Five questions answered on Grangemouth petrochemical plant closure

What has the government's response been?

Owners Ineos announced this morning that the petrochemical plant at the Grangemouth complex in Scotland will close.  We answer five questions on the closure.

Why is the plant closing?

Ineos made the announcement following a meeting with the workforce at the plant and its associated oil refinery this morning.

The decision comes after a long dispute between workers and management. The company had said if the workforce rejected new proposed changes to pay and pensions the plant would close.

Staff rejected both proposals to freeze pay for three years and to reduce pensions.

In a statement the company said:

"The company made it clear that rejection of change would result in closure. Regrettably, the union advised union members to reject any form of change.”

The outcome of the employee vote on the company's survival plan was a 50/50 split.

How many people work at the plant?

About 800 people are employed at the petrochemical plant, as well as other sub-contractors.

What else have Ineos said?

The company statement goes onto say:

"The shareholders met yesterday to consider the future of the business following the result of the employee vote.

"Sadly, the shareholders reached the conclusion that they could not see a future for Grangemouth without change and therefore could no longer continue to fund the business".

 "As a result of this decision, the directors of the petrochemicals business have had no option but to engage the services of a liquidator. It is anticipated that a liquidation process will commence in a week."

What has the government said?

Nothing official as yet. Ministers, including the Scotland Secretary Alistair Carmichael and the Energy Secretary Ed Davey, are meeting in London to decide on a response to the decision.

Labour's Shadow Energy Secretary, Caroline Flint, has requested an Urgent Question on the Government's contingency planning regarding Grangemouth Refinery.

What financial problems has Grangemouth faced?

According to Ineos the plant, which has been shut for a week due to the ongoing dispute, is losing £10m a month.

It had said it was ready to invest £300m in Grangemouth, but only if workers agree to the new terms and conditions.

The Scottish government said at the beginning of the week it had been trying to find a buyer for the site. 

The Grangemouth Oil Refinery in March, 2012, in Grangemouth, Scotland. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Are the Conservatives getting ready to learn to love the EEA?

You can see the shape of the deal that the right would accept. 

In an early morning address aimed half reassuring the markets and half at salvaging his own legacy, George Osborne set out the government’s stall.

The difficulty was that the two halves were hard to reconcile. Talk of “fixing the roof” and getting Britain’s finances in control, an established part of Treasury setpieces under Osborne, are usually merely wrong. With the prospect of further downgrades in Britain’s credit rating and thus its ability to borrow cheaply, the £1.6 trillion that Britain still owes and the country’s deficit in day-to-day spending, they acquired a fresh layer of black humour. It made for uneasy listening.

But more importantly, it offered further signs of what post-Brexit deal the Conservatives will attempt to strike. Boris Johnson, the frontrunner for the Conservative leadership, set out the deal he wants in his Telegraph column: British access to the single market, free movement of British workers within the European Union but border control for workers from the EU within Britain.

There is no chance of that deal – in fact, reading Johnson’s Telegraph column called to mind the exasperated response that Arsene Wenger, manager of Arsenal and a supporter of a Remain vote, gave upon hearing that one of his players wanted to move to Real Madrid: “It's like you wanting to marry Miss World and she doesn't want you, what can I do about it? I can try to help you, but if she does not want to marry you what can I do?”

But Osborne, who has yet to rule out a bid for the top job and confirmed his intention to serve in the post-Cameron government, hinted at the deal that seems most likely – or, at least, the most optimistic: one that keeps Britain in the single market and therefore protects Britain’s financial services and manufacturing sectors.

For the Conservatives, you can see how such a deal might not prove electorally disastrous – it would allow them to maintain the idea with its own voters that they had voted for greater “sovereignty” while maintaining their easy continental holidays, au pairs and access to the Erasmus scheme.  They might be able to secure a few votes from relieved supporters of Remain who backed the Liberal Democrats or Labour at the last election – but, in any case, you can see how a deal of that kind would be sellable to their coalition of the vote. For Johnson, further disillusionment and anger among the voters of Sunderland, Hull and so on are a price that a Tory government can happily pay – and indeed, has, during both of the Conservatives’ recent long stays in government from 1951 to 1964 and from 1979 to 1997.

It feels unlikely that it will be a price that those Labour voters who backed a Leave vote – or the ethnic and social minorities that may take the blame – can happily pay.  

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.