Benn says government ‘committed to NI shipbuilding’

The government is committed to the maintenance of shipbuilding in Northern Ireland, the secretary of state has told BBC News NI.

Hilary Benn was speaking after a report that the Harland and Wolff shipyard will not receive a government loan guarantee.

Mr Benn did not comment directly on the guarantee application other than to describe it as “commercially sensitive.”

Harland and Wolff is seeking the loan guarantee to help stabilise its finances.

It said it has not received any decision and “continues to provide information and updates on a regular basis to facilitate government in its decision-making process.”

Mr Benn said: “The government is very seized of the issue in relation to Harland and Wolff”.

“We want shipbuilding to remain in Belfast, in Northern Ireland which has such a proud tradition,” he said.

The company wants to take on £200m of new borrowing to refinance an £90m high interest loan and invest in its operations as it scales up ahead of a major Royal Navy contract.

It is seeking to borrow from a consortium of UK banks, but needs the government to act as guarantor – meaning if the loans were to go bad the state would step in to repay the lenders.

The Financial Times said the new government considers it would be “irresponsible” to offer the guarantee to the heavily loss making firm.

There was some confusion on Wednesday about whether the firm has “reworked” its application to seek an 80% guarantee rather than one covering 100% of any loan.

On Tuesday evening, the firm released a statement saying the government had been offering a 100% guarantee.

But in March it raised concerns about “honouring that 100% level.”

The statement added: “Consequently, we have proposed a reworked deal at the standard 80% guaranteed level, that has been awarded to hundreds of other companies.”

However, on Wednesday, a company spokesperson told the BBC: “We have not reworked anything.”

They added that the application had always been on basis of 80% and it was “the former government which offered 100%.”

In May, the former trade minister Greg Hands was asked a parliamentary question about whether any ministers or officials in his department had unilaterally proposed a 100% guarantee to any company.

He said: “The Department of Business and Trade has not unilaterally proposed a 100% guarantee to any company.”

The BBC has asked the company for further clarification.

The head of the Unite trade union, Sharon Graham, described the shipyard as of “strategic importance”.

She said: “Our members have demonstrated their ability to win and deliver national strategic shipbuilding projects.

“Unite will do whatever it takes to defend our members and the shipbuilding sector,” she said.

Harland and Wolff was bought out of administration in 2019 and in 2022 was part of the consortium which won a major contract to build three Royal Navy support ships.

The company has had to invest significantly to prepare for that work which has contributed to its losses.