Oil Refining Sector

Brian Leishman Excerpts

Thursday 11th December 2025 Westminster Hall

[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.

--- Later in debate ---

[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.