In a major boost for Scottish industry, the UK Government has intervened with a substantial funding package to secure the future of the nation's largest chemical plant. More than £120 million in state support will keep the Ineos Olefins & Polymers facility at Grangemouth operational, safeguarding approximately 500 jobs.
A Strategic Partnership for National Infrastructure
The deal, announced on Wednesday 17 December 2025, sees the government partner with chemicals giant Ineos in a combined investment of around £150 million into the petrochemicals site. The complex has been deemed "strategically important" for UK national infrastructure. Prime Minister Sir Keir Starmer framed the move as a direct investment in "good jobs, stronger communities and a modern economy."
Ineos founder Sir Jim Ratcliffe, who has previously criticised Labour's energy policies, welcomed the funding, stating it would bolster UK manufacturing. The agreement includes strict taxpayer safeguards: the government funding can only be used to improve the site, and the state will receive a share in any future profits generated.
Securing Jobs After a Period of Uncertainty
This intervention follows a period of instability for the Grangemouth complex. Ineos had shut down its ethanol plant and oil refinery at the site earlier in the year, citing high operational costs. The company revealed it had spent over £100 million in the last year alone to maintain operations at the O&P plant before the government stepped in.
Business Secretary Peter Kyle emphasised the package's role in providing "certainty to workers and the supply chain." The sentiment was echoed by Scottish Secretary Douglas Alexander, who told BBC Radio Scotland the deal guaranteed "critical production of critical chemicals" and represented good value for taxpayers.
Reactions and Calls for a Broader Strategy
The announcement was met with relief and calls for further action. Scottish Government Minister Gillian Martin welcomed the news, noting her administration had long called for UK intervention on a scale seen elsewhere. She highlighted a separate £8.5 million Scottish Government investment in the Grangemouth cluster announced the previous week.
Unite union General Secretary Sharon Graham praised the step but urged it must not be a "one-off." She called for a comprehensive, joined-up industrial strategy with investment to drive a "workers' transition," signalling that unions will continue to push for strategic backing of core British industries.
The deal marks a significant moment for UK industrial policy, demonstrating direct government action to protect a key manufacturing asset and its workforce in the face of economic pressures.
