London’s Lord Mayor and other leading shipping names have warned the UK not to let its leading global maritime position slip, with a potential exit from the European Union considered a damaging development for the sector.
Addressing a breakfast in London to launch a new report on the prominence of shipping services to the UK economy, Jeffrey Mountevans described shipping as the “watery basis of our wealth for many centuries”.
“As we all know there are other maritime centres who would love to surpass the UK’s position at the helm,” he said.
“It would be more than a shame, it would be a travesty, if we allowed our uniquely diverse and longstanding role at the forefront of the global maritime industry to be eroded.”
Mountevans was introducing a report by the City of London Corporation which shows the maritime services sector contributes £4.4bn ($6.3bn) to the UK economy and employs over 10,000 people.
While the report does not specifically address a Brexit situation, Doug Barrow, chief executive of Maritime UK revealed the City of London Corporation had a two hour debate on the issue before deciding to back the remain campaign.
While Mountevans had departed for another engagement at this stage of the breakfast, Barrow said the Lord Mayor supported that position.
Harry Theochari, vice chairman of Maritime London, told those attending the Mansion House event that a Brexit would be “damaging” to the UK maritime industry.
Ship finance representatives at the meeting, who asked not to be named in print, explained that if financial passporting was changed in the event of a UK exit, banks would have to re-evaluate their position and may shift part of their operations to other European locations.
Tom Boardley of Lloyd’s Register noted that a Brexit situation could also hit the UK register.
“A lot of shipowners chose the red ensign as it’s the premier EU flag,” he said.
Shipowners needed
Lambros Varnavides, vice chairman of the Baltic Exchange, said the presence of a shipowning cluster in the UK was key to the future of the services sector.
“Without the shipowning in London we will gradually wither away,” he said. “Owing to the change in tax legislation we have already seen some very prominent names have left. Without that base gradually all the services will suffer.”
Theochari said the UK maritime services sector had come though the worst recession shipping has ever seen very well.
However, he noted the ship and offshore finance pool has shrunk from $128bn in 2007 to around $88bn in 2014, with much of that shortfall a result of UK banks and Western European banks cutting back on lending.
At the same time,Theochari noted the UK is not strong in areas of new finance with the US and Norway dominating in the bond markets and the US boasting the largest pool of private equity.
“We are working very hard to kick-start to the UK capital markets,” he said.
Theochari explained: “It’s clear from the report that the future is very much in our own hands. As I say to the partners at my firm, we have been at the forefront of shipping for 320 years. Are we really going to let it slip through our fingers on our watch. If so, shame on us.”
