Government launches new finance scheme to support UK shipbuilding

Wed 26 Jul 2023
Posted by: Phillip Adnett
Trade News

Ship coming out of docks

The government today (26 July) unveiled a new financial scheme to boost the UK’s shipbuilding industry.

The Department for Business and Trade (DBT) announced that it hopes that the Shipbuilding Credit Guarantee Scheme (SCGS) will create hundreds of UK jobs and “contribute hundreds of millions to the UK economy”.

The SCGS works by guaranteeing a percentage of the value of loans used to purchase, refit, retrofit or repair vessels, thereby encouraging lenders to offer finance to British ship owners and operators.

‘Integral’ to economy

Minister for industry Nusrat Ghani said:

“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.

“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.”

‘Flourishing’ maritime sector

Marco Forgione, director general of the Institute of Export & International Trade, said:

“It is a positive step that the government is investing in UK shipbuilding and the infrastructure around it. Launching the SCGS will help build confidence with investors looking to purchase domestically built vessels.

“The UK remains home to a flourishing, dynamic and innovative maritime sector. This scheme will help support coastal communities and those with a strong shipbuilding history to continue to grow and develop high skilled jobs for the future.

“The industry already supports 42,600 jobs all across the country and adds £2.8bn to the UK economy.

Shipbuilding refresh

SCGS forms part of the government’s £4bn plan to revitalise UK shipbuilding and coastal communities through the National Shipbuilding Strategy Refresh that was announced last year.

The original strategy was launched by the Ministry of Defence in 2017, with the refreshed version reportedly including new priorities, such as decarbonisation and levelling up, with an additional £4bn worth of funding commitments.

Industry view

Maritime UK, whose CEO Chris Shirling-Rooke welcomed today’s SCGS announcement, last week published a briefing paper on the strategy, which included calling for the introduction of a shipbuilding credit scheme.

Other recommendations included increased funding for decarbonisation projects, more focus on skills for shipbuilders and investment in innovation, research and development.

In the report, Maritime UK noted that the governments of neighbouring shipping countries – such as the Netherlands and Norway – continued to provide more funding for maritime innovation than the UK, and that take-up of more sustainable technologies lagged in the sector generally.

Thames Clippers

Ghani will formally launch the scheme at an event onboard a Thames Clippers’ boat in London.

The Clippers’ boats are produced in the Wight Shipyard, who are expected to benefit from the new scheme.