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Business Comment

Mark Leftly: Good news on Grangemouth. But the Government needs to refine its message too


Westminster Outlook When it comes to the Scotland independence referendum, politicians in Westminster don’t learn. And with only two months until the vote, they probably never will.

Danny Alexander, the Liberal Democrat Chief Secretary to the Treasury, yesterday confirmed a £230m government loan guarantee for Ineos, owner of the Grangemouth oil refinery in Scotland, to build Europe’s biggest ethanol tank. Shale gas imported from the US will be used for manufacturing plastic, which will then be exported across the Continent.

This is commonsense: the guarantee will make it easier and cheaper for Ineos to raise money for the tank, which is considered vital if the company is to continue manufacturing petrochemicals at Grangemouth at a time when North Sea oil supplies are declining.

The deal secures thousands of jobs less than a year after Ineos’ chairman, Jim Ratcliffe, successfully indulged in some old-fashioned union-busting, threatening to close Grangemouth if workers didn’t bend to his will. The concessions that employees made to be able to keep on feeding their families included a three-year pay freeze.

The loan guarantee is, then, either a comprehensive endorsement of Mr Ratcliffe’s turnaround plan or his reckless negotiating tactics, largely depending on your political persuasion. Instead, Mr Alexander told us the deal was “fantastic news for Scotland’s economic future”.

Setting aside the feeling that only a politician would so readily praise their own deal, the Inverness MP is probably right. But he didn’t need to use poorly disguised code for “you wouldn’t have got that without the Union”, as it’s obvious that pumping money into Grangemouth will benefit the wider economy.

Mr Alexander should simply let the facts speak for themselves, particularly when Scotland’s First Minister, Alex Salmond, is successfully playing on perceptions that Westminster is arrogant in its dealings north of the border.

Every time the Better Together campaign argues that Scotland is better off economically as part of the UK, the implication, rightly or wrongly, is that it could barely survive on it own.

Similarly, many scoffed when pro-independence campaigners claimed Scotland could leave the UK but keep the bits it likes, such as the currency. But look at it from their point of view: politicians hundreds of miles away are telling them they can’t still have the pound even though it belongs to them too.

Issues like currency and keeping Trident nuclear submarines in Faslane on the Clyde will have to be negotiated in the event of a “Yes” vote for independence, no matter what either side wants to claim will happen.

Mr Alexander and Better Together have not sought to be condescending or mildly passive aggressive, but neither have they been careful enough in their tone or argument. An emotive referendum requires reasons why the UK needs Scotland to stay, not thinly veiled accusations that it can’t do any better on its own.

If Better Together wants the votes of the best-educated people in Europe, it can’t seize on every deal that benefits Scotland as evidence that remaining in the UK is the only option – it isn’t.