Business Weekly - Cambridge, UK

The FTA fears the ‘tide tax’ will spread to other UK ports and airports with disastrous consequences.

It says port owner, Hong Kong based Hutchison Whampoa, has imposed the levy without any consultation with the industry but the company says it has been forced into the action by the UK government’s refusal to pay for related infrastructure improvements.

One of the East of England’s biggest investors, Hutchison, says it has been compelled to charge an additional tax on the price-per-container handling fee in order to generate £85m, required by the UK Government for improvements to road and rail connections servicing the port.

“Our hands are tied,” said Paul Davy at the Port of Felixstowe.

“We have to recover the costs placed upon us by the Government if the infrastructure project is to proceed.”

The port is already operating at capacity, according to Davy, and the expansion would permit a 50 per cent increase in the amount of cargo that passes through Felixstowe.

In order to gain consent to begin the expansion, involving a £240m investment by HPUK, according to sources, an additional £85m was required by the Government to upgrade existing road and rail connections, as far away as Doncaster.

The handling fee charged for importing containers into Felixstowe varies, according to terms agreed by HPUK and import firms, but it will now be bumped up by a further £5.50 per container as a result of the surcharge.

FTA’s Christopher Snelling said: “The surcharging of users of ports will add directly to the cost of the UK’s supply chain, raising costs to businesses as well as the end consumer. It will also act as a further disincentive for shipping lines to call at the UK at a time when the UK’s status as a ‘Port of Call’ is already under threat.

“It is the role of Government to fund rail and road investments for which it has a responsibility to society as a whole. It is notable that no other major industrialised country, including the United States, has pursued such a policy.

“FTA members fear that this surcharge will set a precedent – the direct charging of the shipper at ports and airports across the UK for development of the wider transport network.

“The UK will be at an increasingly competitive disad-vantage compared to mainland Europe as a place to do business if the cost of using UK ports of entry goes up in this fashion.

“The implementation of the surcharge could see importers using other ports, or even avoiding the UK as a stop for goods destined for Europe.

“Hutchison has imposed this scheme without any consultation with industry. We would have wanted them to sit down with us much earlier and discuss the problem they face.”

The consummation of the toll could see Hong-Kong based Hutchison Whampoa charging its own countrymen an estimated 20 per cent on all goods containers originating in China being brought into the UK.