| The United Kingdom is a maritime nation; 95% of our trade by tonnage arrives or leaves by sea. The shipping sector contributes over £1 billion per annum in overseas earnings. In addition, shipping supports significant land-based activities: London is the world's most important maritime services centre, contributing another £1 billion per annum to the balance of payments. Maintaining the UK's prominence in world shipping depends on having a sizeable merchant fleet and trained personnel both for the merchant navy and for the shore-based maritime industries that depend on people who have had experience of working at sea.
Tonnage tax was introduced in 2000 to try and achieve both these aims: to boost the UK fleet and to increase the training of seafarers. It has considerably increased the UK registered merchant fleet and the training commitment in tonnage tax has led to an increase in the number of cadets. The Committee welcomes this success. But tonnage tax has not created the number of jobs for UK seafarers that had been expected, and there are fears that too few officers are moving from training to employment to meet Britain's future needs.
The Treasury and Department of Transport have recently published a review of the tax regime, which proposes measures which are likely to be taken forward in this year's Finance Bill. The Committee welcomes the attempts by the Government to ensure that legislative changes required by the revised EU maritime state aid guidelines do not lessen the effectiveness of tonnage tax. But the more difficult questions about training and employment have been remitted for consideration by a sub-group of the Shipping Task Force. This must not be an excuse for indefinite delay. We recognise that the first intake of cadets is only now reaching the end of initial training and that ideally further changes to the regime should be reached through consensus. However it is clear that shipping companies have gained real benefits from the tonnage tax regime; we believe it should be possible to extend its role in ensuring the United Kingdom has the trained seafarers it needs. It is reasonable to seek an opinion from the Shipping Task Force, but there should be a deadline for its work. The Government should be prepared to take difficult decisions once that work has been done.
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