Scotland Office minister, Kirsty McNeil, has paid a visit to the Arnish yard in Lewis amid uncertainty over its future under the Harland and Wolff (H&W) flag.
Eyes are on the possibility of H&W being broken up as its new look board of directors explores restructuring options following the UK Government’s decision to refuse an emergency cash injection to keep it afloat.
The government also turned down a bid to provide a guarantee for fresh loans the firm sought with new creditors at lower interest rates to help bring down is high debt levels.
The company previously warned its ability to carry out new and large contracts would be “adversely affected” without government financial help.
H&W was forced to urgently obtain an additional £20 million loan from its existing American funder, Riverstone, to stave off the risk of immediate administration.
Restructuring advisors, Rothschild, have been hired to “assess strategic options.”
All activity across the group is currently under review. In the meantime, H&W is
winding down all non-core aspects of the business to focus on contracts in its yards
located at Belfast, Appledore, Methil and Arnish.
Kirsty McNeil said: “I wanted to visit the yard to see for myself the fantastically skilled workforce that is here.
“There's a promising future with potential new finance and new management, and that's great to see.
“And these yards now have backing from UK and Scottish Government working together.”
She added: “What the UK Government has not been able to do is confirm export finance, because our job is also to safeguard taxpayers' interests, and we simply couldn't see that the return would be as we would need it to be in order to give that taxpayer investment.”
In response to the point that one of Labour’s first decisions on industrial matters when elected to power is to reject a rescue deal for these important Scottish fabrication yards, Ms McNeil said: “Economic growth is our number one mission, and we hope to see there will be jobs in the islands. We're doing investment through the National Wealth Fund.
“We are absolutely committed to safeguarding workers' futures here.
“However, the numbers have to stack up, and unfortunately, with that taxpayer guarantee, they simply didn't.”
When asked about how the UK Government can help safeguard jobs in Fife and the Western Isles for both yards, she said: “The national growth mission is our number one priority. The National Wealth Fund will help the creation of GB Energy will help.
“Until we get that economic stability, we're not going to be able to do any of the other things that we want to do.”
She added: “The fantastically skilled workforce here is characterised by its flexibility when there's work here for it to do. I'm confident that they'll do so.
“The UK Government, along with Scottish Government, is committed to a future for this yard. We have to make sure that the numbers add up, and that's what we'll continue to do.”
Torcuil Crichton, the new MP for the Western Isles said Labour inherited the crisis from the outgoing administration.
He said “Harland and Wolff needed £200 million pound export guarantee which the
Tory government failed to give them. They left that on the in-tray for us, and we've
had to make the decision. A hard decision that Harland and Wolff didn't meet the
criteria.
“The fear was that that export loan guarantee wouldn't touch the sides in any yard in the UK on its way to pay off the loans in America, so that money can't go ahead.
“But these yards, particularly this yard here, must have a great future. It's in the right place, facing the West Atlantic. It's got a great workforce, flexible workforce, good management, and now it's got the backing of not one government, but two governments.
“Labour's plans for GB Energy mean that this yard and the western seaboard of Scotland, have a future, have an economic future, and will have jobs in this new industry.”
He added: “Harland and Wolff is a private company and has to sink or swim. It's being repurposed and it looks like it's going to market.
“But where Arnish is - its geographic location, the fact that Labour has a vision
for GB Energy - this yard turns that vision into reality.
“This is the stepping stone to renewables right here, right now, and this yard and the workforce in it who have prove themselves over the years, not just in terms of the flexibility, but in terms of the quality of that work. I'm sure they can do it.”
He highlighted the firm is disposing of rid of excess investments that
If it goes to market this is a “jewel on the west coast” in the right spot for manufacturing to offshore renewable industry.
Mr Crichton added: “The UK government isn't supporting Harland rules repurposing, but the UK Government and the Scottish Government and development agencies can make this jewwl shine by investing in and around the yard, investing in jobs and facilities.
Proposals to expand the newly constructed £15 million deepwater harbour in Stornoway “gives hope for the future, and that's the stepping stone to the future of renewables and GB energy.”
He added: “When you speak to the guys on the floor here, some of whom have been here for decades, and the management here, who are very forward facing, they've seen ups and downs as we've all seen ups and downs in Arnish over the years.
“I remember, as a journalist, writing the obituary for this yard twice over. It's come back time and time again. And now with a Labour government with its eye on the Atlantic, and on renewable energy, I think this yard is a future.”
Labour business secretary Jonathan Reynolds said government funding for H&W “would not necessarily secure our objectives and there is a very substantial risk that taxpayer money would be lost.”
Kirsty McNeil carried out a range of visits and talks with local businesses and agencies while in Lewis including Stornoway Port, Harland & Wolff, Callanish Centre, Comhairle na Eilean Siar, Harris Tweed Hebrides, MG Alba, and crofting interests, to see how the Scotland Office and the UK Government can play a role in the economic development of the islands.
Harland & Wolff figures ‘didn’t stack up’ says Scottish Office minister on Arnish visit
11 August 2024
