Fumes, Oligarchs and Resilience


Several elements of the Grangemouth spectacle were on the edge of farce this week. MP Eric Joyce complaining that the people of the area “deserved better representation”. Truly. The utter capitulation and ineptness of the union. The callousness and duplicity of Ineos. These are dysfunctional broken systems of governance and representation on all levels.

Now, the spin room is in full cycle.

The Guardian holds that:

The way Grangemouth was saved probably adds to the challenge for the Yes campaign. The crisis was immediately about the many hundreds of jobs dependent on the site. But it was also about energy policy. Grangemouth matters a lot to the UK energy network, but it is absolutely crucial to that of Scotland. Three-quarters of its oil-based fuel passes through the site. So the closure of Grangemouth would have deprived an independent Scotland of the ability to process the North Sea oil and gas that remain central to the nationalist vision of the country’s economic viability. From a nationalist perspective, Grangemouth had to stay open, and there will be much relief that it did. Yet a crucial and perhaps lasting image from this week’s last-ditch bargaining has been the opposite of the one that Mr Salmond would have wanted. On Thursday afternoon, the UK’s Scotland secretary, Alistair Carmichael, and the Scottish government’s finance secretary, John Swinney, gave a joint press conference outside the plant. They spoke as one, both showing their commitment to Grangemouth and both putting their respective governmental heft behind the attempt to restart the plant.

The fix gives stability to the North Sea conduit for decades, a bigger win for Salmond than any short-term PR squeezed out by Alistair Carmichael, who next week (as last) will be part of a team telling you that the industry is doomed and declining. In other words the fact Grangemouth was saved probably adds to the challenge for the No campaign.

But there’s wider lessons too. Quite how a business that was portrayed as a wretched loss-making sump one day popped up as a viable prospect the next is a mystery. Yes the FM pulled some favours with BP, but what it reveals is systems of industrial scale tax-evasion that would make an Ibrox chairman blush.

Keith McLeod at the Record explains that INEOS closed down a business which could have delivered half a billion pounds of profit in the coming years, citing work by accountant Richard Murphy of Fulcrum Chartered Accountants.

All is spin. He says the plant was making a fortune until Ineos apparently set out to make it appear loss-making. Rather than losing money, as the company claimed, the chemical plant at Grangemouth delivered £7million in profits last year.

It’s clear that Ineos used smart accounting techniques to paint a bleaker future for the plant and secure taxpayers’ cash. Murphy said the plant made £6million profit the year before, even after a pension fund shortfall was factored in.

So we can’t have accountability for these robber-barons and we can’t manage transparency either. That stems from the fact that we perceive ourselves beholden to them.

Murphy added:

I think there is an odd story in those accounts. The future of this company at the chemical plant could be quite profitable. It could make quite a
lot of money. How do you reconcile that, what’s going on here? They are using accounting rules I don’t recognise. They are using numbers I can’t find in any actual published accounts.

The lessons from Grangemouth (setting aside dependency on a toxically damaging fossil fuels) are surely to move beyond the desperate fire-fighting of defending whole communities dependent on one firm. Or, indeed, an entire economy over-dependent on one fossil fuel?

But the wider and deeper issues that means this can’t be a victory for UK:OK is put simply by Robin McAlpine at Our Kingdom (‘What’s really happening at Grangemouth’):

This is a facility that provides 80 percent of Scotland’s fuel – and it is in the power of one man to close it down at will. It is to the great credit of the Scottish Government that (given its limited powers) it has put pressure on the company, has looked to find a buyer if Ineos won’t agree to operate the plant and has refused to rule out public ownership. While this last course of action is unlikely, it is another sign of the SNP shifting away from the free-market orthodoxy of British politics. This is not a facility (virtually a monopoly industry) about which we can afford to have no views or opinions about ownership. There is now a serious debate in Scotland about whether our key infrastructure is safe in private, often foreign, hands. The behaviour of Ineos has intensified that debate. Britain is in denial about the importance of the ownership of the economy.

Shifting from dependency culture and concentration of power is not just about the constitution, it’s about moving towards democracy in the workplace, transforming industrial relations and environmental justice too.

All the way down the line this is a society based on a single point of failure: over-reliance (aka addiction) to a petro-chemical economy, an unrecoverable Member of Parliament, big business trampling over peoples rights.

So if the next few days offers short-term PR for either side the reality is that independence should be about actually facing-up to our long term energy needs, the reality of our climate crisis, and the need for real economic resilience beyond frantic phone calls to a man on a yacht.

Comments (12)

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  1. Alasdair Frew-Bell says:

    ask the French or Germans or Italians if their national infrastructure should be in foreign hands and you would get a curt reply No! ask a Brit of the capitalist bent and the reply might be ” depends on what they’re offering”. this is the elizabethan freebooting, sell-yer-arse, coffeehouse, southsea bubble mentality that the anglo-norman Britstate feels most comfortable with. unlike the English and that running dog of unionism, the Guardian, we see an alternative to the flaccid anglo-american model on the horizon. the Grangemouth affair demonstrates how much we need to throw off the yoke of globalization.

  2. florian albert says:

    There is a fair bit of wishful thinking going on here. There is little sign of the ‘serious debate’ that Robin McAlpine suggests is taking place.

    If you look at how the events of the last week unfolded, some things become clear.
    Once INEOS had said it would close the petrochemical plant, getting INEOS to change its mind was the over-riding priority of the SNP, Labour, Tories and LibDems. This was understood to involve the workers accepting INEOS’ terms – even if nobody said it out loud.
    Alternatives were not really considered. Nobody wanted to buy the plant and nobody believed that the Scottish (or UK) government could run a petrochemical plant successfully.

    At the heart of the problem is the chronic weakness of the Scottish economy. Older Scots will remember NCR, Goodyear and Caterpillar being induced to come to Scotland. More recently, it has been Amazon.

    Some good might come from this crisis if it leads to greater awareness of the weaknesses of the Scottish economy and action to repair them.
    Scottish politicians were united on two things this week. First that Grangemouth had to be saved. Second, that it should be done by cooperating with an aggressive multi-national company.
    That is the sobering lesson for all who those who believe that the Scottish political class is a radical one.

    1. “getting INEOS to change its mind was the over-riding priority of the SNP, Labour, Tories and LibDems”

      Labour and the Tories? Labour’s sole priority was not being seen criticising Unite, and the only UK ministers who even seemed to acknowledge the dispute was happening were Lib Dems – Ed Davey and Alistair Carmichael. Labour and the Tories were absolutely nowhere on this, illustrated perfectly by the total absence of questions about it at Prime Minister’s Questions.

      “Second, that it should be done by cooperating with an aggressive multi-national company.
      That is the sobering lesson for all who those who believe that the Scottish political class is a radical one.”

      It’s nice that the rest of us have the luxury to be able to pontificate about what this means in regards to Scotland’s relationship with rich industrialists and global capitalism, but I suspect the 800 people who were about to lose their jobs were a bit more concerned about how they were going to put food on the table than whether Scotland’s political class is radical or not. Not to mention all the small businesses who rely on Grangemouth.

      What was the alternative to cooperating with Ineos, bearing in mind that any alternative that didn’t result in everyone keeping their job is unsatisfactory? People being hours away from losing their livelihoods is not really the time to indulge in political theory. This needed swift action, and it’s difficult to see what else would have been practical.

      1. florian albert says:

        Like it or not, there is a direct link between Scotland’s relationship with global capitalism, on the one hand, and Grangemouth workers keeping their job, on the other. There is no longer enough North Sea gas and INEOS’ plans to keep the complex open involve importing shale gas from North America.
        When UNITE, to use Iain MacWhirter’s phrase, let the workers march over a cliff, no significant figure amongst Scottish politicians spoke out against this foolishness. The Scottish political class, led by Alex Salmond, sees itself as different from the Westminister class, both Coalition and New Labour.
        It considers itself more radical. Put to the test, this radicalism evaporated. It was replaced by a determination to accept INEOS’ terms.
        I agree the workers had almost no alternative. The question is why nobody had the courage to tell them this before they went over the cliff.
        This episode is similar to the Labour government of 1976’s dealing with the IMF. Both expose the absence of an alternative to accepting the economic status quo.

  3. bellacaledonia says:

    Interesting from Iain Macwhirter:

    This has been one of the worst industrial relations disasters of modern times and has disturbing implications for trade unionism, the Labour Party and Scotland. The workforce only narrowly escaped with their jobs, but had to accept all of Ineos’s terms – a promise not to strike, a three-year wage freeze, zero bonuses, the end of final salary pensions. It was game, set and match to private equity.

    The result will have been noted by every industrial employer in Britain, as the highest-paid and best-organised (in a trade union sense) industrial workers in Scotland have been humbled. Indeed, at times Grangemouth felt like a speed-dating version of the miners’ strike in 1984 as workers were on the point of destroying their own livelihoods. Had it not been for the efforts of the hyper-active First Minister, and the fact that the workers effectively sacked their own union leaders, we would have been lamenting another Ravenscraig this weekend.

    Indeed, Grangemouth’s obituary had already been written in newspaper offices across the country: how the fall-out would devastate the Central Belt just as the crash of Ravenscraig obliterated the economy of Motherwell. Reporters had sought out local businesses preparing for relocation or closure, spoken to workers checking the job centre more in hope than expectation, and to mothers worried about feeding their children. It’s an easy story to write. We’ve written it 100 times: industrial vandalism; the unacceptable face of capitalism; workers sacrificed on the alter of profit…

    I’ve written unflattering things myself about the way in which Ineos owner Jim Ratcliffe does business. Ineos is a private equity company that specialises in deals below the radar and fancy (albeit legal) accountancy. Its claims about losing £10 million a month at Grangemouth seemed exaggerated to say the least. But in this particular case, the unions played into Ratcliffe’s hands, and proletarian romanticism should not prevent us from stating what actually happened here.

    Last weekend, Unite seemed prepared to allow one of Scotland’s most important industrial centres – along with the livelihoods of 800 workers, and 2,000 contract employees – to be sacrificed to their own obstinacy and self-interest. Their beef with Ratcliffe began with a row over union official Stephen Deans’s involvement in the selection of a Labour candidate in the Falkirk by-election. The union threatened strike action in defence of their official, who was suspended pending an investigation.

    No-one should be in any doubt that Ratcliffe was exploiting this situation. But while posturing and blustering about Deans, Unite failed to realise that Ratcliffe was serious about closing the Grangemouth petrochemical plant. If any of Unite’s officials had lifted a phone to call one of Scotland’s legion of oil analysts, or any business journalist, they would have been told that Grangemouth is on a distinctly shoogly peg; that its out-dated plant and history of poor industrial relations made it a likely candidate for the chop in a global business hit by falling prices and competition from low-cost countries in Asia.

    Too many Labour politicians, shaking righteous fists at Ratcliffe, ignored the contemporary industrial reality: people like him don’t care what anyone says about them. Nor was he bothered by the prospect of a work-in. In a petrochemical plant with an international supply chain? Go right ahead, gentlemen…

    Had Grangemouth gone under, songs of woe would have been sung on the picket lines and at benefit concerts, and journalists like me would be calling for the curbing of capitalist greed. But that wouldn’t have been much use to the workers looking for new jobs.

    For the union to lead its workers to the cliff without realising this beggars belief. But then allowing them to walk over it, with no safety net waiting below, is a tactic that makes no sense. In any other organisation, heads would be rolling. Yet on Friday, Unite leaders were congratulating themselves on saving the Grangemouth petrochemical plant. Talk about self-delusion

  4. Stephen says:

    “The utter capitulation and ineptness of the union.”

    Can you tell us how you would have handled it better?

    1. bellacaledonia says:

      Well no doubt the behaviour of Ineos is both reckless and brutal – but we knew that anyway? There’s three things that Unite seem to have done badly:

      1) They lost the media war, hands-down, despite (as the article quotes) having commissioned some work which exposed the forms dodgy accounting

      2) They seem to have most of their energy wrapped up in their dysfunctional relationship with Scottish Labour, the details of which seems to be oozing out daily

      3) They seem to have had no bargaining strategy

      I’ve been a member of a trade union most of my working life (T&G, BECTU, NUJ) and I’m totally on the workforces side. But blindly defending ALL unions in ALL situations as being above any criticism just seems ridiculous.

      1. Stephen says:

        I never suggested that all unions be defended in all circumsatnces – I asked how you would have done better. You haven’t said – all you’ve done is point out some things that you say have been done badly. ( “They lost the media war” …really ?An industrial workforce about to take strike action getting a bad press…that’s never happened before. It’s far from a complete picture either – the Record,the biggest selling non Murdoch newspaper was fairly consisitently sympathetic)

        What would your bargaining strategy have been? ( particularly after the employer walks out of talks and says he is going to shut the plant) please telll me how yyou would have done better?

      2. Tartanfever says:

        Stephen – ‘How would I have done better ?’

        I wouldn’t have threatened a strike over the alleged ‘ bad treatment’ being given to Brother Deans when he was first suspended (pending internal enquiry)

        However, the union did and Brother Deans was re-instated, again pending internal enquiry.

        Unite then decided that the workforce should then have an overtime ban and go on a ‘work to rule’ regime to continue showing their displeasure at Brother Deans treatment.

        Taking this kind of ‘muscular’ stance against the backdrop of the whole Labour/Falkirk fiasco was plainly stupid and set the tone for the coming events.

  5. Keith says:

    So one man holds thousands in the palm of his rich hand and dictates terms, not only to a workforce, but to a country: “You can keep you jobs and have the chemicals, but only if you obey me”. Scotland has had a taste of a new wave (a tidal wave) of totalitarian capitalism – the political system of China and Singapore – in which total authority is held by the employer, the owner, the supra-state oligarch. What then is freedom or self-determination? The Daily Mail readers must be be hugging themselves with delight.

  6. John Souter says:

    The dillema is stark – Global corporatism and democracy do not mix.

    The solution is equally stark – In terms of strategic importance of resources and general utilities no nation can afford to cede control to commercial conglomerates.

    Let the nation own and control the company – say SPU plc (Scottish Power and Utilities) – run on commercial lines as remote as possible from partisan political interference and with the CEO, executives and workforce all employees of the company and not public employees and all subject to the normal commercial measures of competence and performance inclusive of the level of dividend returned to the public purse.

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