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London maritime under threat from Asian competition: survey

London maritime under threat from Asian competition: survey
London is threatened as a shipping business hub by competition from the Far East, according to a survey of young professionals by the Shipping Professional Network in London (SPNL), in conjunction with Moore Stephens.

Almost 70% of respondents to the survey warned London faced declining influence as shipping centre over the next decade unless it reacts to competition. The survey listed the challenges facing the British capital. Respondents were asked to choose the top three, and rank them in order of threat. The majority chose “competitiveness,” as the most prevalent , followed by “taxation” and “the ability to adapt to a fast-changing environment.”

The survey revealed an undercurrent of disparaging opinion about the British capital, with one of the respondents to the survey writing that “the best people now are going to Singapore instead of coming to London.” Another asserted that “There is only a shipping industry in London because of the use of English law in contracts. But English law has become very expensive and uncertain. Currently there seems to be nothing better, but this is changing, and the legal and shipping professions are not stepping up to the changing times.”

Richard Greiner, a shipping partner with London-based Moore Stephens, responded by pointing out that “Reducing the cost of operating in London is actually outside the control of the maritime industry, and London is by no means the only city in the world where costs are increasing.” Indeed concerns about rising costs in rival Singapore have been voiced by a number major companies based in the city state.

Greiner highlighted moves under undertaken to make the UK competitive. “The UK operates a very successful tonnage tax regime, for example, which provides participating companies with a low level of tax on shipping activities, the potential to pay no tax when vessels are sold, and predictability on future tax liabilities. The UK also continues to offer significant tax advantages for individuals resident but not domiciled in the UK.”

He remarked, however, that “The SPNL survey contained a number of constructive observations. London should embrace competition, and use it as a platform to expand and improve.”

Some respondents were more optimistic, drawing attention to the capital’s strengths. “The high-value professional services such as finance, insurance, P&I, law and shipbroking underline the prime importance of having a central London office,” said one.

Others called attention to London’s historical advantages: “As long as IMO, the P&I clubs and NGOs are based in London, it will always be a maritime business hub”; “London must concentrate on its strengths in the legal, insurance and financial sectors…”; “A huge proportion of global commodity trade is centred there.”

“Our members showed a proper understanding of London’s strengths as a maritime centre, combined with a keen sense of what is happening elsewhere,” said SPNL chairman Claudio Chistè. “These are people who are working at the coalface, as it were, who are absorbing new technology and new ideas, and who have the prospect of long careers ahead of them. They want London to succeed.

“London has shown over centuries that it has the mettle and the determination to compete. The SPNL believes that it will continue to do so, provided it can meet the challenges which have been identified.”

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