Ineos to Mothball UK Plants Citing High Gas Prices, Criticizes Labour Policy

Billionaire industrialist Jim Ratcliffe has accused the Labour party of "economic vandalism on an industrial scale" after high natural gas prices prompted his company, Ineos, to mothball three vital chemical plants in the UK. Ineos stated that the decision, driven by "ridiculously high" domestic gas prices, could affect up to 4,000 jobs at the sites in Hull and across the wider supply chain.

The affected plants produce essential raw materials for a variety of European industries, including pharmaceuticals, clothing, cosmetics, detergents, building materials, and military explosives. Ratcliffe highlighted that gas prices in the UK are currently 12 times higher than in the United States and eight times higher than in China, making it impossible for the company to compete.

He further argued that sourcing replacement products from the US would result in twice the carbon footprint, and from China eight times the carbon footprint, compared to materials produced at the more efficient Hull plants. "The UK government’s energy policy is leading to economic vandalism on an industrial scale, exporting jobs to China and the United States and driving up global CO2 emissions at a stroke," Ratcliffe said.

Gas is a critical component for these factories, serving as both an energy source and a key ingredient in the chemical production process. Two of the plants have already ceased operations, with the third slated to go offline in the coming days. Ineos plans to keep the 245 directly employed workers at the Hull plants on the payroll for the time being.

Operations could potentially resume if Ineos secures cheaper liquefied natural gas (LNG) directly from the US or if UK gas prices decrease. This situation follows a previous incident in October when Ineos cut 60 jobs at the same site, citing the impact of "dirt-cheap carbon-heavy" imports from China flooding the market.

Reform deputy leader Richard Tice criticized the move as a "devastating indictment of the failed energy policies that have left British industry on its knees." He urged for policies that would make British energy cheap, secure, and competitive to retain high-skilled manufacturing jobs.

Ratcliffe's comments are part of a broader critique of the UK's direction under Labour. He has previously expressed a loss of confidence in the country's trajectory, citing failures to address welfare and immigration, along with a high tax burden. He has also described the failure to invest further in North Sea oil and gas as "insanity."

Earlier in the month, Ineos chairman Brian Gilvary noted that "years of policy instability" concerning the industry had led to a significant drop in investment. Concurrently, a North Sea business task force called for the scrapping of the windfall tax on oil and gas firms, reporting that 25,000 jobs in the sector have been lost since Labour came into power.