The (Un)Just Transition

Last November, it was announced that Scotland's last crude oil refinery was to shut down by 2025. Petroineos – a joint venture between Jim Ratcliffe's Ineos and the Chinese state-owned oil company PetroChina – told their workforce that Grangemouth will "soon be unable to compete effectively" with overseas rivals. Their decision was simple: Profits would be greater if the business moved abroad. 500 jobs were immediately put at risk, with employment prospects for future generations disappearing overnight. The local economy, dependent on one of Scotland's few remaining industrial bases, was thrown into uncertainty. This pattern is all too familiar. It was repeated in January as Tata delivered devastating news to Port Talbot's workers in South Wales.

Grangemouth's imminent closure is further evidence that, while politicians waste words, Scotland's just transition is in peril. The security of Petroineos' employees and their community has been left to the whim of multinational corporations. Decision-makers are powerless to influence the decisions of Britain's richest man, who'd sooner confirm his stake in Manchester United than a future for his workers. The closure of Grangemouth, now within a 'Green Freeport' zone, demands an urgent examination of Scotland's industrial strategy, but also of our democracy. At the crux of this issue is a question politicians of all parties are determined to ignore: Who controls our economy?

In January, Scotland's First Minister appeared on Rory Stewart and Alistair Cambell's podcast to discuss his Government's industrial strategy. Their conversation was a fitting illustration of the centrist restoration. Three different political parties were represented around the table. Still, no listener would have batted an eyelid had what Humza Yousaf said been suggested by Tony Blair's spin doctor or the former Tory MP. Probed on his Government's 'industrial strategy', Yousaf explained he had met with some of 'the biggest investors in the world' during a recent trip to London. He listed BlackRock, JPMorgan, Morgan Stanley, and Barclays. These corporations, he said, 'have an interest in investing in Scotland' because of the opportunity presented by the drive to net zero. Yousaf went on to explain that, at the behest of these investors, his Government was going to have to 'reduce the size and the scale of the public sector.' Grangemouth's closure is in keeping with a broader arrangement that systematically strips power from Scotland's people and communities under the guise of a just transition.

According to the Scottish Government, the First Minister's trip, organised in partnership with the City of London Corporation, was to showcase 'Scotland's world-class financial services'. The visit ensured Scotland' benefits' from the City's efforts to make Britain a 'global center for nature finance, and targets other shared priority areas including green and sustainable finance.' This reflects just how shallow the SNP's vision for Scottish 'independence' has become. Always eager to condemn 'London rule', their protests do not extend to the centralisation of economic power in the capital — in fact, they are content to piggyback on it. Sovereignty is understood in the narrowest possible terms. In the Scottish Government's estimations, the job of political actors is not to intervene in the economy but to operate within the confines set by capital. It's often said that politicians aren't moving fast enough on climate policy. In Scotland, the truth, however, is they are moving quickly, but only to 'future-proof' the economy for capital, informed by a political perspective that states they have no other choice.

In January 2023, the Scottish Government licensed Scotland's first 'Green Freeports', one in Inverness & the Cromarty Firth and the other on the Firth of Forth. Some 40% of Scotland's industrial emissions are generated within the latter's zone (which includes Grangemouth), highlighting the territory's importance to the Scottish economy. These 'free enterprise zones' will provide low-tax, deregulated playgrounds for capital, offering multinational corporations an opportunity to slash workers' wages, terms, and conditions. For Petroineos, the tax breaks on imports that come with freeport status will no doubt have influenced their decision to close Grangemouth's refinery and transform the site into an oil import terminal.

The Scottish Government's Freeport announcement was followed six months later by the news that Glasgow and Aberdeen would become 'Scottish Investment Zones', entitling each area to 'tax reliefs and other incentives' worth up to £80 million. Having rolled over for big business, the Scottish Government has ensured swathes of Scotland – and the most significant parts of the Scottish economy – are now under special measures. The Scottish Government is no innocent observer in Grangemouth's closure, having aided and abetted the behaviour of Petroineos by consistently relaxing regulations.

Fourteen years of austerity – and almost half a century of neoliberalism – has left the Government a shell of its former self. This decades-long full frontal assault on state capacity has hollowed out institutions like the civil service, giving way to NGOs, charities, and the private sector to fill the gap. A general retreat from politics is the consequence. With a much-diminished state, politics became siloed - the realm of middle managers rather than those with conflicting visions for society's future. The case of the Scottish Government is no different. Incapable of developing a just transition themselves, less because of constitutional confines and more on account of a lack of political will, the task is being farmed out to the private sector. Petroineos' decision to pull the plug at Grangemouth is a stark reminder of the consequences of this method.

Unfortunately, an incoming Labour government offers little to no change in approach. When Labour ditched their £28bn Green Prosperity plan earlier this month, those defending Starmer's decision suggested the electorate would only notice "what Labour's stance was when we get to the general election campaign." This could not be further from the truth. Thousands of workers across Britain — most of all those in Grangemouth and Port Talbot — will be keeping a keen eye on Labour's industrial policy. For Labour's front bench, the economy is siloed from politics.

Consequently, the "fiscal rules" — Rachel Reeves's codeword for the position of the IMF and Bank of England — must go unquestioned. On this trajectory, Labour's ascendancy will neither renew democracy nor kickstart a worker-led just transition but default to confining power to the hands of the few. Starmer has made no secret of his disdain for the social forces and broader class conflict required to do otherwise.

The climate crisis necessitates that Grangemouth's oil refinery had to close at some point. This is an inescapable fact. However, Scotland will still be fossil fuel dependent in 2025, Petroineos' deadline for ceasing operations. The country will be left as an oil producer without a domestic refinery and, consequently, reliant on imports. Illogical short-termism such as this plagues our economy because of precisely the political dynamic outlined above. Long-term thinking – or meaningful engagement with workers and their trade unions – simply does not happen when the transition is outsourced to private sector actors whose primary obligation is to their shareholders.

A just transition worthy of the name will require democratisation of the economy, long-term industrial strategy, and detailed diversification plans for sites like Grangemouth. First, however, we must re-politicise the economy in the electorate's minds, breaking with the malaise that has captured mainstream politics. As long as politicians are allowed to bow to the 'fiscal rules' as an excuse for their stunted ambitions, we are losing the fight for a fair transition. We know all too well that a transition entrusted to the free market will leave power and profit centralised in the hands of the ruling class.

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Coll McCail is a Scottish activist and writer.

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All thoughts and views are solely of the author