The Lindsey oil refinery — one of the last five in the UK — is winding down after nearly 60 years. Photo / Betty Laura Zapata, Bloomberg via The Washington Post
In Scunthorpe, 63-year-old Martin Foster has spent nearly five decades in the steelworks, watching the industry that sustained his family for generations slowly wither.
Here, the steelworks and the town are inseparable. A statue in the centre depicts a man and woman leaving the plant after a shift – a reminder of when steel was the lifeblood of the community.
Now, even the remaining jobs are at risk after the European Union announced higher tariffs on imported steel, a move that could close sites like British Steel.
“It’s the same in every town where there’s a large private employer like British Steel – you take that away, and local businesses, particularly smaller ones will struggle to survive,” Foster said.
Claire Kilty, 43, who runs Kilty Cuts hairdressers on Scunthorpe’s high street, feels the ripple effect immediately.
“Our bookings will go from being completely rammed to being dead. Because when the husbands get paid, their wives and children will come in and get their hair done,” she said.
The tariffs are a result of Europe’s trade wars with the United States, but the bloc remains the United Kingdom’s biggest steel export market – making the fallout especially harsh.
The industry has already been gutted by cheap Chinese imports, leaving locals without jobs. It’s a hardship repeated across the region.
A 30-minute drive away, Dave Payne and his family had a stable existence producing fuel for cars, trucks and planes at the Lindsey oil refinery.
Despite periodic turbulence at the plant, the job offered enough security for the 49-year-old to serve as a rescue volunteer patrolling the coast along the Humber estuary.
But the refinery – one of the last five in the UK – is winding down after nearly 60 years, and Dave Payne and his 21-year-old son Will are likely to lose their jobs at the end of January.
The refinery’s closure, and that of a nearby bioethanol plant, were among a series of shutdowns in the Humber region, a once-thriving industrial hub that originally rose to prominence as a whaling port.
While reasons for the cutbacks are varied – and in the refinery’s case include allegations of financial irregularities – the common thread is fading industrial competitiveness, because of things like high energy costs compared to rivals like China, that politicians have struggled to address.
The headwinds might get stiffer. Chancellor of the Exchequer Rachel Reeves is expected to raise taxes to shore up the country’s finances, when she presents her new Budget in November.
The combination has hit the east coast hard and turned it into ground zero for the latest stage of Britain’s industrial decay – and its looming political fallout.
The Lindsey site is situated in a Conservative constituency, with the surrounding seats in Humberside split between the Tories and Labour.
Dave Payne and many of his colleagues are frustrated by what they see as indifference from the major parties and feel pushed toward alternatives like Nigel Farage’s Reform UK, the rebrand of the Brexit party.
“It feels like Labour used to stand for the common man, for the workers – and it just feels like they are as far away now as they have ever been,” Payne said. “Reform comes up – and we don’t necessarily back them – but where else do we go?”
At the refinery, the job cuts were announced early in the morning as some were coming off overnight shifts. Staff were shuttled into separate rooms. One lot was told employment would end in October. The other would get three more months.
Local services are already suffering. Jess and Steve Gledhill, who run the Pelham Hotel in Immingham near where the refinery is located, have seen bookings from contractors at the plant dry up.
“It’s absolutely devastating,” Steve Gledhill said. “I feel for the families who have mortgages and children, who have lost everything.”
Discontent is evident in the polls. Farage’s populist party is some 10 points ahead of Labour and has nearly doubled the support of the Conservatives.
In an effort to win back working-class voters, Prime Minister Keir Starmer attacked Reform for lacking a plan for the country.
“When was the last time that you heard Nigel Farage say anything positive about Britain’s future?” Starmer said at a Labour party conference in Liverpool last week. “He can’t. He doesn’t like Britain. He doesn’t believe in Britain.”
Keeping energy prices for businesses and consumers affordable is one of the key problems.
Last year, the UK got more than half its electricity from renewable sources for the first time, but costs remain high because of the role that natural gas plays in setting prices.
The consequence is that Britain’s medium-sized manufacturers face the highest average electricity prices compared to main EU rivals.
The Labour Government relaunched an industrial strategy in July after it was ditched by the Conservative Government under Boris Johnson. The plan aims to cut power prices for energy-intensive industries by as much as 25% and is flanked by a programme to encourage investment in Humber and across the UK, according to Starmer’s Government.
“We’re standing by companies in the chemicals, refining and bioethanol industries to help them remain viable and continue to support high-quality manufacturing jobs across the country,” a government spokesperson said in a statement to Bloomberg.
The plan also includes accelerating grid connections for new projects and boosting exports, but the programme to bring down energy costs isn’t due to be in place before 2027.
“Some companies just can’t wait that long,” said Verity Davidge, director of policy at Make UK, the manufacturing trade body. After the initial optimism generated by the industrial strategy, the mood has shifted. “Costs are simply crushing businesses,” she said.
The hurdles from exiting the EU in 2020 have become part of Britain’s structural impediments.
Brexit increased barriers and the cost of doing business with the bloc, Britain’s largest trading partner. It also made the UK less attractive for investment.
Drugmaker AstraZeneca paused a £200 million ($466m) expansion of its Cambridge headquarters, having already backed out of building a vaccines hub outside of Liverpool.
US rival Merck and Co scrapped plans for a £1 billion London research hub. Taking issue with the process for selling drugs to the National Health Service, some of the world’s biggest pharma companies have said the UK is becoming “uninvestible”.
With companies already dealing with technology shifts from digitalisation and climate change, Brexit had “a long-term scarring effect”, said David Bailey, a professor of business economics at the University of Birmingham.
“That put UK manufacturing on the back foot and playing catch up on the investment front.”
After Labour took control of the Government last year, it vowed to revive growth.
The Humber was earmarked for investment in a project to capture and store carbon-dioxide emissions. There are also plans to establish a clean industrial hub in the region, though major government funding hasn’t yet materialised.
Starmer’s trade deal with the White House was a blow for some businesses in the region.
As part of the agreement, Britain’s bioethanol industry was effectively sacrificed to secure concessions for British cars. More recently, talks aimed at eliminating tariffs on British steel were shelved – despite the Government treating Trump to royal pomp and circumstance.
What’s left of the country’s supplies of bioethanol, a fuel additive to lower vehicle emissions, is now at risk of vanishing. Ensus, which runs Britain’s last remaining plant in Redcar – about 120km up the coast from the Humber – has warned it will also be forced to close the site without Government support.
“I feel let down,” said George Weston, chief executive officer of Associated British Foods whose Vivergo Fuels business ran the now- closed bioethanol plant in the Humber.
Facing tariff-free imports from the US after Starmer’s pact with the Trump Administration, “the trade deal was the final nail in the coffin” – even if the UK’s tariffs were lower than levies for the EU.
For the Humber region, the bioethanol decision will also impact local farmers, like James Mills, who sold wheat to the plants for processing into fuel.
“The arable industry is in dire need,” said Mills, a third-generation farmer from just outside of York, who farms with his wife and parents. “Unfortunately, our Government has traded it away. I don’t think I’ve seen people as concerned about the future as we are now.”
Even as talks go on to find a solution for the refinery, the Paynes – among the crew staying on until the end of January – are now weighing their options, but finding new jobs in the region won’t be easy.
“It’s going to take a massive wedge out of the local economy,” Dave Payne said.
Sign up to Herald Premium Editor’s Picks, delivered straight to your inbox every Friday. Editor-in-Chief Murray Kirkness picks the week’s best features, interviews and investigations. Sign up for Herald Premium here.