mAritime nAtion:

A guide for MPs

#mAritimenAtion
CEO’s FOREWORD
GUY PLAtten
A
s Britain is an island nation, shipping
is arguably the most important
industry to the UK economy.
They may not know it, but every single
person in this country, every single day,
will touch, use and eat goods that have
been brought to the UK by ship. That is
because 95% of all imports and exports
are moved by sea.
Manufacturers rely on shipping to
import their raw materials, and to export
their finished goods. Energy companies
rely on shipping for their oil and gas.
Supermarkets rely on it to stock their
shelves. Hospitals rely on it to ensure they
have the medicine and equipment they
need. And 65 million passengers rely on
shipping for access to public services,
employment, business and holiday travel
every year.
The country relies on the £10bn the
maritime industry contributes in GDP.
It supports 240,000 jobs, and everyone
relies on it for the £2.5bn it pays in tax to
the UK Exchequer.
Shipping is an overwhelming success
story for the UK. But the UK industry,
respected for its leadership across the
world, is under sustained attack from new
competitors in developing economies.
Global seatrade is expected to double
by 2033, and it is vital that the UK has the
ambition to take a big slice of that pie. It
is time for British politicians to defend
and promote this industry, and to help
shipping companies make the most of the
massive opportunities for growth and job
creation that exist.
This document is intended to be an
introduction to the shipping sector for
MPs and sets out how industry and
government can work in partnership
moving forward. We stand ready to
work with every politician and every
stakeholder who shares our ambition –
to remain the world’s leading maritime
nation.
An introduction
to shipping
T
here are more than 120 commercially
active ports and harbours
operating in every corner of the UK.
They handle the world’s biggest container
lines, oil tankers and cruise ships, as well
as the smallest offshore support vessels
and tugs.
As long as the UK is a trading nation, it
will rely on shipping. But ships can move
anywhere in the world at a moment’s notice;
they can change their flag and register in
dozens of other countries – taking their
economic contribution with them.
The UK is in direct competition with
other established and emerging maritime
nations. Any loss of competitiveness will
damage the UK economy severely, but any
improvement to its competitiveness will
reap significant rewards.
In the 1990s, the UK was an
uncompetitive place to base a shipping
company, and jobs were quickly moving
overseas. Since the introduction of the
Tonnage Tax regime, there has been a
significant improvement. The Tonnage
Tax is responsible for creating 80,500 UK
jobs, and boosting the industry’s economic
contribution by £4.9bn. It is proof positive
that a strong, stable and competitive tax
regime works – not just for the industry,
but for the workforce and economy as
a whole.
In a recent survey, 88% of shipping
industry leaders said that the UK was a
competitive place to do business. But the
survey comes with a warning that, with
emerging economies seeking aggressively
to grow their maritime base, action is
needed. If Singapore, Hong Kong, Shanghai
and Dubai out-compete us, jobs will be lost.
For centuries we faced little or no major
competition from economies around the
world. No-one could come close to us on
our skills and expertise.
But things have changed. Global
business is moving eastwards. Seatrade
is expected to double by 2033 – not solely
because of the strength of western
economies, but because of the emergence
of new, previously under-developed
economies too.
So now is not the time for nostalgia.
If the UK is to remain a global maritime
power, we have to fight back. We became
a maritime power simply because our
forefathers were better than everyone else
at what they did. We must be the same.
We should not want solely to compete in
a globalised economy, but rather to lead –
as we always have.
working with
government
I
n 2013, the UK Chamber – alongside
associations representing other aspects
of the maritime services sectors –
entered into a ‘strategic partnership’
with government.
Its intention is to meet the challenges
facing the industry, to compete and
to grow.
Ministers from the Department for
Transport, BIS, HM Treasury, the Cabinet
Office and several other departments are
meeting industry leaders to determine
ways forward on key strategic and
practical issues. In doing so, we have
developed a strategic plan for the industry.
This way of working is innovative and
unparalleled across the world. It must be
maintained and developed.
Through this process, we have been
able to boost funding for maritime
training and make other significant
improvements – but there is so much
more still to do.
Shipping should not be a party political
issue. Every party and every politician
has a stake in ensuring that the UK
remains a competitive maritime power.
We recognise, however, that differing
parties have different ideologies on
business, taxation, skills and global
competitiveness. Through the strategic
partnership, we call on all parties to put
aside their ideological differences, and
work with us to create more jobs and
boost the industry’s already significant
contribution to the economy.
Policy
Agenda
A globally competitive F
or centuries we faced little or no
major competition from economies
business
around the world, no-one could come
close to us on our skills and expertise
– but things have changed. Global
environment
business is moving eastwards. As western
economies expand and previously under-
developed economies emerge, seatrade
will continue to grow. Countries in the Far
East are desperate to take our mantle and
they are taking decisive action to do so. So
now is not the time for nostalgia. If the UK
is to remain a global maritime power, we
have to fight back.
With shipping’s importance growing
it has never been more important to
ensure the UK has a competitive offering
to this truly global industry. There are
many issues that damage the UK’s
competitiveness, such as unnecessary
regulation and the difficulties international
employees face in obtaining visas – a
problem that we know has seen UK jobs
moved overseas.
That is why we have backed the
Government’s Maritime Growth Study,
set to be completed in late 2015. It
is vital all political parties back this
study and commit to implementing its
recommendations.
In particular, we need to see:
l The creation of an empowered and
robust cross-government maritime
organisation that can provide leadership
and governance to the whole sector
l An attractive and comprehensive
business proposition created to promote
both maritime companies, and maritime
service companies
l That the UK becomes – and is promoted
as – a competitive location to own, operate
and register ships
l That developing UK maritime skills
both at sea and ashore is seen as an
prerequisite for the sector’s growth
Backing
British Business
W
e constantly hear about the
importance of inward
investment – and it is important.
Many of the UK’s leading shipping
companies, although foreign owned,
choose to come here and contribute to
our economy. That is, of course, a good
thing, but if we spend all our time chasing
inward investment, our economic destiny
becomes entirely beholden to decisions
made abroad.
We still have a number of UK-born
shipping companies, but we do not
have enough. We need a more balanced
approach. If you look elsewhere in the
world, entrepreneurs and brokers are
giving it a go. They are buying their first
ships, and planning for more in years to
come. They are the major shipowners
of tomorrow but, so far, precious few
of them are British. We have to find
what is holding back UK entrepreneurs
and remove those barriers. Since the
recession, hundreds of thousands of
new British businesses have been set
up – but virtually none of them are
in maritime services. That provides
a clear, long-term threat to the UK
industry, and it ignores the numerous
opportunities for growth. It is a threat
that must be resolved.
To achieve this, we need existing
enterprise and investment schemes
to be modified or, indeed, developed
to make shipowning attractive to
investors and entrepreneurs, by
including a range of tax relief options
for start-up companies.
 G
lobal seaborne trade will double in
the next 20 years, but there is an
increasing shortage of seafarers
across the world.
This provides an unprecedented
opportunity for the UK to plug that gap,
creating new jobs and developing a new
seafaring generation. If we do not create
A seafaring those jobs, other countries will. But the

generation
industry needs government to match its
ambition.
We know that there is plenty of demand
from young people wanting a career at sea,
we know that the UK’s training programmes
and infrastructure are world class, and
indeed we know too that UK-trained officers
are well respected and in high demand
around the world. But quality comes at a
price – the UK is one of the most expensive
countries in which to train seafarers.
Government currently invests £15m in
seafarer training annually, and for that,
almost 900 people a year are recruited
for a career at sea. But this is not enough.
Government support currently covers
around a third of all training costs. If it met
the full costs, the numbers we could train
for the maritime sector would be increased.
A career at sea needs to be attractive
and financially worthwhile. Many countries
offer tax incentives to encourage seagoing
careers. The UK’s Seafarer’s Earnings
Deduction has helped, but it is only
available to those who spend 183 days
in a year outside the UK. This acts as a
disincentive to employment on short sea
routes, and the scheme should be extended
to all UK seafarers.
A greener
environment
W
hile it is invevitable that an
industry moving 90% of global
trade is going to have an
environmental impact, it is also time
political stakeholders acknowledge – and
welcome – the major steps forward that
the shipping industry has made in recent
years. Too many times we have seen
public figures make statements about the
industry’s environmental record that are
simply untrue.
Global shipping accounts for just 2% of
the world’s carbon emissions, and that
number has fallen year on year, even
as demand for shipping services has
increased. Old ships are being retired, and
new, greener ships are coming onstream
using innovative technology and developing
best practices to further reduce the number.
That shipping’s contribution to global
carbon emissions is falling at a time of
unprecedented growth in seaborne trade is
a remarkable achievement.
Despite these significant improvements,
however, the industry continues to face an
onslaught of new EU regulations.
The EU must respect that shipping
is globally regulated through the UN’s
International Maritime Organization (IMO).
This is to ensure a level playing field for all
shipping companies, and every time the
EU develops its own regulations, that level
playing field is put at risk.
The UK must play a strong role in
Europe, while ensuring that the European
Commission respects the global authority
of the IMO to develop environmental
regulations.
Border
Controls
T
he numbers of migrants arriving
in Calais in the hope of entering
the UK continues to increase.
Unfortunately, the UK Government’s
response is having a negative impact
on ferry operators and their customers,
especially on routes to and from Dover.
Lengthening queues at UK immigration
check points – particularly in Calais – at
peak holiday travel times, are causing
unacceptable levels of disruption. This, in
turn, means considerable inconvenience
and additional costs to passengers,
freight businesses, ports and the ferries
themselves. It also makes passenger and
freight vehicles much more vulnerable to
migrants attempting to gain access.
Around £89bn worth of trade passes
through Dover and Calais per annum. The
continuing wave of headlines highlighting
the migrants’ attempts to reach the UK
is putting this key gateway under strain.
Families returning from holiday, and
freight drivers bringing goods into the UK,
need proper protection from those who
are prepared to go to extreme lengths to
enter their vehicles, or otherwise attach
themselves to them. Whilst greater
security than the present gates and
fencing at the port of Calais would
be a positive step, the UK Government’s
own strategy for controlling entry into the
UK requires an urgent re-think.
To help ease the burden on ferry
companies, we need:
l Government to allow Border Force
officers to process passengers in groups –
so that, for example, passengers who are
obviously a family returning from holiday
are not subject to queues of several hours
l Defined service standards and
maximum queuing times at Border
Control posts. The UK Government
forces airports to ensure 95% of their
passengers wait no more than five
minutes to move through security
controls, and 98% no more than 15
minutes. The standard set for businesses
should also be observed by Government
agencies such as Border Force
It is clear that the solution to the
migrants problem lies not just in Calais
itself, but also in addressing the source of
the problem through greater cooperation
between the UK, French and other EU
governments and through staunching the
flow of migrants entering the EU via the
Mediterranean. International development
also has a key role to play over the longer
term in reducing economic migration.
© Chris Howes/Wild Places Photography / Alamy
UK Chamber of Shipping 30 Park Street, London SE1 9EQ
Tel: +44 (0)20 7417 2800 Email: query@ukchamberofshipping.com
Web: www.ukchamberofshipping.com Twitter: @ukshipping