THERE are fears among members of the UK's shipping community that a British exit from the European Union will place the future of London's role as a global centre of ship financing, brokering and insurance in jeopardy.
According to accounting firm PricewaterhouseCoopers, the maritime business contributes US$6.5 billion to the economy annually, with 80 per cent of business coming from abroad, reported the Wall Street Journal
Shipping employs 469,000 people in the UK, according to Maritime London, a promotional body for UK-based shipping companies.
London is home to Lloyd's Market Association, the world's biggest grouping of shipping-insurance agents, which handled a combined $38 billion of premiums last year. It is also the base for some of the industry's biggest shipping financiers, such as Royal Bank of Scotland PLC; brokers, including Clarksons PLC; and leading shipping legal firms, among them Norton Rose Fulbright LLP.
"An owner can get a shipping loan, insure his vessel and find a charter in a very short time within London's square mile and that's what makes the city attractive to owners," said director of maritime advisory firm Flagship Navigation Ltd, Mike Sapountzoglou.
"If the UK leaves the EU, banks may relocate to other parts of Europe and other services may follow dealing the shipping cluster a serious blow."
Chairman of legal and claims consulting firm C Solutions, Peter Ahlas, said a UK withdrawal from the EU could be "devastating" for local maritime services as business will likely be lost to other shipping centres, such as Singapore.
Shipowners "are already moving to other shipping centres because of better tax regimes, and a good part of ship financing has already migrated to New York," Mr Ahlas said.
Source : HKSG.