landlord. That has entered the language of nearly every country in the world—the concept of wanting to abide by good standards and fairness in trade.

This is why the Fairtrade Foundation is such an important concept. The hon. Member for Strangford (Jim Shannon) referred to the Christian churches, which have been big supporters of the movement, and led to the Jubilee 2000 campaign and so many other things. When I was training to be a priest, every church I went to had a Fairtrade stall at the back. I have to confess that early Fairtrade Foundation coffee was pretty dire, and now it is a standard part of the offer in Sainsbury’s, Waitrose, Tesco and Aldi—in every single supermarket. It is great that a complete transformation has happened because of the dedication of a large number of people working on an entirely voluntary basis.

[Sarah Olney]

rose—

[Chris Bryant]

I think I can see a Liberal Democrat hand gesturing at me.

[Sarah Olney]

I am interested in the Minister’s formulation of free and fair trade. Would he not agree that fair trade is free trade, and that free trade is fair trade? It is about bringing down barriers, which may have been put in place by the larger producers or people with a market advantage. The point is to create a fairer playing field, because that is what free trade is.

[Chris Bryant]

I suppose, on the whole, I was trying to say that I want to try to take down tariff barriers where I possibly can, so that we can engage in free trade, but that only works when we have fair opportunities underlying it. The hon. Member for Strangford will correct me if I have this wrong, but I think there is a phrase in the Bible about justice and peace kissing one another. Sometimes we strive for justice, but it is not real justice if we do not get peace with it; and sometimes we strive for peace, but it is not real peace if it is not based on justice. That is the combination of Shalom and Tzedek, to use the Old Testament terms, that we are striving for with free and fair trade.

As my hon. Friend the Member for Glasgow North said, the Fairtrade Foundation has been around for more than 30 years. It has done an amazing job in certification. Indeed, I think there are now more than 5,000 Fairtrade-certified products in the UK, and many of our constituents search them out every day of the week.

I, too, was approached by the Brew it Fair campaign, which has raised specific challenges around tea, including the living conditions of workers, gender inequality and a series of other issues. I praise it for raising those issues and bringing them to everybody’s attention.

I am delighted that Rhondda Cynon Taff county borough council in my constituency was made a Fairtrade county in 2007. It has therefore had a considerable period of time to roll out these policies. I am sorry to keep referring to the hon. Member for Strangford, but he asked about procurement. Of course, procurement is a key issue. We often have discussions in Parliament about what consumers do, but it is also about what the Government do.

The hon. Member is quite right that we produced a new national procurement policy statement in February this year, which lays out new ways in which people can drive this agenda into procurement, on the back of taxpayers’ money. Similarly, the Procurement Act 2023, which came into force on 24 February this year, has a new central debarment list, which Ministers can put people on if they have been involved in modern slavery. In that way, we can make sure the supply chain is cleaner.

Fair trade is not just about the issues I have mentioned. The International Labour Organisation says that, around the world, 28 million people are in situations of forced labour. I am sure that any of us could cite some of the places where that might be true. Similarly, every minute we are losing forest area equivalent to 11 football pitches, which is a challenge to all our climate change ambitions.

Of course, the impact of climate change will be felt most intensely among the poorest peoples on Earth. To see that, we only have to look at places such as the Carteret Islands, off Bougainville in Papua New Guinea, or the outlying poorer lands of Thailand, where some of the very poorest people are in danger of losing their homes, their livelihoods and their access to clean drinking water. Similarly, a million animal and plant species are threatened with extinction, which is a threat to biodiversity, and whether biodiversity loss happens in our country or in any other country, it is a threat to us all.

There are two other issues that have not been referred to much so far today. The first is corruption. The danger of corruption in some political systems around the world, particularly where there is an authoritarian regime, is intense. That is why it is so important that, under the Bribery Act 2010, we have particular responsibilities to ensure that British businesses trading elsewhere in the world are not able to engage in corrupt practices.

The second issue is displaced people, which is slightly different from the issue of forced labour. I remember visiting Colombia in 2018 with ABColombia, where I was struck by two things. First, as we flew over vast territories, I was struck by how much of the land had been taken for palm oil. That massive agribusiness had effectively displaced many millions of people who had lost their property thanks to the activities of militias and the FARC, and the battle between the two.

Similarly, when I went to El Porvenir and La Primavera, which are not far from Colombia’s border with Venezuela, it was striking how people found it very difficult to make a living when they had been deprived of large amounts of their land—they had effectively been living in a warzone for the best part of 20 years. That is why it was so important that, when Colombia was able to bring about peace with the FARC, it was very keen to bring forward the idea of land reform—that work has never really been completed—so people have access to land again and can make a living.

I have a few principles that influence how I look at all of this as we go through the process of our responsible business conduct review. First, I believe in a seamless garment. Again, I am sorry, but that is another biblical phrase. When Jesus was on the cross, lots were cast for his garment because it was seamless. I think it is important that we look at all these issues together, in the round. As I said, it is not just one issue.

This may seem a slightly flippant way of looking at it, but I was watching “Do they know it’s Christmas?” the other day on a Christmas compilation TV show. Of course, it is great because it is dealing with human rights around the world, the lack of clean drinking water and people starving from famine, but I was struck that only three women were asked to take part in the filming of the 1984 version. That could be a test for anybody, but it was the three members of Bananarama: Sara Dallin, Siobhan Fahey and Keren Woodward. That made the point to me that we need to look at all these issues in the round. Gender inequality, human rights issues, corruption and environmental concerns all need to be addressed in the round when we are looking at the whole of our supply chain.

Secondly, I commend the voluntary efforts. The shadow Minister, the hon. Member for Reigate (Rebecca Paul), referred to how the previous Government recognised them, which is true. I think we have all done that, and we have done it for many years. I doubt that there are many MPs who have not been to some kind of Fairtrade event and shown willing.

I pay tribute to Howies, a Welsh clothing company, because sometimes it is not easy to prosper in this world. It is great that the company is owned by its staff—I, too, am a member of the Co-op—and it says that its

“award-winning men’s and women’s clothing is ethically produced using organic, recycled or natural fabrics wherever possible… we want to be a company that does things differently to others—one that does things honestly, responsibly and quietly.”

I think an awful lot of UK consumers would love to be able to think that, whenever they go into a supermarket or any of the major chains, that would be what influences the company they are buying from, going all the way back to the beginning of the supply chain. In fact, there is evidence to suggest that companies are more successful when they adopt that kind of attitude. Consumers like it, so the companies can prosper. For that matter, it also gives a sense of purpose to everybody who works in the company.

Thirdly, as several Members have mentioned, we do not want a race to the bottom. My hon. Friend the Member for Glasgow North said that if we have worse standards or weaker requirements than elsewhere, the danger is that all the least-ethically sourced stuff comes to the UK. It would be a form of ethical dumping—similar to subsidy dumping or carbon dumping—into the UK. We are very keen that it should not happen, so of course we want to work alongside international comparators.

Fourthly, I am very keen for the UK to have requirements that are both effective and proportionate to the harm being dealt with. I have a question in my mind that was raised with me a couple of weeks ago, at a roundtable involving quite a few of the sorts of organisations we have talked about, including the anti-slavery body. I am not sure that having another annual report that is never read by anyone—including the person who wrote it, possibly—would be either effective or proportionate. Reports are costly for an organisation to produce, and they might not make the blindest bit of difference to whether a consumer or the company takes action on this.

Fifthly, notwithstanding that, section 54 of the Modern Slavery Act 2015 requires large organisations over a certain threshold to publish transparency in supply chain statements, and we provided new guidance on that in 2025. As has already been referred to by the Liberal Democrats, some of that is good, but there is a danger that it is just ticking a box, not driving forward change; and I am far more interested in driving forward change than I am in simply ticking boxes.

My sixth point is—there are not too many more, honestly—[Interruption.] I do not know why you are all laughing. We are engaged in a responsible business conduct review, and this debate is a very helpful part of that; it feeds into what we are hearing from businesses, because we want to make sure that what we eventually come forward with will be proportionate and effective. I was asked specifically whether we will also look at mandatory human rights and environmental due diligence reports. Yes, we are looking at how those would work, what would be most effective, and how they relate to requirements for multinational companies in other countries as well.

Seventhly, since we came to power, we have opened the Office for Responsible Business Conduct, which is a one-stop shop for industry. Again, I am interested in driving change, and sometimes businesses do not know where to turn. Smaller businesses might have no idea how to meet the law or best effect the kind of change we are all looking for. The Office for Responsible Business Conduct has a strong mandate there.

I have already referred to my hon. Friend the Member for Glasgow North and the hon. Member for Strangford—who of course is a friend to us all, as we meet him in so many debates. It was great, too, to hear from my hon. Friend the Member for Wolverhampton West (Warinder Juss) and from the hon. Member for North Herefordshire (Dr Chowns), and from the man from Del Monte—or rather, from my hon. Friend the Member for Ealing Central and Acton (Dr Huq); indeed, the one point she did not make was that it would be quite nice if there were a woman in charge. Maybe one day there will be a woman from Del Monte—although I note that Del Monte went into chapter 11 proceedings in July, so it is not clear what state it is in now. I also thank my hon. Friend the Member for Cumbernauld and Kirkintilloch (Katrina Murray).

Many of us have effectively given the same speech, because we all feel quite passionately that we want to get these issues right. I know that many people work in retail in the UK in a whole series of sectors; quite a few of our discussions have been about food and beverages or fashion, but the same is true for furniture and other sectors, too. We simply want to get this right, because our aim here in Government is to ensure that British businesses have an opportunity to export and import, and that this is always based on free and fair trade.

[Wera Hobhouse (in the Chair)]

I am enormously grateful to the Minister for leaving plenty of time for Martin Rhodes to wind up.

14:48

[Martin Rhodes]

First, I thank all those who have taken part in the debate. We have covered a lot of common ground but brought a lot of different perspectives to it.

A number of hon. Members, including the Minister and the shadow Minister, the hon. Member for Reigate (Rebecca Paul), and my hon. Friend the Member for Wolverhampton West (Warinder Juss), mentioned community campaigns, which are an important part of Fairtrade. Others, such as the hon. Member for North Herefordshire (Dr Chowns), have spoken about campaigns more generally,.

Other hon. Members have also raised business— my hon. Friend the Member for Cumbernauld and Kirkintilloch (Katrina Murray) talked about what can go wrong when good practice is not in place, while others reflected on where business practice goes right. My hon. Friend the Member for Ealing Central and Acton (Dr Huq) talked about what can happen when things are not done ethically and about the difference that the Fairtrade premium can make when they are.

Others emphasised the input of producers, including my hon. Friends the Members for Ealing Central and Acton and for Cumbernauld and Kirkintilloch. Those different perspectives show one of the great strengths of Fairtrade: it brings together consumers, producers, campaigners and businesses to look at what can be achieved through certification.

I very much welcome what the Minister said about global connectedness. That is what underpins all this: the recognition that we are much more connected through trade, culture, travel and everything else than we were previously. In some ways, that broadens people’s horizons, and makes them see and understand things that they never previously had the chance to think about or knew existed, and it can help uncover injustices and make action more possible. However, in other ways, we see trading activity that is based on entering into places to deliberately and repeatedly exploit them.

We had some discussion earlier about the aid budget. I, too, look forward to returning to 0.7% of GDP, but as I said, when the UK aid budget and aid budgets across the world have been cut, we must look much more at trade and other means to achieve the principles that we all want to achieve.

The Minister spoke about “free and fair” trade and discussed what that means with the hon. Member for Richmond Park (Sarah Olney), but it is important to reflect on what was said. We want free trade, but if we free up trade and tear down barriers, and yet the underlying system does not allow for fairness, we will get an unfair outcome. We therefore need to make sure that fairness is embedded, and Fairtrade has shown itself for a number of years to be a proven way of doing trade that is mutually beneficial to all in the supply chain.

I welcome the Minister setting out the principles behind the responsible business review, and I very much welcome the fact that human rights and environmental due diligence are part of that. The Minister made mention of the Bribery Act 2010, which provides a framework for legislation—

[Wera Hobhouse (in the Chair)]

Order. May I encourage the hon. Member to wind up?

[Martin Rhodes]

I am making my final point, Mrs Hobhouse.

[Wera Hobhouse (in the Chair)]

The normal order is two minutes to wind up.

[Martin Rhodes]

I have only 30 seconds left, and I am on my final point. I welcome the opportunity from including human rights and environmental due diligence, and the Bribery Act offers a framework for looking at how that might be done.

Question put and agreed to.

Resolved,

That this House has considered the role of Fairtrade certification in UK business and trade.

14:52

Sitting suspended.

Oil Refining Sector

Thursday 11th December 2025 Westminster Hall

[Relevant document: Fourth Report of the Scottish Affairs Committee, The future of Scotland’s oil and gas industry, HC 459.]

15:00

[Martin Vickers (Brigg and Immingham) (Con)]

I beg to move,

That this House has considered the future of the oil refining sector.

It is a pleasure to see you in the Chair, Mr Western. I am pleased that this debate has attracted considerable support, particularly from north of the border, and that today The Times had a timely editorial on this issue.

My constituency is in northern Lincolnshire on the south bank of the Humber, which has been christened “the UK’s Energy Estuary”. In recent years, the Humber has become a world-leader in the offshore and renewable energy sector—something we are proud of locally. However, while the Humber is full of opportunity for offshore and renewable energy and will play a significant role in the UK’s net zero efforts, we must not overlook the UK’s carbon energy needs as we make the transition to cleaner energy sources. We must face the fact that a significant portion of our total energy consumption still comes from oil, gas and coal and will continue to do so. The UK’s annual total primary energy consumption is around 130 million to 140 million tonnes of oil equivalent; fossil fuels made up roughly 79% to 81% of that in the year 2022-23.

The Humber has played a significant role in ensuring that that demand is met. Until the crisis at Lindsey oil refinery in my constituency earlier this year, the Humber could boast of producing a third of the UK’s refined fuel, with two of the UK’s six major oil refineries based in the Humber region. Now, as we approach the end of 2025, only four operational refineries remain in the UK, following this year’s closure of Grangemouth, with significant job losses, and the uncertainty at the aforementioned Lindsey refinery where over 400 people are employed. Even more striking is the fact that the number of refineries is down from 18 in the 1970s.

Sadly for the oil refining sector, most people do not even realise that it exists or appreciate its importance, yet the sector is a vital part of the UK’s energy security. A number of our crucial sectors rely on it, including the transport industry and defence sectors. All Members will know that oil refineries produce products that are essential for our critical energy needs, such as petrol, diesel, jet fuel and fuel oil. The Lindsey refinery has a capacity equivalent to around 35% of British petrol consumption and 10% of British diesel, and also supplies aviation fuel to Heathrow via pipeline.

Yet the House of Commons Library states:

“Refinery output in 2024 was 48 million tonnes. This was 55% below the 1973 peak.”

Output in 2024

“was around 14% below levels from the late 2010s and more than 40% below output from the start of the century.”

That is worrying considering that refineries supply 47% of the UK’s final energy demand, as 100% of aviation, 97% of road and 61% of rail transport still relies on liquid fuels. The refineries also support 100,000-plus jobs across the UK, with 4,000 directly in the refineries. We collect £37 billion annually in tax—that is duty and VAT—from them, and they deliver low-carbon fuels that have an impact equivalent to removing 3 million cars from the road each year. That is not to mention the fact that ours are among the lowest-carbon refineries globally—in fact, 80% of the UK’s top import partners have a higher carbon intensity—yet despite their importance we have seen the closure at Grangemouth and the uncertainty at Lindsey.

What does the future hold? UK oil refineries continue to face a number of challenges. Of course demand for refined products will decrease as the country continues to reduce its emissions in accordance with the legally binding commitment to achieve net zero emissions by 2050, though that target may change. Moreover, energy is the single largest cost of operating a refinery. The industry faces high energy costs, and carbon costs negatively impact the competitiveness of UK refineries. UK refineries are essentially competing with one hand tied behind their back while their competitors pay little or nothing in carbon costs. That is on top of the issue of unequal access to decarbonisation opportunities.

Our route to lower emissions must not come at the price of deindustrialisation or at the expense of our energy security. As an editorial in The Times today points out, some in the Government are so hostile to fossil fuels and so beholden to the green ideology that they are willing to sacrifice our future income and tolerate the jobs that are being lost. We must put the national interest first. Moreover, our climate targets are still some way off, so in the meantime we must continue to rely on the products that refineries produce.

The sector remains vital for today’s economy, yet our refineries are closing. We must realise that closing UK refineries does not reduce demand; it merely shifts production abroad. That, of course, often leads to higher emissions. We are thereby exporting jobs outside the UK while failing in our efforts to cut emissions. Losing further capacity would therefore leave the UK increasingly dependent on imports and the unpredictability of global politics, relying on other nations that often have weak rules on environmental protection, labour rights and safety.

Moreover, once a refinery closes, it does not return. The skills, infrastructure and investment are lost permanently. We must also consider the impact on the local economy and local people that closures cause. At Lindsey, over 400 people are directly employed on the site, and well over 1,000 rely on it through the supply chain. As North Lincolnshire council said in its position statement on Lindsey oil, the implications of any closure of the site will have far-reaching consequences for the local economy and the people employed directly and indirectly.

The council has stated that the potential closure of the refinery will have a significant impact on local market confidence, particularly following the turmoil at British Steel earlier this year. As such, failure to properly support the businesses impacted could multiply exponentially the impact of the closure. Moreover, the south Humber bank, where the site is located, relies on the interconnectivity of its industrial supply chains. As such, the refinery is not an isolated operator but an integral node in a wider network that supplies products to downstream users, and disruption at one site can quickly ripple across the regional economy.

These integrated clusters work in tandem, reflecting the modern industrial model, and our economic resilience relies on the system being maintained, thereby ensuring long-term industrial sustainability in the UK. I note the Scottish Affairs Committee’s conclusions on the handling of Grangemouth, which can be found in the Committee’s recently published report on Scotland’s oil and gas industries. I am sure the Chair of the Committee, the hon. Member for Glasgow West (Patricia Ferguson), will delve more deeply into the detail of the report, though let me quickly say now that the report stated that both the UK and Scottish Governments should have acted sooner to prepare for the crisis in Falkirk.

[Euan Stainbank (Falkirk) (Lab)]

I hear the hon. Member on the strategic importance of oil refineries; we have seen it in Grangemouth for over 100 years. Back in February 2024, in response to a question from the former Member for East Lothian, the right hon. Member for Richmond and Northallerton (Rishi Sunak), the then Prime Minister, described the closure of Grangemouth refinery as “obviously a commercial decision”. Does the hon. Member for Brigg and Immingham (Martin Vickers) agree with that characterisation by the former Prime Minister, who was at the time his party’s leader, given that he is describing—and I agree with him—the strategic role that oil refineries play in his community?

[Martin Vickers]

The hon. Member makes an important point: it is the case that such decisions are not solely commercial; the Government must consider, more widely, energy security and the impact on the economy.

In preparation for this debate, I received representations from various interested parties that are dependent on the oil refining sector. They have outlined their concerns, some of which I have mentioned already, and the solutions they would like to see put forward. One issue that has been mentioned to me is the expansion of the scope of the carbon border adjustment mechanism to include oil refineries’ products. As Members may know, the CBAM is a tax levied on goods at the border based on their carbon content. Expanding the CBAM to products from oil refineries based overseas, as the Government proposed in their autumn Budget, would enable domestic oil refineries to remain competitive and stop them fighting with one arm tied behind their back.

I mentioned that the refining sector is subject to ever-increasing regulatory burdens and carbon pricing. Sadly, the impact of net zero politics, particularly the UK emissions trading scheme, is driving rapid and sustained deindustrialisation of the British economy. Refining receives substantially lower free allowances under the scheme compared with other industries, such as steel and cement, and ETS costs are one of the highest expenditures in a refinery’s operating budget. Competitors in other regions do not face those costs, which seriously damages the competitiveness of UK refineries. We must realise that the ETS damages our energy security and should be urgently repealed. Longer-term solutions may include bringing refined products fully into the UK CBAM or ensuring that the UK retains control over refineries in any future UK-EU carbon market linkage agreement. If we do not want to let this issue get any more out of control, we must act now.

Before concluding, I refer back to the situation at Lindsey oil, because the company is in administration. We have a situation in which FTI Consulting, acting on behalf of the official receiver, is engaged in discussions with potential buyers and investors. Those talks are rightly confidential, and when questioned, Ministers have repeatedly said that they are awaiting the recommendations from FTI. That inevitably feeds speculation through the grapevine that angers employees and their union representatives. I have held meetings with two consortia that are interested in buying the whole site and continuing operations, and the leader of North Lincolnshire council has held discussions with a third. Do the Government support a deal that would retain the refinery complete? Until now there has been no answer. I again ask the Minister: do the Government favour that option and, if necessary, would they provide some support?

Have the Government instructed FTI to prioritise jobs? A letter from Unite the Union to the Secretary of State throws that into doubt. In the letter, Unite says:

“In this vein you informed me and the Unite reps for the refinery on two occasions that you had advised FTI that bids which save the jobs should be prioritised and that if needed, there could be government money for a viable bid which saved the site.”

Is Government money available? The reply seems to throw doubt on all of that. The reply from the Minister for Energy to Sharon Graham at Unite says that the Government

“have made repeatedly clear that long-term and sustainable employment is a priority for the Government”,

but that does not necessarily mean it is a priority that has been passed on to the official receiver.

At a meeting with me and the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), the Minister for Energy assured us that if the worst came to the worst and the refinery were to close, or there were to be large- scale job losses, one option would be for the Government to work with MPs, local authorities and other agencies to form a taskforce to consider what help and support would be available to revive the local economy. Is that offer still open? My understanding is that the Government have said that there will be no further redundancies until the end of March, which I welcome. Could today’s Minister clarify whether the Government are meeting the cost of that, or whether the costs will be taken into account by the administrators and the amount available to creditors adjusted accordingly?

The future of not just Lindsey oil but the whole oil refining sector is at stake. The Government must review their current position and act to secure the industry for the future.

[Several hon. Members rose—]

[Matt Western (in the Chair)]

Order. I see that seven Members are looking to speak. Let us start with six-minute speeches and see how we progress.

15:14

[Douglas McAllister (West Dunbartonshire) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Western. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important debate. I speak in my capacity as a member of the Scottish Affairs Committee, which has recently published a report, “The future of Scotland’s oil and gas industry”, as part of our inquiry into Scotland’s role in the UK’s energy transition. I thank the hon. Member for allowing the report to be tagged to this debate on the Order Paper.

The closure of the Grangemouth oil refinery, following the Petroineos announcement in November 2023 that refining operations would cease at the site, was a key focus of our report. The Grangemouth oil refinery operated for over a century, and was Scotland’s only oil refinery before refining officially ended in April this year. The refinery’s closure has left some 400 employees and the wider Grangemouth community facing deep uncertainty. The Prime Minister’s pledge of £200 million through the National Wealth Fund for future industries at the site was welcome, as was the Scottish Government’s announcement of £25 million to help establish a just transition for Grangemouth. The extra £14.5 million announced in the Budget was another welcome boost. However, the Government have not yet set out how that will be delivered and how it will tangibly result in jobs.

The Committee visited the Grangemouth site during our inquiry. We heard oral evidence from Petroineos, the company that owns the refinery, from its parent company Ineos, from union representatives, from Project Willow and from the Forth Valley college, which provides the skills support for former refinery workers. Our report concluded that both Governments should have acted sooner to set in motion plans for the site’s future and to prepare for resulting job losses. That lack of action created an employment gap and hardship to the local community that could have been avoided.

We said in our report that Grangemouth is the “canary in a coalmine” and a stark warning of what is to come. That warning proved prescient: just a few months on from the publication of the report, ExxonMobil announced its plans to shut the Mossmorran ethylene plant in February 2026. That is yet another example of Scotland’s rapidly changing industrial base. As we move away from our reliance on fossil fuels, industrial transition will only accelerate. For our national resilience, we must learn from these cases.

The Grangemouth case has illustrated the need for the Government’s active stewardship in the energy transition. Our report recommends that the Government set out clear principles that outline the conditions and actions that underpin a just transition. We recommend principles that emphasise the importance of early Government intervention, proactive engagement with workers and communities, and a focus on decent jobs. Those principles should draw on best practice and ensure that transitions are fair and planned, not rushed and reactive.

Last month, the Minister for Energy, my hon. Friend the Member for Rutherglen (Michael Shanks), said that announcements will be forthcoming on the investment proposals brought forward by the National Wealth Fund. I understand that the first project to be funded on the site was announced today: a groundbreaking biotech company using by-products from whisky distillation, which is jointly funded by both the UK and Scottish Governments’ £3 million of investment and hopes to deliver over 300 good jobs. That announcement is welcome.

The timescales of establishing future industries at Grangemouth and the jobs that they will create all hinge on the types of investment proposal put forward. I commend the Committee’s report to all hon. Members. A response from the Government is expected by Christmas; I hope that that response will recognise the sentiment in our report that continued momentum on Grangemouth’s future is vital. Project Willow must not be left to gather dust while jobs are at stake. Communities that have powered our economy for generations deserve certainty and a fair future.

15:18

[Sir Edward Leigh (Gainsborough) (Con)]

I thank my hon. Friend and constituency neighbour the Member for Brigg and Immingham (Martin Vickers) for securing this timely debate about Lindsey oil refinery, which employed many of my constituents. The closure is a disaster for our Greater Lincolnshire area. It is, I believe, a direct result of green policies that are no longer logical.

I am no climate change sceptic. I am prepared to have investment in green energy—we are world leaders in offshore wind in the Humber, are we not? We are doing our bit, but the Government are taking it to new heights. All ideologues are dangerous, but fanatical ideologues are the most dangerous of all, and that is what we have in our Secretary of State. We have these ludicrous targets; I commend the editorial in The Times today calling it “targetitis”. Originally, Theresa May arbitrarily set a limit of 2040. Where did that come from? Boris Johnson, in his bumptious, casual way, not considering the evidence, unilaterally cut it down to 2030. Where did that come from? All this is massively damaging.

I would not mind if we were actually making a difference to global warming, but we are responsible for only 1% of global emissions. According to some estimates, our total global emissions are less than China’s annual accrual. We are making absolutely no difference! China holds us in contempt. It is doing to us what we did to it in the 19th century. China is totally ruthless.

[Luke Taylor (Sutton and Cheam) (LD)]

Will the right hon. Member give way?

[Sir Edward Leigh]

I give way to the hon. Gentleman, who is the son of a very distinguished councillor in my constituency.

[Luke Taylor]

It is a pleasure to contribute to this debate. Together, the 100 smallest carbon-emitting countries represent more carbon emissions than China on its own, so if all those smaller-emitting countries make their own contribution it can make a bigger contribution to cuts than China. Does the right hon. Member not agree that those small measures add up to a huge difference globally?

[Sir Edward Leigh]

That may be a fair point. I said at the beginning of my speech that I am not a climate change sceptic. Everybody is prepared to do their bit.

I have already mentioned wind farms, but what about solar energy? In Lincolnshire we are prepared to have solar energy on our farmland, but in my constituency 16,000 acres of the most productive land in the entire country—enough land to feed the city of Hull every single year—is put under solar farms, with panels manufactured in China, destroying our ability to feed ourselves. There has to be a balance, but at the moment we do not have one. We are importing so much from our dear friends in Norway that they are opening 250 exploration wells.

This debate, secured by my hon. Friend the Member for Brigg and Immingham, is extremely timely. The closure of Lindsey oil refinery is a complete disaster. It employs many of our constituents and is vital for the whole of our industrial infrastructure. We need strong domestic refining capacity. The Secretary of State goes on about energy security all the time, but that would strengthen energy security at a time when we are already importing two thirds of our gas and increasing volumes of refined fuels.

I would not mind these green policies, but we are not actually contributing to tackling global warming; we are simply exporting carbon emissions to other countries. It is complete madness. If we were sensible about this, and if it were possible to get some sort of global recognition of the problem, maybe we could start to tackle it. Relying on foreign refiners means exporting jobs and value overseas while leaving Britain more exposed to global price shocks and geopolitical risks. Expansion of the UK refining sector protects thousands of highly skilled, well-paid jobs. It also supports an entire region and supply chain in engineering, fabrication, logistics and maintenance. Those are precisely the jobs that sustain industrial communities and create apprenticeships for young people.

Refining underpins every major industrial sector. Manufacturing, aviation, defence, logistics, agriculture and pharmaceuticals all depend on reliable supplies of fuels and petrochemicals. Allowing it to pass into decline would simply shift production to countries with weaker environmental standards.

Lindsey oil refinery was a major economic anchor for our area. We know that it was put into administration. I share the comments of my hon. Friend the Member for Brigg and Immingham: this is a national crisis in terms of national policy, which is wrong, and of local policy. The people of Greater Lincolnshire demand action from this Government, and they demand it now.

15:24

[Brian Leishman (Alloa and Grangemouth) (Lab)]

It is a pleasure to see you in the Chair today, Mr Western. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this highly important debate, and I draw everyone’s attention to my membership of Unite the union.

Since coming to this place, I have repeatedly raised the issue of the Grangemouth oil refinery closing, with 435 jobs lost on site and 2,822 lost in the wider supply chain. Closure means an end to a century of oil refining on the site and to a generational employer for Grangemouth people. Nearly every family in the town has had someone, or knows someone, who worked at the site. There is no doubt about it: local businesses will feel the pain of the closure. The hairdressers, barbers, small independent retailers, hotels, restaurants, pubs and garages are the very businesses that make up the heartbeat of the local community and the town’s economy. They are all negatively impacted.

The closure is more than just a local constituency issue. It is Scotland’s biggest industrial issue in four decades, it is safe to say, since the end of the coalmining industry. To put the matter into the national context, the Grangemouth refinery was worth more than £400 million per annum to the Scottish economy, according to both Scottish Enterprise and PwC. While conflict rages on in Europe, British people have been susceptible to the resulting price shocks and disrupted supply chains that have impacted the oil industry in Europe. At this perilous time, with refining ending at Grangemouth, Scotland is now in the ridiculous position of importing our own oil. The energy-abundant nation of Scotland is reliant on global logistics and outside influences for our oil products. It is incredible that we have lost our self-sufficiency.

Why has this happened? Why did the refinery close? I will say something different from what right hon. and hon. Members have mentioned so far. Let me be clear: the idea that the Grangemouth refinery closed as part of trying to achieve net zero, or as part of some woke green agenda or an environmental campaign, is utter nonsense. The real reason—the heart of the matter—is Petroineos. It is made up of private capital, Sir Jim Ratcliffe’s Ineos and a foreign Government in the form of Chinese state-backed PetroChina. It controlled the Grangemouth refinery, a key piece of Scottish and British national infrastructure, and closure was a commercial decision.

Closure happened because it was more profitable for a private company to make hundreds of workers redundant and operate Grangemouth as an import terminal. It was international capital concerned with the corporate greed of a billionaire owner, with shareholder dividends their priority. That is the ruthless nature of how international capital works. Ratcliffe has massively weakened Scotland’s national economy and jeopardised our country’s energy security for his own needs. I am disgusted by Governments allowing that to happen, and by the pandering to Ratcliffe in spending billions of pounds to help with the regeneration around Old Trafford and hundreds of millions of pounds to provide a loan guarantee for his plant in Belgium.

I make absolutely no apologies for being ideological. As the country sacrificed state ownership of vital infrastructure, we lost control of our own refinery. We have seen job losses, an exodus of skills and talent, local shops closing and all the social consequences that follow deindustrialisation. That is what has happened to former industrial towns the length and breadth of the United Kingdom. For goodness’ sake! The country needs a different industrial direction, to bring an end to being at the mercy of private capital and foreign Government influence.

There is a clear, coherent case for Government ownership. It is in the public interest. In questions to the Department for Energy Security and Net Zero and to the Treasury, I have asked what ownership stake the UK Government are willing to take in future industries at Grangemouth. I put the same question to the Minister this afternoon.

Just as I make no apologies for being ideological in my opinion of public ownership, I make no apologies for criticising both the UK and Scottish Governments. We know that oil will be part of the energy mix for decades to come, so it is time for both of Scotland’s Governments to be bold. The existing infrastructure of the Grangemouth refinery is largely still in place, and there should be a conversion to sustainable aviation fuel there.

We have signed up to highly ambitious mandates, so let us try to meet those targets. Successful conversion of refineries is there for everyone to see—at La Mède in France, Eni’s Venice refinery in Italy and Phillips’s Rodeo refinery in the US. I say this to the Minister today: what happens at Grangemouth will go a long way in deciding how we shape our future economy, who controls it and who this Government actually serve and work for.

15:31

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Western. I commend the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important debate. I also acknowledge the contribution of the hon. Member for Alloa and Grangemouth (Brian Leishman), who spoke with his usual passion, but today I believe with a degree of anger as well, and rightly so.

A just transition supports and protects existing oil and gas sector workers through—I emphasise “through”—the transition to a world-class renewables workforce, a transition in which Scotland is well placed to lead the world. I want to share the following quote:

“‘just transition’ has now become meaningless for so many people and that’s a failure… People should feel like that’s not something done to them, but something they’re part of shaping.”

That was said by the Minister for Energy in a recent interview with the Holyrood magazine. Sadly, for thousands of workers in North sea upstream, midstream and—in the case of refining—downstream jobs, a just transition is far removed from the reality that they face.

The workers now made redundant are angry at the UK Government’s failure to support their transition. Their families and communities are also angry, as are we, their representatives. We know that the just transition is doomed to fail because of three things: first, the failure to press forward with renewable energy schemes in north-east Scotland at the urgent pace that is required; secondly, the failure to allow new exploration licences while persisting with the crippling energy profits levy on the oil and gas sector; and thirdly, the failure to protect refinery jobs at Grangemouth and Mossmorran. Today I learned that 7,000 business leaders, workers and companies have signed a letter to the Prime Minister in which they demand change to the EPL to avoid the projected 1,000 job losses per month.

Looking specifically at the situation in Grangemouth in Scotland, Anas Sarwar, the leader of the Labour party in Scotland, said that a Labour UK Government would

“step in to save the jobs at the refinery and to invest in that transition…and we would put hundreds of millions of pounds behind it to make it a reality.”

No doubt the Minister will cite the £200 million promised to support Grangemouth, and reference has been made to the Scottish Government’s contribution. Of course, today brings good news in that regard, with MiAlgae’s welcome investment announcement on top of the Celtic Renewables project. The Scottish Government are an active partner in funding those projects, and we welcome the investment. However, the funding announced today amounts to only £7.73 million in total, and the 280 jobs —perhaps more—will not be fully realised for five years, if ever. Where is the rest of the promised £200 million? Where is fulfilment of the promise made by the leader of the Labour party in Scotland? Where is the intervention that occurred for Scunthorpe? People need work now. Families need certainty, but all they face this Christmas is uncertainty. In the meantime, the refinery workforce has been largely cast aside.

Looking further afield in Scotland, including Prax Lindsey, the UK has lost a third of its oil refineries just this year, on this Government’s watch. Furthermore, it is an uncomfortable truth for the Government that the UK’s uniquely high energy costs—the highest in the G7—are one of the main factors harming the refining sector and industry more generally.

I acknowledge that the North sea basin is in decline, but the importance of sovereign capability in national security is often repeated from the Government Front Bench. It is particularly true in defence, but how can defence capability be even remotely claimed if the vital fuel needed to operate tanks, ships and aircraft is acquired in the quantities needed through imports from abroad? Those imports can hardly be described as secure in this currently very dangerous world. Refining sites, as mentioned by the hon. Member for Alloa and Grangemouth, have great potential for such things as sustainable aviation fuel production, but this remains a jam tomorrow promise. This is not remotely a positive trend for our economy, our environment, or, vitally, our national security.

I must press the Minister to address these questions. How can she tell the thousands of directly employed and supply chain workers at Grangemouth, Prax Lindsey and the many other sites and companies that are shedding workforce in the oil and gas sector that they are part of shaping the just transition? What assurance can she give those workers that the future is bright, especially when the Acorn project in my constituency faces growing uncertainty, for example? I urge her to address those questions in her speech. The destruction of the refinery jobs is a repetition of the Thatcherite coal mine closures and the steel plant shutdowns, with no plan for the workers, their families and the communities affected. We have long memories in Scotland. Only with the full powers of independence in areas such as energy policy will the workforce at Grangemouth and elsewhere in Scotland’s oil and gas sector get the priority and the just transition to the future that they so richly deserve.

15:36

[Euan Stainbank (Falkirk) (Lab)]

It is a privilege to serve under your chairship, Mr Western. I congratulate the hon. Member for Brigg and Immingham (Martin Vickers) on securing this important debate, and I agree with his comments regarding the strategic importance of oil refineries for their communities—if only colleagues who were previously in government had grasped that before the decision by Petroineos to close Grangemouth in November 2023 was announced.

As has been remarked by colleagues, 2026 will mark the first year since, I believe, 1850 that Scotland does not have an oil refinery. This year marked 101 years since the start of oil refining in Grangemouth, and the date that refining ceased in April 2025 was a devastating time for the community I represent, the community of my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman), the whole of Scotland and the United Kingdom. I remember sitting in the Falkirk council chamber when the announcement was made. The implications were obvious immediately: the loss of many of the highest-paying jobs in the Falkirk area, and the loss of a substantial tax base for Falkirk council and the Scottish and UK Governments. The announcement was completely unexpected for those of us in opposition parties, who were not in the know.

The failure of Government, as my hon. Friend the Member for West Dunbartonshire (Douglas McAllister) has articulated on behalf of the Scottish Affairs Committee, to prepare our community or have a plan in place for a no job loss transition at Grangemouth refinery has become symbolic of a similar story happening across industrial communities for decades. It was infuriating to find out from the Scottish Affairs Committee report that, through late 2023 and 2024, when it would have mattered, many of the decision makers failed to act to prevent the unjust transition at Grangemouth.

Petroineos confirmed to the Committee in April 2025 that, in the years prior to the announcement in November 2023, the then UK and Scottish Governments had requested information from the company, and subsequently chosen not to make an investment decision that would have saved the refinery. It was engaged for years with Government and no one lifted a finger to stop the path to the closure of refinery operations. Although I wish we had grasped the reality of the situation far more clearly in the transition from opposition to entering government, I welcome the determination of Ministers to get investment into Grangemouth quickly so that we can deliver that new industry to the community.

Today—two weeks after the Chancellor allocated further Government funding to Grangemouth to speed up investment decisions—marks an exceptionally positive announcement for the area. Up to 310 jobs are coming to Grangemouth to support the construction and operation of MiAlgae, a Scottish biotech success story. That does not, however, diminish the fact that many high-paid, high-skilled jobs have been lost, and the constant worry that they and the industry will never come back is justifiably the primary emotion that still grips my community.

We have an obligation not to repeat the mistakes of the past. We do not want the workers at Grangemouth, many of whom have not found employment since the closure in April, to be lost to the middle east, America or Norway. There is still a future for high-skilled refining workers at Grangemouth. That is why I welcome the Skills Transition Centre, announced back in February, funded out of the Falkirk and Grangemouth growth deal, which this Labour Government enhanced by £10 million when we came to power. However, the college that contains the skills centre is facing an existential financial crisis. One of the three campuses that constitutes Forth Valley college—the Alloa campus, in the constituency of my hon. Friend the Member for Alloa and Grangemouth —is directly jeopardised by the 20% real-terms cut inflicted on colleges since 2021 by the SNP Government.

The pathways for local kids to grasp the new industrial opportunities coming to our community will be actively barred if Government settlements for our further education sector are insufficient. Any consolidation that followed the closure of the Alloa campus would affect the courses available for thousands of young people in Falkirk, Stirling and especially Clackmannanshire. Kenny MacInnes, the principal of Forth Valley college, rightly reminded a conference recently that the college will be an instrumental part of whatever comes next at Grangemouth. The Scottish Government must bear that and Colleges Scotland’s recently published report in mind when they set their budget next year if they ever want to speak credibly about rebuilding opportunities in my community.

[Seamus Logan]

I note the hon. Gentleman’s remarks, but is he concerned about his own Government’s commitment to this important debate, given the row upon row of empty seats on the Government Benches?

[Euan Stainbank]

I note the attendance, and I welcome the hon. Gentleman’s presence in this debate. However, when we were talking about the Grangemouth refinery at the time that it mattered, in the previous Parliament, I note there was an active lack of interest from SNP politicians, with the exception of the former Member for East Lothian, who is no longer a member of the Scottish National party. I have raised the concern, and I have asked for direct intervention from my Government about skills funding for the college during Treasury questions. I very much welcome the enhancement of the local growth deal, which enabled the skills centre to be built.

I will talk about the future of the refining sector. Since being elected I have repeatedly made the case that the best opportunity for Grangemouth is in refining biofuels, especially sustainable aviation fuel, due to its industrial role as a fuel supplier for Glasgow and Edinburgh throughout history, its equal proximity to Scotland’s two largest and busiest airports, its operational capacity and its proximity to a town that has the infrastructure necessary to host the required contractors.

The £200 million national wealth fund commitment to Grangemouth first proposed by Scottish Labour MPs late last year, fought for by Scottish Labour Ministers and announced by the Prime Minister in February, should be spent primarily on developing a new anchor industry for our community that complements the existing skills profile of refinery workers. Ideally, we would not give private international capital a full stake in the project. Many businesses are interested in investing in refining biofuels at Grangemouth, and they are calling for policy certainty during the transitional phase into sustainable aviation fuel.

Legislative measures such as the SAF mandate and the revenue certainty mechanism go a long way towards that, after the Government picked up the work that was delayed for far too long under the previous Administration. However, I would like the Minister to address the following points. Clarity on the revenue certainty mechanism and the pre-contractual work that can be carried out is crucial. Will the Government enable pre-contractual work to be carried out, as we did through contracts for difference, so that there are no delays once the RCM comes into effect later next year?

Project Willow mentioned a proposal to delay the hydroprocessed esters and fatty acids cap. Despite substantial questioning from me, that has not been addressed yet by Ministers at either the Department for Energy Security and Net Zero or the Department for Transport. Will the Government consider altering, delaying or lifting the cap following that recommendation? Finally, it would be useful to have an update on how the £200 million is being deployed, following the welcome announcement on MiAlgae this year.

15:44

[Lee Anderson (Ashfield) (Reform)]

It is a pleasure to serve under your chairmanship, Mr Western. Of course, we have been here before with industry in this country. I remember what happened to the coal mines back in the 1980s. I worked in the coal mines in Nottinghamshire and Derbyshire, and the whole industry was decimated by the Conservative Government at the time—

[Sir Edward Leigh]

You were a Conservative once!

[Matt Western (in the Chair)]

Order.

[Lee Anderson]

If the right hon. Gentleman wants to intervene, he is more than welcome.

What the Government did not realise at the time is that when they got rid of a coalmine—each coalmine had a football team, a rugby team, a cricket team, a community club, a miners’ welfare, a brass band and a bandstand in the local welfare grounds—it destroyed whole communities, and those communities will never come back. They will never be the same again.

Fast forward 40-odd years and we have a Labour Chancellor and Government, who we would think would protect these industries. Look at the hypocrisy in that part of the world. We have Drax power station, which used to burn coal from a nearby coalmine, just a few miles down the road. I think that was shut about 10 years ago. I remember the Energy Secretary at the time was campaigning to keep it open. How things have changed! The power station now burns wooden pellets from trees chopped down in North America—in Canada. They chop the trees down and put them on diesel-guzzling cargo ships. They then chop them up into pellets using diesel-guzzling machinery on the ship. They then come to this country, are put on diesel-guzzling cargo trains and transported to Drax power station, where we set fire to them. And we say that is renewable energy. That costs the British taxpayer about £1 million a day in subsidies. I think it has cost about £10 billion so far since we have been using wooden pellets there.

Just a few miles down the road we have the perfectly good Lindsey oil refinery, which appears to be doomed, with 400 jobs at risk and a thousand more in the supply chain. If the Government are going to use taxpayers’ money to subsidise industry or keep places open, they should look at the oil refineries, because once they have gone, they are never coming back, and we have lost the community and that sense of pride.

There are not many Government Members here, to be honest—I cannot see many—although I will thank the hon. Member for Alloa and Grangemouth (Brian Leishman) for his passionate contribution. I did not catch most of it because I am a little bit deaf; I will sit a bit closer next time.

[Brian Leishman]

I don’t know what you mean. [Laughter.]

[Lee Anderson]

We would expect this Labour Government to do a little bit more for these communities. Back in the ’80s, Labour was attacking the Tories for doing exactly the same thing: closing the vital industries. As I say, once the industry has gone, it is gone, and the skills that one generation passes on to another are gone as well. It is all well and good saying to somebody, “It’s okay, you can make windmills or solar panels,” or, “We’ll retrain you in green energy,” but they do not want that. This lot do not understand that there are still men and women in this country who want to get up in the morning and go do a proper day’s graft. They want to set the alarm clock at 10 o’clock at night, get up at half four or five o’clock in the morning and go do a proper day’s graft where they get their hands dirty. It is dangerous, dirty work, and they contribute towards their society by earning decent wages—good wages—and it keeps their communities going. If we lose that, we lose it for ever.

In the last year alone, we have lost a third of refineries, following the closure of Grangemouth, and now Lindsey is obviously doomed as well. That leaves just four refineries in the country. Why is Lindsey closing? Because it is being hit again and again with costs just to stay compliant with the UK emissions trading scheme. We know that to be compliant, refineries are required to submit verified emission reports to the UK ETS authority and to surrender sufficient allowances to meet the total emissions generated. As the hon. Member for Brigg and Immingham (Martin Vickers) said, those costs account for the highest expenditure in a refinery’s operating budget. Just let that sink in: the biggest cost to a refinery is one that has been inflicted upon it for the sole purpose of meeting net zero. In other words, it has been inflicted by this Government and the Energy Secretary.

[Seamus Logan]

I hear what the hon. Member says about oil refineries, and I share many of his concerns—you will have heard what I said—but I have also heard him and his party colleagues talking about “net stupid zero”. Does he actually believe that we should cancel all the wind farm projects and all the grid infrastructure rebuilding? Is that what he firmly believes we should do?

[Matt Western (in the Chair)]

Order. I remind Members that when they say “you” they are speaking to me.

[Lee Anderson]

I have heard colleagues talk about “net stupid zero” in the past. We think the targets should be scrapped; we are not against trying different sources of energy to fuel our nation. We are saying we should have a sensible transition. China has got it right: it is burning coal. China is opening coal mines and using coal-fired power stations. The irony is that China makes solar panels and windmills using electricity generated by coal-fired power stations, and then flogs them to us. We think, “That’s great! Look at this: we’re reducing the Earth’s carbon.” We are not reducing the Earth’s carbon; we are just exporting it to other countries. It is absolute madness and hypocrisy. When we are committing this nonsense, it costs our Treasury billions of pounds in receipts a year. It is absolute nonsense. When some of my hon. Friends say “net stupid zero”, that is what they are referring to. And it is stupid—it is absolute madness.

I am going to finish now, because I have had an extra minute and I know other people want to speak. I have been one of those working men who gets up in the morning at 5 o’clock and goes and does a dirty, horrible, dangerous job. I know what it is like to come home, after doing a horrible shift on a horrible job. I know what the people in these communities feel like. They do it because they love their family and their community, so they go and do some jobs that nobody in this room would ever do. This Labour Government should remind themselves what the Labour party was founded on: helping the working man in this country.

15:51

[Jim Shannon (Strangford) (DUP)]

It is a real pleasure to serve under your chairship, Mr Western. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for leading the debate. The very thrust of the issue that the hon. Member for Ashfield (Lee Anderson) underlined, and that I endorse, is how it changes communities whenever disastrous decisions are taken.

The future of the UK oil refining industry has become an increasingly urgent topic as we navigate the pressures of energy security and the transition to net zero. I should have welcomed the Minister to her position; I wish her well in it. I am not sure whether today’s is a good debate for her to be answering questions, but that is by the way—we will see how it all goes. We have seen the closure of two major oil refineries this year, so it is important that we are here to discuss the future of our fossil fuel sector across the United Kingdom.

This debate is important not just for the constituencies represented by, for example, the hon. Members for Alloa and Grangemouth (Brian Leishman) and for Falkirk (Euan Stainbank), but for us in Northern Ireland as well. Our oil came from Grangemouth and Lindsey, so the impact for us in Northern Ireland will be the same as it is for everybody else. The difference will be that we will not be getting oil from within the United Kingdom and will have to buy it from outside. That concerns me greatly.

I commend the Members who have spoken. In particular, I commend the hon. Member for Alloa and Grangemouth for his passion, which he always shows in the main Chamber and here in Westminster Hall. He puts forward his case incredibly well.

The UK’s oil-refining capacity has shrunk substantially over the past 20 years or so. As of 2023, total refining capacity stood at roughly 1.22 million barrels per day, and the UK produced around 51.45 million tonnes of refined petroleum products. Some people ask how this effects the workers. Many of us have constituents who work in the oilfields—I think nearly every constituency has them; I know I have them in Strangford—and this impacts on them as well. Northern Ireland does not have any operating crude oil refinery, and all refined fuels, such as petrol, diesel and jet fuel, are imported.

Historically, some of Northern Ireland’s fuel came from refineries across the rest of the UK, with the products shipped or piped to Northern Ireland terminals. For example, Petronas, which until 2025 operated the Grangemouth refinery, supplied almost all the fuel for Northern Ireland. We have witnessed the closure of two refineries, Grangemouth and Lindsey, and Members have outlined their concerns, whether they represent the area or are here to speak on behalf of others. There is no doubt about the significant impact on where we source fuel. Events in the wider UK refining sector, such as closures or capacity losses, will have knock-on effects on fuel security, price stability and supply chain resilience in Northern Ireland. The impact will be felt by us all.

We have witnesses the United Kingdom’s reliance on imports, and there has been a significant impact in terms of job losses, and the redundancy of engineers, technicians and maintenance workers. We also have to recognise the significant loss of skill and experience. Even if things were to change in time, those people will have moved elsewhere, so how do we start again? That is, if we are able to start again, of course.

Furthermore, the closure of refineries has an impact on associated industries such as petrochemical storage and marine freight. The impact is like a domino effect: one thing happens and it knocks on right down the line. With two large domestic refining assets having closed, the UK must now import more petrol and more diesel, which completely reduces our domestic control over fuel supplies.

I believe that we are doing our bit to improve our infrastructure and to adapt to net zero goals, but what does that mean in the meantime? I do not think anybody here does not believe that there is a role for net zero, for the green environment and for green energy, but we do not want to lose the core of our ability to produce oil for our own country. The United Kingdom’s commitment to net zero remains essential to protect the environment and for our long-term energy security, and to create new green industries. However, the recent closures of the refineries at Lindsey and Grangemouth show that the transition also brings real challenges for workers and local economies—for every economy right across this United Kingdom of Great Britain and Northern Ireland—affecting all the regions and our overall industrial capacity.

The transition has to be carefully managed. It is the responsibility of the Minister and this Government to ensure that we are equipped to deal with the changes, for the benefit of everyone in this great United Kingdom of Great Britain and Northern Ireland. I always say that we are better together, but we have got to work together as well. We have to work together for everybody. That is what I ask the Minister: how can we make sure that we can all do it better together?

15:57

[Luke Taylor (Sutton and Cheam) (LD)]

It is a pleasure to serve under your chairship, Mr Western. I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important debate, and all the Members who have spoken for their contributions. I declare an interest as the chair of the all-party parliamentary group for the future of aviation, travel and aerospace—we have done a lot of work on sustainable aviation fuel—and that I met representatives of Exolum, the International Air Transport Association, LanzaJet and the Tank Storage Association in preparation for this debate.

At times of great upheaval and change, it is tempting to look to political leaders, artists or other major cultural figures to get a sense of where the world is headed. That is certainly a popular approach among historians, but I think it misses something: the often pivotal role of engineers—and I say that not just because I am one myself, or was. It is not necessary to subscribe to an entirely materialistic view of history to recognise that engineers, no matter who they work for or where they work, are often at the vanguard of the kind of technological change that enables our wider political or social ambitions to be achieved. That was true at the cusp of the industrial revolution; it was true when the white heat of technology exploded the middle class in the ’50s; and it is true now, perhaps more than ever, as we embark on the mission to undo the damage to our environment that previous technological shifts have wrought. We must secure our energy supply so that we can withstand an ever more uncertain future, and transform our late-industrial malaise into a green, prosperous and abundant economy through a truly just transition.

Data from the oil and gas industry shows that it directly supports around 26,000 jobs across the UK and indirectly supports 95,000 more. These are largely jobs in offshore drilling, rigging, catering, scaffolding, onshore fabrication yards, anchor manufacturing and vessel maintenance, and there are more. It is also estimated that there are another 84,000 jobs among the hospitality workers, taxi drivers and others who serve industrial communities and are supported by them in turn. We have seen before what happens when there is a major industrial shift and we fail to support jobs and the communities they help to keep alive—from the closure of the pits to the ongoing crisis of British Steel. We must learn lessons from past deindustrialisations to avoid similar damage to communities today.

All policy makers should dedicate themselves to avoiding the traumatic manifestations of necessary—or, at the very least, foreseeable—moments. It is vital that any job losses in this sector are mitigated by reskilling and retraining with new green investment. However, right now in 2025, we are losing our traditional refining, chemicals and existing biofuel production capability and home-grown expertise. Complexity, departmental misalignment and a lack of pragmatism in public policy are holding back the existing and future fuels sector. The Government have the power to solve those things. I hope that today we can suggest and agree some constructive next steps.

Earlier this year, Liberal Democrat colleagues and I recognised the importance of the Government’s Sustainable Aviation Fuel Bill. Sustainable aviation fuel, or SAF, will be one of the main enablers of aviation’s transition from polluting liquid fossil fuels to a future of hydrogen, battery and hybrid zero emission power plants. As part of that transition, SAF has a huge role to play in creating new green jobs and delivering on our energy security goals.

Local production creates jobs, improves resilience, reduces import dependence and stabilises prices, but without efficient resource allocation and strategic investment, future refinery closures could create severe supply bottlenecks and undermine our energy independence. It is equal parts encouraging that there is consensus among the serious political parties in this country about the need for transition and energy security, and concerning that from different ends of the spectrum, the Greens and Reform are either wilfully ignorant or unwilling to accept that supporting the oil refining industry to transition is critical.

The Greens seem willing to turn their back on any of the major technologies involved in the just transition of our fossil fuel infrastructure. They are locked into the pursuit of an ideological purity that sees those companies and producers solely as the problem and not as part of the solution. Reform’s static, stagnant and staggering belief that net zero is either bound to hurt working people or just bad in and of itself, only gives them the self-satisfied and smug smile of someone who thinks they know all the answers, but that could not be further from the truth.

[Lee Anderson]

The hon. Member talks about hurting working people. Does he not agree that the closure of the oil refineries hurts working people?

[Luke Taylor]

I completely agree. That is why we are talking about a transition. It may well bring shivers to the hon. Member’s spine to talk about transitions, but it is critical that we talk about them in a reasonable and sensible way, and about how we look forward to the future rather than to the past. Reform’s approach is equally dogmatic and damaging as that of the Green party and has already been found wanting in practice in local government.

We can only make the transition a reality if we grasp the opportunity to utilise our existing oil refining infrastructure to turn to the chemistry of the future, with a diverse set of feedstocks from a wide range of supply points. We should be working with industry on delivering that, but industry leaders tell me that on the critical steps that the Government should be taking, they are going ignored or unheard.

Let us take bioethanol, for example. At the start of 2025, the UK bioethanol sector provided 895 million litres of renewable fuel production capacity and thousands of direct and indirect jobs. It was also a significant market for British agriculture and providing critical co-products such as carbon dioxide for the NHS, and for the food and drink sector. As of December 2025, the industry has been halved, following the US-UK trade deal.

An immediate solution would be to transition that bioethanol to SAF, as the alcohol-to-jet technology being developed in the UK can convert it into jet fuel. Under the SAF mandate rules, however, bioethanol readily produced in the UK—sustainable enough for a car engine—has been deemed not sustainable enough for a jet engine. Will the Minister consider the request of industry to support the UK’s bioethanol industry to continue operations and simultaneously support SAF production by allowing bioethanol use under the SAF mandate? The upcoming call for evidence on the role of crops under the UK SAF mandate should be released urgently, and a pragmatic approach taken.

Similarly, opening hydrogen storage subsidies to include liquid fuel infrastructure would ensure that existing assets could play a role in the hydrogen economy. Hydrogen storage is critical, but hydrogen production and usage are also critical to our future renewable goals and to providing the supply of SAF that will be required to decarbonise aviation. DFT rules state that, to make compliant SAF in the UK, hydrogen must be green hydrogen—rightly—and cannot be supported by the hydrogen production business model, a scheme established by DESNZ to get UK hydrogen production off the ground. That alone is not controversial. However, there is no green hydrogen available in the UK that will not be supported by the HPBM, which means that a portion of SAF using these renewable molecules will be uncompliant and, essentially, very expensive fossil jet fuel, despite it actually being green. I convey to the Minister the ask from industry that the DFT and DESNZ should be urgently working together to ensure interconnectivity with hydrogen policy and SAF policy, so that SAF producers are not penalised for using domestic industry?

[Euan Stainbank]

Project Willow also recommended the delay or lifting of the cap on hydrotreated esters and fatty acids. Would the hon. Member agree with that approach being taken? This is the project and report on the future industrial options at Grangemouth.

[Luke Taylor]

I know that the hon. Member has a lot of knowledge on this issue. I think that looking at all the options that maintain capability is critical. What might come out of this is an ask for this Minister— or potentially the aviation Minister, the hon. Member for Selby (Keir Mather)—to sit down with our APPG, in which there is a lot of expertise, to talk about some of the ways that we can maintain capability but also achieve our transition and net zero goals.

A pragmatic approach could be not to apply the rules to smaller users of hydrogen—for example, where hydrogen accounts for less than 5% of feedstock—while a longer time is taken to consider the impacts for large-scale hydrogen users.

I now turn to our wider ecosystem of logistics infrastructure. Pipelines, storage and distribution networks are essential for connecting supply and demand, especially as the market shifts towards sustainable fuels and as we look to improve our energy security. For example, Exolum, which runs a 2,000 km onshore pipeline network that delivers 40% to 50% of the aviation fuel used for UK flights each year, is transforming its aviation fuel pipeline network to supply SAF.

To unlock further investment in the infrastructure and ensure a just transition, industry is calling for long-term policy signals, such as extending and increasing renewable fuel mandates; targeted incentives like business rates relief and payment holidays for new infrastructure; inclusive subsidy schemes for hydrogen storage; and fast-tracking obligations for renewable liquid heating fuels.

At present, most support for fuel infrastructure is directed towards large-scale production projects. Conversely, investment in storage and distribution infrastructure is increasingly undertaken at an operator’s own risk and often ahead of immediate market need. That imbalance is amplified by a business rates system that can disincentivise new investments and high-end capital projects—including energy transition initiatives—especially when the investment is by overseas companies likely to be looking for more cost-effective placement of funding in countries with more generous and strategic policies. How will the Minister ensure that policy and investment frameworks can support storage and distribution infrastructure, thereby enabling the development of a future-ready energy system, capable of responding to evolving market conditions and minimising supply chain risks?

The Liberal Democrats urge the Government fully to grasp the opportunities that our industrial capacity and workforce capability offer our country, to lead the world in a transition to next-generation fuels and energy. It is in our blood and our tradition as a country to grapple with these big technological questions, so it should be up to us to show what real leadership on the just transition looks like—not just because great feats of engineering are impressive in their own right, which they are, but because a whole generation of people whose lives and careers have been shaped by our oil refineries and wider energy sector, and future generations, are counting on that leadership. In recent years, the Conservatives abandoned it. We urgently need to get it back and provide stability for the communities most affected.

Home-grown, local renewable energy and fuels can be clean, cheap and popular, and they embed resilience. The Government must work with industry because striving for theoretical perfection, rather than ambitious but deliverable policy, risks choking the sector and neutering this revolution. Our engineers and industry stand ready to deliver, as they have done time and again, the greener economy that we need and that communities up and down the country deserve.

16:09

[Harriet Cross (Gordon and Buchan) (Con)]

It is a pleasure to serve under your chairmanship, Mr Western. I congratulate and thank my hon. Friend the Member for Brigg and Immingham (Martin Vickers) on securing this timely and important debate. I pay tribute to him for his work in standing up for workers, not just at Prax Lindsey but across his constituency and his region—his energy estuary. I also thank the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) for his wise words. We can support all energies; it is not an either/or. We must not run down the oil, gas and liquid fuel sector just for the want of achieving a target.

In 2025 alone, we have lost two of the UK’s six remaining refineries, with thousands of well-paid workers losing their jobs in the supply chain. Grangemouth and Prax Lindsey have closed, but not because we need any less petrol, diesel, jet fuel or heating oil—just as we will not need any less ethylene after the Mossmorran plant closed in Fife, or any less oil and gas when this Government wilfully shut down the North sea, destroying jobs in communities such as mine in Aberdeenshire.

As the Minister knows, we will simply become more dependent on foreign imports, lose billions of pounds in tax receipts that could support our public services, and destroy hundreds of thousands of skilled jobs in parts of the country that need them the most. We will, as the Minister also knows, strangle our domestic production and then import more products from countries with far higher emissions. We will offshore our carbon, offshore our jobs and offshore our security, all so that the Secretary of State can boast of global leadership at COP. No one is going to want to follow our lead if we make ourselves poorer and less secure. We will become a warning, not an example, to the rest of the world. It is ideology over national interest. As Labour’s friends in the unions say, it amounts to exporting jobs in order to import virtue.

The production at Prax Lindsey will now be replaced by imports from other countries. Ineos will retain its ethylene and propylene production at Grangemouth, but will now import ethane on huge diesel-chugging container ships from across the Atlantic. Perhaps the Minister would like to explain how that is going to reduce global carbon emissions.

Rian Chad Whitton has produced a fantastic report for the Prosperity Institute in which he explains in detail how high energy costs and carbon taxes are crippling heavy industry in the UK, but particularly our refineries. We spend a lot of time in this House talking about electricity—as we should, because our electricity prices are the highest in the world, and this Government are locking us and our constituents into higher prices for longer in the upcoming allocation round 7 auction—but what we often miss in our debates is that only a small proportion of our current energy consumption is from electricity. The vast majority of it comes from other fuels such as natural gas, and that is particularly true for our heavy industry and refining sector.

When refineries use natural gas to produce their products, they are subject to a carbon tax on every unit of CO₂ they release. Refineries have no choice but to use natural gas, because no other fuel can do the job that natural gas does in their processes. Many other countries charge a much lower carbon tax, or—when it comes to our competitors for refined products, such as in the US, India or the Gulf—charge no carbon tax at all. The carbon tax imposed on our industry through the emissions trading scheme makes it significantly harder for refineries to do business in the UK, increases costs for consumers and makes our industry less competitive.

Hon. Members do not have to take my word for it; they can listen to the UK chair of ExxonMobil, which runs the Fawley refinery in Southampton. At the Energy Security and Net Zero Committee recently, he said:

“the majority of…petrol and diesel imported into this country, is produced in the US, Saudi Arabia, Kuwait and India…They have lower energy costs, lower labour costs and zero CO₂ costs…Fawley refinery this year will spend between £70 million and £80 million on CO₂ costs alone. In the next four or five years that will increase to £150 million. You tell me of another industry where you can afford to have a £150 million cost burden on a single producing unit and expect it to remain competitive for the long term. It is an absolute catastrophe waiting to happen”.

In his report for the Prosperity Institute, Rian calculates that at Prax Lindsey, in the constituency of my hon. Friend the Member for Brigg and Immingham, the cost of the carbon tax alone amounted to 120% of the operating profit. How on earth can any refinery survive in that environment?

Things would be bad enough, but Ministers are not intent on making them even worse. Their decision to align the UK carbon tax with the EU’s more expensive one has increased the price that our industry pays by about 70% in the space of just a year. Why are they doing this? Ministers talk about EU alignment as if it is inevitable, but it is not. They control the market. They choose how many allowances they release. They could choose not to align with the EU and keep control of our own carbon market.

Increasing the carbon tax is a political choice that is already causing production costs to soar at refineries in Pembroke, Fawley, Stanlow and the Humber, and that has increased the cost of everybody’s electricity bill, too. Labour Members should know that electricity bills have increased by £2 billion this year alone because of the Government’s choice of alignment. The carbon tax is charged on gas-fired power generation too, and it is passed straight through to our constituents in wholesale electricity prices. That is exactly why the Conservatives have said that we will axe the carbon tax as part of our cheap power plan, to cut everybody’s electricity bills instantly by 20%.

The soaring carbon tax is crippling the refining sector. Will the Minister explain how refineries are supposed to survive when the Government are planning to increase the carbon tax between now and 2050? Is it the Government’s plan to have a carbon tax of £147 a tonne in 2030, as set out in the National Energy System Operator report? If not, will she disown her party’s claim that the NESO report shows that the clean power 2030 plan is achievable? Will the Government scrap their plan to align with the EU carbon tax scheme, which would lock us into ever higher carbon prices with no control? Will the Minister commit to increasing the number of free allowances given to the refining sector to shield it from at least some of the burden?

Refining is viable only when the raw product to refine is abundant and cheap. We cannot run a refinery on warm words about net zero and promises of green jobs that never materialise. We need crude oil and natural gas, so let us consider what is happening to the domestic oil and gas sector under this Government. Production is down, and falling at an accelerating rate; the cessation of production and decommissioning is being brought forward; investment is going overseas; 1,000 jobs a month are being lost from producers, operators and the supply chain, and no exploration wells were drilled in the UK North sea last year, for the first time since the 1960s. Why is this happening? Because the Government have banned new licences and continue—choose to continue—to keep the energy profits levy and tax UK oil and gas production at a higher rate than any other comparable basin. How can UK companies possibly compete when paying tax at 78%? There are no longer windfall prices or windfall profits, so why are companies still having to pay windfall taxes?

The Government’s short-term and idealistic policies on the North sea have an impact everywhere: they impact jobs, livelihoods, households, businesses and industries across the country. Does the Minister understand the anger and frustration in communities like mine in Gordon and Buchan, and throughout the energy sector, at the Prime Minister’s words about the EPL last week? People are losing their livelihoods and their ability to support their families because of the Government’s political choice to shut down the oil and gas sector. To hear that the Prime Minister does not even understand the policy that he is imposing, which is causing so much harm, is a complete slap in the face for energy communities across the country. Can the Minister confirm for the record that the Prime Minister was wrong to say that the windfall tax kicks in when there are excessive profits? Will she confirm that there is no longer any windfall left to tax?

[Euan Stainbank]

When the hon. Lady’s party was in power, in February 2024, in response to a question from the former Member for East Lothian, her then party leader said that the future of the Grangemouth refinery was “obviously a commercial decision”, essentially excluding themselves from taking any action. Does she agree or disagree with the former Prime Minister’s characterisation, considering what we have heard from the Conservative Benches—and I agree—about how oil refineries are strategically important? It was not a commercial decision, and something could have been done when her party was in office.

[Matt Western (in the Chair)]

I am sure the hon. Lady will give the Minister enough time for her speech.

[Harriet Cross]

I absolutely will, so I will end on that point. I thank the hon. Gentleman for his intervention. I find the what-aboutery from Government Members extraordinary. They seem to think that because something has happened in the past, it is okay for something else to happen now. The Government are shutting down the UK oil and gas sector because they keep taxing it. Jobs such as those lost at Grangemouth are being lost every single week across the country as a result. If the hon. Member thinks that is okay, he should say so, but I do not think it is okay, and that is why I am fighting against it.

16:20

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Katie White)]

It is a pleasure to serve under your chairmanship, Mr Western. I have really enjoyed the debate, which has been full of passion and emotion. I heard the anger, including in what my hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) said, but I also heard that there is a lot of commonality in some of our values and on the transition that we are trying to achieve together. I have genuinely enjoyed listening and I have noted lots of points. There were a lot of questions; I will endeavour to get through them, but if I do not, we may need to follow up in writing to hon. Members.

I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this important debate, and I am grateful to all hon. Members for their contributions. This is a timely opportunity to discuss a matter of strategic significance for our nation’s energy security: the future of the UK refining sector. The industry has helped to underpin our economy and our resilience for decades, and its future deserves our full attention. The Minister for Energy is in Grangemouth today, and I will say more about that later.

Our refineries play a crucial role in ensuring a stable supply of the essential fuels that keep our transport networks running, our industries operating and consumers supplied with the energy they rely on every day. The sector is more than just a fuel; it drives growth in key sectors, supports thousands of skilled jobs in communities and sustains supply chains for chemicals, plastics and manufacturing. Refineries also play a critical role in the wider downstream oil sector. The Humber refinery in the constituency of the hon. Member for Brigg and Immingham is the UK’s only source of anode-grade petroleum coke, which is essential for electrical vehicle production. The Fawley refinery contributed to the global covid-19 response by supplying the specialist halobutyl rubber used to seal vaccine vials.

Importantly, UK refineries are also investing in their own future through decarbonisation and diversification by deploying carbon capture or producing low-carbon fuels to support our transition to net zero. Demand for refined products will continue, even beyond 2050, and the UK’s refineries will remain essential for hard-to-abate sectors such as heavy industry, aviation and maritime. That is why, as my hon. Friend the Minister for Energy made clear in June, the Government are absolutely committed to securing the long-term viability of the UK’s refining sector, and, as set out in the autumn Budget, we are reviewing critical policies to address the challenges that the sector faces.

Those challenges are real. In the 1970s, the UK operated 18 refineries; today, as has been said many times during the debate, only four remain. Falling demand for traditional fuels, global competition from mega-refineries in the middle east, India and Africa, changing trade dynamics and ageing assets all put pressure on UK operations. But with challenge comes opportunity, and the Government are determined to seize the opportunities by driving innovation, supporting investment and ensuring that the refining sector continues to play a vital role in our economy and for our energy security for decades to come.

The Government have already taken significant steps to support the refining sector and the wider fuel sector, and we are committed to do more. We have driven the shift to low-carbon fuels through the renewable transport fuel obligation, and this year we went further with the sustainable aviation fuel mandate, backing cleaner fuels for aviation. The Humber refinery already produces SAF at commercial scale, while Fawley and Stanlow are among the projects backed by our advanced fuels fund, which provides grants to accelerate the next generation of transport fuels. Refineries are playing a key role in driving the UK SAF industry forward, strengthening energy security with a home-grown supply. We are also de-risking investment in SAF production through the revenue certainty mechanism. We are working with industry to cut emissions through carbon capture and low-carbon hydrogen at major clusters such as Viking and HyNet. We will set out a clear plan for industrial decarbonisation to keep the UK competitive.

[Sir Edward Leigh]

The hon. Lady is giving a paean of praise for refineries, so why are the Government taxing them out of existence?

[Katie White]

I am glad that the right hon. Gentleman intervened, as I was going to come on to his points—in particular, his interesting point about the national interest. I say to him gently that I feel we are working in the national interest, but the national interest includes energy security as well as respecting the science of climate change, which is happening. As he is the Father of the House, I genuinely listened to his points, but I was a little disappointed—[Interruption.] He can laugh all he likes, but I listened to his points. He talked about the UK being responsible for less than 1% of emissions. That is the case in terms of nation states, but I think the UK’s impact in the world is so much larger, whether through people following our policy decisions, the impact of our banking sector or our consumption of goods, which has also come up a lot.

We are looking at how we manage the transition, and we want to do it in a way that respects the science, but I am also competitive about where Britain can take advantage of these industries. We want to make sure that we have these industries, including the wind turbines that the right hon. Gentleman mentioned, but we also want to look at how we can make the transition justly and fairly. I will come on to that later in my speech.

Last month, the UK ETS Authority confirmed that current benchmarks will stay in place for the 2027 scheme. That decision gives refineries and other energy-intensive industries the certainty that they need. By maintaining those benchmarks, we are providing stability and breathing space, helping businesses plan, manage costs and prepare for future changes to the scheme.

We are also reviewing compensation for energy-intensive industries. We announced in the autumn Budget that we are assessing the feasibility of including refined products in the carbon border adjustment mechanism, so that imported goods face an equivalent carbon price and the sector’s efforts to decarbonise will not be undermined by carbon leakage. This is the refining sector’s top priority, which the Government are committed to exploring as one of several levers to support the sector’s long-term future. These measures demonstrate our commitment to supporting investment, driving innovation and ensuring that the refining sector remains competitive and resilient as we transition to a low-carbon economy.

Looking ahead, the Government are taking further steps to secure the long-term future of the UK refining sector and to ensure a just transition. The Department for Energy Security and Net Zero has established a dedicated team to work across Whitehall and with industry. A number of Members asked about working across Whitehall; we will continue to do that, to ensure that we maximise the impact. This will guide how we manage the transition, protect energy security and support jobs and local communities.

We will continue to engage closely with the fuel industry to identify practical measures that can strengthen the sector. That is why, in June, we convened the first ministerial—[Interruption.]

[Matt Western (in the Chair)]

Order. Can I have a certain decorum from other Members while the Minister is speaking?

[Katie White]

Thank you, Mr Western.

That is why, in June, we convened the first ministerial roundtable with the refining industry in more than a decade, providing a clear signal of our commitment to partnership and dialogue. As announced in the autumn Budget, we will shortly launch a call for evidence to inform the UK’s long-term strategy for the downstream oil sector. That will seek industry views on the opportunities and barriers to transition, the risks facing the sector and the types of support needed to deliver and manage a competitive transition. These actions underline our determination to work hand in hand with industry. I thank the Scottish Affairs Committee for its recent report, and my hon. Friend the Member for West Dunbartonshire (Douglas McAllister) for sharing it.

The refining sector has faced long-standing challenges, and recent closures underline the scale of change. Petroineos’s decision to end refining at Grangemouth was disappointing. As my hon. Friend said, while the difficulties there were well known, there was no Government plan in place before we took office. Within weeks of doing so, we worked with the Scottish Government to put together a £100 million package to support the community and invest in the local workforce, along with tailored support to secure good alternative jobs. When we came into government, there was no overall plan for Grangemouth from either the SNP or the Tories. We have put one in place.

We are committed to securing Grangemouth’s long-term industrial future. We are working closely with the Scottish Government, the Office for Investment and Scottish Enterprise to attract future investment and transform the area into a clean energy and sustainable technology hub. This effort is already delivering results. We have received over 100 inquiries to date, and the investment pipeline is supported by the £14.5 million in funding announced at the Budget, alongside the National Wealth Fund’s £200 million for co-investment opportunities at Grangemouth.

Today, I can confirm that, along with the Scottish Government, we have made £3 million available for MiAlgae, an innovative biotechnology company that produces sustainable omega-3 rich products, which will create over 130 direct jobs at the site and 310 jobs across Scotland over five years. These steps demonstrate our commitment to a managed transition by supporting communities, attracting investment and ensuring that sites like Grangemouth—

[Matt Western (in the Chair)]

Order. The Question is—

[Sir Edward Leigh]

On a point of order, Mr Western. You are a fellow member of the Panel of Chairs. Can we make it clear to our colleagues that it is normal courtesy for the Minister to allow the proposer of a motion some time to wind up, if only a minute? That did not happen on this occasion.

[Matt Western (in the Chair)]

The right hon. Member is absolutely right that it is a courtesy, but my understanding—I think he will understand this, too—is that it is not an obligation. On this occasion it was not possible for the Minister to do that, given the number of interventions that we had, as well as the full contributions from all the Members who chose to speak.

Question put and agreed to.

Resolved,

That this House has considered the future of the oil refining sector.

16:30

Sitting adjourned.