In recent weeks there has been media speculation over the status of Harland and Wolff and the nature of its ongoing discussions with the Government, upon which we have been unable to comment due to the commercially sensitive nature of those discussions. I am now pleased to be able to address the subject and update members of the House. My officials have been working with all parties extensively for a number of weeks to ensure an outcome for Harland and Wolff that delivers shipbuilding and fabrication across the UK and protects jobs.
After a detailed review of an application by Harland and Wolff for a UK Export Finance export development guarantee, His Majesty’s Government have decided not to proceed with the provision of a guarantee. This decision was based on a comprehensive assessment of the company’s financial profile and the criteria set out in our risk policies. We have also decided not to provide any form of emergency liquidity funding. While such a decision is not easy, it is my assessment, following extensive engagement by my officials with market players, that HM Government funding would not necessarily secure our objectives and there is a very substantial risk that taxpayer money would be lost. The Government believe, in this instance, that the market is best placed to resolve the commercial matters faced by Harland and Wolff.
A statement was published on 19 July by Harland and Wolff indicating that the company has commenced discussions with its existing creditors, Riverstone Credit Management LLC, to secure the additional funding it needs. This should allow the business to continue pursuing its short and longer-term objectives, in which the Government continue to take an interest. In all our engagements with them, Riverstone Credit Management LLC has recognised the importance of the assets at Harland and Wolff as well as the people who work there, showing a desire to find pragmatic solutions that support HM Government objectives.
Harland and Wolff indicates that these discussions on new financing should conclude in the next few days. This will involve the current CEO taking an immediate leave of absence and the onboarding of new management with a focus on recapitalisation and ensuring sustainable finances.
I know the recent media reports will have been of concern to workers across Harland and Wolff’s sites, as well as the wider supply chain. I am working closely with my colleagues the Secretaries of State for Northern Ireland and Scotland, and Ministers are also engaging with the leaders of the Northern Ireland Executive and Scottish Government, alongside the local Members of Parliament, to support a positive outcome for all affected sites across the UK. My ministerial team have also reached out to the trade unions represented across the four sites to reassure them that the steps set out by the company appear to me to hold by far the best prospects of ensuring business continuity, job security and the delivery of important existing contracts.
My officials will continue to work closely with those in the Ministry of Defence and the National Shipbuilding Office on the fleet solid support contract, for which Harland and Wolff remains a key subcontractor. Officials in the Ministry of Defence are also well engaged with the prime contractor, Navantia UK, to monitor delivery of this important contract.
I welcome potential new financing for Harland and Wolff and the appointment of new management and wish them all the best in their continued efforts to build up this business.
Shipbuilding supports 42,600 jobs nationwide, adds £2.4 billion to the economy every single year, and is an important pillar of our civil and defence industrial base. We are committed to supporting vibrant and successful shipbuilding and fabrication industries, and our skilled workforces who deliver them, in all parts of the UK, in which Harland and Wolff has its role to play.
[HCWS15]