The UK defence sector, particularly its procurement system, has long been a subject of scrutiny. In this context, the announcement that Spanish state-owned Navantia UK is acquiring Harland & Wolff, a historic British shipbuilding company, raises serious questions about the wisdom of selling critical national assets to foreign buyers.
While the proposed acquisition promises to safeguard over 1,000 jobs and integrate four key sites into Navantia’s operations, the broader implications for the UK’s industrial sovereignty and defence strategy warrant close examination.
In a press statement (December 19th) from the Department for Business and Trade, no mention whatsoever was made of the fact that Navantia UK is a subsidiary of a Spanish state-owned company.
The company’s profile at Companies House reveals that Sociedad Estatal de Participaciones Industriales, a Spanish Government department, holds “75% or more” of shares on Navantia Uk and “75% or more” of voting rights.
The directors are Juan Ignacio De La Cueva Garcia, and Alberto Isidro Martinez, both Spanish citizens.
Agustin Alvarez Blanco, also a Spanish citizen, resigned his directorship on 10th October 2024.
The Proposal at Hand
Navantia UK’s bid includes Harland & Wolff’s facilities in Belfast, Northern Ireland; Appledore, England; and Methil and Arnish, Scotland. According to Navantia UK, the deal would bolster the UK’s industrial capacity in shipbuilding, defence, and offshore wind sectors.
The company argues that integrating Harland & Wolff into its operations would support a skilled workforce, strengthen the domestic supply chain, and ensure timely delivery of ongoing projects like the Fleet Solid Support (FSS) programme. This initiative involves constructing three ships for the Royal Fleet Auxiliary, a collaboration between Harland & Wolff’s Belfast and Appledore sites and Navantia’s Puerto Real facility in Spain.
On the surface, these assurances seem promising. In an era of economic uncertainty, preserving jobs and enhancing industrial capabilities are compelling objectives. However, the proposal raises significant concerns about the long-term impact on the UK’s strategic autonomy and alignment with stated government priorities.
The Labour Government’s Defence Vision
The new Labour Government’s manifesto underlines the importance of a robust defence industrial strategy. It pledges to align security and economic priorities, ensuring resilient supply chains and strong partnerships between government and domestic businesses.
Specifically, it commits to prioritising UK businesses for defence investment, promoting innovation, and enhancing resilience across sectors like steel and shipbuilding.
Selling Harland & Wolff to Navantia UK, a foreign state-owned entity, appears to run counter to these goals.
While the acquisition may provide short-term stability, it clearly undermines the UK’s ability to maintain control over what little remains of its critical defence infrastructure. This concern is particularly acute given the parlous state of UK defence procurement, where delays, cost overruns, and reliance on overseas suppliers have frequently been criticised.
Lessons from History
Harland & Wolff’s storied history as a cornerstone of British shipbuilding adds emotional weight to the debate. Founded in 1861, the company built iconic vessels like the Titanic and played a pivotal role in wartime ship production. Its decline in recent decades mirrors the broader erosion of the UK’s industrial base, which has often been attributed to short-term decision-making and inadequate investment.
Past experiences with foreign ownership in strategic sectors provide cautionary tales.
For instance, the sale of British steel producers to overseas investors has sometimes resulted in closures or reduced capacity when global market conditions shifted. Similarly, foreign-owned defence contractors may prioritise the interests of their parent companies or home governments, potentially leaving the UK vulnerable in times of crisis.
Strategic Autonomy vs. Economic Pragmatism
Proponents of the Navantia deal argue that foreign investment is essential for revitalising the UK’s shipbuilding sector.
They contend that Navantia’s resources and expertise could enhance Harland & Wolff’s competitiveness, ensuring its long-term viability. Moreover, the integration of facilities could streamline operations and improve efficiency, particularly for projects like the FSS programme.
However, critics argue that strategic autonomy should take precedence over economic pragmatism. Defence assets are not just economic entities; they are vital components of national security. Outsourcing control over such assets to foreign entities, even allies, risks creating dependencies that could prove costly in the future. For example, any disruption in Navantia’s operations or shifts in Spain’s foreign policy could have cascading effects on the UK’s defence capabilities.
Alternatives to Foreign Ownership
Rather than selling Harland & Wolff, alternative approaches arguably could have be explored to achieve the twin goals of economic stability and strategic autonomy. One option could have been increased government investment, aligning with Labour’s manifesto “commitments”. By providing financial support and fostering public-private partnerships, the UK could strengthen its shipbuilding sector without ceding control to foreign entities.
Another possibility is promoting domestic consortia to acquire and manage Harland & Wolff. This would keep ownership within the UK while leveraging private sector expertise and resources. Additionally, policies aimed at enhancing workforce training, research and development, and infrastructure could further bolster the sector’s resilience.
The Broader Implications
The potential sale of Harland & Wolff highlights broader issues within the UK’s defence and industrial strategies. It underscores the need for a coherent, long-term vision that balances economic imperatives with national security considerations. While foreign investment can play a role in revitalising industries, it should not come at the expense of strategic autonomy or the government’s ability to safeguard critical infrastructure.
The debate also raises questions about the effectiveness of the UK’s procurement processes. If domestic shipyards struggle to compete with foreign firms, this may reflect systemic issues such as inadequate funding, fragmented supply chains, or outdated policies. Addressing these root causes is essential to ensuring the sustainability of the UK’s defence sector.
The acquisition of Harland & Wolff by Navantia UK presents a complex dilemma.
While the deal offers potential benefits, such as job preservation and enhanced industrial capacity, it also poses significant risks to the UK’s strategic autonomy and defence priorities. In light of Labour’s manifesto commitments to prioritise UK businesses and strengthen domestic supply chains, the government must carefully weigh the long-term consequences of selling a critical national asset to an overseas buyer.
Ultimately, the decision should reflect a balanced approach that values economic pragmatism without compromising national security. By investing in domestic capabilities and fostering a resilient, innovative defence sector, the UK can chart a path that aligns with its strategic and economic interests.
Harland & Wolff’s future should not just be about preserving jobs today but ensuring the UK’s ability to build and defend tomorrow.
Main Image: By August Schwerdfeger – Own work, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=74673537
