From today's FT:
Sir, A flotilla of admirals advocates increased spending on the navy to protect our seaborne trade (Letters, December 5). If such trade needs billions of pounds’ worth of such protection, it is traders who should fund the protection, not taxpayers.
On second thoughts, so many admirals signed the letter that I should have said a "fleet of admirals".
Ralph Musgrave, Durham, UK
Quite right. According to the shipping industry's own figures, they pay £3.1 billion a year in the usual mish-mash of taxes. We can roll the whole lot into the tonnage tax (which was introduced in 2000) and use that to fund as much Royal Navy as the shipping industry is prepared to pay for.
As a rough guide, total UK imports of goods from non-EU countries are worth £180 billion a year and exports are £120 billion, so that's a tax base of £300 billion. The MoD's total budget is around £30 billion a year, of which maybe a third is Royal Navy (of which an unknown amount is spent on stuff of no interest to the shipping industry, it's not like an aircraft carrier is much use against pirates), so we could fund the Navy with a (say) 2% levy on the value goods imported and exported.
Or it might be cheaper for ship owners/charterers to dispense with paying such a levy/user charge at all (like LVT, it's not really a tax), in the UK or in anywhere else, in which case they don't get protection from Royal Navy and take the higher insurance premiums on the chin; or maybe other countries' navies offer a better value service etc.
How much does insurance cost as a % of the value of goods being transported by ship, how much [more] would it cost for a ship which could not claim protection of any navy? I've no idea and the internet won't tell me.
Elevate their cause?
5 hours ago
11 comments:
in which case they don't get protection from Royal Navy
Why is the word Lusitania floating through the mind?
JH, that was an American ship, wasn't it? Obviously, in war time, slightly different rules might apply, and if our Navy is really bad at protecting ships, or over-charges, well, I explained that in the post.
Maybe if commercial ships and boat owners were allowed to carry arms and defend themselves they would not need navy protection.
It's hardly fair to deny by law the means to self defense then charge for a defense service.
I means it's not like that happens to householders or shop owners. Oh right.
W42, what's the problem?
Surely UK law can only apply to UK ships. If you want to arm yourself, then just don't fly the UK flag, don't pay for Royal Navy to protect you etc. if it works out cheaper for you (or more fun), then great.
Lusitania was British, not American. Also if it had been escorted, that would have made it more vulnerable to attack, not less, as there would then have been no possibility of its being protected by the rules regarding neutral shipping.
Royal Navy Protection Insurance then. If you pay and on the register, you are protected, else you can pay when you need it, perhaps at 5x the usual fee (as with AA/RAC).
EBM
Clearly doing the tonnage tax thing properly, would seem likely to reverse the use of flags of convenience. Why? Because the commercial insurance premiums would rise a lot. So traders and ship owners who are relatively honest would re'flag to the UK and the others would take the chance. However what you cannot account for is the fellowship of the sea. If an RN ship came upon a non UK flagged ship in trouble it is likely that the RN ship would still lend assistance. Mind you, if the Somalian Pirates knew that non-UK flagged ships were not likely to have insurance etc would they bother pirating them at all?
And whilst you can tonnage tax for shipping protection there is still a need to 'defence' spending on vessels that may not be on ship care duty, so some other income would be spent on them.
And, I do think aircraft carriers would be useful in dealing with pirates. Have one cruising the general area where pirates operate plus a few picket frigates who could call on their airborne violence when required might be quite handy.
not sure why an aircraft carrier is no use against pirates....planes travel faster than boats.
A carrier in the straits of wherever, could hear of a pirate attack, send up a plane or 2 and blast the pirates to splinters of blue blistering barnacles before a destroyer or frigate or anything on the surface could even get close
RA, aha, that's me told.
EBM, that seems like a fair compromise, and deals with Lola's "fellowship of the sea" issue.
L, D, it seems a very expensive way of doing it. Most pirates operate within a few dozen miles of land, so it's cheaper to rent a bit of land off the nearest friendly government and have an air base. That's far cheaper than £millions a week for an aircraft carrier parked in the middle of nowhere. But helicopters might be a good compromise, they can be launched from smaller/cheaper ships, are also much faster than most boats and can carry a far few whizz bang rockets.
And yes, there are some RN activities that are not for the particular benefit of shipping but for the general benefit of everybody, that can be paid out of general taxation of course. But maybe the RN's patrol activities generate a big enough profit to pay for the fancy stuff like nuclear submarines etc.
Actually, the British flag is rapidly coming to be regarded as a flag of convenience, too.
Pirates operate over the whole of the Northern Indian Ocean; the high risk area (HRA - it avoids declaring it as war zone, and so paying crews more) is basically west of 78E and north of the Equator. A pretty big area.
A large number of companies are now involved in the security of these ships - if they send armed teams, the risks are minimised: no armed ship has been attacked. Yet.
The RN does have ships in the Indian Ocean, but it (and the ships of many other navies) does have a large area to cover; they tend to concentrate on the Gulf of Aden, with its protected corridor, in the hope that, after Bab el Mandeb, the concentration of ships will dissipate over the Arabian Sea.
The audacity of pirates has to be admired - one ship arrived safely, and anchored in the bay of a "safe" port, and the security team went off; the pirates promptly boarded, and captured the ship! One was recently attacked in the anchorage of Muscat (Oman).
The the Arabian Sea is not the only "pirate" area; there is also West Africa, the Malacca Strait (still!), the South China Sea (still!), and some parts of South America. The solution lies in the past - only when the shore bases are sorted will the piracy stop.
RSP
D, you can't trust those people. I'd go and knock on the doors of Kenya, the Seychelles, maybe Somaliland or one of the more reliable Gulf states.
RSP, of course, it's a moveable feast, but there's no reason why the Indian Navy wouldn't operate a similar exercise on their patch (or the Chinese on their patch, there's not much point manufacturing the stuff if it's just going to get stolen en route), call it a protection racket if you will, and different national navies will have to carve up the ocean between them and split the proceeds.
I mean, if you want to drive from England to China by car, you drive through a lot of different countries, and each country has their own police force which will either protect you, take bribes from you or indeed rob you. That's life.
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