Britain loses another industry after Starmer refuses to step in
On Friday, the Government announced it would not give any funding to the Vivergo Fuels business in Hull, which is losing £3m a month.
Around 150 workers are expected to lose their jobs at the factory, which is expected to close by Sept 13 and is one of only two domestic bioethanol production sites.
The industry had hoped for a bailout after Sir Keir Starmer's trade deal with Donald Trump, which will allow the US to supply Britain with 1.4bn litres of duty free ethanol.
But on Friday afternoon, a government spokesman said: 'This Government will always take decisions in the national interest.
'That's why we negotiated a landmark deal with the US which protected hundreds of thousands of jobs in sectors like auto and aerospace.'
It said it had worked to understand the challenges faced by both Vivergo and the Ensus bioethanol plant in Redcar on Teesside, which has also been refused a bailout.
But the spokesman said the Government would not offer any direct funding 'as it would not provide value for the taxpayer or solve the long-term problems the industry faces'.
They continued: 'We recognise this is a difficult time for the workers and their families and we will work with trade unions, local partners and the companies to support them through this process.
'We also continue to work up proposals that ensure the resilience of our CO2 supply in the long term in consultation with the sector.'
Unite, Labour's biggest trade union backer, heavily criticised the Government for refusing to bail out the bioethanol industry.
Sharon Graham, general secretary, said: 'This is a short-sighted decision that totally disregards the benefits the domestic bioethanol sector will bring to jobs and energy security.
'Once again, the Government's total lack of a plan to support oil and gas workers as the industry transitions is glaring.'
The union noted that bioethanol was a key component of sustainable aviation fuel, which is expected to be in huge demand in the coming years.
The closure of the Vivergo plant will also represent a fresh blow to thousands of British farmers who supply grain to the site.
A record number of farms are already closing for good after Rachel Reeves's changes to agricultural property relief made the future of thousands of rural businesses unviable.
As well as the collapse of a major domestic market, the closure will risk pushing previously profitable farms into making a loss.
A spokesman for Associated British Foods (ABF), the owner of Vivergo, said: 'It is deeply regrettable that the Government has chosen not to support a key national asset.
'We have been fighting for months to keep this plant open. We initiated and led talks with the Government in good faith.
'We presented a clear plan to restore Vivergo to profitability within two years under policy levers already aligned with the Government's own green industrial strategy.'
ABF accused the Government of having 'thrown away billions in potential growth' and the chance to lead the world in bioethanol.
'The loss of Vivergo will be felt most acutely by our dedicated workforce and their families and by the thousands whose livelihoods depend on our supply chain, from farmers to hauliers and engineers.'
During its talks with Jonathan Reynolds, the Business Secretary, ABF had demanded ministers step in to cover 'short-term funding of Vivergo's losses' as well as striking a longer-term deal to put its plant on a profitable footing again.
Investment from Vivergo is thought to support around 1,220 farming jobs across the north-east of England.
The UK imports around 45 per cent of its CO2 and sources have previously warned of a supply crisis without a domestic bioethanol industry if foreign sources were disrupted.
In June, The Telegraph revealed a leaked memo by industry leaders that said the bioethanol sector was a 'critical component' of British food security and energy resilience.
The memo warned: 'The closure of Vivergo would damage farm incomes, increase import dependency and undermine the Government's strategic goals across multiple departments.'
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