Shipping is key to our post-brexit success
Since the vote to leave the European Union, the future of British business has been the subject of extensive and heated debate. Peter Hargreaves, the billionaire donor to the Leave.eu campaign, was one of many leading business people to suggest that the best model for Britain, post Brexit, was that of Singapore, where there were few barriers to companies who wanted to move there and, in some cases, huge state incentives for those that did.
But claims that in order to survive after Brexit the UK shipping sector will have to follow the Singaporean model by pandering to businesses can be readily dismissed. Unlike Singapore, the UK has numerous advantages that have allowed British shipping to flourish. In spite of the doom and gloom surrounding Brexit, the UK’S shipping will be the backbone of a truly “global Britain” once we eventually leave the European Union. This global Britain will be defined by new trade agreements and greater attention, in diplomatic and economic terms, paid to the Commonwealth and emerging markets. It will reprise Britain’s position as an international trading hub. And while it’s true that Singapore has grabbed a large market share of international shipping in recent years, it has not been a one-way street: over the past year, a number of shipping companies have moved operations away from it. The UK doesn’t have to share the same fate. It has more to offer than low financial barriers and less red tape, and the success of the sector must not be underestimated: it supports almost a million UK jobs and delivers 95pc of international trade.
Britain, it bears remembering, has a rich seafaring history and continues to be an influential maritime power. The International Maritime Organisation, the regulator of global shipping, is based in London. English language and law are universally respected in global business. More than that, in fact: English law serves as the de facto law for the majority of global businesses. And when you consider Britain’s location geographically, its language and its time zone, it’s clear to see that it is almost uniquely placed to trade goods seamlessly around the globe.
London remains a much soughtafter business and industrial centre, and contributes greatly to making British shipping profitable. The Menon report on Leading Maritime Capitals of the World 2017 placed London fifth. A cluster of financial, insurance and legal services in the City makes it an attractive base that allows companies to conduct all their affairs in one location. But the UK’S position as a world-leading shipping hub doesn’t just hinge on the prosperity of London. The country is home to many worldclass clusters of maritime services, strengthening its overall offering on the global stage. As an island nation, we are accessible and well-equipped to send and receive goods at several points along our vast shoreline – the longest of all EU member states.
Ports including Felixstowe, Glasgow, Liverpool and Southampton all have enviable facilities for international shipping. Extensive infrastructure throughout the UK allows the swift delivery of international goods. Few countries in the world can boast of having the same logistical power that the UK has.
Few countries, too, can compete with British tonnage tax: a versatile tax system that encourages enterprise in the shipping sector. In Britain, the tax levied on shipping companies depends on the total tonnage of the shipping fleet and not the company’s profits. It isn’t unique to the UK, but British tonnage tax is hugely competitive, and represents a very attractive incentive.
The UK also continues to have a strong voice within the international community. Just as its diplomatic, political and economic power remains undented by Brexit, so does the future of its growing shipping industry.
We are told on an almost daily basis that our post-brexit future looks bleak, and we are on a sure path to global insignificance. But far from facing a period of decline, the UK will thrive in the post-brexit world.
And what’s more, it is British shipping that will be the very foundation on which we build our post-brexit success as a nation.
Guy Platten is the chief executive of the UK Chamber of Shipping
‘Britain has a rich seafaring history and remains a maritime power’