The new Labour government is planning to reject shipbuilder Harland & Wolff’s request for a critical £200m loan guarantee needed to stave off collapse.
The Belfast-based shipyard, which in its glory days was responsible for building the Titanic, has been holding last-ditch crisis talks with ministers to approve the bailout.
It wants to borrow millions from a number of British banks but needs the government to act as a guarantor should the loan go bad.
The Financial Times reported on Tuesday that Labour had deemed approval of the guarantee an inappropriate use of public funds. One Whitehall figure said it would be “deeply irresponsible.”
The previous Conservative government were reportedly split over the decision to prop up the business.
One official said: “There is a lot of frustration that the Tory government sat on this decision for months, it was selfish and irresponsible for them to duck the decision and just leave it for the incoming Labour government.”
The news places the financial viability of the firm, which has been lossmaking for years, in significant doubt.
It came shortly after its shares were suspended from London’s AIM market amid accounting issues with its annual results.
It also casts into doubt the future of a £1.6bn contract to build Royal Navy ships in the UK.
If Harland & Wolff goes under, warships will be built in Spain over Ireland—the first time in British history a foreign shipyard has made a warship.
Harland & Wolff has been here before. The company’s financial issues go back decades and it was saved from administration in 2019 via a £6m deal with the energy firm Infrastrata. Auditors warned in 2023 that the business faced “material uncertainty” unless it could source fresh work.
The government and Harland & Wolff have been approached for comment.
More to follow.