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

Memorandum by the Chamber of Shipping (IT 40)



  The Chamber welcomes the Government's commitment to take a strategic view of the role of shipping and the wider maritime-related industries in the UK and to put forward a positive industrial policy for this sector.

  A new vision of Britain's maritime future, with Government and industry operating in partnership, would benefit UK plc in terms of national earnings, GDP, employment and defence.

  The Chamber hopes that the satellite paper promised on shipping will set the policy framework. The Chamber, together with RMT and NUMAST, is calling for urgent Government action in the areas of training, employment costs, taxation and investment, and future opportunities for British ratings.

  Shipping has virtually no capacity limitations; pays its full infrastructure cost; is the most environmentally friendly transport mode; and is subject to high international standards of training and safety.

  UK ports and terminals are generally efficient. However, a positive planning policy is necessary to encourage the location of major consumers of raw materials on or near the coast and to ensure that waterside sites in ports and waterways remain available for maritime activities.

  The Chamber supports speedier planning processes, greater transparency of port accounts, and the current review of the role and status of trust ports.

  The Chamber welcomes the practical approach of the White Paper to the facilitation and promotion of short-sea shipping, including a review of the freight facilities grant regime.

  Government must not give undue advantages to other transport modes (such as rail). The current discrimination in the use of 44-tonne lorries (which are allowed in movements to railheads, but not to ports) should end. It is unjustifiable and deliberately disadvantages the use of shipping.

  The Chamber supports most of the practical measures suggested in the White Paper to improve port and coastal safety functions and the initiatives being launched by the newly constituted MCA. We do not, however, support the imposition of a levy on ships to pay for Emergency Towing vessel Cover, since this would impose a cost burden on British companies when many others would also benefit.


  The Chamber welcomes the fact that, although the principal focus of the White Paper is the national domestic transport framework, the Government does recognise that there is also an essential, wider dimension to transport policy. This includes how cargoes and passengers reach and leave the UK, as well as the economic and employment contribution which British carriers make to UK plc from transport operations abroad.

  The Chamber welcomes the acknowledgement in paragraphs 3.179-3.182 that, while continuing to take a free-market approach to the sea transport sector, the Government will also "take a strategic view of the role of shipping and the wider maritime-related industries in the national economy so as to determine Britain's future maritime needs and how those may be secured". We welcome in particular the assurance that any new policy will be based on a long-term vision and will comprise objectives with firm commitments to action jointly agreed between the industry and government. We strongly endorse the four broad aims set out in paragraph 3.181.

  The Chamber acknowledges that the Government is fulfilling its manifesto commitment in addressing the key issues of employment and investment in the UK shipping industry and congratulates the Deputy Prime Minister on his establishment of the Shipping Working Group and the work it is undertaking.

  In that context, the Chamber has worked closely with and co-ordinated its approach with the two main seafaring unions, RMT and NUMAST. The industry has jointly called for urgent Government action in the following areas:

    —  Training—The aim is to achieve a target of 1,200 new officer recruits each year (identified by both Cardiff and London Guildhall Universities) and to employ more ratings. This would require upgrading existing training assistance programmes, removing unnecessary restrictions on ships where seafarers can be trained, encouraging the development of alternative career structures for seafarers, including more rating/officer conversion training and enhanced training for ratings.

    —  Employment costs—This is the key driver to the preservation of maritime skills in Britain for the future needs both of shipping and the related, shore-based businesses. This would require expanded crew travel assistance under the present scheme and tax alleviations to reduce the cost of employing British nationals in the worldwide market.

    —  Taxation and investment—A new competitive tax environment is required for shipping in Britain, which would put British companies on the same footing as other countries in Europe, including the Netherlands, Norway, Germany, Greece, and others. In recent years, the first three of these have provided a choice between an optional tonnage-based tax regime for their shipping companies and the conventional corporate tax regime.

    —  Ratings—Further study is required on the important issue of future job opportunities for British ratings.

  The industry has argued that action in these areas would produce significant rewards for Britain, in terms of:

    —  a bigger fleet and share of the trading opportunities which lie ahead (world seaborne trade is forecast to double by the year 2012). This in turn would mean increased revenues for Government;

    —  increased employment of British seafarers;

    —  more high-value, flexible and long-term jobs for teenagers;

    —  safeguarding an expansion of Britain's maritime skills also for the many related shore-based industries in manufacturing (for example, shipyards, shiprepairers and marine equipment manufacturers), other maritime services (such as ports and surveyors), and in the City (including insurance, shipbroking and legal services);

    —  defence capability secured; and

    —  Britain's status in international organisations on key environmental issues strengthened.

  A new policy and vision of Britain's maritime future—established through a partnership between Government and industry—would be the first step towards re-establishing a wider maritime awareness and confidence in Britain as an island nation. It would bring significant and positive effects for the UK plc. National earnings, GDP, employment and defence would all benefit.

  In this context, if maritime transport is to continue to play a significant part in Britain's national transport network—and it currently carries 25 per cent of all cargoes moved within Britain by tonne-miles—then it is important that the Government acknowledges the value of the national fleet and the maritime skills necessary to operate it. British carriers must be in a position to compete on the same broad basis as their European and international competitors, both in terms of the taxation climate and employment arrangements. This the White Paper appears to do.

  A separate "daughter" paper on shipping is expected to be published in the Autumn, which will include the Government's proposals and strategy for reviving the shipping industry. We hope that it will fulfil this promise. We understand that the ETRA Committee intends to examine the matter of shipping (including the crewing of British-flagged ships and the work of the Marine and Coastguard Agency) after the publication of that paper. The Chamber would welcome the opportunity to present evidence also concerning that inquiry in due course.


  In any consideration of the practical role of shipping within the UK's domestic transport system, four key factors should be borne in mind:

    —  maritime transport has virtually no capacity limitations. As part of an open world-wide market, more or different ships are instantly available and even the construction time for new vessels is not extensive. Provided port facilities are available, there are no "track capacity" limitations;

    —  the competitive world of shipping provides capacity with no requirement for direct operating subsidies. In the UK in particular, shipping already pays its full infrastructure cost through port charges and light dues;

    —  in terms of energy efficiency and air pollution, shipping is already the transport mode which is the least harmful to the environment. Its activities are by definition mostly remote from land and therefore from populated areas; and

    —  maritime transport operators provide a high standard of training and of safety, meeting increasingly well-policed national and international standards.


Posts and Planning (pages 75, 80 and 102)

  In our view, the UK is generally well supplied with ports and terminal facilities. The best are now among the most efficient in Europe. There will always be a need for further investment as trades and ships change but we consider that the competitive environment within which port operators, whether they are in public, private or trust ownership, respond to customer demand is healthy. There do not appear to be constraints on the availability of investment capital (except perhaps with local authority-owned ports, and they too have generally been able to enter public/private partnerships where necessary).

  We are concerned that waterside sites in both ports and waterways should remain available for maritime activities, whether as terminals linked to inland transport or, particularly, for industrial use. There should be a presumption against re-zoning of waterside or nearby sites for housing or leisure use except where future water transport use cannot be envisaged. Such proposals should have at least regional consideration, rather than a purely local perspective, and take account future expected growth in waterborne transport.

  Furthermore, there should be a positive planning policy to encourage industrial projects which are likely to be major consumers of raw materials to be established in costal locations. Where appropriate, these and other industrial/distribution projects which require freight connections should be directed to port or terminal sites. Such developments should not be permitted elsewhere if suitable waterside sites are available.

  We share the concern of the ports industry about the length of the planning process for new terminals and would favour improvements to the existing appeal procedures, to allow speedy decisions to be taken. We would favour improvements to the existing appeal procedures to allow speedier decisions to be taken. This might include empowering hearing inspectors to limit participation to "representative intervenors" for groups with similar interests.

  While the overall competitive environment does generally bring appropriate pressure on port costs, port authorities are local statutory monopolies and are able to exploit that particularly where customers are tied to waterside facilities such as oil refineries or quarries. We have no doubt that ports should continue to be subject to the regulatory safeguards of the Ports Act. We would still welcome greater transparency in the availability of port accounts—apart from trust ports, it is rarely possible for users to assess whether port charges are set at reasonable levels without making a formal objection to the Secretary of State. We are also strongly in favour of open consultation between the authorities and port users about all aspects of port facilities and services—the arrangements in UK ports vary enormously in effectiveness.

  Specifically, the Chamber welcomes the current review of the role and status of trust ports in Britain, following the Government's withdrawal of the earlier plans to force the privatisation of such ports above a certain size. We share the White Paper's view that there is a role both for a variety of forms of ownership of ports in the UK.

Facilitation and Promotion of Short-Sea Shipping (pages 71-72 and 75-76)

  The Chamber welcomes the practical approach in paragraphs 3.183-3.188 to the potential for diverting more traffic to water-transport. Although modest, it is nevertheless significant and should be supported. Generally, the concern should be to provide genuine choice and encouragement for shippers to move cargo by the best and most suitable mode in a competitive environment. Two basic principles should underlie Government policy: each transport mode should carry both its full infrastructure costs and is full ongoing environmental costs (e.g., in terms of pollution).

  Specifically, the Chamber welcomes the intention to extend the application of the freight facilities grant regime so that coastal and short-sea shipping may benefit and looks forward to the consultation promised, including on the criteria to be used in assessing applications. While the Chamber has in the past been sceptical of the effectiveness of the existing regime in achieving an effective shift from road to water, we favour the giving of greater attention to waterborne options which might be brought into the scheme. This applies both to coastal and inland-waterway operations. We hold the view that rail grants should not be given where there is a more cost-effective alternative, with or without a reduced grant.

  If the use of water transport is to be expanded, it is essential that the objective is not obstructed by policies or advantages aimed at other modes. In particular, while it is undoubtedly desirable for more traffic to be transferred from road to rail transport, that should not prevent traffic moving from road to water, and most not encourage transfers from water to rail.

  One disappointment in the White Paper is its rejection (pages 71-73)—at least for the time being—of the case for allowing general use of 44-tonne lorries operating with six axles. The Chamber notes the open statement in paragraph 3.165 of the reason for this in that the Government perceives a danger that some existing or future rail freight would transfer to road if general use were allowed. The Chamber welcomes the willingness of the Government to refer the matter to the Commission for Integrated Transport, but notes that this will take time and the White Paper does not envisage implementation of general use before the year 2003. Again, the intention is explicit: to give railways the chance to develop the heavy-load market.

  It is a disappointment that the White Paper did not consider the case, put by the industry, for an interim phase in which the use of 44-tonne lorries would be permitted in movements to ports as well as railheads. Shipping is generally acknowledged to be more environmentally friendly than rail transport and yet the current policy discriminates against shipping in favour of rail. To persist with a policy which deliberately disadvantages shipping is unjustifiable and the Government should be urged to correct this at an early date.

  Limiting the use of 44-tonne lorries to railheads alone may increase road miles. Where nearer ports are available, it causes increased transshipment costs (road/rail as well as port interfaces) and diversion from sea to through-rail transport (e.g., to the Continent).

  In considering measures which will enable greater use of sea transport, the Chamber draws attention to the disproportionate savings in road miles from the use of the larger-capacity carrying potential that ships offer. For example, one British shipping company has a contract for delivering clean oil products from Milford Haven to Avonmouth, using the capacity of a single ship (less than 8,000 tonnes). Just that one contract takes 22,000 road movements off our roads every year.

Safety and Standards (pages 87-88 and 124-125)

  In regard to the section on Marine Safety, the Chamber supports strongly the new initiatives of the Maritime and Coastguard Agency (MCA) in bringing together the former Marine Safety and Coastguard Agency in a single, integrated agency. We support also the actions being undertaken by the new MCA to rationalise and improve the efficiency of the agency, particularly with a view to creating a user-friendly authority which will encourage greater registration of ships in the UK, while of course maintaining high safety and environmental standards. In the section on Ports and Shipping and Marine Clean-Up, the Chamber supports the Government's actions to encourage responsible discharge of ships' wastes in ports and the provision by port and terminal operators of adequate waste facilities (paragraph 4.149).

  We also support the concept of a "marine operations code for ports" and a continuing high profile by the UK Government in IMO work on standards generally and pollution and compensation.

  However, the Chamber does not support the proposal, in paragraph 4.148, that there might be scope for imposing a levy on ships to pay for additional emergency towing vessels (ETV) cover around the UK coast. In practice, this would impose a correspondingly greater burden on British shipping companies, while the benefit will be obtained by all companies with ships passing through UK waters and indeed by the nation as a whole.

The Chamber of Shipping

September 1998

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