London has historically been the pivotal centre for the shipping business for hundreds of years. Although there are now not as many docks as in the past, London still holds its crucial position in the shipping industry.
The Brexit referendum and rivals such as Singapore are seriously threatening Londons status in the industry. It is however to be specified that London position was suffering even before the referendum, but the uncertainty stemming from a possible post-brexit environment could mean London will lose its top position.
As suggested by David Balston, director of policy at the UK Chamber of Shipping, Londons main concern would be to make the city as competitive as possible in maritime terms as to make the UK offering on all sectors and industries as attractive as possible in a post-Brexit scenario.
For instance, Singapore, who has historically looked up at London as the leading city for the shipping industry, has offered lucrative tax breaks for companies who decide to relocate there, in order to steal Londons top position, which proved to the be a catalyst for the industry development.
The industry has however drafted a host of requests for the government to implement promptly. Namely, the industry expects the government to ensure that maritime services operate according to new free trade agreement, while also ensuring that quitting the EU will result into the UK being able to offer much more attractive tax breaks for shipping firms and investments. The government is also expected to provide additional support in the industry promotion and to establish a shipping register. If promptly addressed, these requests could help London maintain its status.
Brexit could also allow the UK to significantly cut red tape, while, reportedly, EU state aid rules have hindered the implementation of the British tonnage tax regime, which offered a lower tax environment that could be reinstated in a post-Brexit scenario.
Source: Giambrone Law ILPPrevious Next