Grangemouth Refinery (Industrial Action)
The next item of business is a statement by John Swinney on industrial action at Grangemouth. The minister will take questions at the end of his statement and therefore there should be no interventions.
I am grateful for the opportunity to provide Parliament with further information on the industrial action that is planned on Sunday and Monday at the INEOS refinery at Grangemouth. The First Minister wrote to the Presiding Officer and the other party leaders on Sunday to outline the action that is being taken by the Government and our key partners.
It is not acceptable to the Scottish Government for the dispute to go unresolved. We urge INEOS and Unite to make every effort to resolve their differences. We therefore hope that the matter will be resolved by constructive and urgent dialogue.
To support such dialogue, at various stages over the past few days the First Minister and I have encouraged the management and the unions to take part in talks to resolve their disagreements. The Government has also taken the initiative of offering both parties a constructive intervention to assist discussions between the management and the unions.
We arranged for an independent pensions expert—Stewart Ritchie, who is president of the Faculty of Actuaries—to carry out a study to clarify the issues that are in dispute regarding proposals for the future of the INEOS pension fund. As president of the faculty, he is uniquely placed to provide independent and quality advice of the sort that is required to help the parties find a resolution to the issues. That proposal has been made available to the Advisory, Conciliation and Arbitration Service, where both parties have been involved in talks, and it remains on offer to help resolve the issue.
Given the possibility that industrial action will take place, INEOS has initiated a process of shutting down the plant ahead of the planned action this weekend. That work started last Friday. Following any action, it will take time for the plant to return to full production. As a result of agreements that were reached at ACAS, we expect that the resumption of fuel production should take place within a matter of days.
The strike has the potential to affect all sectors of Scottish society and the Scottish economy. We are therefore taking the issue extremely seriously. United Kingdom ministers—with whom we are in regular contact—have powers in relation to continuity of fuel supplies under energy legislation. We are responsible for consequence management in Scotland.
Ministers first discussed the potential strike at a routine meeting last Wednesday of the Cabinet sub-committee on emergencies, which was chaired by the Cabinet Secretary for Justice. Ministers have now met in the emergency committee eight times, and will continue to meet as necessary.
We have activated the Scottish Government emergency room and our wider contingency planning arrangements to ensure that urgent and prudent actions are taken at local and national levels and across key sectors. That work is focusing on three main aspects: assessing the potential impact of any disruption to fuel production at the refinery; making every effort to source alternative fuel supplies in the event that the action goes ahead; and ensuring that appropriate contingency arrangements are in place to mitigate any possible impact on key services and on people across Scotland.
On the potential consequences of a temporary loss of fuel production at Grangemouth, a great deal of work is in hand to manage existing stocks to meet demand. BP has distributed additional supplies to forecourts in advance of the proposed action. Work is also in hand to source alternative fuel stocks from elsewhere in the UK to continue to meet demand across Scotland.
We are confident that, with good will on all sides, there will be enough fuel to keep Scotland moving. Ample supplies of fuel are available in Scotland into May, and we anticipate that stocks can be maintained.
An important message, however, is that people should not change their normal fuel buying patterns. We therefore urge the people of Scotland to be sensible and only to buy the fuel that they need. We encourage people to make the journeys that they require to make and to use public transport.
We will continue to monitor demand and to work with fuel retailers to manage the situation. It would clearly be unacceptable if any retailer were to take advantage of the potential of localised fuel shortages to increase prices. I call on all retailers to ensure that increased prices are avoided at all costs.
A wide range of activity is under way to assess the potential consequences of any temporary reduction in fuel supplies. INEOS, BP, transport operators and others are working to ensure that we have provision of fuel supplies. Scottish ministers and Scottish Government officials are meeting regularly to liaise with the oil industry and local responders to monitor the situation and to consider the potential impacts of fuel disruption on key public services. All eight of Scotland's strategic co-ordinating groups, which comprise local emergency services, local authorities and other key groups, are considering the potential regional issues and contingency arrangements. Those issues are being relayed back to Government through our emergency room, to ensure that our activity is driven not only nationally but by the potential issues on the ground.
Scottish Government officials are also in direct contact with individual operators and agencies—for example, those in the transport industry—to ensure that issues are considered across every part of Scottish life.
The issue of upstream production will not, of course, affect consumer supply. However, during the day, it has become clear that there might be an impact on the BP Kinneil plant, which controls the Forties pipeline system. Although that plant would be ready to operate soon after the end of any industrial action, there remains the possibility of disruption to production, which currently stands at 725,000 barrels of crude oil and 80 million cubic metres of gas a day. That could place a substantial penalty on upstream production, and could affect almost a third of oil producers in Scotland, none of which is party to the current dispute between INEOS and Unite.
Should any shortages arise, the local, regional and national arrangements that I referred to a moment ago are in place to ensure that prudent contingency measures to prepare for potential scenarios are taken. Those measures will vary across areas and sectors, but all will focus on maintaining essential services, minimising any impact on the public and ensuring that there is a speedy return to normality.
Within that activity, the Scottish Government will work to ensure that essential services operate as normal. We will ensure that any key supply issues for public transport, food deliveries and the emergency services are addressed.
Although we hope that the dispute can be settled to the satisfaction of all concerned, the Scottish Government will continue to take proactive and thorough contingency measures to secure fuel supplies and to prepare for the consequences of any action.
Parliament can be assured that we are continuing to liaise with the UK Government, INEOS, BP and key responders, and that we are monitoring the situation closely. Ministers and officials are meeting as required to monitor developments and provide a national overview and direction.
While the situation continues, the Scottish Government's emergency room will remain in operation to support the activity of Scottish ministers and officials. It is also co-ordinating the detailed activity of the Government across the potentially affected areas and is responding to national issues that are raised by local responders.
We will, of course, keep Parliament updated on the situation as it develops.
As I indicated earlier, the minister will now take questions. We have around 20 minutes for those questions, after which we will move to the next item of business.
My front-bench colleague, Iain Gray, who has been liaising with Mr Swinney on these matters, apologises for not being with us—he is at a family funeral today.
Is the minister aware of claims in newspaper reports in the north-east of Scotland that security guards are now on duty on at least one petrol station forecourt and that some petrol stations are now limiting the amount of fuel that motorists can buy? What assurances can he give that contingency measures are now in place to ensure that such shortages do not become commonplace if the situation continues to deteriorate?
In the advance paper copy of the statement that was provided to Opposition parties, there was no mention of the potential disruption to supplies from the Forties pipeline, but I noted that, in the oral version of the statement, the minister referred to that issue. What action does the Scottish Government plan to take to minimise the impact of industrial action on oil production in Scotland as a result of disruption affecting the Forties pipeline?
Does the minister agree with Labours members that it was inappropriate for INEOS management to initiate legal action against Unite while the ACAS talks were under way, and that the ACAS process would be best assisted if there were no resort to legal action?
I will, of course, be delighted to update Iain Gray on developments during the next few days, as we discussed earlier this week.
On the press reports about fuel shortages, I am certain that some filling stations will run out of fuel during the period that lies ahead. Petrol stations run out of fuel when there is no petrol shortage, or any threat of one; it just happens. We have to be responsible about the way in which we deal with those issues publicly. Ministers will certainly do that, and we will take action where we possibly can to encourage the fuel suppliers to guarantee that, across the country, there will be continuity of supply.
On that point, we are in active and regular discussions with the United Kingdom Government, which carries responsibility under the devolution settlement for the continuity of fuel supply.
On Ms Alexander's second question about the Forties pipeline, production in the North Sea is obviously very important to the Scottish and UK economies. Ensuring continuity in relation to the Forties pipeline depends on whether and for how long the BP Kinneil plant can receive steam from the Grangemouth plant. If disruption is kept to a minimum, any disruption to the Forties pipeline will be minimised into the bargain. Obviously, we are encouraging co-operation between the unions and management to ensure that such interruptions are kept to a minimum.
On the actions of INEOS and the ACAS talks, the Government is clear that the way to sort out the issue is by discussions around the table at ACAS. We offered the management and the unions a constructive solution on Monday when we offered to provide specialist actuarial support to assess the pensions dispute that lies at the heart of the problem. We encourage the parties to get around the table and talk. I suspect that, when we are trying to bring the parties together to resolve the problem, the less commentary given by everyone concerned, the better.
I also thank the cabinet secretary for his statement, and for his comments about fuel supplies for the public and public services.
I agree with the cabinet secretary that it is unacceptable that the dispute remains unresolved. The issue is too important to Scotland for the situation to be allowed to drag on, and the signal that the dispute is in danger of sending out about Scotland as a place in which to do business could have severe and damaging consequences beyond what is currently being suggested.
On the point that the cabinet secretary made about oil and gas production, he will be aware of the statement made by Oil and Gas UK today, in which the organisation makes the fair point that if production has to be stopped, it cannot simply be restarted. If the dispute rallies and continues beyond one stoppage, it could have a significant adverse impact, not just on oil and gas production on the UK continental shelf, but on the Scottish economy and on all the contractors and associated businesses that are dependent on the sector. What, specifically, is the Scottish Government—along with the UK Government—able to do to ensure that that sector is not penalised by a dispute, which, as the cabinet secretary said, it has nothing to do with?
Those issues are material to the potential impact of a prolonged dispute on the Scottish economy. We will certainly continue to encourage a dialogue at ACAS to resolve the dispute because that is how the matter can be properly addressed.
The First Minister has been in touch with ACAS regularly during the past few days to encourage that discussion. We were all disappointed that the talks did not reach a successful conclusion yesterday, but we are reassured by ACAS's enthusiasm for continuing to pursue the issue. It has made it clear that it will be in contact with both parties every day to encourage further dialogue and discussion. That is the best way to resolve the problem.
On the impact on the Scottish economy, a resolution of the dispute is the quickest way to avoid any negative impact, and ministers will continue to argue that that is the best solution.
I thank the cabinet secretary for the advance copy of his statement. I also agree with his sentiments on ending the dispute as quickly as possible.
The First Minister said earlier that there is a "substantial and ample" stock of fuel to cope. The cabinet secretary said in his statement that the Government needs to "mitigate any possible impact" and that, should any shortage arise, the Government will act. Does the Government realise that the impact is being felt now and that there are shortages?
If, as ministers say, fuel stocks are "substantial and ample", why are petrol stations on the A9 without fuel today—in April, not in May? From Evanton north, there are shortages of diesel; stocks do not exist in many rural areas; and speculation is pushing up prices. In the Borders, the local NFU Scotland representatives have told Jeremy Purvis that there is no red diesel available because of the situation at Grangemouth. Even the Shell petrol station that is close to the Parliament has run out of diesel and, this afternoon, increased its petrol prices by 1p a litre.
The First Minister told Parliament earlier that fuel would last well into May; yet, just an hour later, Lothian Buses reported that there would be no buses from Sunday onwards. Will the cabinet secretary confirm that, this afternoon, the Minister for Transport, Infrastructure and Climate Change telephoned Lothian Buses to guarantee supplies for Edinburgh? If that is the case, does that guarantee from Scottish ministers extend to every bus operator in Scotland?
Is the cabinet secretary also aware that 130p a litre is normal in my constituency, where the price of fuel is still rising? Why is 130p a litre now the reality elsewhere as well?
As people drive home tonight and see the reality, who will they believe: the Automobile Association, the Royal Automobile Club and business organisations, which are reporting restrictions, closures, queues and rising prices; or the ministers who say that they will monitor any impact? Is the Government not out of touch with what is happening across Scotland?
I would have thought that, after the total fiasco of Nicol Stephen's questioning at First Minister's question time today, the Liberal Democrats would have learned a lesson about how to handle statements of this importance. [Interruption.]
Order.
My goodness—when they ask the wrong questions, they mutter about the answers that they get.
Let me address the issue of Lothian Buses. Lothian Buses was assured this afternoon that it will receive diesel from BP. There had been some form of miscommunication between BP and Lothian Buses in the earlier part of today during, as I understand it, a normal dialogue about fuel supplies. That miscommunication was addressed once we became aware of the issue. I encourage a sense of responsibility in everyone in the circumstances, and that extends to members on the Liberal Democrat front bench.
There are ample supplies of fuel to last into May; the key issue is the distribution of those supplies to all parts of the country to meet consumer demand. Operational decisions on that are being taken by the fuel distributors and we are monitoring the situation carefully and encouraging the fuel distributors to get the balance of distribution around the country correct.
I am fully aware of the significance of fuel prices in the Shetland Islands. I saw them myself the other week, when I was in the islands. As I said in my statement, it is wholly unacceptable to the Government that fuel distributors should try to make any form of capital out of the situation that we face. Everyone should act responsibly, and I encourage everybody to do so.
We come to questions from back benchers. Members know the form by now. If they are kept short, we will get them all in—although I am not confident that we will be able to do so, as there are quite a few.
The cabinet secretary will recognise that safety and security at the INEOS site in Grangemouth is of great importance to residents in the local area. He will be aware that the central Scotland strategic co-ordinating group has been working with INEOS to address those issues. Will he ensure that the Government's officials continue to work closely with the co-ordinating group and that, if local services need additional specific support from central Government, that will be made available at the earliest opportunity?
We took the decision at the end of last week to activate the strategic co-ordinating groups to ensure that preparations could be undertaken in different parts of the country. Those groups are considering any possible implications for supply at the local level. The Government has been in regular touch with the groups, and we will continue that dialogue. Close co-operation between the Government and the strategic co-ordinating groups is essential to ensure that we properly address any issues that arise.
INEOS has singled out workers at Grangemouth with this attack on their pension rights. I do not want the workers at Runcorn and elsewhere to get the same treatment. Does the minister agree that Grangemouth workers have, grossly unfairly and against their wishes, been pushed into the front line of a wider battle in defence of pension rights? Will the Government stand up for Scottish workers and ensure that they have the same pension rights as English workers in the same company?
As my colleagues in the United Kingdom Labour Government acknowledge, this is a private dispute between INEOS and Unite. It is for those two parties to resolve their pensions issues. The Government has—[Interruption.]
Order.
The Government has offered constructive intervention to try to bring the parties together by arranging for the president of the Faculty of Actuaries, one of Scotland's most distinguished pensions experts, to provide advice to try to resolve some of the issues. The trade unions and the management are best placed to resolve those issues through negotiation and dialogue.
I thank the cabinet secretary for his statement and for the effort that he and others in the Scottish Government have put in to bring Unite and INEOS together. Will he say a few words about the operation of Scotland's transport services and reassure residents of Scotland's islands that, as Caledonian MacBrayne has made clear, ferry services will not be affected by the strike action?
In my statement, I made it clear that the Government will take steps to ensure that the interests of public transport are protected, by making arrangements to ensure that public transport is able to operate effectively with adequate fuel supplies. We are in regular contact with the various transport companies in Scotland to make them aware of the Government's actions and to understand the challenges that they face, and we will continue that dialogue. On Caledonian MacBrayne, island services are essential to provide life-line services to all the Scottish islands, and the Government will work closely with ferry service providers to ensure that there are adequate fuel supplies to enable those services to continue.
I declare an interest as a member of Unite.
As a former official with Unite, I spent some time working in the INEOS chemical plant at Grangemouth. I always found the quality of the industrial relations there to be high, so I must ask: what has happened over the past few years to cause a sudden change? The cabinet secretary assured Parliament that he would liaise with the UK Government, INEOS and BP. Will he also ensure that a clear line of communication exists between the Scottish Government and Unite?
I assure Mr Park that we will do exactly that. The Cabinet Secretary for Justice and I met a group of Unite officials on Sunday; I spoke to Unite officials on Monday morning; and the First Minister spoke to Unite officials this morning. There are clearly established lines of communication, which will continue.
What steps is the Government taking to encourage people, where possible, to switch to public transport in the short term to ease some of the demand for fuel on the forecourts?
Quite clearly, I am using the opportunity offered by this statement to encourage members of the public to do that. Ministers will continue to send out that message to people in Scotland. If more people use public transport, it will certainly help us to ensure that the economy and public services keep operating.
The cabinet secretary wisely recommended that the general public should make the minimum use of fuel and should not change their travel plans. What travel restrictions will those wise words place on members of the Government and Government officials?
Ministers will endeavour to use public transport to deliver the Government's objectives, whenever that is practical and possible. I dare say that we will reconsider our diary commitments to see whether, if they cannot be undertaken using public transport, particular commitments are absolutely required. We will encourage our officials to do the same.
I will pursue the public transport point. Will the minister give an absolute guarantee that, contrary to the suggestion of Lothian Buses, BP was given no instruction to deprioritise fuel supplies for public transport and to prioritise forecourts? If any such instruction was made, by whom was it made and when was it overturned?
Does the minister agree that this short-term crisis reinforces the long-term need to break the dependency on oil? What is the Government doing about that long-term need?
Any instruction on the supply to public transport could not be issued by the Scottish Government, because we do not have the power to issue such a direction. The United Kingdom Government would have to issue it and it was not issued. The position in respect of Lothian Buses is as I explained in my answer to Tavish Scott.
Mr Harvie talks about the need to change the long-term trend and to encourage more use of public transport. That is the Government's strategy and approach and we will encourage such behaviour. Public transport user numbers are rising and ministers will continue to encourage such a trend.
Many businesses and industries in the Highlands and Islands rely heavily on fuel. That applies particularly to our hauliers, who already face difficulties from high tax and rising prices. I welcome the reassurance from the cabinet secretary about fuel supplies, but will he comment specifically on the supply of diesel, which is important to our haulage industry?
Ministers will be in contact with the fuel companies, as we have been in the past few days, to ensure that we have an adequate fuel supply in all parts of the country. That is important for the haulage sector. Our officials are in touch with the Road Haulage Association to ensure that we are fully aware of concerns among hauliers, and ministers will ensure that that information is fed properly into the process of discussion with the UK Government and oil companies, so that any action that is needed can be taken.
For once, I agree with the cabinet secretary: there has been confusion about the supply of fuel to Lothian Buses, as BP claims that it was directed to deliver fuel to forecourts instead of the bus company. Will he confirm that the UK Government has taken no powers to direct anyone in the dispute? Will he also confirm—
Briefly, please.
Will the cabinet secretary also confirm that the help that the UK Government has promised and the co-operation between the Executive and the UK Government show that devolution can work well if there is good will on both sides?
Thank you.
That also proves the union's value.
How well some individuals can rise to the challenges that we face takes my breath away—my goodness.
George Foulkes's first point was absolutely right. United Kingdom ministers have not taken the powers to direct in any way. I spoke last night with Malcolm Wicks, the Minister for Energy, and the First Minister spoke this morning with John Hutton, the Secretary of State for Business, Enterprise and Regulatory Reform. I can be no clearer than saying that in neither of those conversations did the secretary of state or the minister suggest any necessity in the foreseeable future to contemplate the use of those powers. We agree with that assessment. We are in close dialogue to address the issues.
The Government works closely and carefully with the UK Government on issues that matter to the people of Scotland. At all times in those discussions we will continue to assert the Scottish interest robustly.
The cabinet secretary will know that employment at the Grangemouth site contributes significantly to the central Scotland economy. Will he confirm that the Government is committed to the Grangemouth area's continued success and that it will support continued talks between the two sides to reach a resolution that ensures that workers are not disadvantaged?
I agree with Jamie Hepburn. It is important that there is discussion to ensure that the dispute is resolved and that the wider process of investing to strengthen the Grangemouth plant, which is critical to the Scottish economy, is taken forward effectively.
I can only apologise to the three members whom I was unable to call.