Windsor Framework rules could hamper government bailout of Harland and Wolff - Allister

DUP leader Gavin Robinson says that he will continue to engage with the government on the business’s future, after having raised the issue at his first meeting with the Prime Minister.

Loans requested by the company should be guaranteed “forthwith” as part of government efforts to regenerate the UK’s naval fleet, according to Ulster Unionist MLA Steve Aiken.

The comments come after reports in the Daily Telegraph that Whitehall civil servants have warned the new chancellor Rachel Reeves against a financial rescue package for the company – which has sought a £200m loan guarantee from the government.

The newspaper says there are concerns among officials that the money could end up “in the hands of Wall Street financiers” – and that ministers could be forced to seek permission from Brussels for a subsidy, because of the Irish Sea border arrangements.

The TUV leader said it is “a practical and serious illustration of what happens when a country surrenders sovereignty over its own affairs and businesses to a foreign entity. Suddenly, legitimate internal national decisions, such as how much aid the Treasury can supply in a case of need, is subject to the say so of a foreign jurisdiction, in this case the EU.

“This is because Article 10 of the Protocol subjects Northern Ireland to EU State Aid rules which strictly cap and control aid to businesses.

“It is preposterous that a shipyard on the Clyde, or elsewhere in GB, can avail of unfettered aid, but in Belfast such is subject to foreign control.

“Neither the Windsor Framework or the useless DUP Donaldson deal changed this, leaving UK sovereignty subjugated and our shipyard at risk”.

DUP leader Gavin Robinson said: “I raised Harland and Wolff in my first meeting with the Prime Minister and since with a number of his colleagues. He is seized of the importance of H&W to Belfast and the opportunities for the future based on significant MoD contracts. That engagement will continue.”

Ulster Unionist Party finance spokesperson, Steve Aiken MLA, said “the news around the continuing uncertainty about loan guarantees for H&W is concerning, not just for the workforce, but also as we are trying to ramp up our defence capability.

“The reality is, that without investment & support to H&W, the Royal Navy will be denuded of vital support shipping. The UK’s maritime industrial base has been so run down under the Conservatives that without bringing back capacity in Belfast we will not be able to regenerate our Fleet.

“Rachel Reeves has many competing priorities but support for our nations defences is vital and the Treasury should guarantee the loans forthwith”.

The ship yard has a £1.6 billion contract with the Royal Navy.

Earlier this year the company described speculation about its future as “inaccurate” amid newspaper reports that the former Tory chancellor Jeremy Hunt would block a financial support package designed designed to keep it “afloat”.

The Times said that if the company collapsed the work it was contracted to do “could be carried out abroad instead – something which would be a first in the history of the Royal Navy”. The GMB union said its staff were “concerned”, whilst engineering union Prospect said the report was “another blow to highly-skilled UK shipyard workers”.

Belfast isn’t Harland and Wolff’s only UK site, as it owns a smaller yard in Devon and two in Scotland. However, the company describes its famous Belfast site as “one of the biggest dry docks in Europe” in Belfast, as says it is one of only three shipyards in the UK capable of doing “complex defence projects”.

The company lost £43m last year according to its latest financial statements. It wants to borrow £200m from a consortium of British banks, but needs the government to guarantee the loans.

Yesterday, the Daily Telegraph reported that “Whitehall sources confirmed Treasury officials have advised Ms Reeves that a bailout would be fraught with risk for the Government. They have warned the support risks falling foul of post-Brexit state aid rules, risking a clash with the European Union, while there are also concerns about taxpayer cash being used to pay off the company’s Wall Street lenders”.