No-deal oil refinery jobs warning issued by Grimsby MP

By Grimsby Telegraph | Posted: 8 Apr 2019

Up to 900 jobs could be lost in northern Lincolnshire’s oil refinery sector if there is a no-deal Brexit.

That is, according to Grimsby MP Melanie Onn, the stark prediction Total Lindsey Oil Refinery has made because of the fear of cheap American petrol flooding the UK market.

In an attempt to guard against disrupting the economy if Britain left the European Union without a deal, the Government's Department for International Trade announced last month that most import tariffs would be set at zero – including for crude oil produced at Total’s North Killingholme plant, the third largest refinery in Britain.

The current tariff on petrol imports is 4.7 per cent to prevent the market being flooded with cut-price fuel from overseas.

Labour's Ms Onn raised the issue with Brexit ministers in the House of Commons and has also written to Trade Secretary Liam Fox about her concerns.

Opened in 1968, the French-owned Lindsey Oil Refinery is one of two on the South Humber Bank, with the US firm Phillips 66 running the Humber Refinery across the fence.

Although the refineries are in the neighbouring Cleethorpes constituency - with pro-Brexit Conservative Martin Vickers in the seat - hundreds of skilled labourers from Grimsby work at the plants.

Speaking during Brexit questions, Ms Onn said: "Total Lindsey Oil Refinery contacted me to warn me about the risk, in the event of no deal, of the equivalent of Chinese steel dumping but with US gasoline if we end up with zero per cent import tariffs.

“That will result in the loss or downgrading of up to 900 jobs in my area. Does he agree that that would irrevocably damage our local economy?"

In her letter to Cabinet member Mr Fox, she wrote: “The domestic production of gasoline provides millions of pounds of value to the economy through employment, contracts and taxation.

"For example, Lindsey Oil Refinery close to my constituency provides good quality, well paid and aspirational employment to 400 people in our area and works with 500 local contractors.

"The impact of an undercut in price resulting from the zero per cent tariff could leave the future of this industry at risk and prove to be a false economy if the UK misses out on the economic benefits of domestic production."

But junior Brexit minister Kwasi ‚ÄčKwarteng, pictured below, when replying to Ms Onn, asked "why on earth" the town’s MP had "rejected on three occasions" the Prime Minister’s EU withdrawal deal, given she was so concerned about the impact of a no-deal exit.

The Conservative front bencher said: "The question I ask myself – given that she has so much concern for manufacturing interests in her constituency, is why on earth has she rejected, on three occasions, the only deal that would provide certainty and a degree of consistency for the companies she seeks to represent?"

In a statement issued to Humberbusiness.com following the Westminster mention, a Total Lindsey Oil Refinery spokesperson underlined the 'serious concerns' about tariff imparity. They said: "Total Lindsey Oil Refinery is in regular contact with its local stakeholders regarding its business. Total Lindsey Oil Refinery has been operational for over 50 years and in that time has become a well-established part of the local economy providing highly skilled employment across the region.

"As a business we have prepared for the UK leaving the European Union, however we have serious concerns about the tariff proposals from the Department for International Trade in the event of a no-deal Brexit. These proposals would set tariffs for imported gasoline to 0 per cent, whilst exports from the UK would have a 4.7 per cent rate applied. This will undermine the competitiveness of our business.

"We are committed to refining in Europe and in the UK. During the summer of 2019 Total Lindsey Oil Refinery will be completing a $100 million (£76m) investment program to upgrade our facilities to produce higher quality low sulphur fuels and improve our energy efficiency. We have also recently launched a further $25m (£19m) investment programme for 2020 to continue improving our refining process and upgrade our products’ qualities to match the energy needs of the UK for the future."

Theresa May last week invited Labour leader Jeremy Corbyn to discuss a Brexit compromise that both the Government and opposition could agree on.  Key members of both front benches have been embroiled talks, which according to Labour, broke down due to lack of compromise from Downing Street.

If an agreed position cannot be found then Mrs May has said she will put a number of different options to a vote in the Commons and accept the outcome which secures a majority.

Ms Onn last Wednesday voted to pass an emergency law to force the Prime Minister to extend Article 50 to avoid a no-deal situation, after MPs hijacked control of the Commons for a third day against the Government’s will.

Matt Hancock, in his brief spell as Energy Minister, is thought to be the last cabinet member  to have visited the refinery complex. 

As previously reported, the Grimsby seafood industry would remain almost tariff-free in a no-deal situation but the region’s car importers could be stung by tariffs that could make the average family-sized vehicle £1,500 more expensive to buy-in.

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