British shipping & maritime services - world leaders
In recent decades Britain has continued to lead the world as a maritime services centre, with marine insurance, ship finance, law, classification societies, shipbroking, education, consultancy and others all combining to form the largest maritime services cluster, based in the City of London. This strength has historically been rooted in a strong shipping industry and the skills and experience that provides.
Since 2000, shipping itself – owning and operating ships – in the UK has seen remarkable growth as a result of the Government’s positive policies in favour of investment, training and the British register. The UK-owned fleet has increased by some 200 per cent, and the UK-flag fleet – albeit from a very low base – has grown by more than six times.
This turnaround is of major benefit to the UK economy, shipping revenue for 2008 (latest figures) recorded an increase of £2.38 billion to a massive £13.2 billion, of which almost £10 billion came from overseas trading. The overall net contribution to Britain's balance of payments was also up at £7.1 billion.
Sea transport was third in the league table of service sector export earners, with revenues totalling £10.6 billion, equivalent to more than 6% of the total for the UK.. As a headline figure, shipping now earns well over £1million every hour of every day for the UK economy.
In employment terms, the number of new entrant officer trainees in 2009 increased to more than 950, twice the level in 2000 and the highest for at least 20 years. The growth in trainee officer recruitment has risen twice as quickly as the number of uk-based ships.
Shipping combines with not only “city” maritime services but the broader interests, including shiprepair and marine equipment manufacturing, lying at the heart of the £56 billion turnover maritime cluster in this country. There is every reason to expect that the fleet’s current expansion will continue into the long term – ensuring that the UK remains Europe’s largest maritime centre, and a global leader.
To be sustained into the future, however, this success needs a stable and competitive environment, not least in fiscal policy. The adoption of tonnage tax by shipping companies is conditional on a ten-year commitment to trading and training in the UK. That requires confidence that the regime will not be modified without good cause and adequate notice – and that decisions in other policy areas do not reduce the attractiveness of basing shipping businesses in the UK and of training British seafarers.
That confidence has been shaken over the last few years by a sequence of changes and reviews. The 2006 reform of the taxation of finance leases and proposed future changes to the capital allowances regime bring uncertainty which prompts questions regarding further potential fleet expansion and investment in the UK.
There are challenges too in other policy areas – for example, the law concerning the employment of foreign seafarers, currently under consultation. Challenges may come also from outside the UK, particularly in the application of state-aids policy to tonnage tax by the European Commission.
It is essential that the Government re-establishes a strong focus on ensuring that its successful shipping policy is actively sustained and that the conditions are right for further growth of shipping operation and employment in the UK.