Business secretary confident of ‘market-led solution’ for Harland & Woolf

The business secretary, Jonathan Reynolds, has said he is confident that the Harland & Wolff shipyard in Belfast will continue to build ships for the Royal Navy, despite ruling out government support for the struggling company.

Harland & Wolff is part of a consortium on a £1.6bn contract to build three naval fleet solid support ships to supply the Royal Navy’s aircraft carriers. However, it has faced months of uncertainty over its future.

The government on Monday confirmed that it had refused to grant a £200m loan guarantee to help the struggling company to refinance. The shipbuilder had hoped to secure a guarantee of up to 80% of any loan value to help it avoid collapsing into administration for the second time in five years. But the guarantee would have put taxpayer money at risk if the shipyard fails.

Harland & Wolff’s precarious finances add to a series of industrial policy challenges already mounting up for the Labour government, including the prospect of job losses at Tata Steel’s plant in south Wales, and the proposed takeover of Royal Mail’s owner by the Czech billionaire Daniel Křetínský. Reynolds also revealed on Monday that the government was likely to call in Křetínský’s Royal Mail bid for a formal review.

Speaking to reporters at the Farnborough international airshow in Hampshire, Reynolds said support for Harland & Wolff “would not have been a prudent use of government money”.

However, asked if he was confident that Royal Navy ships would still be built in Belfast, he answered simply: “Yes.”

His confidence will be a boost to the workforce of about 1,500 in Belfast and at H&W’s other shipyards in Devon and Scotland.

Matt Roberts, national officer at GMB, a union representing workers at the yards, said that they must be saved.

“These are worrying times for workers and their families in Northern Ireland, Scotland and the south-west,” he said. “These yards have been at the heart of UK manufacturing for centuries, from building the Titanic to the ships that defeated the Armada.”

Reynolds said he expected a “market-led solution” to refinancing the company’s large debt load, and added that he thought the promise of government support had delayed efforts to find private sector lenders.

The shipbuilder was forced to suspend its London-listed shares a fortnight ago, raising concerns about its future. Its chief executive, John Wood, left abruptly on Friday, his departure understood to be a condition imposed by lenders. The US investor Riverstone is reportedly considering a new loan.

On Royal Mail, Reynolds said he would talk to Křetínský this week, after discussions on Monday between the investor and unions. “I think it would be reasonable to expect it to be called in,” he said, pointing to the previous review when Křetínský first increased his shareholding.

He added that he would look at how the government could receive binding assurances that jobs and some crucial services could be retained.

Reynolds and several other cabinet ministers were accompanying Keir Starmer on Monday to the Farnborough airshow, where executives from the aviation and weapons industries gather every two years.