Port of Southampton threatened by tax rises

Some of the port’s biggest customers could see their tax bill for calling at Southampton rise by 67 per cent, prompting widespread concern among the 12,000 workers in the region dependent on the port for work.

Docks bosses said it looked like the industry was “under attack” from the Government and warned major shipping lines could switch to using cheaper foreign rivals.

The hike comes on the back of changes to the way port rates are collected that has landed 25 Southampton port firms with a backdated tax bill of £3.75m.

At the same time, the global recession is hitting the city waterfront with car handling volumes down by almost 50 per cent and container volumes dropping by at least ten per cent.

Now Transport Minister Jim Fitzpatrick wants another shipping tax, known as light dues, to rise as well.

Under his proposals major Southampton container shipping client CMA CGM is reported to face a UK tax increase equivalent to £1.5m a year and the port’s biggest car handling firm Wallennius Wilhelmsen could see its annual tax bill rise by £300,000.

Industry watchers warn they and other companies may decide to use rival ports like Rotterdam in Holland and Le Havre in France, using small, cheaper “feeder” vessels to transfer goods into the UK instead.

Port director Doug Morrison said: “It’s quite scary. What the DFT are proposing is a swingeing increase in light dues. It’s a major issue for us. The whole of the industry is up in arms about it. The big ships would go to the continent and it would only be the small ships that would come to the UK.

This would mean a rise in the cost of transporting goods into the UK and a reduction in the number of jobs in the marine sector.

“Companies like CMA CGM are really struggling at the moment and on top of that they could be hit with this.

“To attack the industry and that’s what this is looking like, is nonsensical. On top of that, the way the valuation office has mishandled the port rates issue, you wonder if the Government understands the industry.

“Anything that adds to the cost of shipping is a threat. It makes me concerned that yet again the Government are putting new taxes on goods coming into the UK and making us less competitive with our European rivals.”

Light dues fund the country’s network of lighthouses and sees ships taxed by weight. Mr Fitzpatrick is proposing the rate climb from 35p a net tonne to 41p, and the cap up to which the rate is payable rise from 35,000 tonnes to 50,000 tonnes. Finally, he suggests ships be liable for the dues on the first nine calls per year as opposed to the first seven currently.