The Scottish shipyards where almost 400 jobs face the axe after £200m loan denial

First Minister John Swinney has said both the UK and Scottish governments are keen to protect jobs at the Harland and Wolff yards, as the company faces an uncertain future.

He said Deputy First Minister Kate Forbes has been in talks with the UK government to safeguard the future of employment at the shipbuilding company's sites.

Harland and Wolff has a shipyard in Belfast and owns two fabrication sites in Scotland – at Methil, Fife, and Arnish, Lewis – as well as Appledore in north Devon.

The Harland and Wolff cranes in Belfast. Picture: PA

It has been denied a £200 million government loan guarantee, leading to the company engaging an investment bank to discuss its "strategic options".

Chief executive John Wood has taken a leave of absence and Russell Downs, an industry expert in refinancing and recapitalisation, has stepped in as interim executive chairman.

Harland and Wolff is part of a consortium, including Spanish shipbuilder Navantia, which won a contract to build fleet solid support (FSS) ships designed to supply munitions and supplies to Royal Navy warships at sea.

Mr Swinney was asked about what steps the Scottish Government are taking as he spoke to journalists on Tuesday.

He said a number of talks had taken place between Ms Forbes and the UK government and trade unions in the past few days.

Mr Swinney said: "There is obviously a situation where Harland & Wolff are trying to secure additional investment in their operations.

"Our priority is to make sure that we do everything that we can to support employment at Arnish and Methil.

"The Scottish Government will do that in concert with the United Kingdom Government where it's possible for us to support such proposals."

In a written statement to Westminster on Monday, Business Secretary Jonathan Reynolds explained why the government had rejected the request to act as a guarantor on fresh lending sought by the company.

He said it had not been an easy decision but there was a "very substantial risk that taxpayer money would be lost".

Mr Reynolds added: "The Government believes, in this instance, that the market is best placed to resolve the commercial matters faced by Harland and Wolff."

GMB Scotland, the biggest union at Harland & Wolff’s two Scottish shipyards, has written to Scottish Secretary Ian Murray, Deputy First Minster Kate Forbes and UK government minister Sarah Jones to urge them to work together to protect almost 400 jobs at risk at sites north of the Border.

Louise Gilmour, GMB Scotland secretary, said: “The recent history of the Scots yards has been one of squandered opportunities. The workers are skilled, committed and blameless for the ongoing uncertainty around their yards.

“They deserve every possible support from ministers on both sides of border who must work urgently management and unions to find a secure way forward.

“There are many options to protect these yards, including in the manufacture of wind turbines and other renewable energy infrastructure.

“If talk of a just transition is ever to be more than empty words, these workers and their yards must have a secure future as part of a new industrial strategy for Scotland.”