Would independence have protected Grangemouth?

Today has been a comprehensive defeat for the employees of Grangemouth, a site through which about 10% of Scotland’s GDP (1% of the UK) passes, and which itself contributes 1.2% of Scottish GDP*. Unite the union have agreed to wage cuts, pension cuts, and a three year no-strike guarantee. That will place downward pressure on wages across Scotland.

This is the same union that won a strike over pensions just two years ago. What changed?


That the union were “Led into an ambush” seems about right. No one can blame the workers and their shop stewards for not wanting to lose their jobs, or to fight a protracted strike over Christmas, with no certainty if they would ever return to work. They were forced to ask themselves whether Ineos was serious about liquidation – that is, sacking the workers and selling off the assets.

Ineos would have happily fought a long strike or liquidated the plant, using its deep pockets to outlast the workers if necessary. A company like Ineos probably can’t be beaten without international trade unions. Their interest was not so much in cutting wages right now, but in breaking the confidence of the workers and their union.

A combination of economic necessity and public pressure put nationalisation on the table in Scotland but not at Westminster. The Scottish government played down the idea of nationalisation, but never absolutely ruled it out. The Westminster government described the situation as “regrettable” and took little action. The Scottish government is not allowed to borrow money – it has to balance its books each year.

That makes it very difficult, perhaps impossible, to nationalise the plant, which is expected to be loss-making over the short term and highly profitable after 2022. Ineos’ cooperation would have been necessary to continue running the plant, and the Scottish government would have been forced to buy the physical plant out of liquidation and rehire the staff. An independent country would be able to compulsory-purchase the whole plant, for “appropriate compensation”.

With the full powers of independence, nationalisation would have been at least a plausible outcome, which would have tremendously strengthened that hand of the trade union. Perhaps under independence, we wouldn’t be staring defeat in the face today.

* I have been unable to identify the primary sources for these figures, but they seem to be generally accepted in the press.

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