BRITAIN’S position as a top hub for maritime services is being eroded by competition, a loss of shipping finance business and the removal of tycoon-friendly tax breaks, a report said, deepening uncertainty for its financial sector as Brexit nears.

Britain has been a pivotal global shipping center for centuries, especially the City of London, and has dominated marine insurance, ship broking, shipping finance and other maritime services.

These contribute US$5.6 billion a year to Britain‘s economy, providing employment for more than 10,000 people in highly skilled jobs, according to a report by consultancy PwC, commissioned by trade association Maritime London.

But a shift in global shipping trade to Asia and tougher competition are adding to pressures on this niche sector, the report said.

“We estimate that if the U.K. had maintained its market share over the last two years, this would have resulted in an additional US$700 million annually in gross value added for the U.K. economy,” said the report, published in partnership with the City of London Corp.

The global maritime services market is estimated to be worth US$20 billion annually.

“Significant ground has been lost to international competitors in recent years. Competitors such as the United States, China, Norway and particularly Singapore, are all challenging in key areas of development and we must react,” said Harry Theochari, chair of the separate Maritime U.K. body.

The report, launched at the start of London International Shipping Week, comes as Britain spins toward an election. Brexit remains up in the air, more than three years after Britons voted to leave the European Union. Options range from a turbulent “no-deal” exit to abandoning the whole endeavor.

The report’s authors said their interviews with maritime services professionals “offered mixed views on the impact of Brexit on the U.K.’s perception as a politically stable country.”

“Some pointed to opportunities to reduce regulation post-Brexit, while others expressed concerns about the availability of talent and the perception of the U.K. as ‘open for business’,” the report said.

The exodus from shipping finance by many leading lenders including Britain’s Royal Bank of Scotland and Lloyds had affected London’s position as a money destination for international shipping firms, the report said.

Separately, Britain’s decision to scrap tax breaks for long-term residents who claim “non-domicile” status led to the departure of prominent Greek players from London in recent years.

“The U.K. needs to be more active in courting ship owners and other industry participants to come here,” the report said.

(SD-Agencies)