Grangemouth plant shutdown leaves government fighting to save 800 jobs

Petrochemicals workers will lose their jobs after abrupt closure, with 2,600 refinery employees and contract staff at risk

The government is scrambling to save 800 jobs at the Grangemouth petrochemicals site in Scotland after its owner, Ineos, abruptly closed the plant in a rancorous industrial dispute.

As the energy and climate change secretary, Ed Davey, said that "all efforts" would be made to rescue the plant, Ineos also refused to rule out closing the oil refinery on the same site.

Workers were given the grim news at a meeting with Ineos's chairman, Calum MacLean. Ineos had given the workforce until Monday evening to accept its demands for radical changes to terms and conditions but the company concluded there was not enough support.

Its decision means that up to 800 petrochemicals workers will lose their jobs, and it threatens the positions of some 600 or more employees at the refinery plus 2,000 contract staff.

Staff reacted with shock to the news, as Ineos followed through on its warning that the threat of closure was not a bluff.

The fate of the giant plant on the Firth of Forth has far-reaching implications for Scotland and the UK. Grangemouth is Scotland's biggest manufacturing business, its refinery supplies most of its fuel and the petrochemicals plant produces plastics used in industries ranging from cars to packaging.

In an urgent question on Grangemouth in parliament, Davey told MPs repeatedly that the government wanted the plant to stay open if at all possible. It would still consider a business case to provide investment to help keep the plant running.

"We will be using all our efforts through the [Business] department and UKTI [UK Trade and Industry body] to assist should we need to have a buyer for the petrochemical plant," he said.

However, Ineos has already warned that the refinery – currently shut down because of the dispute – could be closed permanently if the Unite trade union did not agree to a no-strike deal.

Davey also confirmed that detailed contingency plans had been drawn up to protect firms and customers from running out of fuel and chemical supplies. He met MPs later to discuss the issue in more detail.

Downing Street has insisted the closure of the Grangemouth refinery would not pose a threat to fuel supplies, after the AA warned it could hit petrol prices. The prime minister said in an answer to a parliamentary question from the Labour MP Tom Watson that ministers had discussed the closure during Cobra meetings.

Downing Street dismissed speculation that the plant could be nationalised, saying it was a matter for unions and owner to resolve. The prime minister's spokesman said it was disappointing that the petrochemicals side of the plant had closed and called on "both parties" to "continue their dialogue" over the future of the refinery.

The closure of the petrochemicals plant follows a standoff between Ineos and Unite, which represents about 1,100 of Grangemouth's permanent employees as well as many contract workers. Many businesses – from the Rumbling Tum burger van near the site to cab firms, pubs and hotels – rely on trade from Grangemouth.

Gordon Alexander, who owns Grange Radio Cabs, said closure would devastate local businesses. "Local shops and local snack bars would definitely go out of business. We do a lot of executive work for them and if they were to close I would probably lose about half of my 50 cabs."

Edmund King, the president of the AA, warned that petrol prices could rise if Grangemouth and other European refineries closed down.

"The AA is concerned with the impact of this refinery closure," he said. The European commodity trading houses have been predicting the loss of five to six refinery plants over the next two years.

"In March to April of last year, with the closure of refineries and the impending start of the US motoring season, wholesale prices went up by 20%, adding 8p to 10p to a litre of petrol. The spike was short-lived because US drivers cut back and some of the refineries were bought. However, the damage was done and a new UK petrol record [142.48p a litre] was set."

Bitter dispute

The announcement follows the passing of a deadline on a survival plan put to employees, which asked them to accept changes to pensions and other terms and conditions.

The Unite union said about 680 of the site's 1,370-strong workforce had rejected the company's proposals, which include a pay freeze for 2014-16, removal of a bonus up to 2016, a reduced shift allowance and ending of the final-salary pension scheme.

Ineos said its owner, Jim Ratcliffe, and other shareholders met on Tuesday to study the response from the workforce to their survival plan, and wanted the employees to be the first to know of any decision the company made.

A dispute over pay and conditions at the oil refinery remains unresolved.

Unite has accused the company of "playing Russian roulette" with the future of Grangemouth, the biggest industrial site in Scotland, and is backing any efforts by the Scottish government to find a new buyer for the oil refinery and petrochemical complex.

Ineos sent a letter to workers last Thursday asking them to indicate their rejection or acceptance of the plan.

It said those who supported the survival plan would receive a transitional payment of up to £15,000.

The two sides have been embroiled in a bitter dispute for weeks, initially over the treatment of the Unite convener, Stephen Deans, who was involved in the row over the selection of a Labour candidate in Falkirk, where he is chairman of the constituency party.

He was suspended, then reinstated, then was subject to an internal investigation, which is due to report on Friday.

The dispute has since widened to the future of the entire site, with Ineos warning that it would close without investment and changes to pensions and other terms and conditions.

The company said the plant, which has been shut down since last week because of the dispute, was losing £10m a month.

Ineos had said it was ready to invest £300m in Grangemouth, but only if workers agreed to the new terms.

Article Source : http://www.guardian.co.uk

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George Osborne opens doors to rich Chinese with new visa system

British chancellor moves to improve relations with Beijing after rift over David Cameron's meeting with Dalai Lama

George Osborne has heralded the "next big step" in Britain's relationship with Beijing, unveiling a new visa system to make it easier for Chinese business leaders and rich tourists to visit the UK.

In a sign of Downing Street's determination to reset relations with Beijing, which unofficially downgraded Britain's status after David Cameron met the Dalai Lama last year, the chancellor told an audience in the Chinese capital that no country in the west is more keen to attract Chinese investment than Britain.

Osborne, who began a five-day trade mission to China at the weekend, told students at Beijing University: "I don't want us to try to resist your economic progress, I want Britain to share in it.

"And I want, this week, us all to take the next big step in the relationship between Britain and China. Because more jobs and investment in China mean more jobs and investment in Britain. And that equals better lives for all."

As a first step the chancellor announced Britain will make it easier for Chinese business leaders to visit the UK by introducing a 24-hour "super priority" visa service.

In the biggest step, a separate pilot scheme will allow selected Chinese travel agents to apply for UK visas simply by submitting the application form used for the EU Schengen visa.

The scheme is aimed specifically at the high-end tourism market, after figures showed that wealthy Chinese tourists are not bothering to apply for a UK visa after applying for a Schengen visa, which allows them to visit 22 out of the 28 EU member states plus Iceland, Liechtenstein, Norway and Switzerland.

Ministers were understood to be alarmed when one study found that Chinese tourists were buying vastly higher numbers of expensive designer handbags in Paris than in London. The chancellor said: "These changes will streamline and simplify the visa application process for Chinese visitors, while ensuring the system is strong and secure. This is good news for British business and tourism."

The Foreign Office has no difficulty with the relaxed visa system, which will be administered through its embassy in Beijing and consulates in Shanghai and other high-growth cities.

But concerns have been voiced to the chancellor and the prime minister from within the Foreign Office that Britain needs to tread with care in the light of China's human rights record and its aggressive cyber-attacks.

Cameron is understood to have heard the Foreign Office's concerns with sympathy. But he is determined to open a new chapter in Britain's relations with China after declaring that the "Bric" countries – Brazil, Russia, India and China – would be a priority. He has led two trade missions to India but has visited China only once as prime minister, three years ago.

Ed Davey, the energy and climate change secretary, who has recently returned from Beijing, spoke of a "massive Chinese investment" worth tens of billions of pounds in nuclear power and other sources of energy in Britain.

Davey told the Andrew Marr Show on BBC1 that there would also be major energy investments from Japan and South Korea. The China General Nuclear Power Group has been in talks with EDF Energy about taking a stake of up to 49% in the deal to build a nuclear power plant at Hinkley Point.

Osborne's trip – in which he is being accompanied in part by the London mayor, Boris Johnson, and four other government ministers – is designed to pave the way for a long-awaited trade mission to China by the prime minister.

Cameron was forced to abandon a visit to China earlier this year when Beijing punished him for meeting the Dalai Lama, the spiritual leader of Tibet, at St Paul's Cathedral in May 2012 with Nick Clegg.

The prime minister abandoned tentative plans for a trip to China in April after Beijing indicated that he was unlikely to be granted meetings with senior figures. The UK government said no plans had been finalised and the new Chinese leadership, which only took over in March, needed time to bed down.

The Osborne and Cameron trips, which have been pencilled in for the autumn for some months, have been the subject of intense negotiations in Whitehall. The chancellor is said by some ministerial sources to be adopting a gung-ho approach and is keen to explore every opportunity to boost trade links with China. "With George it all comes to pounds, shillings and pence at the end of the day," said one ministerial source.

Britain's nervousness about the Dalai Lama was highlighted when Johnson declined on five occasions on Sky News to say whether he would like to meet Tibet's spiritual leader. On the fifth occasion an exasperated mayor told Dermot Murnaghan: "This is the fifth time, I'm coming up for air again, Dermot, I'm just repeating that it's not my job as mayor to insert myself into controversial areas of international dispute. My job is to promote the interests of the city."

In his speech Osborne said: "There are some in the west who see China growing and they are nervous. They think of the world as a cake – and the bigger the slice that China takes, the smaller the slice that they will get. I totally and utterly reject that pessimistic view. If we make the whole cake bigger, then all our peoples will benefit. That should be the basis of our relationship with China."

In addition to Beijing Osborne will visit Shenzen, Guangzhou and Hong Kong.

Article Source : http://www.guardian.co.uk

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