City depends on foreign shipowners, report warns

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The Independent Online
THE Government has been warned not to deter foreign shipowners, especially the Greeks, if it wants the City to keep its leading position in shipbroking.

A City Research Project report, written by London Economics, says the City's advantage in the pounds 400m-a-year shipbroking business depends on the presence of a substantial number of foreign owners. This position could be damaged if Greek shipowners, who have 15 per cent of the world fleet, decided to leave London and base themselves in the Greek port of Piraeus.

The report says the Government looked in 1989 at a harsher tax regime for Greek shipowners in London but dropped the idea because of concern that it would drive them away. But it concedes that it is difficult to assess how far broking business would switch to Piraeus.

The report examines how London has managed to keep three large marine services - broking, insurance and ship finance - when the British merchant fleet has declined dramatically. Marine insurance premiums reached pounds 3bn in 1991 and London banks have lent pounds 7.5bn to shipowners.

The success is due to the City's established markets, the inter-relationship between different services, the presence of foreign owners and London's good reputation.