Harland and Wolff: Deal struck to save shipbuilder producing new Royal Navy vessels but taxpayers take hit

The Belfast-based company was placed into administration in September for the second time in five years. The deal with Navantia will secure 1,000 jobs across the UK and protect the future of H&W’s shipyards.

The firm, which famously built the Titanic, is a subcontractor in part of a consortium that landed a major contract to build new fleet solid support (FSS) ships for the navy. Navantia UK is the main contractor on the contract, which was originally valued at £1.6bn for three vessels.

Business Secretary Jonathan Reynolds would not be drawn on how much extra cash would now be pumped into the contract but insisted the revision was “relatively minor” and represented a good deal for taxpayers, workers at H&W’s shipyards and national security. The deal, which is subject to regulatory approval, will secure jobs at H&W’s four shipyards in Northern Ireland, Scotland and England: Belfast, Methil on the Firth of Forth, Arnish on the Isle of Lewis and Appledore, north Devon. The purchase agreement is set to protect workers’ existing terms and conditions.

Mr Reynolds said the change to the FSS deal was “relatively minor given the size of that contract, which is obviously a very important one for national security”. Officials said the variation made the “minimum changes necessary” to ensure Navantia can still deliver on the contract and build all three ships.

Mr Reynolds said: “This is a huge vote of confidence in the UK. It is good for jobs, it’s good for national security, and it’s good for all parts of the UK. This was a huge problem that we inherited walking into office. We have been able to broker a solution that is not just a solution to the short-term problem, but one in the best long-term interests of the UK.”

He said the amendment to the FSS contract was “a far better solution than what was on the table when we initially came into office, which would have been a loan guarantee, which I believe would have lost the taxpayer all of its money and not delivered those ships and not secured the yards or the jobs”.

Northern Ireland Secretary Hilary Benn said the deal was “great news for Belfast”. “Harland and Wolff is an iconic, internationally-renowned company with a long and proud history,” he said. “I am delighted that, with this deal, it will now have a bright future ahead.”

The GMB union welcomed the deal but said it remained cautious about the future of H&W’s yards. Matt Roberts, GMB national officer, said: “Today’s announcement is a hugely positive step for retaining UK sovereign manufacturing. But despite all four yards remaining open, GMB remains cautious. Without a steady drum beat of work these yards will continue to struggle. GMB will continue the fight to ensure that does not happen.”