New shipbuilding loans scheme to boost UK’s coastal economies

Initiative will drive growth in areas such as Liverpool, Plymouth, the Solent, Rosyth, Clydebank and Belfast

P&O ferries Norbank, left, and Norbay at Gladstone Dock in Liverpool. AFP

A scheme to help ship buyers access finance to buy UK-built vessels and upgrade existing ones has been launched as the government looks to boost Britain’s coastal communities.

Through the Shipbuilding Credit Guarantee Scheme, the government will act as a guarantor for lenders, unlocking credit for maritime companies.

It will help to boost the UK shipbuilding industry and drive growth in areas such as Liverpool, Plymouth, the Solent, Rosyth, Clydebank and Belfast.

“Shipbuilding is an integral part of the UK’s industrial identity and through this scheme we are backing our great maritime businesses to get ahead of the competition," said the British Minister for Industry, Nusrat Ghani.

“With cutting-edge vessels designed and built here in the UK, this will be a boost to high-skilled careers and every company involved in the supply chain for shipbuilding, helping us to grow the economy.”

The scheme is expected to create hundreds of jobs and contribute hundreds of millions of pounds to the economy, according to government estimates based on the demand for commercial shipbuilding in the UK.

The scheme also part of the government’s £4 billion ($5.1 billion) plan to revitalise UK shipbuilding and coastal communities through the National Shipbuilding Strategy Refresh announced last year.

Ms Ghani will formally launch the scheme at an event onboard a Thames Clippers’ boat – built at Wight Shipyard, one of the UK companies that stands to benefit from the new scheme – on July 26 in London.

The P&O ferry Norbank leaves Gladstone Dock in Liverpool en route to Dublin. AFP

The scheme will guarantee a percentage of the value of loans used to buy, refit or repair vessels, sharing the risk with lenders to encourage offers of finance to UK vessel owners and operators.

“As I set out in the National Shipbuilding Strategy Refresh, this scheme will help build confidence in UK shipyards, allowing them to invest in the people and the technology to drive productivity forward in this vital sector of the UK economy," Shipbuilding chief and Defence Secretary Ben Wallace said.

Shipbuilding is hugely important to the UK, supporting 42,600 jobs and adding £2.4 billion to the economy every year.

A strong domestic sector helps to support the wider economy’s export ambitions, with 95 per cent of UK trade moved by sea.

The shipbuilding industry is a growing part of the UK’s new green economy.

It is hoped the scheme will encourage continued investment in innovative, sustainable, low-carbon maritime technologies.