Labour Faces Backlash Over ExxonMobil Plant Closure
The Labour government is facing accusations of deliberately undermining Britain's oil industry as fears grow about Chancellor Rachel Reeves' upcoming Budget. The controversy erupted after Paul Greenwood, chairman of petrochemical giant ExxonMobil, confirmed the closure of their ethylene manufacturing plant in Fife next year, directly blaming government policies for making UK operations uncompetitive.
Policy Decisions Forcing Industry Exodus
Speaking bluntly on BBC's Today programme, Mr Greenwood outlined four key factors needed for success in the sector, revealing that government policy had sabotaged three of them. 'I will be blunt - I have one of those keys to success in place, and that is a brilliant workforce,' he stated. 'Two of those keys I deliberately do not have because of Government policy.'
The chairman specifically highlighted the decision to phase out North Sea activity, windfall taxes, and the ban on production licences as destroying access to cheap, abundant ethane supplies. Additionally, he revealed ExxonMobil paid £20 million in CO2 taxes last year, a figure expected to double within four to five years, while international competitors face no such burdens.
Business Leaders Warn of Economic Consequences
The plant closure announcement comes amid growing concern from multiple business sectors. Sarah Barraclough, chief executive of developer Skipton Properties, described managing through 'one big bad news story after Covid' and warned of a brain drain as talented young workers seek opportunities abroad. 'They are wanting to go to Australia, they are wanting to travel the world and go somewhere else where this isn't their reality,' she told BBC Radio 5 Live.
The economic backdrop appears increasingly worrying, with recent figures showing:
- GDP effectively flatlining in the third quarter
- Economic output falling in September
- Unemployment rates continuing to rise
The Mossmorran facility's closure follows ExxonMobil's assessment of various options to continue production and unsuccessful attempts to find a buyer. The shutdown is expected to begin in February, putting 179 ExxonMobil staff and 250 contractors at risk of redundancy.
Political Response and Worker Support
The Scottish Government has pledged to explore all options to support affected workers, with Deputy First Minister Kate Forbes expressing 'extreme disappointment' at the decision. She noted being surprised by how quickly discussions moved from marketing the plant to closure announcements, and emphasized the need to retain the highly skilled workforce for any future just transition in the energy sector.
However, UK Industry Minister Chris McDonald indicated the government wouldn't intervene to keep the site open, stating past interventions only occurred when there was a 'fundamentally sound business proposition.'
As Rachel Reeves prepares her fiscal package for next week, featuring potential tax rises including employer national insurance hikes and increased minimum wage costs, business leaders are warning that these additional burdens are crushing growth at a time when the economy can least afford it.
