Union warns of threat to Harland & Wolff jobs if Treasury vetoes £200m support | Shipping industry

A union representing workers at the historic Harland & Wolff shipyard in Belfast wrote to the chancellor, Jeremy Huntwarning that doubts about financial support for the company put jobs at risk.

The GMB said workers were concerned by claims that a £200m export guarantee could be blocked by the Treasury despite support from the ministries of defence, business and trade, and Northern Ireland.

The news follows reports that the chancellor is considering blocking a controversial £200m bailout package for the company, which also owns facilities in Devon and Scotland as well as Belfast Dockyard which is famous for being where the doomed Titanic was built.

The dispute cast doubt on the government’s commitment to distribution of contracts for naval vessels in the United Kingdom under its national shipbuilding strategy and Defense Secretary Grant Shapps suggested 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 which has been awarded a £1.6 billion contract to build “solid fleet support ships” – auxiliary vessels designed to transport ammunition and other supplies to The Royal Navy battle ships.

In the letter to Hunt, GMB general secretary Gary Smith wrote: “The workforce at Harland & Wolff maximizes UK-made content that supports the growth and security of UK capacity, in areas that need these jobs and Apprenticeships – Northern Ireland, Devon, Outer Hebrides and Fife.

“All this is put in jeopardy by the time it takes to get a [UK Export Finance] a guarantee to allow the business to refinance itself.’

Harland & Wolff applied for a £200m guarantee from UK Export Finance, a government body. The guarantee will allow it to borrow to pay off expensive debts to Riverstone Credit Partners, a US investor. However, the Treasury is reportedly considering vetoing the support, which would have guaranteed £200m in loans to a company whose stock market value this week collapsed to £17m.

Harland & Wolff’s yard is well known in Belfast for its two yellow cranes – Samson and Goliath – which dominate the city’s skyline. However, the London-based company carries only her name bought the famous shipyard out of administration in 2019 before accepting the historic mark in 2021.

The company has not turned a profit since it shifted focus from developing a gas storage project to taking over the shipyard. It lost nearly £100 million in 2021 and 2022.

Awarding the £1.6 billion contract to Harland & Wolff and Navantia has proved controversial, given that the British company relatively small size and limited experience.

Kevan Jones, Labor MP for Durham North, said he was concerned that the Royal Navy’s solid fleet support vessels would have to be built entirely at the Navantia shipyard in Cadiz if Harland & Wolff failed. This would undermine the British government’s hopes of keeping jobs and expertise in the UK.

“Awarding this contract in the first place is against the interests of the national shipbuilding strategy,” Jones said. “Questions have to be asked as to why – knowing what we know now about Harland & Wolff – they were given a multi-billion dollar contract in the first place.”

Gavin Robinson, interim leader of the Democratic Unionist Party and the MP for the East Belfast constituency, which contains the shipyard, said on Wednesday that reports that the company could collapse were “underwhelming” and that there was “strong support for the shipyard in London”.

Ben Wallace, who was defense secretary until last summer, told the Times, which first reported the suggestion that the £200m support package could be withheld, that the Treasury had been “hostile” to the national shipbuilding strategy and that it “continued to hamper efforts to get UK shipbuilding back on track”.

Harland & Wolff said on Wednesday it was “comfortable to move forward with what is a complex and large transaction for all parties involved”, in a statement to the stock market.

A government spokesman said: “We continue to work 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 trial is confirmed. No final decisions have been made to provide support.’

Harland & Wolff did not respond to requests for comment. Navantia declined to comment.