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Martin Vickers (Brigg and Immingham) (Con)
It is a pleasure to take part in this Adjournment debate, and I thank Mr Speaker for granting it. As I advised the Speaker’s Office and with the Minister’s agreement, the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) will take a few minutes of my time. To some extent, the points I will be making are similar to those in my Westminster Hall debate, which took place on 11 December.
Before I turn to the specific issue of the closure of the Prax Lindsey oil refinery in my constituency, I want to question the Government’s position regarding energy security. The loss of Lindsey oil refinery will reduce the UK to just four refineries. All of that makes us even more reliant on imports in a turbulent global situation. As we know, world markets can result in supplies being disrupted. At a time when we have an unpredictable American Administration, we are becoming more and more reliant on American-owned businesses, and I question whether that is wise.
Sir Edward Leigh (Gainsborough) (Con)
I am grateful to my hon. Friend and neighbour for introducing the debate. Of course, as local Members of Parliament, we must be primarily concerned with our constituents who have worked at the refinery. Is it not the point, which he powerfully makes—we have just had a debate on Ukraine—that in an increasingly dangerous world, the Government must look into their own hearts about whether their policies on energy security are meeting national security?
Martin Vickers
I thank my right hon. Friend the Father of the House, who makes an important point and strengthens the argument I was trying to make. We are exporting skilled jobs, and the Government seem to find that acceptable. The Minister has previously stated that the market would adjust as, indeed, it has, but it raises the question of whether, if another refinery were to close, at what point we will recognise that we must retain some refining capacity in the UK—surely for strategic reasons, if no other.
Brian Leishman (Alloa and Grangemouth) (Lab)
I thank the hon. Member for securing this debate and for his Westminster Hall debate. We sit on opposite sides of the Chamber, but I thoroughly respect how much he has stood up for his constituents and the wider oil refining industry in the United Kingdom, and I thank him for that.
I will speak about Grangemouth and specifically the jobs that have been lost there—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Gentleman will not speak about Grangemouth. The debate is about the Lindsey oil refinery, and interventions must be brief.
Brian Leishman
Thank you, Madam Deputy Speaker. I was under the impression that the debate was on the wider UK refining sector. On that note, we talk about just transition—it is often mentioned in this Chamber—but job losses and no future jobs are the definition of a very unjust transition.
Martin Vickers
I thank the hon. Gentleman for his kind words. Equally, I recognise how he has stood up for his constituents over the Grangemouth issue, and I compliment him on that.
Jim Shannon (Strangford) (DUP)
I also thank the hon. Member for bringing forward the debate. He is right to refer to the Lindsey oil refinery, but all of the United Kingdom of Great Britain and Northern Ireland is affected by the sector if we become vulnerable and reliant on foreign entities. Does he agree that for the nation’s energy security and future energy provision, we need to right this wrong and invest in British-based refineries and energy provision, because otherwise everybody in this great United Kingdom of Great Britain and Northern Ireland will suffer as a result?
Martin Vickers
I thank the hon. Member for his intervention. No debate would be complete without such an intervention. He is absolutely right that it is the United Kingdom’s energy security that we are referring to.
To turn to the future of the Lindsey refinery, which has been part of the local economy in my constituency for over 50 years, the closure is a tragedy not just for the immediate workforce, 124 of whom have already been made redundant, but for the area as a whole: the bars, restaurants, hotels, haulage firms, Humberside airport, catering suppliers—the list goes on. North Lincolnshire council receives around £2 million a year in business rates, which could steadily reduce over coming years. Needless to say, that would leave an enormous hole in its budget, which would have a consequent impact on the local community.
At last week’s question time, the Secretary of State said in reply to me that fault lay with the owner, Prax. I agree that the directors bear responsibility, but it is my constituents who are feeling the consequences. A Minister has previously stated that the Government are not in the business of saving failed businesses—even, it seems, when they are a vital national resource.
Dave Doogan (Angus and Perthshire Glens) (SNP)
The hon. Member is right that the UK Government said that they are not in the business of saving failing businesses, but they have washed their hands of some of the key factors that contribute to those businesses failing. For example, they are signalling about new licences in the North sea, but these refineries use vast amounts of energy. In the UK, we enjoy the highest industrial energy prices in the developed world. That is the Government’s responsibility.
Martin Vickers
The hon. Gentleman is absolutely right that energy costs have played a major part not only in the struggles of Lindsey oil refinery, but in those of other businesses, particularly manufacturing businesses. The Government’s comment that they are not in the business of saving businesses seems rather strange coming from Labour.
Ministers have repeatedly said that there is a legal process that the insolvency practitioners must follow. Of course, I accept that. I have previously said that I feel that the Government are hiding behind the administrators, because they have refused to consider the wider implications of the refinery closure, for example on the local economy, the workforce and national energy security.
I have asked on more than one occasion if the Government would prefer a sale of the whole business that would allow it to resume production. Alarm bells rang for me when I received a letter from the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Leeds North West (Katie White), following my Westminster Hall debate. It said:
“The sales process remains ongoing, with the Official Receiver and Special Managers continuing to engage with all interested parties. However, they have confirmed that none of the credible”—
that is the important word—
“offers received would enable a return to refining operations within the next few years or allow all employees to be retained.”
I note that she refers to “credible” bids—so we have an acknowledgment that there were indeed credible bids—and to a timeframe. That contradicts the Government’s repeated statements that there were no credible bids. Either there were credible bids or there were not. Which is it, Minister?
In fairness to the Minister, when the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn) and I met him last week, he did at least acknowledge that the Government would have preferred a sale of the business in its entirety.
Richard Tice (Boston and Skegness) (Reform)
Picking up that point, if there was a serious bid to buy the whole site—to invest in it, keep it going, maintain the jobs and grow the number of jobs—surely that should have been taken into account, not only in the interests of the local area, but in the strategic interests of Lincolnshire and the country. Will the hon. Gentleman therefore ask the Minister to ensure full transparency in this whole process so that we can establish whether or not there were credible alternative bids to keep Lindsey oil refinery going?
Martin Vickers
The hon. Gentleman supports the point that I was making. I got it in writing from the Under-Secretary that there were credible bids. The issue of credible bids is one of the most important unanswered questions following last week’s announcement about the sale of the assets to Phillips 66, which I should say is an excellent local employer and provides hundreds of well-paid jobs. I have corresponded or met with four consortia that wanted to buy the business in its entirety. When I spoke to the union representative yesterday, he said that there were seven such expressions of interest. The four consortia I have been in contact with referred to FTI Consulting—the agents—and have reached the same conclusion: they have been ignored and not allowed to put forward their case in sufficient detail for any informed judgment to be arrived at.
The Minister will no doubt be aware of an email to the Prime Minister from James Ascot, who is acting on behalf of Axiom. In the email, Mr Ascot said that Ministers
“have publicly stated that no bids were received for the full Lindsey Oil Refinery site that would safeguard the future of refining operations and protect jobs. This statement is factually false. Our company did submit a fully funded, credible bid for the entire site on behalf of our client, expressly structured to preserve and continue operations, safeguard jobs and provide a full credit and liability solution, and a separate cash acquisition value of £400 million… This bid existed.”
Dave Doogan
The hon. Gentleman is being very generous in giving way again. He is setting out a seriously curious sequence of events for a well-intentioned Government relative to a vital industry. Is he concerned, as I am, that this is more about the beliefs of the Secretary of State than the industrial imperatives of these islands? The Government are failing in their pursuit of decarbonisation, but they are succeeding in deindustrialisation.
Martin Vickers
The hon. Gentleman makes an important point about the Government’s overall policies in relation to net zero.
Adam Wilson of Falcon Petroleum wrote to me describing
“the unsatisfactory experience we have had with the bidding process with FTI… We own and operate 4 refineries in Europe and the middle east. With advancement of technology we have been able to go carbon neutral at all our refineries. We had pledged to turn LOR carbon neutral within 2 years if we had successfully purchased it.”
I could give other examples, but what I have said so far makes it clear that the approaches to FTI from consortia that wish to purchase the whole business and continue production have been rebuffed. Potential investors, employees and all those affected have a right to know why. The Government have chosen not to get involved. Yes, they have offered a training guarantee, which is helpful, but much more is required. At a meeting with me and the hon. Member for Great Grimsby and Cleethorpes last week, the Minister suggested that the Minister for Investment, Lord Stockwood of Great Grimsby and Cleethorpes, and local authorities and all agencies could help to provide investment in the area. We must sit around the table with them at an early opportunity. We need better transport connections, and early decisions from the Government on the many proposals in their in-tray that could boost the Humber region economy.
To sum up, why did the Government not act to ensure that production continued, and engage more fully in the process to achieve that? When will the Minister and Lord Stockwood visit the area and put in place a structure that helps us to recover the local economy? How many jobs will be saved by the P66 deal? The receiver’s job is to ensure the best deal for creditors, so will the Minister explain why a sale of the assets rather than the business better achieves that? The Government are one of the creditors, so how much are they owed and how much of it will the P66 deal return to the Treasury? I look forward to his response.
Melanie Onn (Great Grimsby and Cleethorpes) (Lab)
I thank my hon. Friend the Member for Brigg and Immingham (Martin Vickers) for securing the debate and for being so gracious with his time.
For workers and their families across the Humber, the past six months have been bruising to say the least. People who have spent their working lives keeping a complex site safe, compliant and productive have faced prolonged uncertainty—and they have done so with dignity and professionalism. I put on the record my support for them and give assurances that they are always at the forefront of my mind when I am pushing for clarity in this House.
It is important that accountability matters in who is ultimately at fault for the collapse of the refinery. In September last year, the High Court froze about £150 million-worth of assets belonging to the former owner of the refinery, Winston Soosaipillai—also known as Sanjeev Kumar. This action will be welcomed by the workers and communities who have paid the price for Mr Soosaipillai’s reckless financial mismanagement, but what happens to those assets? For how long will they be frozen? Can they be used to support and develop the site, or support some of the interventions that the Government have discussed?
As the hon. Member for Brigg and Immingham has detailed, there are concerns about the official receiver process, and there is some justification for them. The whole process has been incredibly opaque, and it has been very difficult to engage in communications under legal frameworks that barred Government and elected representatives from having any kind of input. The targets that the official receiver was working to have not been clear at all. We are in the dark, as are the workers, and that has caused even more uncertainty and distress for people.
Is this really the best outcome for the site? I am encouraged by Phillips 66 taking on the site, but it cannot be ignored that ministerial correspondence has said that there were credible bids. We have heard the numbers; they are disputed—is it four, seven, one, or none? We do not know, because we cannot get any answers on that. The Government have shifted position, and now say that there were no credible bids, or certainly none that provided any immediate refining capacity, or allowed the site to be run as a going concern. We understand that there may well be commercial interests involved, but could we not open the books, and see the matrix that the official receiver used and how they reached their decision, under Chatham House rules? Then at least elected representatives would be able to make an assessment on behalf of their constituents. Surely the Government could do that.
Dave Doogan
The hon. Lady talks about our need to scrutinise what was deemed a credible bid. Will she ask the Minister whether the Government will apply “commercial in confidence” rules in order to cover their tracks when it comes to what was and was not a credible bid?
Melanie Onn
I disagree with that, but I urge the Government to be prepared to open up on some of the process. I understand that there will be commercial sensitivities, but I hope that a route can be found to enable us to scrutinise the information available.
Sir Edward Leigh
We have heard from my hon. Friend the Member for Brigg and Immingham (Martin Vickers) that there are bidders, and they think that their bid is credible. I think we are entitled to tell the Government that we do not want asset-stripping here. This is not just about the local community; we are talking about a vital national resource, and the House of Commons needs to be informed, big time.
Melanie Onn
We have also had trusted privilege, as a House, in the past; we were able to see secure information and secure documents. All of us were able to go to a room and sign in to read documents on exiting the European Union, for example. There are ways and means of doing these things, and of placing trust in elected representatives. Much of the information from companies was made available to local representatives anyway, because they emailed the details to us. It would be interesting to learn why the official receivers deemed bids not to be credible.
I will move forward, because decisions have already been made, and it would be challenging, to say the least, if we went backwards on this. The written statement of 22 July delivered by the Minister for Energy confirmed important commitments for those directly employed at Lindsey: a package guaranteeing jobs, a redundancy scheme that will end in March—another 240 people will be made redundant then—and a training guarantee. There have been concerns about that training guarantee, and I would ask the Ministers to look more closely at that as we move forward.
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this debate. I know that he and other hon. Members, including my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn), have been engaging closely on this issue with the Minister for Energy, who stands ready to continue to engage with them on the detail.
Let me start with Prax Lindsey oil refinery. It entered insolvency on 30 June 2025 because of the untenable position in which the owners left the refinery, which gave the Government very little time to act. I know how difficult the process has been for the workers, their families and the local community. The insolvency process at the refinery is led by the court-appointed official receiver, who must act independently, in accordance with his statutory duties. Since the insolvency, we have worked with the official receiver to protect workers, and to ensure the safety of the site and the security of fuel supplies. That has also allowed time for bidders to express an interest in the site and its assets.
After a thorough process to identify a buyer for the site, the official receiver has determined that Phillips 66 is the most credible bidder and can provide a viable future for the site. I am glad to say that the sale is expected to complete in the first half of 2026. As many hon. Members will be aware, Phillips 66 is an experienced and credible operator of a Humber refinery, next door to Lindsey. It already supplies fuel to the region and has consistently turned a profit in recent years. The sale allows Phillips 66 to quickly expand operations at its Humber refinery.
The company has decided not to restart stand-alone refinery operations at Lindsey. In its words, not mine,
“Due to the limitations of its scale, facilities, and capabilities, evaluations have shown that the refinery is not viable in current form.”
Although that is disappointing, it is not totally unexpected, given the long history of problems with the business. We understand that the previous owners, Total, sought to sell the refinery for several years and sold it to Prax for a nominal amount. Since Prax’s acquisition in 2021, the refinery has recorded about £75 million of losses. In addition, following a thorough assessment of offers, the official receiver confirmed that no offer was put forward that would credibly see a return to refining operations in the next few years.
Phillips 66 plans to integrate key assets into its Humber refinery operations, expanding its ability to supply fuel to UK customers from the Humber refinery. That is positive news for boosting domestic energy security, securing jobs—including hundreds of new construction jobs over the next five years—and creating future growth opportunities for renewable and traditional fuels. That being said, Ministers in the Department and I recognise that this is a very worrying time for workers, and I am glad to report that the remaining 250 directly employed workers are guaranteed employment until the end of March, although that will be cold comfort to many of them. Phillips 66 will provide further information on the number of jobs that will be retained as it moves towards completion of the sale in coming months. The Minister for Energy has asked Phillips 66 for clarity as soon as possible, and to retain as many jobs as possible. The Government will continue to support the 124 workers affected by redundancy last October.
Richard Tice
The bottom line is that P66 is mothballing the site, and will use certain bits of it for parts, rather than investing in its other site. Will the Minister allow a full, open and transparent look at alternative bids that would have kept the site open, and would have allowed us to keep many more jobs and to retain a strategic national asset?
Martin McCluskey
The hon. Gentleman will know that such discussions are commercially confidential, and the official receiver has undertaken an independent process to come to his decision.
As my hon. Friend the Member for Great Grimsby and Cleethorpes mentioned, the support for the 124 workers affected by redundancy last October includes a training guarantee to ensure that they have the skills that they need, and are supported to find long-term jobs. That goes above and beyond the usual support offered in insolvency situations. I am pleased to confirm that many —the majority—of those workers have already taken up this offer. My hon. Friend the Minister for Energy will be pleased to discuss any issues that my hon. Friend the Member for Great Grimsby and Cleethorpes thinks may emerge to do with the training guarantee.
I believe that the agreement with Phillips 66 marks the next step in securing an industrial future for the site and for the workers, who were badly let down by the former owners. The circumstances surrounding the insolvency are deeply concerning, and that is why the Energy Secretary immediately demanded that the Insolvency Service launch an investigation into the owners’ conduct and the circumstances surrounding the insolvency, which is ongoing.
Turning to issues in the broader UK oil refining sector, the UK’s refineries continue to play a vital role in maintaining reliable supplies of essential fuels that keep transport moving, industry operating and support households with their day-to-day lives. We appreciate that their contribution goes far beyond fuel alone. They are anchors for local economies, providing well-paid, skilled jobs and supporting a wide web of supply chains, which involve everything from chemicals to plastics to advanced manufacturing.
Refinery facilities also enable the production of specialist materials that many of our industries rely on. For example, the Humber refinery produces the UK’s only anode-grade petroleum coke, used in electric vehicle technology, while Fawley’s output of specialised rubber helped to ensure vaccine vials could be produced securely during the pandemic. Crucially, our refineries are also adapting for the future. They are investing in modernisation, low-carbon fuels, and technologies such as carbon capture, which are all essential to the UK’s transition to net zero. The Humber region will have a major role to play in that over the coming years. While overall fuel demand is expected to shift over time, sectors such as aviation, maritime and heavy industry will continue to depend on refined products well into the future. We want to preserve our refining sector and keep it competitive.
Melanie Onn
On the point about keeping UK oil refineries competitive, what will be the Government’s position at the European Union summit in May, in discussions on the emissions trading scheme? What will they take forward?
Martin McCluskey
I will write to my hon. Friend on that point about the carbon border adjustment mechanism and the ETS.
As was set out in the autumn Budget, we are reviewing critical policies to address the challenges that the sector faces. I will briefly go through the steps that we have already taken to help the downstream sector adapt and stay competitive. First, through the renewable transport fuel obligation and the new sustainable aviation fuel mandate, we are backing the production and use of cleaner fuels. The Humber refinery is already delivering sustainable aviation fuels at scale, and refineries at Fawley and Stanlow are benefiting from Government support through the advanced fuels fund to bring next-generation fuels to market. We are also working to de-risk investment in sustainable aviation fuel production through the revenue certainty mechanism.
Secondly, we are working closely with industry on major decarbonisation efforts, including carbon capture and hydrogen projects, within industrial clusters such as Viking and HyNet, which will be central to keeping UK manufacturing competitive as global markets tighten emissions standards. The UK ETS Authority’s decision to maintain current benchmarks for the 2027 scheme year provides the consistency and breathing room that energy-intensive industries need to plan investments and manage costs effectively.
In the autumn Budget, we committed to assessing the feasibility of including refined products in the carbon border adjustment mechanism. That is a key priority for industry, and it would help ensure that UK refineries were not undercut by imports produced to lower environmental standards. Collectively, these measures signal our determination to create the conditions for continued investment, innovation and long-term competitiveness as we transition to a low-carbon economy.
Looking ahead, the Government are deepening their engagement with the sector to ensure a smooth and secure transition in the coming years. It is important to note that Minister Shanks led the first ministerial—
Madam Deputy Speaker (Caroline Nokes)
Order. The Minister will know that we do not refer to our colleagues by their names.
Martin McCluskey
Thank you for reprimanding me, Madam Deputy Speaker. The Minister for Energy led the first ministerial roundtable with the sector for more than a decade, and will continue to engage with the industry.
In closing, let me be clear: we recognise the importance of the Lindsey oil refinery and the Lindsey site to the local community and the national economy. The integration of its assets into the Humber refinery will boost energy security and support high-quality employment locally. The UK refining sector matters, and that is why this Government are acting. From supporting low-carbon fuel production and deploying carbon capture and hydrogen, to launching a call for evidence that will shape our long-term strategy, we will work with industry, devolved Governments and the community to deliver a managed transition.
Question put and agreed to.