Vivergo Fuels closure in Hull spells trouble for the Government - Ismail Mulla

While businesses come and go all the time, it’s not often that they are able to point the finger directly at Government policy for them failing.

Labour has been keen on patting itself on the back over its trade deal with the US. It says the deal protected hundreds of thousands of jobs in sectors like auto and aerospace.

In reality it was a bully getting his way. Putting Britain under pressure to accept concessions that have done damage to the bioethanol industry.

There’s the old saying that two is a trend. Well that certainly is the case in the nascent British bioethanol industry with not only Vivergo but also the Ensus plant on Teesside sounding alarm bells.

The end of the 19 per cent tariff on American bioethanol imports as part of the recent UK-US trade deal will clearly do damage. The whole industry has argued the trade deal, coupled with regulatory constraints, has made it impossible to compete with heavily subsidised American products.

If the Government never intended to support Vivergo after its trade deal with Donald Trump, then why was it insisting that the Vivergo’s parent company Associated British Foods (ABF) had jumped the gun with its announcement several weeks ago that it would close?

Businesses have to plan months in advance and it’s inevitable that if a venture becomes unviable then it will be shut down, regardless of how big a parent company is. This is not me going into bat for a multinational conglomerate, it’s just a statement of fact as to how they operate.

Ben Hackett, managing director of Vivergo Fuels, said: “The Government’s failure to back Vivergo has forced us to cease operations and move to closure immediately.

“This is a flagrant act of economic self-harm that will have far-reaching consequences.

“This is a massive blow to Hull and the Humber.”

It is a cynical political calculation from the Government. However what it has done is opened the door for Reform UK. Net zero initiatives will be met with charges of hypocrisy.

Vivergo recently signed a £1.25bn memorandum of understanding with Meld Energy to anchor a “world-class” sustainable aviation fuel facility at the site. Once again we’ve opened the door to other countries to take the charge.

And let's not forget that this is about more than just the jobs that will be lost at Vivergo. There is a much wider impact from this closure with farmers once again set to suffer as a result of Government policy.

Perhaps the Government is looking to write a handbook entitled ‘How to lose votes and alienate farmers’.

Vivergo can produce up to 420 million litres of bioethanol from wheat sourced from thousands of UK farms.

The National Farmers Union (NFU) described the imminent closure of the Vivergo plant as a “huge blow”.

Jamie Burrows, NFU combinable crops board chairman, said: “Not only is it terrible news for those hundreds of workers who will lose their jobs but also for the thousands of people whose livelihoods depend on this supply chain – that includes local farmers who have lost a vital market for their product.”

Nigel Farage’s party will now be able to tap into further resentment at the state of things in this part of the world. You’ve got to remember Reform won the mayoral elections earlier this year in Hull and East Yorkshire.

As Mr Hackett says: “This decision by ministers will have a huge impact on our region and the thousands of livelihoods in the supply chain that rely on Vivergo, from farmers to hauliers and engineers.”

This is what fuels the fire of populism and will help Reform come election time.

It is also a reminder to the Prime Minister that while he is off galavanting on diplomatic missions abroad, the question that needs to be asked is how policy is delivering for communities here. And allowing Vivergo to fail will have a real impact in communities in this part of the world. Those images of him holding up pieces of paper with Donald Trump may well come back to haunt Sir Keir Starmer.