THE Scottish government is planning to use public cash for a “Prestwick-style rescue” to safeguard hundreds of jobs at a troubled northeast fish factory.
About 900 workers at Young’s Seafood plant in Fraserburgh face the axe after the company lost a £100m contract with supermarket giant Sainsbury’s for processing and packaging salmon.
The Scottish government had earlier offered some tentative proposals that could save 250 jobs at the plant but has now said it will “consider all options” to ensure the plant’s future and retain the majority of its workers.
The options include providing the kind of soft loans that Holyrood has advanced to loss-making Prestwick airport, which the Scottish government bought two years ago in a bid to protect jobs, but would not involve Holyrood buying the plant outright.
The move comes after it emerged that the Westminster government has offered £1.3m of taxpayers’ cash to help Young’s develop its plant in Grimsby, Lincolnshire, where it has its headquarters, at the expense of the Fraserburgh facility.
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Business minister Fergus Ewing told The Sunday Times: “The Scottish government has written to Young’s to confirm that we are prepared to match any package of aid that may have been offered [for its Grimsby plant] provided it is legal and complies with state aid rules.”
“We strongly believe there are a number of market opportunities consistent with maintaining a substantial presence in Scotland. These include the Scotland food and drink export plan and the substantial and growing benefits associated with Scottish provenance. We are confident that this will allow the Fraserburgh factory to remain open with a significant workforce,” said Ewing.
Scottish salmon exports are a fast expanding market and grew by £50m last year to reach £500m for the first time.
Sajid Javid, the Westminster business secretary, confirmed to the Scottish government that the UK government had offered to extend northeast Lincolnshire’s regional growth fund programme, which will give Young’s the opportunity to bid for a grant to invest in its Grimsby plant.
Javid said that any funding applied would “be subject to rigorous assessment against state aid and the growth fund’s value for money criteria”.
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Young’s is considering making an application for the funding, but the Scottish government insists the deal breaches European Commission rules which place strict limits on the direct financial support governments can offer to companies.
A spokesman for Young’s Seafood said: “We have received proposals from the Scottish government and other agencies. We are reviewing the details and will discuss this with the appropriate stakeholders as part of the consultation process taking place.”
Lewis Macdonald, Labour MSP for North East Scotland, said: “The government should do all it can. The Scottish salmon export market is profitable and expanding. This factory could be put on the right footing and jobs could be saved with much less money than the SNP has spent on supporting Prestwick airport, which continues to make losses. People in the northeast are bound to wonder why jobs in Fraserburgh seem to matter less.”