Continued uncertainty about the nature of the future relationship between the United Kingdom (UK) and European Union (EU) overshadowed a session of a House of Lords Select Committee hearing on 18 October, convened to examine the key implications of Brexit for the UK maritime sector.
The EU Committee of the House of Lords, which has the task of scrutinising the UK government’s policies and actions in relation to the EU, heard oral evidence from a panel of five expert witnesses representing the UK Chamber of Shipping, Stena Lines, Holyhead Port, the British Ports Association, and British Marine.
The experts agreed broadly that engagement with the maritime sector by UK government departments, such as HM Revenue and Customs, is at last being stepped up but significant concerns were expressed about the impossibility of preparing for the still unknown future nature of the relationship between the UK and the EU.
Asked about Brexit preparations at the port of Holyhead, the port’s manager, Wyn Parry, explained that no significant infrastructure changes have been made so far, since it is not clear when or whether they will be needed. Holyhead is one of the UK ports that could be most affected by Brexit, particularly a ‘no-deal’ Brexit, because of the heavy volume of traffic flowing to and from Ireland.
A significant amount of Holyhead’s outward-bound business is for “just in time” produce needing to get to market in Dublin, which would be badly damaged if post-Brexit customs checks cause delays. Engagement with the Department for Environment, Food, and Rural Affairs (Defra) to address the potential issues has been disappointingly low key so far. The port itself is built in the middle of the town and is severely space constrained making expansion to accommodate queues of trucks difficult.
Speaking with IHS Markit recently John Hulmes, chairman of Mersey Maritime, made a similar point about the port of Liverpool, which is also space constrained. Recruitment of additional staff at ports is also on hold until there is greater certainty about whether they will be needed.
Other key issues raised at the House of Lords hearing related to the possible loss of cabotage rights for UK-flagged vessels at EU ports, whether or not UK seafarer qualifications would be recognised in the EU after Brexit, and the effect of Brexit on the UK ship register.
The amount of tonnage under the UK flag could be seriously affected if it is no longer recognised as an EU flag and if EU or European Economic Area nationals are no longer recognised as “qualifying persons” under the Maritime Shipping (Registration of Ships) Regulations as eligible to be owners of vessels flying the Red Ensign. However, Doug Barrow, director of the UK Ship Register, told IHS Markit in September that one of his goals is to broaden, rather than restrict, the eligibility requirements for owners of UK-flagged vessels, perhaps as soon as early next year.
Another significant concern raised by the Select Committee was over the UK’s proposed withdrawal from the European Maritime Safety Agency and how responsibility for safety, security, and pollution in UK waters would be managed in future. Gavin Simmonds, a policy director at the UK Chamber of Shipping, noted that the government would need to provide new IT infrastructure to facilitate this and questioned whether there would be sufficient time for its implementation.
There was also discussion about opportunities for the UK maritime sector that might result from diverging from EU rules. Neil Glendinning from the British Ports Association confirmed that, in a UK context, the EU Ports Services Regulation is “entirely superfluous”. The possibility of a renaissance in UK shipbuilding because of fewer restrictions on state aid and led by technological innovation received a cautious welcome from the expert panel.
There was also some discussion about whether there might be benefits for the UK diverging from EU environmental rules, including from the EU Ship Recycling Regulation, which takes effect at the beginning of next year and will compel EU-flagged ships to be recycled at EU-approved shipbreaking yards rather than on the beaches of South Asia.
Most environmental rules originate from the International Maritime Organization, where the UK may be able to play a bigger leadership role once it is no longer part of the EU block. However, the idea that the UK might seek to benefit from lower environmental standards for shipping, more generally, would appear to be at odds with the government’s launch just this past week of its Clean Maritime Council.
Speaking at the opening of the council’s first meeting on 15 October, the UK Minister for Shipping, Nusrat Ghani, explained that the aim of the council is to “devise a strategy to reduce greenhouse gas emissions from the [shipping] sector and to improve air quality on and around [the UK’s] waterways, ports, and shipping lanes”. Her goal is to develop a Clean Maritime Plan that will “bring new opportunities for Britain’s businesses to design, develop, and sell green solutions to this global challenge”.