Grangemouth oil refinery to shut by 2025; UK government ‘minded to intervene’ over Telegraph sale – business live

Sharon Graham, the general secretary of the trade union Unite, said the announcement of the Grangemouth closure “clearly raises concerns for the livelihoods of our members but also poses major questions over energy supply and security going forward”.

Grangemouth is the only major facility of its kind in Scotland. It accounts for just under a sixth of Britain’s domestically produced refined fuel products, although the mix of products varies between refineries.

Graham vowed:

Unite will leave no stone unturned in the fight for jobs and will hold politicians to account for their actions.

Here is our full story on the Grangemouth oil refinery closure in Scotland:

Grangemouth oil refinery in Scotland is to cease operations and could do so as early as 2025 under plans announced by its owner, Petroineos, part of the petrochemicals empire owned by Monaco-based British billionaire Sir James Ratcliffe.

Trade unions raised concerns about the impact on livelihoods of the 500 people directly employed at the facility, near Falkirk, and on the UK’s fuel supply from the closure of one of the country’s six large oil refineries.

Petroineos, which has discussed its plans with Westminster and the Scottish government, said it had had no choice but to adapt to global pressures affecting the refining market.

The company said it hoped to transform Grangemouth, which already imports liquefied natural gas (LNG) from the US, into a pure fuel import and export terminal within 18 months.

Franck Demay, chief executive of Petroineos Refining, said it was “business as usual” at the facility for now.

As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce,” he said. “As a prudent operator, we must plan accordingly, but the precise timeline for implementing any change has yet to be determined.

This is the start of a journey to transform our operation from one that manufactures fuel products into a business that imports finished fuel products for onward distribution to customers.

A record number of businesses closed across the UK last year, official figures show.

The Office for National Statistics said 345,000 businesses shut their doors in 2022, a 5% increase on the 328,000 that closed in 2021, and the highest figure since records began in 2002.

The so-called business “death rate” surpassed the “birth rate” of new businesses being founded for the first time since 2010. Some 337,000 new companies began trading nationwide in 2022, down from 364,000 the year before. The death rate rose to 11.8% while the birth rate fell to 11.5% from 12.4%. There were 2.9 million active businesses in the UK last year.

The Institute of Directors blamed the increase in business closures on the cost of living crisis, the economic fallout of Russia’s invasion of Ukraine, and the aftermath of the restrictions of the Covid-19 pandemic.

Roger Barker, director of policy and corporate governance at the institute, said:

2022 was a difficult year for UK businesses, as they emerged out of the restrictions of the pandemic and straight into the economic fallout from Russia’s invasion of Ukraine.”
Transport and storage businesses particularly struggled, with the highest death rate at 23.8%, almost double any other industry.

He blamed “higher business costs and declining disposable income”.

Information and communication businesses had the second highest death rate at 13.6%, while accommodation and food services, and retail industries had the joint-third highest at 12.8%.

At the same time, information and communication had a higher proportion of high-growth businesses than any other industry. A high-growth business is defined as a firm where the average annual growth in the number of employees surpasses 20% over a three-year period.

London had the highest birth rate at 12.7%, while the East Midlands had the highest death rate at 13.2%. But Northern Ireland businesses were the most robust, with just 8.2% closing last year - no other region had a death rate below 10%. Northern Ireland also had the highest rate of businesses surviving five years at 49%.

George Dibb, head of the Institute for Public Policy Research’s Centre for Economic Justice, said the data was a “potential warning sign for the British economy with more companies going out of business than started up for the first time in 2022 since the tail end of the financial crisis”.

Whilst this isn’t unexpected - high energy costs combined with the end of pandemic support schemes would always see a rise in company closures - it might signify that greater business support would have maintained higher economic activity.

The only regions with above average high-growth firms are London and the South East. If we want to reduce regional economic inequality and ‘level up’, we need to see more of these booming companies in every part of the country.

There was a power cut at parliament, but fortunately it seems to be fixed – just in time for Jeremy’s Hunt’s autumn statement. You can follow it on our politics live blog here:

Scotland’s sole oil refinery at Grangemouth is due to cease operations in 2025, its owners have announced, a move which could cost hundreds of jobs.

Petroineos, which owns the plant, said it will become a fuel import terminal, a move that will cut the UK’s oil refining capacity.

Grangemouth has a refining capacity of 150,000 barrels per day, and is responsible for 4% of Scotland’s GDP and approximately 8% of its manufacturing base, according to Petroineos.

The company said in a statement:

“The timescale for any operational change has not yet been determined but the work will take around 18 months to complete and the refinery is therefore expected to continue operating until spring 2025.”

The Unite union has pledged to “leave no stone unturned” in its fight to save jobs at Grangemouth.

Unite’s Scottish secretary Derek Thomson told STV News.

“The news will come as a shock to the local community but Unite is going to do everything it can to protect jobs in this vital industry.

Franck Demay, the chief executive of Petroineos Refining, said the Grangemouth announcement does not change anything at the refinery currently, adding:

“As the energy transition gathers pace, this is a necessary step in adapting our business to reflect the decline in demand for the type of fuels we produce.

“As a prudent operator, we must plan accordingly but the precise timeline for implementing any change has yet to be determined.

“This is the start of a journey to transform our operation from one that manufactures fuel products, into a business that imports finished fuel products for onward distribution to customers.

“Throughout this process, our focus will remain on the safe production and reliable supply of high-quality fuels to our customers in Scotland, the north of England, and Northern Ireland.

“As we start to make this investment in preparing for a future transformation, we are equally committed to a regular programme of engagement with our colleagues about the changes we are making to our business.”

Back in Westminster, chancellor Jeremy Hunt has headed to the House of Commons ready to deliver the autumn statement at around 12.30pm:

Newsflash: UK factory order books have fallen to their lowest level since January 2021, the latest industrial trends survey from the CBI shows.

The CBI’s monthly poll of the manufacturing sector found that total order books “deteriorated sharply” this month, to well below the long-run average.

It also found that output fell in the last three months, and is likely to keep declining in the next quarter.

Anna Leach, CBI deputy chief economist, says the survey suggests increases in interest rates are hurting demand for goods.

Leach explains:

“Manufacturing output has been under pressure recently given the combination of slowing demand and the run-down of stocks of finished goods. This latest data will fuel concerns that the economy is slowing swiftly as the highest interest rates for 15 years take their toll on demand.

“The further softening in orders this month is a worry, with order books now in their weakest position since the start of 2021 when the economy was locked down amid the pandemic”.

Here’s our news story on the latest development in the Telegraph sale drama:

If Lucy Frazer decides to issue an Intervention Notice over the Telegraph sale to RedBird, then media regulator Ofcom would draw up a report on any public interest concerns.

The Competition and Markets Authority (CMA) would also investigate whether there are any competition issues.

Frazer would then devide whether to refer the matter for a more detailed investigation by the CMA, under section 45 of the Enterprise Act 2002.

Lucy Frazer adds that it is “important to note that I have not taken a final decision” on whether or not to intervene in the RedBird deal for the Telegraph.

The Secretary of State for Culture, Media and Sport explains:

The ‘minded to’ letter invites further representations in writing from the parties and gives them until 3pm on 23 November to respond.

UK media minister Lucy Frazer has said she is “minded to” issue a public interest intervention notice relating to the sale of the owner of the Telegraph group to a fund backed by Abu Dhabi.

In a statement to parliament, Frazer says her department has today written respectively to Lloyds Banking Group, the Barclay family and RedBird IMI, to inform them that she is ‘minded to’ issue a Public Interest Intervention Notice.

Frazer says:

This relates to concerns I have that there may be public interest considerations - as set out in section 58 of the Enterprise Act 2002 - that are relevant to the intended loan repayment by the Barclay family and the planned acquisition of Telegraph Media Group by RedBird IMI and that these concerns warrant further investigation.

Frazer’s statement come after a group of Conservative MPs wrote to ministers, urging them to use the UK’s national security laws to investigate the Barclay family’s attempt to regain control of the Telegraph newspaper group with funding from Abu Dhabi.

Earlier this week, RedBird announced it had pledged to repay £1.1bn debts owed by their publishing group’s previous owners, the Barclay family, as part of a deal that would see it take control of the Telegraph and Spectator.

The sale of the Telegraph and Spectator was put on hold yesterday, until after a deadline for the Barclays to repay the debts at the start of December.