HC 630 Transport CommitteeWritten evidence from the City of London Corporation (MAS 014)

This letter responds to the recent invitation to submit written evidence to the above inquiry. The City Corporation is not in a position to reply in full to the questions posed by the Committee in its call for evidence but hopes that some observations from its perspective might be of interest to the Committee’s inquiry.

London, and especially the City, is a key centre for the provision of financial and professional business services both to the UK maritime sector and to the wider international shipping community. The industry has a significant national footprint, employing approximately 260,000 people directly and supporting a further 537,000 jobs indirectly, in areas including professional services and finance.

The maintenance of this capacity, and the critical mass of London as a maritime services centre, is a major strategic aim for City Corporation and it is suggested, should remain a priority for HM Government. Maritime services contribute export earnings, employment and tax revenue, and support the flow of foreign capital and investment into the UK. Examples include insurance, where 21% of premiums in the international marine market are brokered in London, while 62% of global “protection and indemnity” business is carried on here.

Law and dispute resolution is also important — the decisions of the Admiralty Court are widely respected and London remains a major centre of choice for the resolution of maritime disputes, either through litigation, mediation or arbitration. 70% of the world’s maritime arbitrations take place in London.

The establishment and maintenance of a stable, predictable, consistent and internationally competitive tax system is critically important. Certainty around Tonnage Tax is welcome. The direction of travel on Corporation Tax is similarly as attractive for shipping and maritime businesses as for any other companies which need not be in the UK but seek an attractive operating environment

The uncertainties of recent years have led to the departure of some ship owners from the UK and the transfer of activity to other centres. The well-established system of Resident Non-Domicile taxation was an important element in attracting to the UK significant numbers of ship-owners, particularly the Greek community. It is important that no further changes to the system as it now stands are made, so that a stable fiscal climate can attract and retain maritime business.

August 2013

Prepared 25th March 2014