Select Committee on Environment, Transport and Regional Affairs Twelfth Report


Summary of Conclusions and Recommendations

      (a)  We believe that the case for ensuring that the United Kingdom has a strong shipping industry, and particularly a successful register and a large number of seafarers, is overwhelming (paragraph 32).

      (b)  Given the parlous state of the UK shipping industry, we strongly recommend that urgent action is taken both to increase the number of vessels on the UK register, and to increase the number of British seafarers (paragraph 54).

      (c)  We welcome the Government's commitment to training, and support the measures proposed in British Shipping: Charting a new course which are intended to increase the number of cadets recruited each year, as well as that intended to promote the training of ratings (paragraph 57).

      (d)  We doubt that many companies, if they do not already contribute to training, particularly those based abroad, will respond favourably to attempts to raise a training levy on a voluntary basis. We recommend that the Government, in conjunction with the Chamber of Shipping and others, should monitor closely the success or otherwise of its proposed voluntary training levies and, if they prove unsuccessful, should consider what measures should be put in place to eliminate 'free riding'. This is a subject to which we return when we consider the proposed tonnage tax (paragraph 59).

      (e)  We recommend that, hand in hand with efforts to increase the funding for, and the availability of, training berths, the Government should take the lead in ensuring that sufficient cadets come forward to fill those berths. We recommend that the Government looks to the example set by the Netherlands, and the successful campaign mounted there to attract recruits to the industry (paragraph 60).

      (f)  We recommend that the Government should determine urgently whether any amendment to employment rights legislation is required to respond to increased use of off-shore contracts, and that it should consider the availability of social security benefits for those employed on off-shore contracts, and by foreign shipping companies. The Government should make such amendments to the law, and to the social security regime, that are necessary to safeguard the rights of seafarers (paragraph 63).

      (g)  We support the Commission's proposals on ferry manning, relating to minimum conditions of service and wages for seafarers on intra-Community ferries (paragraph 64).

      (h)  We recommend that the Government should further press the European Union to consider including intra-community cargo vessels within the terms of the ferry manning initiative (paragraph 65).

      (i)  We therefore welcome the Government's commitment to help the industry to establish a register of British ratings. We recommend that the Government should ensure that accurate data about the state of the British shipping industry continues to be gathered in future. (Paragraph 66).

      (j)  We welcome the Government's commitment to fund the Maritime and Coastguard Agency adequately so that it is able to carry out its valuable programme of Port State Control inspections. We believe that if the Agency sees some benefit in increasing the number of Port State Control inspections the Government should provide it with adequate funds to do so (paragraph 69).

      (k)  We support the Government's efforts in respect of duty free, and recommend that they are redoubled (paragraph 70).

      (l)  We regard the fact that the Treasury and the Inland Revenue did not participate in the Shipping Working Group deplorable, and believe that their failure so to do has unnecessarily delayed the proper consideration of the tonnage tax. We also believe that the evidence given to us by the Treasury was ill-prepared and inadequate (paragraph 77).

      (m)  The UK shipping industry is in a parlous condition, and radical measures are required to arrest and reverse its decline. We recommend that Lord Alexander's inquiry be brought to a close as soon as possible, and that a low rate tonnage tax, including measures to boost training of British seafarers, and to prevent tax avoidance, should be introduced without further delay, preferably as an amendment to the current Finance Bill (paragraph 78).

      (n)  We commend efforts to improve the 'user-friendliness' of the UK register, without compromising safety, and recommend that they are continued. If necessary, we recommend that the Government should make legislative changes to assist the Maritime and Coastguard Agency, by removing unnecessary strictures from secondary legislation (paragraph 80).

      (o)  Since we strongly support the transfer of freight from roads to coastal and short-sea shipping routes, we are clearly in favour of Actions 27 to 33 of the daughter document which have a similar objective (paragraph 81).

      (p)  We do not believe that generally relieving existing restrictions on the use of 44 tonne lorries will encourage greater use of short-sea and coastal shipping. We therefore recommend that the 44 tonne lorry concession should be extended only to travel to and from ports (paragraph 82).

      (q)  We support the existing system of Foreign Earnings Deduction tax relief for UK seafarers, and recommend strongly that it be retained (paragraph 84).

      (r)  We recommend that, as a matter of urgency, the Government should consider how best to end the anomaly concerning the non-application of Foreign Earnings Deduction to British seafarers engaged in the short-sea and coastal trades. Its objective in doing so should be to encourage the employment of British seafarers in those vessels which operate close to our coasts (paragraph 86).

      (s)  We reiterate that, particularly by comparison to road transport, short-sea and coastal shipping is an environmentally-friendly means of moving freight, and that the Government should take whatever steps are needed to encourage freight to be carried by sea. We recommend that the Commission for Integrated Transport should consider the matter as a high priority (paragraph 87).

      (t)  We recommend that the Government should set itself ambitious targets and deadlines for enhancing the situation of the UK shipping industry. There must be improvements in the number, weight and type of vessels on the UK register, and the number, age distribution, and quality of British seafarers. It should devote adequate resources—rather more than £18.6 million over three years—to meet those targets. Finally, it should introduce the radical and positive fiscal measures, relating to the tonnage tax, and the Foreign Earnings Deduction scheme, which we have described above. Only by doing so will it reverse the decline in the UK shipping industry, and if it does not do so the future of the shipping industry, of the shore-based industries, including Maritime London, and of the United Kingdom's ability to defend itself, looks extremely bleak (paragraph 89).

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