Our future as a maritime nation
This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
Britain’s shipping industry has a proud history, but must meet the challenges of the modern world.
Good afternoon everyone.
And first of all thank you for finding time in your busy schedules to be here.
Because the theme of my speech today (10 March 2015) is of immense importance.
Not just to the future of Britain as a maritime power.
But to our future as a major trading nation, with ambitions to compete and thrive in the 21st century global economy.
We have so much to be proud of in our maritime industries.
A rich and extraordinary history.
A flag that is respected around the world.
Ports, training institutions, and maritime services that are recognised globally for their excellence.
Shipping and ports are the lifeblood of our economy.
Moving up to 95% of the UK’s international trade.
Providing UK consumers with an ever-growing choice of goods.
And UK exporters with the connections they need to compete.
Yet this self same industry.
This priceless national asset.
Is facing increasing challenges.
Challenges from abroad.
And challenges at home.
If we fail to meet these challenges, then there’s a danger that our rivals will start to overtake us.
And that would be a tragedy.
Not just for the UK’s maritime industries.
But for Britain itself.
Two months before the general election.
Is an opportunity to take stock.
To look at the progress we have made over the past 5 years.
But also to set out a blueprint for the future.
A clear plan of action for maritime, that I hope will help the next Shipping and Ports Minister, and the next government, to provide the support the industry needs.
I make no apologies for being ambitious.
For those with the power to exercise change, to inspire and enthral, they must free themselves from the mechanistic constraints of a technocratic approach to politics.
My ambition is for Britain to be recognised as the world’s most important maritime centre.
I want to spread the word that we’re not just open for maritime business.
But that we will scout relentlessly for new business around the globe.
So we become a natural home for multinational maritime companies and organisations.
A country with the skills, innovation and expertise to meet the needs of international trade.
And which maintains the highest standards in safety and environmental protection.
As I will explain today, in many ways, we are making progress towards this vision.
But I also want to be frank about where we’re falling short.
My first frustration is simply that we don’t shout about our maritime industry enough.
Considering its influence and importance – it has an unaccountably low public profile.
When was the last time you read a story about our shipping industry on the front page of your morning paper?
News editors appear to love anything on rail, roads or aviation.
Which contributes £5.6 billion to the country’s GDP.
Which employ 107,000 people here appear to operate within a bubble.
To such an extent that many people have no idea of just how important they are.
And that brings a danger.
As other countries compete harder and harder.
That we underestimate our modern maritime industry.
That we assume it’s a fading business in the high-tech 21st century.
In an era of super-jumbo jets.
And high speed rail lines criss-crossing continents around the world.
One thing’s for sure.
We cannot afford to live on past glories alone.
Yes, we have a long and proud history as a maritime nation.
Once, all knew that Britain ruled the waves.
But I want us to be just as proud now.
The image of the River Thames crowded with ships and barges laden with goods is not some distant memory of England past as evoked by HG Wells in Tono-Bungay or Joseph Conrad in Heart of Darkness.
For supermarket shelves to be stocked.
For raw materials to be delivered to our factories.
And for world beating British firms to reach global markets.
We depend on our docks, our shipping and our seafarers.
In fact we are just as reliant on sea trade as we were centuries ago.
When the East India Company was transforming links across the Empire.
And when shipping was providing British industry with the competitive advantage it needed to prosper.
Today, the UK remains home to a flourishing, dynamic and innovative maritime sector, successfully supporting UK trade and the wider economy. Seafaring, and the skills that support it, will be at the heart of our island nation’s life for all time.
So let’s make sure we appreciate and promote our maritime industry.
Not just abroad to potential customers but at home too.
So everyone realises that if we want to thrive as a country, our maritime industries must also continue to thrive.
Because we certainly have a good story to tell.
The volume of freight travelling through UK ports has increased by 19% since 1980.
The gross tonnage of trading vessels registered to the UK flag increased five-fold between 1999 and the peak in 2009.
And the gross value added of the sector as a whole trebled between 2002 and 2008.
This puts the maritime sector on a par with aviation - and larger than pharmaceuticals.
Britain’s shipping sector has responded well to technological change.
Take the way that the industry has cut freight costs and carbon emissions by building larger, more efficient and greener ships.
Or the way ports have modernised to service those bigger ships.
British innovation has played a huge role in improving maritime safety, and reducing risks of environmental damage.
Our maritime business services are renowned for their excellence.
Staffed by skilled and dedicated professionals.
And the quality of our flag is respected all over the world.
So today I would like to pay tribute to everyone who has contributed to this success story.
From ports and ship operators.
To the maritime support sector and trade unions.
And to my predecessors, including Stephen Hammond and Mike Penning - and ministers in previous administrations.
It is right that we celebrate what has been achieved.
But we also have to look ahead.
We know that world trade is expected to double over the next 20 years or so.
But much of that increase will be outside Europe.
Our position as a global maritime centre will face increasing competition particularly from the Far East. To secure our future and develop our sector we must be imaginative, innovative and inspire the next generation of entrepreneurs, embrace world-beating new developments and encourage tomorrow’s maritime leaders.
The old contrasts between north and south hemispheres.
Between Third World and First World.
Or between west and east.
Are rapidly breaking down.
Countries like China, Brazil, Malaysia and India are emerging as new superpowers, with the political commitment, economic capacity and low cost labour to challenge the established economic order.
And that’s going to change world shipping.
In fact, it’s already doing so.
Our position as a global maritime centre is under threat.
And we are seeing some signs that we may be losing ground in the ensuing struggle.
Since its high point around 2009, the UK ship register has declined by around 17% in gross tonnage.
And estimates of the Gross Value Added from shipping – although not necessarily reflecting the maritime sector as a whole – also show signs of shrinking.
We simply cannot afford to stand still while others up their game.
Or simply undercut us.
It is not just that we need to respond (I am never bound by mere necessity). We have a duty to respond.
So let me explain how
Explain what more we need to do to compete on a global level.
If you ask me where we can find the future of British shipping, my answer is clear.
In our schools and universities.
One of the best ways we can secure that future is to invest in skills and training.
A subject close to my heart.
A successful and sustainable industry needs the right people, with the right skills, and rewarding career paths to attract new entrants. We can all be stronger through opportunities grasped by those whose competencies reinforce our competitiveness.
I want youngsters to be fired up about a maritime career.
That means promoting it more effectively.
As a dynamic industry providing rewarding and exciting job opportunities.
So I was extremely pleased to see recent figures that showed the previous decline in UK seafarers has been halted - and numbers are beginning to rise.
The maritime trailblazer group on apprenticeships has also made great strides.
As a former Minister for Skills I am proud of our record on apprenticeships.
More than 2 million have been created during this Parliament.
That’s something to celebrate this week of all times as this is National Apprenticeship Week.
In which we promote the range and breadth of apprenticeships.
And we urge more businesses to take on apprentices, especially small business.
There is no better way of learning a craft than by actually doing it, under skilled instruction in the workplace.
And there is no better way to build a solid foundation for the future of the UK maritime sector.
That is why we increased funding by 25% for the Support for Maritime Training (SMarT) scheme.
To boost numbers of UK officer cadets and ratings.
At £15 million a year, it is now the highest it has been.
In 2014 we had 1,940 officer cadets in training – again the highest figure for very many years.
And the quality of these cadets is outstanding.
Something celebrated by the Maritime and Coastguard Agency Cadet of the Year Award.
But of course there is more to be done, particularly around ratings training.
So from October we will pilot an extension to the tonnage tax scheme.
Allowing the option of training 3 able seafarer ratings each year in place of 1 officer cadet.
To provide more opportunities for young people at every level of the industry.
Skills are clearly integral to the maritime sector’s future.
But the sector also needs a stable business and fiscal environment if it wants to grow.
Building the best financial environment will encourage a bold, sustainable and home-grown maritime industry, attracting and supporting international business and inward investment to the UK.
Britain will go into this general election in a dramatically better position than the last.
We were absolutely clear when the coalition formed in May 2010 that our first priorities were tackling the record deficit, and stimulating an economic recovery.
Well – we’ve kept our promise.
Our long term economic plan is working.
We’ve born down on our deficit, so today it’s half the level we inherited.
And we are one of the fastest growing economies in the industrialised world.
So we’ve built a stable economic platform on which shipping businesses can grow.
And it’s critical that the next government doesn’t threaten that hard-earned advantage.
We’ve worked incredibly closely with the maritime sector to take advantage of the opportunities that a stronger UK economy generates.
For example, in 2013, we welcomed the world to the inaugural London International Shipping Week.
I don’t need to remind you that it was a triumph.
Preparations are well underway for the second Shipping Week this September.
This will be another fantastic event, showcasing all that the UK has to offer.
I encourage you all to play your part in making this as successful as the first event.
Or even better.
It’s also a real opportunity to raise the profile of maritime at home.
We’ve also worked hard to develop a common understanding of important maritime objectives across Whitehall, and together with industry.
A third plan – on maritime business services – will be published shortly.
Together, these 3 initiatives set a very clear path ahead.
Showing precisely what we need to do to create the right environment for businesses to thrive.
Getting tax and regulation right remains among our highest priorities.
We’ve seen how the introduction of a Tonnage Tax regime has spurred the regeneration of our maritime industries.
Something that the UK helped pioneer.
And something we continue to pioneer by linking Tonnage Tax and seafarer training.
Through this scheme, we’ve provided shipping businesses with the stability and certainty they need to plan for the future.
Despite others introducing similar schemes.
Perhaps with fewer strings attached.
We have retained our training requirement.
So if you want to be in UK Tonnage Tax then you have to play your part in developing the skills base.
We’ve helped reduce costs by significantly cutting red tape.
We have simplified regulations dealing with ship safety, and also seafarer health and safety.
And we have intervened to retain regulations if they have the potential to undermine safety in any way.
Where possible, we’ve cut other costs, too.
Last October, I agreed with my Irish counterpart that aids to navigation around the Republic of Ireland would be funded by income raised in Ireland.
And I was delighted to announce another one penny cut in Light Dues, which will save the industry £2 million pounds a year.
It means we will have reduced Light Dues by 19% in real terms since 2010.
Shaping international outcomes
So the business environment at home has improved significantly.
But shipping is an international business by definition, and world trade that works for us requires international regulation and a level playing field for the whole industry.
That is why we’re a stalwart supporter of the International Maritime Organisation, which we are most proud to host here in London.
We’ve worked hard within the International Labour Organisation to secure an improved regulatory framework to protect the interests of seafarers.
Within the IMO we have helped introduce an energy efficiency design index for new ships.
This established for the first time a global mandatory greenhouse gas emission reduction regime for an entire economic sector.
And we have ratified the ILO’s Maritime Labour Convention, so that MCA surveyors are now checking that foreign flagged ships calling at UK ports meet the standards of seafarer welfare set out under the convention.
Often, the international maritime community is in complete accord about new legislation.
But sometimes, we to must say no to the EU to get the right results for UK shipping.
So, where I’ve needed to, I’ve faced down the EU.
We’ve turned the tide on the EU’s port services regulation.
And recognising that the new European sulphur limits were contentious.
We worked with the industry to get our message across.
Explaining the problems that the new regulations could cause.
And developing more practical and proportionate ways to enforce the new standards.
The seas flow everywhere, not just around Europe. This is therefore probably the least appropriate sector to have a strong EU influence.
Maritime safety remains our absolute priority.
The sea is brutal and unpredictable so maritime operations are often inherently hazardous. This is why we need a culture that ensures those using and working on the seas are as safe as they can be, and have the means and mechanisms to respond effectively should an incident occur.
If ever any evidence were needed of such hazards, it was the tragic loss of the Cemfjord and the beaching of the Hoegh Osaka.
So we will keep pushing to minimise risks.
There have been countless examples over the last 5 years of government and maritime industry working together to protect seafarers from dangers.
And to act with purpose when things do go wrong.
As we did with the Hoegh Osaka.
The Secretary of State’s Representative for Maritime Salvage and Intervention brings together everyone necessary to manage incidents.
So today I’d like to thank all those who help in the event of trouble.
The ever-present danger of the seas is why we invested £1.6 billion in the search and rescue helicopters, a vital service that operates in very difficult conditions to help 6,000 people a year.
And when the coastguard transformation programme is finished in December, capability will improve still further.
Keeping Britain supplied and connected
Finally, let me turn to ports.
The gateways to this country.
Ports have grown, improved and thrived in recent times despite challenging conditions. Accepting the world’s largest and most specialised ships means we can ensure that UK ports are in pole position to generate growth. We will ensure ports continue to grow, and port infrastructure continues to attract inward investment.
We have seen massive expansions at Felixstowe, London Gateway, Southampton, Immingham and Liverpool.
All driven on a commercial basis with little need for taxpayer support.
It was inspiring to see in January what was the world’s largest container ship visit Felixstowe as its first European port of call on its maiden voyage.
But then only yesterday the same port hosted MSC Oscar, an even larger container ship.
So the port sector is acutely responsive to the needs of its customers.
Not just in taking goods off ships and onto land.
But also providing added value to these industries.
Providing car storage to support the motor industry.
Managing packaging and distribution to ensure the efficiency of supply chains.
And supporting the growth of new energy supplies such as windfarms.
And let’s not forget trust ports.
Commercial businesses without shareholders but which are accountable to port users, local communities and Parliament.
Our current trust port study is looking at the effectiveness of this model.
While recommendations to strengthen accountability to ministers and the community will be made.
I recognise that they too have developed new business.
Supporting growth at both local and national levels.
So UK ports have played an instrumental role in the economic recovery.
And are in an excellent position to continue growing in the future.
So I’ve explained the challenges.
From promoting the industry, to a more competitive trading environment.
And I’ve talked about some of the ways in which we are responding.
Now I want to turn to the future.
And what we must do to secure our vision.
For UK maritime to be a global leader, we need a strategy to meet the threats.
And that will give us the greatest opportunities to grow.
That is why we launched a ‘Maritime growth study’ earlier this year with an initial call for evidence.
As Disraeli said:
The more extensive a man’s knowledge of what has been done, the greater will be his power of knowing what to do.
So the study asks: what are the future growth opportunities we should be focusing on?
How can we best work together to seize those opportunities?
And what action can be taken by both government and industry?
We are already starting to hear a consistent message.
Above all, we need regulatory stability.
But the maritime industry also needs more investment in people and training.
Everyone recognises the need for more coordinated promotion of the maritime sector.
Of maritime business services.
Of the value of the maritime sector to this country.
Of maritime career opportunities.
I am certain we can achieve all those things. Together.
I am very grateful to Alderman Jeffrey Evans, who is chairing the study, and to Michael Parker who is heading up an essential industry advisory group.
It is for Jeffrey, the advisory panel and the study itself to identify the necessary policy proposals and the evidence to support them.
And I expect this work to shape the development of key policies beyond the election.
Changes that will have to be taken forward if we are to sustain our position as a global maritime centre.
By ministers, working in tandem with the industry and the trade unions.
But although I don’t want to pre-empt the outcome of the study, I think it is possible to identify the broad areas where action will be needed.
First, as I have made clear this afternoon, we must work collectively to raise the profile of the maritime sector.
We cannot continue to be a world maritime centre if we do not trumpet our strengths and our objectives for the future.
We will not attract high quality people if they’re unaware of what the industry has to offer in terms of rewarding and satisfying careers.
And we will not win public support for UK maritime if people do not understand what you do or why it is important.
I expect a radical shift in the way the industry is promoted.
Second, we have to place even greater emphasis on supporting business, and welcoming investors who wish to come to the UK.
Unless we show that we want businesses to come here, then they will choose somewhere else.
That means demonstrating that we are responsive to their needs.
We must resist interference in particular from the EU, which drives up costs and so blunts our competitive edge.
So I call on my department to audit all up-coming regulatory proposals with the industry above and beyond the necessary. In short, I want no gold plating, no more pan-national bureaucratic burdens insensitive to our national interest.
We must also co-ordinate efforts to sell ourselves internationally at every opportunity.
What we have to offer is the largest concentration of maritime and marine services in the world.
With unbeatable training, research and manufacturing facilities.
These are fantastic assets – so let’s use them.
Third, and I promised to be frank, we in government have to operate in a more joined up fashion.
We cannot afford to have different departments implementing policies without others knowing what’s happening.
It’s vital that businesses thinking of locating operations here know who they should be talking to.
Let me give you an example. When I was a minister at BIS, I worked with the Department for Energy and Climate Change (not knowing then that I would be a minister in that department in the future) as we were seeking to build a new nuclear power station. The development of the Power Station, Hinckley Point B, requires a range of skills from its genesis to its end, following decommissioning perhaps a hundred years later. Mapping the competencies needed cooperation across government departments and partnership with a range of nuclear sector industries.
We need to think on this scale, at this level, as we anticipate the consequences of other major infrastructure developments of the kind that must be at the heart of our ambitions for ports and shipping.
To this end, we will establish a cross-departmental taskforce from which a plan with the maritime industries will be made
Fourth – we have to accomplish these goals while sustaining and enhancing our reputation for safety, for quality and for the highest standards in everything we do.
Lowering standards or dumbing down to compete with others is simply not an option.
The Red Ensign is recognised around the world as a high quality flag.
That is our biggest selling point.
The UK is also recognised as a major player in setting international standards within the IMO.
And as an island nation with some of the busiest shipping lanes in the world around our shores.
So what we can offer is the very best that global maritime has to offer.
Supported by the most pro-maritime and joined up government.
With a determined conviction to support and grow our maritime sector further in the years ahead.
And my fifth and final point - we need a continuing and renewed focus on high quality training, education and qualifications so we retain the skills we need as a maritime nation.
Everyone I meet is passionate about maritime education and training – and rightly so.
The breadth of career opportunities offered by the maritime and marine sectors is wide – from seafaring to marine insurance, from maritime law to boat building.
We need to do more to raise the public consciousness of these opportunities.
Particularly for young people. I want to see new opportunities created to attract and retain fresh talent across the whole of the sector.
For without skilled people our maritime industries will die.
It’s a sad fact that a large proportion of UK seafarers are nearing retirement age. While international competitors are successfully attracting much more young blood into the industry.
I task everyone here in the room this evening with delivering this vision - of creating the maritime and marine sectors of the future.
We already have some of the best, if not the best, maritime training institutions in the world.
We need to make sure that they are filled with bright youngsters.
Ambitious, professional and skilled people bringing fresh perspectives and ideas.
And we work together - collectively – to create opportunities to train them at sea as well as ashore.
I wondered about establishing a number, a target for recruitment and announcing it today, but that would not be right, whilst we have an industry led growth study missioned to make recommendations on such matters. So I task that study to determine a target for recruitment into this industry and to recommend a plan to make it happen. I expect numbers and details to be acted upon.
In conclusion then, we have seen real progress and improvement in recent years.
But as we head for the general election,
I think we need to be honest about where we’ve come from.
And what we still have to do.
That’s why the booklet, which I have pleasure to launch today, looks not only at our achievements and successes, but where future challenges lie.
We have an extraordinary maritime history.
And we have so many strengths.
A strong flag. Superb maritime services. World-leading expertise.
That’s why I am sure that the UK maritime industry can lead once again.
So we’re not just a nation that is proud of its maritime past.
But also proud of what we can be in the future.
It is my vision that government, industry, the trade unions, universities and colleges come together to create and promote more opportunities for the UK.
And where better than London International Shipping Week in September.
While the eyes of all maritime nations are upon us to bring together the champions of maritime industries to set out how we will achieve our shared vision of a modern, open, commercial maritime sector.
Staffed by professional, dedicated and highly skilled people.
And part of a growing, quality flags.
Which once again will rule the waves.
Government should know its limits; so only do what is desirable in the cause of virtue and wouldn’t be done otherwise.
Much of what I have set out today will only be achieved by the sector; those who know best in the professions of the maritime world, working with ministers.
While I have a voice in government what I can say is that you have a champion to work for you and fight for you, inspired by our seafaring past, excited by our maritime present and relentlessly ambitious for its future.