ExxonMobil: Mossmorran

With your permission, Madam Deputy Speaker, I wish to make a statement on the closure of the ExxonMobil Fife ethylene plant at Mossmorran in Scotland. I thank Mr Speaker for accommodating this statement today.

Like many Members of this House, I am saddened to learn of Exxon’s plans to close its Fife ethylene plant. This decision is of course extremely worrying news for those employed by Exxon, as well as for contractors who work at the plant, those employed by the companies who supply the site with gas, and those at the adjacent natural gas liquids plant operated by Shell. While this is no solace to those impacted at Exxon, Shell has confirmed that it does not see its workforce or operations being affected by this closure.

The Government and ExxonMobil have been discussing the operating environment of the plant since April, and my officials have endeavoured to meet Exxon every week since August. Ministers also met Exxon regularly this year, underlining our commitment to exploring every possible opportunity to retain the site’s operations. This afternoon, I spoke with Paul Greenwood, the chair of ExxonMobil. He assured me that Exxon is not suggesting that this closure was due to a lack of action or will on the Government’s part. It was a commercial decision made when the numbers simply did not add up. He reiterated to me that the site is 40 years old, inefficient and in dire need of modernisation to be commercially viable for the future.

The company estimates that it would have cost close to $1 billion in capital investment to bring the site to a point where it would be profitable. That fact, combined with a challenging petrochemicals market, including a sharp decline in ethane supply in the North sea, meant that the investment was likely to outweigh the return. ExxonMobil has already closed similar assets in Europe, and is divesting from activities where there is no short-term path to profitability. It explored alternative use cases for the site, but none offered a viable route to sustainable operations. As the site has been significantly loss-making for the last five years, and as it would take a further five years for the investment to reach its potential, Exxon decided against continuing operations. In those circumstances, the support from the Government that Exxon would need to change those calculations was beyond acceptable levels. Exxon was aware of this, and it has acknowledged that, even with support, the commercial circumstances were simply too stark, and the costs would have been too great. So despite tireless, inventive and determined work from both Government officials and Exxon, the challenges facing the site were ultimately insurmountable.

The decision that the Government would not provide financial or bespoke policy support was communicated to Exxon by my right hon. Friend the Business and Trade Secretary, but we have of course retained an open dialogue with the company throughout. This is not a decision that either the company or the Government have taken lightly. As hon. Members know, this Government have shown that we are prepared to step in and support industry when it is feasible to do so. We have stepped in to support businesses in the steel, shipbuilding and chemicals industries, protecting jobs and vital capability across the UK, including Scotland, but in all cases there was a fundamentally sound business proposition underpinning our investment. Sadly, here that was not the case.

I want to stress that, as disappointing and concerning as the closure of the Mossmorran site is, it is not symptomatic of UK industry as a whole. Our commitment to supporting UK industry is clear in the many steps that we have taken since coming into government last year. Our modern industrial strategy lays out a raft of policy interventions to ensure that British industry remains a world leader that is hugely innovative and investable—a strategy to cut red tape, lower energy bills and get spades in the ground. The fact that we have seen £250 billion of investment committed and over 45,000 jobs supported since July is testament to the strategy’s success so far.

The closure of the Fife plant is a commercial decision made by ExxonMobil, but of course it has a very human cost. There are 179 direct employees and 250 contractors employed, and there are more people in the supply chain. I know Members from across the House will be primarily worried about these individuals and the communities impacted. Let me assure the House that the Government stand ready to provide support through the Department for Work and Pensions rapid response service and its involvement in PACE—partnership action for continuing employment. The Secretary of State is meeting Unite tomorrow as part of a wider visit, during which he will discuss options for more support for the affected employees. I also met Unite earlier today, and I will meet GMB colleagues tomorrow.

I have been assured by the company directly that Exxon, as a responsible employer, will ensure that it properly supports its staff in finding alternative work, including at its Fawley site at Southampton, and will support those employees in their relocation. Our focus now is on helping the workforce through this troubling period, and ensuring that responsible next steps are taken for the decommissioning and remediation of the site. Long term, we are ensuring that UK manufacturing at large benefits from this Government’s growth mission. We want to create the right conditions for British manufacturers to properly compete in the global economy and win. Over the coming days, my Department will update the House on the progress that we are making, not least on energy costs.

Before I conclude, Exxon chair Paul Greenwood asked me to reiterate a message that he has given to all the employees at Mossmorran. It is a message that I am sure all Members of the House will agree with: the closure of this site is no reflection on them, their efforts, or their work. They should be proud of what they have accomplished in the last 40 years. As Industry Minister, I personally thank the employees at Mossmorran and the Fife community for their contribution to the UK industrial economy and, through decades of ethylene exports, to our balance of trade for over 40 years.

This is not the end of Fife’s industrial story. As Exxon gradually decommissions and remediates the site, the Government are committed to working with the local authority and the Scottish Government to promote the benefits of this location for future industrial investment. This Government are committed to supporting the workforce and the community over the coming weeks and months, during what I know will be a difficult and painful transition. I commend this statement to the House.

I thank the Minister for advance sight of the statement. Since the Government came to power in July 2024, over 15,000 manufacturing and industry jobs have been lost. Only this Labour Government would recognise that as a success. The Minister says that he is saddened. That is cold comfort to the workers losing their jobs today. Energy-intensive industries are in decline across the United Kingdom. Oil refineries and petrochemicals plants are facing the economic and fiscal realities of choices made by this Labour Government at Ineos in Grangemouth, at Prax Lindsey in Lincolnshire, and now at Mossmorran in Fife, where Exxon has told us that there is no competitive future due to the current economic and policy environment.

The Minister tells us that this was a commercial decision, and that the numbers did not add up. Er, yeah—due to Labour’s decisions. Honestly! He mentions the decline in the ethane supply in the North sea. He almost gets it. The Government’s destructive tax-and-ban policy in the North sea has led to disinvestment, and has undermined the petrochemicals industry and its ability to secure low-cost ethane. That is damaging our energy security, detrimental to our petrochemicals industry, and utterly devastating for Scottish oil and gas workers. The Labour party simply does not get it. Also, the carbon tax—£20 million per annum for the Fife ethylene plant alone—was crippling. We are suffocating industry in this country, and these are political choices.

Industrial emissions are mobile. If we decrease our domestic carbon emissions by crushing British industry, we are simply exporting our climate obligations and increasing reliance on imports of plastics, fuel, ceramics, glass, bricks, concrete and more. We must find a way to decarbonise without decimating our domestic industrial base. Simply forcing industry abroad does nothing to reduce global emissions; in fact, it does the opposite. The high cost of energy and this Government’s war on the North sea are killing industry in this country. We simply cannot afford this Labour Government.

I would be very happy to take the opportunity to educate the shadow Secretary on some of these issues.

Patronising tone.

No; it is real. He will realise that soon. I was genuinely upset when the shadow Secretary of State described my words as cold; they were not. They were sincere and heartfelt, because I have been in this position myself. I really wish that the shadow Secretary of State and his colleagues had shown similar vigour when the steel industry in Teesside was collapsing around us, and my colleagues and I were at risk of redundancy. The Conservatives stood by, and left 10 days for a buyer to be found for the most efficient steel plant in the country before it closed.

I take the shadow Secretary of State’s comments about the uncompetitive business environment in the UK with a pinch of salt, because the plant has been significantly loss-making for five years. I wonder why that is. Could it be because of our high energy prices, resulting from the previous Government’s decision to tie us to international gas prices and put us at the mercy of Vladimir Putin?

The shadow Secretary of State talks about a transition. I know what a terrible transition is like, because I lived through one in the coalfield of County Durham. The Government are ensuring, in Scotland and throughout the UK, that the workforce in these industries have the benefit of a proper transition. That is why we have an industrial strategy, and why we have intervened in industry in the areas that I have mentioned.

Now we come to the point of education. Sometimes it is best to get our knowledge of industry, and industry in Scotland, from somewhere other than Twitter, because we do in fact still have ethylene production in the UK, at Grangemouth. I would have thought the shadow Secretary of State would have realised that. Perhaps he did not realise this, but none of the ethylene produced at Mossmorran was used in the UK anyway; 100% of it was exported to the EU. That was why I thanked the workers for their contribution to the UK’s balance of trade over so many decades.

This is devastating news for all the workers at the ExxonMobil Fife ethylene plant in Mossmorran, many of whom are my constituents. ExxonMobil must now be fully transparent and give proper clarity for the sake of all those affected.

This company made £25 billion in profits last year, yet over the course of multiple meetings with Ministers in recent months it failed to come up with any viable proposals to secure the plant and the jobs. In contrast, I have today met with representatives of Shell, which runs the adjacent Fife natural gas liquids plant, and it has confirmed that the jobs there are secure for the foreseeable future.

I am also in regular contact with trade union colleagues. Earlier today, both Fife council and I called for a new taskforce to be set up to explore future options for the plant and provide proper support to the workforce. Will the UK Government give full support and engagement to such a taskforce?

My hon. Friend is absolutely right that we need to focus on the workforce. Earlier today, I sought and was given reassurances by the company on the support that it will give to the workforce. Its expectation is that, of the 179 permanent employees, 50 of those will remain in employment until at least 2027-28 to support the safe decommissioning of the plant, and a further 50 will be offered relocation to its Fawley plant. I have also made inquiries about apprentices.

On her specific request for a taskforce, that would be usual in this situation. I absolutely support it, and I think a new and distinctive taskforce is required for this plant to address the very specific areas, not only for the plant but for the Fife community.

I call the Liberal Democrat spokesperson.

I agree that this announcement is devastating for Mossmorran and for the communities around Fife. Hundreds of highly skilled workers now face an uncertain future and it is clear that the closure of this cornerstone facility reflects a deeper failure to provide the stable, long-term industrial environment that businesses need if they are to invest and grow in Scotland. For many years, the Liberal Democrats have warned that the absence of a coherent industrial strategy, first abandoned by the previous Conservative Government and then left to drift further by this Labour Government, has created damaging uncertainty for our manufacturing and energy sectors. Will the Minister assure this House that the energy sector is at the heart of the Government’s industrial strategy?

Exxon’s statement made clear that the current economic and policy environment has made continued operations uncompetitive. What steps will the Government take to ensure that the UK remains a viable place for energy production and to prevent further closures of major industrial sites?

We also cannot ignore the human impact. Many of the workers are among the most experienced and specialised in the sector, yet only 50 roles are being offered elsewhere and that is nearly 500 miles away. Can the Minister tell the House how many have been offered and accepted relocation, and what support has been put in place locally for those who simply cannot uproot their lives, families and communities?

Further, the Exxon closure will see many highly qualified and specialised workers laid off at a time of severe cost of living pressures. What immediate and long-term measures are the Government putting in place to ensure that those individuals can transition to appropriate, well-paid employment? Communities in Fife deserve clarity, certainty and a real plan for the future. I urge the Minister to act quickly, decisively and collaboratively to protect the workers and to ensure that Scotland’s industrial base has a sustainable future.

I agree with the hon. Member that at its crux there has been a failure of long-term planning in industry. We can see that when we contrast the two ethylene plants in Scotland. The plant at Grangemouth imports a lot of its ethylene from the US, which is in plentiful supply and comes at a much lower cost. That required a significant investment in the port infrastructure at that plant. ExxonMobil was aware that, in order to ensure that Mossmorran was sustainable, it would need to make a similar investment. It would have been possible for it to have made that investment some years ago, but at this stage, an investment of about $1 billion that would not come to fruition within the next five years is judged by the company not to be sustainable. Of course businesses require some certainty in order to invest; I made that point at Energy questions this morning. The certainty provided by our industrial strategy—in particular, this Government’s commitment to renewable energy technologies—is allowing investment to come in.

I agree with the hon. Member that our focus absolutely needs to be on the employees. I understand that no employees have been offered relocation yet, but it is the company’s view that 50 such posts are available and it is inviting expressions of interest from employees at this stage. I understand that the other plant is a very long way away, and that relocation will not be suitable for everyone—perhaps people do not want to uproot their families or they are embedded in their local communities—but if some workers want to take up that opportunity, I am pleased that it is there. With the offer of relocation for 50 employees and 50 employees being retained, we can see a way forward for about 60% of the permanent employees at the moment. Clearly, I would expect the taskforce to provide support for the other 40%, and the UK Government are working with the Scottish Government and the local authority on that.

We must not ignore the jobs that are being created every day and every week in Scotland in our new clean energy industries, with up to 60,000 jobs by 2030. Fundamentally, this is about supporting that transition. It is my expectation that, as these new jobs are created, people will transition across. As I have said, I lived through a terrible transition in the past. The mission of this Government is to ensure that we have a supportive transition for workers and communities in Scotland and around the UK.

This decision by ExxonMobil, and the manner in which it has been taken and announced, is a very poor way to treat workers who have given so much to the company and their communities. Given that only last year the company was announcing four-year apprenticeships at Mossmorran, including for some of my constituents, will the Minister do everything in his power to ensure that those apprenticeships can continue and that the company, which has made record profits in recent years, recognises its duty of care to those young people?

I was pleased to meet my hon. Friend earlier to discuss some of these issues in detail, and I am pleased that he has raised the issue of apprentices. I raised that personally with the chairman of the company earlier today, and I have established that there are approximately six apprentices involved. It would be usual in this situation for those apprentices to be found positions in local industry, and that will certainly be a priority. With only six apprentices, I do not think it will be a problem. Local industry tends to respond very rapidly in these situations, and of course it is a priority for us to ensure that those apprentices can continue their apprenticeships.

Exxon has said that the plant’s closure

“reflects the challenges of operating in a policy environment that is accelerating the exit of vital industries, domestic manufacturing, and the high-value jobs they provide.”

When are the Government going to take responsibility for the decisions that they are making? We see no prospect of energy prices reducing, while the ethane supply from the North sea is reducing at a huge rate. That is leading to these job losses and it will continue to lead to more and more job losses across Scotland, as the Minister knows, until policy decisions are changed and until the North sea is supported.

I am aware that that is what was reported in the press, but I actually spoke to the chairman of Exxon earlier and asked him specifically whether he could confirm that. He told me that there were a few issues, including the availability and cost of feedstock and the efficiency of the plant. He also said that without the $1 billion investment, he could not see a future for the plant in those circumstances.

I thank the Minister for his statement, and I thank my hon. Friend the Member for Cowdenbeath and Kirkcaldy (Melanie Ward) for exposing the frankly ridiculous lack of transparency from ExxonMobil. My constituents certainly know exactly where the blame for today’s announcement lies: with ExxonMobil.

I wish to bring one issue to the Minister’s attention. A constituent—one of a number who work at Mossmorran —has contacted me with their concerns about the effect on opportunities for young people in the area. Given that we have also seen the SNP’s shocking failure on skills, including its cutting of college budgets by up to 20%, will the Minister reassure me that he will do everything he can work with the Scottish Government, Fife College and others to ensure that skills in the area are maintained and young people in Fife have the opportunities they deserve?

I, too, was particularly disappointed that the announcement was made so close to Christmas. Anyone making such announcements should take that into account. My hon. Friend mentions opportunities for young people, and he is absolutely right to do so. Our clean energy jobs plan was launched just a couple of weeks ago. It highlights the opportunity to create five new regional centres of excellence for clean energy jobs. I know that there will be great demand for the skills of young people in Fife and across Scotland and the UK in those clean energy industries. We have set out the jobs and skills, and the methodology by which we will enable people to access them. The Prime Minister was very clear about that in his speech to the Labour party conference: opportunity for young people is a mission of this Government. Ensuring that young people can access high-quality jobs in the clean energy industries in Fife must be a priority for the taskforce.

Unfortunately for the Minister, some of us have also spoken to Mr Greenwood today. Although the Minister argues that this decision has nothing to do with the Government’s policy on the North sea, that is certainly not what was conveyed to me, but I am sure that he will clarify that from the Dispatch Box. The Minister also says:

“Exxon are not suggesting that this closure was due to a lack of action or will on behalf of the Government.”

Meanwhile, Exxon’s statement says that the decision is down to

“the UK’s current economic and policy environment combined with market conditions”.

What we have tonight is 400 families knowing that they do not have certainty over their ability to pay their bills going forward, a whole community impacted as a result of this decision, and a UK Government Minister who is not being clear with them about why this has happened and why he is not helping them. He stated from the Dispatch Box just a moment ago that the Government have before chosen to intervene—we know that they chose to intervene in Scunthorpe—but they chose not to do so in Grangemouth, as Labour Members will recall, and the Minister is choosing not do so now in Mossmorran. The Government are sleepwalking into the deindustrialisation of Scotland. This is on them.