Grangemouth dispute was UK's costliest ever

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THE shutdown of the Grangemouth oil refinery is estimated to have been the costliest industrial dispute in British history.

Economic experts have claimed the two-day strike which last week threatened to cripple the country cost about 600m.

Calculated at an hourly cost to both the industry and the economy as a whole, the cost would far exceed that of other major industrial disputes including the miners' strike and the Wapping standoff.

The strike at the site run by energy giant Ineos involved around 1,200 members of the Unite union.

Although the walkout over pensions only lasted 48 hours, safety precautions meant the plant had to be shut down, and even after the dispute ended it was not fully operational for five days.

One source who has been closely involved with negotiations between the two sides said the figures involved were "simply astronomical".

He also revealed that senior Government figures were closely involved in ensuring the two sides entered negotiations to end the dispute as quickly as possible.

Officials at UK Oil and Gas, the body which represents the industry, said the dispute cost it around 39m a day. The strike also meant the Forties pipeline had to close, through which crude oil from around 70 North Sea fields is delivered to a processing plant at Kinneil near Grangemouth.

But there were other factors which ensured the bill for the industrial action soared even higher.

The insider said: "When you add that to the fact the shutdown of the pipeline means that around 30% of the usual gas supply into the plant did not make it, that adds 20m a day to the bill.

"Then, because of the time it takes to shut down Grangemouth and then start it up again, the offshore industry stands to lose around 300m, whilst the Government itself loses about 170m in tax."

When the cost to Ineos and other oil companies is added the total reaches "around 600m", according to the source.

The source also revealed how Whitehall officials were in contact with both Ineos and Unite union officials to try to ensure an early end to the dispute.

He explained: "Apparently, the Government was itself coming under pressure from the likes of Opec (the body representing the world's top 12 oil-producing nations] to make sure the action did not escalate."