By Baroness Smith - 29th June 2012
Writing for PoliticsHome, the former Basildon MP claims the decision to allow the Coryton oil refinery to close is a “defining moment” for the Government, and warns of the “truly shocking” impact the closure will have on the local economy.
When Petroplus, the owners of the Coryton refinery in Essex went into administration in January, there was still hope that a buyer could be found and the plant could continue to operate, providing around 20% of the fuel for London and the South East, including petrol, diesel and aviation fuel.
Five months on that hope has turned into despair, and any expectations that the UK Government would want to support the industry as other European Governments have now disappeared completely.
Last week in the House of Lords, I expressed my real concerns that the Government is being dangerously complacent, in not providing even short term support for a longer breathing space to find a buyer. Why is it that in a similar position the French Government invested to protect its national refining capacity and jobs, yet this Government refused to help citing European State Aids laws and adequate capacity in Europe?
A Government that made so much in opposition about how ‘it would stand up to Europe’ has clearly failed by its own standards. In defence of the EU, the European Commission has been unable to trace any enquiry from the Government about state aids – it appears that they didn’t even ask which, implies that they clearly had no intention of making any financial contribution, even short term, to keep the refinery open.
The Government’s other reason for not backing Coryton is that there is overcapacity in Europe which leads to smaller profit margins, even though Coryton is efficient and one of the more profitable plants. But as Lord Tomlinson pointed out to the Minister when she spoke of the fall in petrol demand, the middle of a double dip recession isn’t the best time to work out longer term refining capacity needs. Once the refining capacity is gone and the site is converted to a depot to receive imports of refined fuel we’ll never be able to get it back.
As well as the national implications the local impact is truly shocking.
Hundreds will lose their jobs and we estimate a £50million to £1 billion black hole in the local economy. There has been a factory on that site since 1895 when it started to produce explosives and a refinery for almost 60 years. It’s provided thousands of jobs over those years – now not only will those working there lose their jobs, but they’re lost to future generations as well.
This is a defining moment for many people in understanding what this Government is about and its priorities.
Governments have to make decisions about whether to take responsibility and be interventionist – or stand back and let ‘the market’ decide. Of course, Governments can’t step in to save every job and every industry. But when other European countries appear willing and able to do so, we have to ask why this Government can’t.
The workers at Coryton always knew that this was going to be difficult – but it became a race against time. My judgement is that they wanted the Government to try to help. As devastated as they always would be at closure, if they had truly felt that the Government was on their side and wanted to do all that it could it would have been easier to understand.
As it is they don’t understand, I don’t understand and a whole community is paying a very high price.
Baroness Smith is the Opposition spokesperson for the Home Office and former Member of Parliament for Basildon.