Grangemouth analysis: Nationalising fraught with problems

THE Scottish Government’s recent decision to bring Prestwick airport into public ownership has raised the question of why the same could not be done to save Grangemouth.

'Grangemouth is complicated by the fact that energy policy is reserved to Westminster'. Picture: Ian Rutherford

Grangemouth, however, is a far bigger proposition and is complicated by the fact that energy policy is reserved to Westminster.

Unlike the UK government, the Scottish Government has indicated that it is prepared to consider a move into state ownership.

Despite calls for that to happen from unions and those of a left-wing persuasion, most experts believe that such a move would be very much a last resort. Perhaps the biggest challenge to be overcome when examining the practicalities of nationalising a plant such as Grangemouth would be finding the expertise to run it.

Such specialised skills are not to be found within the ranks of either the Scottish or UK governments.

Presumably, an operator would have to be found. There are questions over how that would be financed by a government currently battling an economic downturn. More cash would have to be found for investment from budgets which are already squeezed.

The Scottish Government will have commissioned studies into Prestwick before the airport was taken into public ownership and doubtless similar exercises are being undertaken by civil servants when it comes to Grangemouth.

Taking this step without any obvious expertise and in a difficult market means that any move to nationalise, experts believe, would be a last throw of the dice to keep the plant open. That is not to say that economists believe it is impossible, just problematic.

A more convincing argument can be made for using government funds to modernise the plant in the hope that, in partnership with the private sector, Scottish jobs can be saved and uncertainties surrounding oil and gas supplies can be mitigated.