by Lloyd's List
8 August (Lloyd's List) - BRITAIN’S leading shipowner trade association already has a working relationship with new shipping minister Mike Kane and expects constructive dialogue with the incoming Labour government, according to its chief executive.
In an interview with Lloyd’s List, the Chamber of Shipping’s Rhett Hatcher emphasised that the industry does not expect to get its wishlist handed to it on a plate, and will instead seek to bring private and public sectors together to boost the UK’s maritime standing.
While non-partisan, the organisation follows politics closely. It sees policy development and the monitoring of new legislation and regulations as part of its core function.
Hatcher spent the early part of his career in the Royal Navy, after which he worked at the Ministry of Defence for nine years, liaising closely with the Home Office, Foreign Office and Cabinet Office.
This has given him a strong understanding of what he described as “the Whitehall village”, a background that should prove helpful whichever political party is in power.
A general election in Britain in the past month saw the Conservative Party lose office after 14 years, to be replaced by an administration led by the Labour Party under Keir Starmer.
As is usual with such handovers, the policies set down under the old government will remain in place until such time as the new government decides to change them.
The Chamber’s remit includes briefing shadow spokespersons, and it had already got to know Kane — whose portfolio also includes aviation and security — while Labour was in opposition.
The last major shake-up in UK shipping policy was the Tony Blair government’s 1998 white paper British Shipping: Charting a New Course, which paved the way for the subsequent introduction of tonnage tax.
The deputy prime minister at that time, John Prescott, was a former merchant seafarer took a personal interest in bolstering the UK as a flag state.
Throughout the current century, the industry has had a low profile. Shipping ministers have come and gone, with six in the last five years alone.
The most recent policy initiative was Maritime 2050, bringing together 184 policy proposals to maintain Britain’s maritime competitiveness.
Billed as radical when launched by Chris Grayling in 2018, it has been backburnered by subsequent transport secretaries ever since.
A critical report from the cross-party transport select committee last year judged it long on aspiration and short on concrete action.
No big surprises in store
While Labour is expected to be generally supportive of shipping, it is unlikely to have any sudden surprises planned.
“The Chamber does not expect very much more than has been announced in public already,” said Hatcher.
“Mike Kane was shadow minister for four years. He is pretty knowledgeable, he knows the issues, he knows where we are nationally on most things.
“We are looking forward to getting a sense of what he has been briefed by his officials and what he has discussed with the Treasury and what priorities he has managed to get across the line, from his perspective.”
Labour’s maritime priorities are likely to include decarbonisation. That could take the form of a revamp of the 2019 Clean Maritime Fund, which the last government had already promised but which didn’t happen before the election.
“There is a very strong consensus that the 2019 Clean Maritime Plan is due a refresh and that cascades out of Maritime 2050. We are very keen that it includes a multiyear strategy,” Hatcher went on.
“Annual plans make it very difficult to generate the level of confidence in the industry and those who invest in it. It is pure business sense.”
The Chamber would like to see a framework of at least three to five years and ideally even longer, facilitating collaboration between the public and private sectors.
“It’s not for the government to fix everything and indeed the industry isn’t after that. We like the flexibility to do this and are very keen to get on with it, but it needs policy and regulation and an understanding of the government plans.”
Another big issue for the Chamber is Britain’s emissions trading scheme tax, known as the UK ETS. The taxes would be tantamount to a 30%-40% levy on fuel for some companies.
That could hit lifeline ferry operators in all four UK nations hard, it feels.
“We are pressing hard for government to exempt lifeline ferries from that at least until 2030, to allow for them to work on their ships, their infrastructure and shore power … before being subject to the scheme to a point where they might not survive,” said Hatcher.
The solution is electrification and ferry companies have expressed willingness to order appropriate newbuildings once the infrastructure is in place.
But once the infrastructure is built, the demands on electricity supply might put the lights out in Southampton.
Kane is aware of issue and will know that EU countries have initiated exemptions from ETS taxes on pragmatic grounds.
Training needs
There is also a need to boost the number of UK seafarers, which have still not recovered from the lockdown era. While an intake of about 2,000 entrants a year is required, the current intake is probably about half that.
At present, the government funds 50% of the cost of training officer cadets through its Support for Maritime Training scheme. So-called SMarT funding runs to about £16m a year.
The scheme expires next year. As a minimum, CoS wants to see SMarT renewed, and ideally, it would like it to support training costs in full.
Hatcher disagrees with the argument that the industry should foot the bill for its own staff training needs.
“We think it’s a team effort. There is [an element of] confidence here, the government showing a commitment, a recognition of the importance and criticality of the sector to the country, its prosperity and its social wellbeing,” he maintained.
Every £1 in government support for seafarer training returns £4.80 to wider economy, according to CoS research.
UK seafarers and UK-trained seafarers are globally seen as the gold standard and more of them can only be good, even if not employed by UK companies.
Despite leaving the European Union in 2020, Britain has still to bite the bullet of implementing post-Brexit border controls. This has infuriated ports-oriented trade associations such as the British Ports Association and UK Major Ports Group.
Their members have spent tens of millions of pounds on infrastructure, only for the recent governments to keep chopping and changing requirements.
The CoS’ priority is to ensure supply chains operate as smoothly as possible and people and goods are subject to as few checks as possible.
“Ships are rubbish without ports and ports are rubbish without ships. It is a very close symbiotic relationship and our members use ports,” Hatcher pointed out.
“The fact is, this has not been dealt with very well previously. We, and our members, are keen to look to the future.”
Labour is promising to negotiate a veterinary agreement for animals and animal products with EU, which will greatly simplify trade in agricultural goods and food. This is seen as a positive.
There is no indication that Labour will roll back the Conservatives’ freeports programme, although extra freeports are unlikely to be a priority, if they happen at all. The CoS is keen for what it describes as a holistic approach to the question.
