Ineos, the chemical manufacturing company founded by billionaire Sir Jim Ratcliffe, has announced the mothballing of three key plants in Hull, citing “ridiculously high” gas prices in the United Kingdom as the primary reason. The decision affects 245 direct jobs at the Saltend Chemicals Park facility and threatens up to 4,000 positions across the wider Humberside supply chain. The affected plants produce acetyls, essential components used in products ranging from pharmaceuticals and cosmetics to building materials and military explosives.
Ratcliffe has sharply criticized the UK government’s energy policy, accusing it of “economic vandalism on an industrial scale” that is damaging British manufacturing competitiveness. He highlighted the disparity in gas prices, noting UK rates are approximately 12 times higher than those in the United States and eight times higher than in China. Gas is vital both as an energy source and as a feedstock in chemical production at the Hull sites, making cost competitiveness critical.
The spike in gas prices is partly linked to geopolitical tensions following the closure of the Strait of Hormuz amidst conflicts involving Iran, disrupting global liquefied natural gas (LNG) supplies. Britain’s reliance on imports has intensified amidst declining domestic production, in contrast to the US’s abundant gas reserves and status as a major exporter. UK gas prices recently reached around 200 pence per therm, a four-year high, compared to the US benchmark of approximately 21 pence per therm.
Ratcliffe warned that the closure risks not only economic damage but also environmental consequences, as imported chemical products from the US and China have significantly higher carbon footprints—twice and eight times greater, respectively—than those manufactured in the more efficient Hull plants. He attributed rising costs and competitiveness challenges to government policies, including a reluctance to expand North Sea oil and gas extraction and the continuation of windfall taxes on domestic energy producers. Ratcliffe has also linked the broader economic decline to high taxes, immigration, and welfare issues under Labour’s leadership.
Opposition politicians echoed Ratcliffe’s concerns, urging the government to prioritize affordable energy to sustain manufacturing and prevent further job losses. Tory Shadow Energy Secretary Andrew Bowie criticized what he described as Labour’s “Net Zero obsession,” asserting it elevates costs, drives investment overseas, and jeopardizes thousands of British jobs.
The UK government responded by emphasizing support for the chemicals sector, citing a £350 million co-investment fund for strategically important producers alongside trade measures to counter foreign import dumping. A spokesperson reaffirmed the government’s commitment to sustaining the industry despite challenging international market conditions.
Independent analysis noted that while Ratcliffe’s comments carry political weight, attributing the current energy crisis solely to domestic policy overlooks broader global factors, including supply disruptions caused by geopolitical conflicts and market dynamics. The deindustrialization of the UK’s energy-intensive sectors has been a long-term trend predating recent policy shifts, though current high energy prices risk undermining regional growth ambitions and innovation in sectors such as advanced manufacturing, defence, and artificial intelligence.
Ineos has temporarily ceased production at two plants, with a third scheduled to pause operations imminently. The company has indicated that it may resume activity if UK gas prices moderate or if it is able to procure cheaper LNG imports from the United States. The firm’s move adds to growing concerns about the sustainability of Britain's chemical manufacturing base amid fluctuating global energy markets and domestic policy debates.