A union representing workers at the historic Harland & Wolff shipyard in Belfast has written to the chancellor, Jeremy Hunt, warning that doubts over financial support for the company are putting jobs in jeopardy.
The GMB said workers were concerned by claims that a £200m export guarantee could be blocked by the Treasury, despite having the backing of the ministries for defence, business and trade, and Northern Ireland.
The news follows reports that the chancellor is considering blocking the controversial £200m financial support package for the company, which also owns facilities in Devon and Scotland as well as the Belfast shipyard, which is famous for being the place where the doomed liner Titanic was built.
The row has cast doubts over the government’s commitment to spreading contracts for navy ships across the UK under its national shipbuilding strategy, and the suggestion by the defence secretary, Grant Shapps, in a speech on Tuesday that the UK had entered a “golden age of shipbuilding”.
Harland & Wolff is part of a consortium with Spain’s state-owned Navantia that was awarded a £1.6bn contract to build “fleet solid support ships” – auxiliary vessels designed to transport ammunition and other provisions to Royal Navy warships.
In the letter to Hunt, the GMB’s general secretary, Gary Smith, wrote: “The workforce at Harland & Wolff are maximising UK manufactured content that supports growth and security of UK capabilities, in areas that need these jobs and apprenticeships – Northern Ireland, Devon, the Outer Hebrides and Fife.
“All of this is being placed in jeopardy by the time it is taking to get a [UK Export Finance] guarantee to allow the business to refinance.”
Harland & Wolff has applied for a £200m guarantee from UK Export Finance, a government body. The guarantee would allow it to borrow to pay off expensive debts owed to Riverstone Credit Partners, a US investor. However, the Treasury is reportedly considering vetoing the support, which would underwrite £200m in loans to a company whose stock market value this week slumped to £17m.
The Harland & Wolff yard is well known in Belfast because of its two yellow cranes – Samson and Goliath – that dominate the city’s skyline. However, the London-headquartered company bearing its name only bought the famous shipyard out of administration in 2019, before adopting the historic brand in 2021.
The company has not made a profit since shifting focus from developing a gas storage project to taking over the shipyard. It lost nearly £100m in 2021 and 2022.
The award of the £1.6bn contract to Harland & Wolff and Navantia has proved controversial, given the UK company’s relatively small size and limited experience.
Kevan Jones, Labour MP for North Durham, said he was concerned that the Royal Navy’s fleet solid support ships would have to be built entirely at Navantia’s Cádiz yard if Harland & Wolff were to fail. That would undermine the British government’s hopes to keep jobs and expertise in the UK.
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“Awarding this contract in the first place went against the interest of the national shipbuilding strategy,” Jones said. “Questions need to be asked why – knowing what we know now about Harland & Wolff – they were given the multibillion-pound contract in the first place.”
Gavin Robinson, the interim leader of the Democratic Unionist party and the MP for the Belfast East constituency, which contains the shipyard, said on Wednesday that reports that the company could collapse were “wide of the mark” and that there was “strong support for the yard in London”.
Ben Wallace, who was defence secretary until last summer, told the Times, which first reported the suggestion the £200m support package could be withheld, that the Treasury had been “hostile” to the national shipbuilding strategy and that it had “continued to hamper efforts to put the UK shipbuilding back on track”.
Harland & Wolff said on Wednesday it was “comfortable with progress on what is a complex and large transaction for all parties involved”, in a statement to the stock market.
A government spokesperson said: “We continue to engage with Harland & Wolff on the export development guarantee. Due to commercial sensitivities, it would not be appropriate to comment further until the outcome of the process is confirmed. No final decisions on the provision of support have been made.”
Harland & Wolff did not respond to requests for comment. Navantia declined to comment.