Spain’s Navantia agrees deal to purchase Harland & Wolff
Newsflash: Spanish state-held shipbuilder Navantia has finalised a deal to acquire the shipyards of Britain’s Harland & Wolff, best known for building the Titanic, the British government has announced.
Navantia’s rescue deal would end almost three months of uncertainty for staff at Harland & Wolff, which fell into administration in late September.
The government says Navantia UK has agreed a “commercial deal” to purchase all four Harland and Wolff shipyards, including its Belfast facility.
The deal has secured 1,000 UK jobs and ensured the delivery of the Fleet Solid Support Programme to build three Royal Navy ships. In Belfast, around 500 jobs will be protected by the deal, according to a statement from the Northern Ireland Office.
Secretary of State for Northern Ireland Hilary Benn says:
This investment is great news for Belfast, for the Northern Ireland economy and, above all, for Harland and Wolff’s hugely skilled shipbuilding workforce.
Harland and Wolff is an iconic, internationally-renowned company with a long and proud history.
I am delighted that, with this deal, it will now have a bright future ahead.
Key events
Sweden cuts rates, but Norway holds
We’re already had some central bank drama, ever before the Bank of England’s interest rate decision lands at noon.
Sweden’s Riksbank lowered its benchmark interest rate by 25 basis points this morning, to a two-year low of 2.5%.
Norway’s Norges Bank, though, left its policy rate unchanged at 4.5% this morning, and predicted it will probably cut rates next March.
In the telecoms world, BT has defeated a £1.3bn lawsuit brought against it for allegedly overcharging millions of customers for fixed telephone lines.
London’s Competition Appeal Tribunal ruled in favour of BT in a case which accused the former telecoms monopoly of excessively increasing prices.
The claimants who brought the case had accuse BT of excessively increased prices for some customers for fixed telephone lines, while offering competitive bundles of fixed line and broadband services where it faced fierce competition from other providers.
The rescue deal agreed with Navantia means taxpayers will pay more for Royal Navy support ships, PA Media reports.
Navantia is main contractor on the Fleet Solid Support Programme to build three vessels for the Royal Navy, while Harland & Wolff is a subcontractor within the consortium. That contrast has been amended, it appears, to smooth the rescue deal though.
Business secretary Jonathan Reynolds insists the revision to the contrast is “relatively minor”, but won’t say how much extra cash would now be pumped in.
Reynolds told reporters:
“This is a huge vote of confidence in the UK. It is good for jobs, it’s good for national security, and it’s good for all parts of the UK.
“This was a huge problem that we inherited walking into office. We have been able to broker a solution that is not just a solution to the short-term problem, but one in the best long-term interests of the UK.”
He said the amendment to the FSS contract, which originally cost £1.6bn, was:
“a far better solution than what was on the table when we initially came into office, which would have been a loan guarantee, which I believe would have lost the taxpayer all of its money and not delivered those ships and not secured the yards or the jobs”.
Navantia: Deal would preserve over 1,000 jobs
Navantia UK says it expects to complete the rescue of Harland & Wolff by January 2025.
In a statement, Navantia confirms that the deal would save over 1,000 jobs.
But it also cautions that it isn’t completed yet, and needs to clear regulatory approvals.
It says:
Navantia UK is in discussions with Harland & Wolff, a historic British shipbuilding business, to acquire its operations across four sites: Belfast in Northern Ireland, Appledore in the South West of England, and Methil and Arnish in Scotland. The acquisition will strengthen Britain’s industrial capacity whilst preserving more than 1,000 jobs.
The deal will enhance UK shipbuilding, defence and offshore wind industry capabilities, developing both a highly skilled workforce and a robust British supply chain. This will strengthen the country’s sovereign industrial capacity.
Under the proposed agreement, which remains subject to completion and regulatory approvals, Navantia UK will manage all four facilities, bringing its extensive expertise in shipbuilding, fabrication, complex programme management and fostering knowledge transfer.
As prime contractor for the Fleet Solid Support (FSS) programme, Navantia UK leads the construction of three ships for the Royal Fleet Auxiliary to support the Royal Navy’s UK Carrier Strike Group. These vessels will be built across facilities in Belfast, Appledore and Puerto Real (Cádiz, Spain).
The integration of Harland & Wolff’s facilities will ensure seamless delivery of the FSS ships by minimising programme risks and streamlining construction. The deal is expected to be completed in January 2025.
Spain’s Navantia agrees deal to purchase Harland & Wolff
Newsflash: Spanish state-held shipbuilder Navantia has finalised a deal to acquire the shipyards of Britain’s Harland & Wolff, best known for building the Titanic, the British government has announced.
Navantia’s rescue deal would end almost three months of uncertainty for staff at Harland & Wolff, which fell into administration in late September.
The government says Navantia UK has agreed a “commercial deal” to purchase all four Harland and Wolff shipyards, including its Belfast facility.
The deal has secured 1,000 UK jobs and ensured the delivery of the Fleet Solid Support Programme to build three Royal Navy ships. In Belfast, around 500 jobs will be protected by the deal, according to a statement from the Northern Ireland Office.
Secretary of State for Northern Ireland Hilary Benn says:
This investment is great news for Belfast, for the Northern Ireland economy and, above all, for Harland and Wolff’s hugely skilled shipbuilding workforce.
Harland and Wolff is an iconic, internationally-renowned company with a long and proud history.
I am delighted that, with this deal, it will now have a bright future ahead.
UK borrowing costs climb as ‘stagflation’ fears hit markets
The UK government’s borrowing costs have surged to their highest level over Germany in decades.
A selloff in UK government bonds has pushed the yield, or interest rate, on 10-year gilts up to 4.63%, from 4.55% last night. That’s the highest level since October 2023.
German 10-year bund yield have risen by less, to 2.28%.
As a results, the spread between UK and German 10-year borrowing costs has widened to 235 basis points.
That’s wider than after the mini-budget in 2022; the Financial Times says its the highest since German reunification in 1990.
UK bonds are weakening as investors fret that Britain could be sliding into stagflation, as growth slows and inflation rises.
Longer-dated US bonds, and debt issued by other European countries, are also weakening – pushing up yields – after the US Federal Reserve indicated it will cut interest rate more slowly than expected in 2025.
Feargal Sharkey: Water industry privatisation has failed colossally
Jasper Jolly
Water campaigner Feargal Sharkey has called for the end to privatisation of the water industry in England and Wales, after the regulator announced a steep 36% bills increase over the next five years.
Sharkey, the former lead singer of the Undertones, said that the government should examine “another model” for ownership of the industry, such as mutualisation – when a company is owned by customers – or nationalisation.
He said:
“Privatisation for the water industry has failed colossally, to the tune of tens of billions of pounds.”
Sharkey, who became a thorn in the side of the industry after becoming disgusted at sewage discharges into rivers, was also heavily critical of Ofwat, the regulator, for allowing water companies to raise bills by more than a third, after initially proposing an increase of 21% in July. He said the decision to allow such steep bills increases amounted to misconduct, costing British billpayers billions of pounds.
He says:
“As much as this was judgment day for the water industry, it was judgment day for Ofwat. Both have failed miserably.
“Ofwat has proved it is utterly incapable. This is the point that we need to restructure the entire industry.”
Thames Water says it will tell customers how their bills will rise over the next five years by next February.
In a statement to the stock exchange, Thames Water says it will review Ofwat’s decision on bills “in detail” before responding.
It also says that Ofwat’s decision, and the £3bn liquidity lifeline agreed with creditors, means its liquidity would be extended to October 2025, “with the potential to extend further to May 2026 if the Company chooses to make an appeal to the CMA”.
Water companies are defying the selloff on the London stock market.
Shares in Severn Trent, which will raise bills by 47% over the next five years, have risen by 1% – making it a rare riser on the FTSE 100.
United Utilities’ shares are up 0.7%, after it was told it can raise bills by 32% by 2030.
London stock market hits one-month low after hawkish Fed
Stocks in London are tumbling at the start of trading, following Wall Street’s 3% slump last night.
The FTSE 100 index of blue-chip shares has dropped by 98 points, or 1.2%, in early trading to 8,099 points, its lowest level since 21 November.
Technology-investor Scottish Mortgage are the top faller, down 3.2%, followed by private equity group 3i (-3.1%), Barclays (-3%) and credit-score firm Experian (-3%).
City investors are disappointed that the US Federal Reserve now expects to make fewer interest rate cuts in 2025.
Preston Caldwell, chief US economist at Morningstar, says:
“The Fed is setting the stage for the possibility of few (or even zero)additional rate cuts in 2025 and 2026. Fed Chair Jerome Powell noted that the federal-funds rate is now “significantly closer to neutral”, although it likely remains still “meaningfully restrictive.
There is much uncertainty about precisely where the neutral rate is located. GDP growth has remained strong despite the Fed’s high interest rates. Inflation is also not quite back to target.
The Fed is virtually certain to slow the pace of rate cuts in 2025, in order to better gauge the effects of monetary policy in real time.”
Tom MacInnes, director of policy at Citizens Advice, has warned that the water bill increases will “hit many households hard”.
MacInnes says:
“While it’s encouraging to see help for customers increasing, the current dysfunctional approach to bill support in this industry means that people will continue to miss out.
“Ending the postcode lottery for water social tariffs – cheaper rates for those who need them – is an essential step to shield those struggling to keep pace with rising bills.
“We found that more than two-fifths (42%) of those likely to be eligible aren’t aware that water social tariffs exist.
“The Government and suppliers must work together to ensure that no one is missing out on the support they’re entitled to.”
UK water bill hike: it’s the “nightmare before Christmas”
Reaction to this morning’s decision to hike average water bills by 36% over the next five years is flooding in, and pressure groups are not impressed.
Giles Bristow, chief executive of Surfers Against Sewage, a campaign group, says:
Ofwat and the government are asking the public to throw good money after bad and pump yet more of their hard-earned cash into a system geared towards making profit for industry. The obscene reality is that a third of every pound a customer pays is lost to industry debt and dividends, and not to cleaning up our rivers, lakes and seas. This is truly the nightmare before Christmas for a cash-strapped public and signs that even under a new government, the sewage scandal rumbles on. No wonder some brave billpayers are taking a stand and refusing to pay into this failed system.
We’re under no illusions that the water system needs urgent investment but Ofwat doing the same thing and expecting different results is sheer insanity.
Those who claim today as a day of great ambition and record investment are either blind or wilfully ignorant. Today is a day where the status quo continues and the vicious cycle of profit from pollution is perpetuated by government and its regulators. Nothing less than radical reform will do. It’s time for the government to put its money where its mouth is and end the model of profit from pollution. Only then will trust be regained and the public’s demand for an end to sewage pollution be realised.
Charles Watson, chair and founder of River Action, another campaign group, said:
It is a travesty that customers are now being forced to pay higher water bills, especially when these increases are directly the result of years of under-investment by the water industry.
Shareholders in the water companies must be laughing all the way to the bank. With customers now being forced to foot the bill to repair and upgrade the water industry’s crumbling infrastructure, the very people who have already benefited for years from huge dividend payments, will see the value of their assets increase in thanks to this customer funded investment.
The real question remains staring us unanswered in the face: when will those who have profited so rapaciously from decades of operational neglect, causing horrendous environment damage in the process, finally be held accountable and made to pay up for their totally irresponsible custodianship of these essential public services?
Harland & Wolff expected to be saved by Spain’s Navantia
Spain’s state-owned shipbuilder Navantia is expected to confirm later today that it is buying Harland and Wolff, the Belfast shipyard best known for the Titanic, in a rescue deal.
The future of Harland and Wolff has been hanging in the balance since September, when it collapsed in to administration.
According to the BBC, all jobs at the firm are expected to be saved in the deal, which is also thought to include Harland and Wolff’s facilities in Scotland and England.
Bloomberg reports that the UK government will provide aid to get the rescue agreed, having been initially reluctant.
Environment Secretary Steve Reed has blamed the 14 years of Conservative government for the state of the water industry.
Speaking after Ofwat announced bills would increase on average by more than a third over the next five years, Reed says:
“Under the Conservatives, our sewage system crumbled. They irresponsibly let water companies divert customers’ money to line the pockets of their bosses and shareholders.
The public are right to be angry after they have been left to pay the price of Conservative failure.
This Labour Government will ringfence money earmarked for investment so it can never be diverted for bonuses and shareholder payouts. We will clean up our rivers, lakes and seas for good.”
