Healey pledges a “new age of industrialisation” with £6bn shipbuilding boost

John Healey has pledged to take Britain into a “new age of industrialisation”, presenting investment in shipbuilding, manufacturing and apprenticeships as central to the Government’s plans for economic growth.

In his first Labour Party conference speech as Chancellor, delivered in Liverpool, Mr Healey said the country’s industrial past could not simply be restored, but could be remade for modern industry.

“Our coal mines are not coming back,” he said. “But this is how Britain’s industrial past is being remade now for the modern world. This is the new age of industrialisation. A new confidence in Britain.”

The Chancellor announced £6 billion of Government contracts for British shipyards, including the procurement of three floating docks for HM Naval Base Clyde at Faslane through a UK-only competition.

The docks, known as Programme Euston, were first set out in 2023 and are expected to upgrade Faslane’s facilities for the next generation of British submarines. The Ministry of Defence has previously said they are expected to enter service in the early 2030s.

The docks form part of a wider £15 billion upgrade programme for the Royal Navy’s shipyards, according to the supplied reports. Mr Healey also said the Government would provide £115 million for a new marine research vessel, which is likewise expected to enter service in the early 2030s.

“By backing British shipyards, we are not only boosting national security but also securing resilience in the industries that will drive growth today while building the capabilities the country needs for the future,” Mr Healey said before his speech.

The UK-only tender creates a potential opportunity for Scottish yards, including the Methil shipyard in Fife, which is owned by Spanish state-owned company Navantia. The yard was bought from Harland and Wolff in 2024 in a deal supported by the Scottish and UK governments.

Scottish Secretary Douglas Alexander said the plans represented a “huge opportunity” for Scottish manufacturing, but he did not guarantee that the work would be carried out north of the border.

“There’s a proper procurement process that needs to be followed, but I have great confidence in Scottish workers and Scottish yards,” Mr Alexander told the Press Association.

GMB, one of the biggest unions in shipbuilding, has campaigned for Programme Euston to be awarded to Navantia’s yards in Methil and Belfast. The union welcomed the commitment to a UK-only competition.

Robert Deavy, GMB Scotland senior organiser in engineering, said defence procurement should create and protect skilled jobs and apprenticeships while supporting local economies.

“Programme Euston is a potentially transformative contract and promising it will remain in the UK will create optimism not only in Methil but in yards around the country,” he said. He urged the Scottish Government to work with UK ministers to provide the apprenticeships and training needed to support the contract.

Alongside the shipbuilding plans, Mr Healey announced a £100 million fund for mayors to establish a Local Apprenticeship Service. Teams will act like “football scouts”, linking young people with firms, including businesses that have not previously offered apprenticeships.

The Chancellor described the scheme as “a down payment” on work led by former Cabinet minister Alan Milburn to address the almost one million young people not in employment, education or training.

“The best thing we can offer a young person isn’t a benefit payment, it’s a first job with training and a wage,” Mr Healey said.

He argued that reforming the welfare system to help people return to work was both an “economic must” and a “moral duty”.

“So once again, as a Labour government, it falls to us to act,” he said. “I refuse to write off a million young people like the Tories have done.”

The Chancellor also announced that Rolls-Royce would invest £300 million in factories in Derby, Bristol, Glasgow and Rotherham. He described the investment as evidence of a “new confidence in Britain”.

Mr Healey said the Government wanted growth to be created across the country, with businesses generating jobs, wealth and investment in more places.

“Growth isn’t just a graph or a spreadsheet,” he said. “It’s a family at the kitchen table saying ‘Yes, it looks like we can afford that holiday this summer’. It’s the sole trader saying ‘Yes, for the first time, I think I can take on an apprentice’.”

He also sought to reassure financial markets ahead of his first Budget next month, saying fiscal discipline would be at the core of the statement and would provide families and businesses with “a bit of breathing space”.

Mr Healey acknowledged that the Government had less money available than his predecessor Gordon Brown had during the New Labour era. He said the country faced more difficult financial conditions and connected the industrial strategy with a promise to manage public finances responsibly.

The speech took place against a difficult economic backdrop. The Confederation of British Industry said private-sector activity had fallen in the three months to September and expected to decline further through the rest of the year. The decline was concentrated in retail and services, while manufacturing fell more moderately.

CBI deputy chief economist Alpesh Paleja said rising energy and employment costs, combined with weak demand, were putting pressure on profit margins. He added that uncertainty before next month’s Budget was holding back activity in some sectors.

The CBI’s chief executive, Rain Newton-Smith, said Mr Healey had set out a strong vision and provided “many of the right signals”. She said the Budget now needed to turn those signals into measures that would encourage firms to invest, take on young people and expand in the UK.

The CBI called for action to reduce the cost of doing business, protect the foundations for long-term investment and remove planning, infrastructure and regulatory barriers to growth. Ms Newton-Smith said the Chancellor’s commitment to fiscal discipline should reassure markets as a precondition for sustainable growth.

The plans were criticised by shadow chancellor Andrew Griffith, who said the announcements lacked clarity over their funding.

“These are more reheated announcements without clarity on where the money is coming from,” Mr Griffith said. He argued that additional docks had already been announced in the defence investment plan, which he said had a £4.7 billion funding shortfall.

Mr Griffith also criticised Mr Healey’s position on defence spending, saying the Chancellor had resigned as defence secretary after warning that Labour’s failure to fund defence was making Britain unsafe, but had not committed to the 3% target he had previously supported.

Mr Healey’s industrial strategy therefore faces two tests: whether the proposed investment can translate into contracts, jobs and apprenticeships across the UK, and whether the Government can deliver that programme while maintaining the fiscal discipline promised before the Budget.