Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence


Examination of witnesses (Questions 240 - 253)

WEDNESDAY 27 JANUARY 1999

MR HUGH MCCOY and MR JIM BUCKLEY

  240.  But what else would you do to strengthen registers then?
  (Mr McCoy)  I think there are two ways of doing this. You either offer incentive, as happened with the British investment grant in the 1970s and I am not advocating that, Chairman, but just giving it as an example, and this is where shipowners were given money to put ships under the British registry.

  241.  Yes, some of us remember that.
  (Mr McCoy)  I remember it well. You can do what is now contemplated which is to create the atmosphere for ships to come into the British registry. That takes time. The former measure is a quick one. I cannot think of many more measures that you would need to do other than giving money away.

  242.  Let me remind you, you did advocate as the Baltic Exchange a second parallel UK Register with acknowledged high safety standards and open to any nationality.
  (Mr McCoy)  Yes.

  243.  So what impact would that have?
  (Mr McCoy)  May I ask Jim to answer that question.

  244.  That is called delegation, Mr Buckley, so forward!
  (Mr Buckley)  I spend my life being delegated to and thoroughly enjoy it, Chairman. The whole thrust of the British Open Register was exactly that which Singapore is offering today and historically sprang out of the announcement that Hong Kong was going back to China. There was a vast fleet in Hong Kong and it was searching for a home. What we were after was enhancing London as a business centre, so although I used the symbol of an open register and a British flag, the thrust of the British Open Register was to attract overseas entrepreneurs to London to place their business with the maritime services of London.

  245.  You are saying that would not be affected one way or the other by a register?
  (Mr Buckley)  Yes, it would bring people to this British Open Register if that proposal were to be followed through and it would put more ships there which would give more political influence to the UK Government, and it would certainly bring more in the way of registration fees, but, most important of all, it would bring business through London and that is why we proposed it.

  246.  Do you believe that there ought to be a conscious political programme followed to encourage the development of the Isle of Man Register as a second UK register?
  (Mr Buckley)  The Isle of Man Register is of course a second UK register in some senses and it is also an open register in some senses. The disadvantage, and I am conscious that this is being recorded, that the Isle of Man has, I guess, is that it is not moored off Tower Pier and close to the City of London because it is not bringing the business into the City of London which is where we are coming from.

Chairman:  That may be a little bit beyond even the Manx Parliament, Mr Buckley.

Mr Stevenson

  247.  Just for clarification, I am getting the impression that what you are primarily interested in, understandably, is whether international maritime business is conducted through your Exchange.
  (Mr McCoy)  Absolutely.

  248.  We have a beggar-thy-neighbour world system where if there are measures taken to attract people to a particular register in one part of the world, another part of the world tries to beat that. I am not suggesting that you have got the answer to that today, indeed I do not think any of us has, but that appears to be the overall situation. Am I correct, therefore, in assuming that as far as the Baltic Exchange is concerned, you are not particularly bothered where they are registered, but it is where they do business?
  (Mr McCoy)  Yes, Chairman, I think this is a fair statement. That is why I said in my opening remarks that we are commercially driven by international trade.

  249.  Indeed, but the question, therefore, I would like to ask, if I might, is: do you, therefore, see any dangers whatsoever in the obliteration of the UK Register, the UK as a maritime presence, which is, in terms of your business, very small, and the continuing success of your business? Is there any relationship whatsoever?
  (Mr McCoy)  If the UK Registry disappeared, Chairman, as I said in my opening statement, the business that we do is so small, I have to be frank and say it would have very little effect.

Mr Bennett

  250.  Why do we need to still have the UK Register linked to British nationality? We are talking about wanting a second register to get around in effect that position, but would it not be much better if we simply had an open register?
  (Mr McCoy)  We are not arguing for a second registry. What we are supporting, the Chamber's position, is that if there is a better regime here for owning ships, whether it is on the UK Registry or a second registry or however, we welcome that because it would bring ships and companies to London who will do their business with the Baltic Exchange, as Jim Buckley has explained, and that is our driving force. I personally do not care where the ships are as long as they do their business in London.

  251.  It seems to me that for a registry the important thing now is standards and that as long as the registry, as you are suggesting, imposes standards, then in an increasingly international world does it matter if the nationality goes with that?
  (Mr McCoy)  It could be argued since there are many fine registers in London, but the proposition I am putting to you, Chairman, is that we want this business in London. I am not being selfish about it; that is what we want. We want more ships to do more business because we are in a very competitive business and the experience of Singapore is that shadow across London because they are going to take business from London eventually, so we want tonnage here.

Mr Gray:  One area we have not really talked about particularly and it is possibly quite important is tell me, to what degree would the Greeks or other foreign nationals who are based in London, and they themselves live in London and manage their ships from London, fix their ships through the Baltic Exchange, to what degree do they believe themselves to be part of British shipping, to use that expression, and in what ways do they make contributions towards the national take, if you like? What is their contribution towards British shipping if indeed I am right in believing that Mr Goulandris believes himself to be a member of the British shipping community?

Chairman

  252.  That is a fairly subjective question, Mr McCoy, but you may answer it in any way you like.
  (Mr McCoy)  I said in my opening comments that the Greeks are estimated to own about 25 per cent of the world's bulk carriers and tankers which is our main trade. They are, therefore, by definition exceedingly important to the London market. I think I said this earlier, that if the Greeks did not support the London market, and there are many people trying to get their business, it would decimate Maritime London as we know it at the Baltic Exchange.

Mr Donohoe

  253.  In a practical sense, what difference, if any, would be made if, say, trade were to be skewed towards the UK as far as, say, the business in Rotterdam transferring to Hunterston? What difference would that make to you?
  (Mr McCoy)  It would make very little difference because Baltic members fix Brazilian iron ore to Japanese steel mills. The fact that those are big ports is not significant. We are a cross-trading market, we fix Romanian ships to Americans and we fix Kuwaiti tankers to South Africans, so it would not have any great effect.

Chairman:  Thank you very much indeed, gentlemen. That has been helpful.

  


 
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