When It Pays to Do Nothing

I was reading comments on piracy by British Foreign Secretary David Miliband in this Reuters article, and it has me thinking out loud.

In the Reuters article, Miliband states the British government will not commit extra resources to the piracy problem that has expanded to the Indian Ocean, and while he is on the subject of offering no extra assistance, he also tells commercial shipping companies that the British government discourages ransoms. I guess he would hate for the insurance companies to have to spend any money collected from... piracy insurance?

Insurance underwriters in London are clearing somewhere in the neighborhood of ~$500 million US in additional premiums annually thanks to Somali piracy, and collections will increase in 2010 with the recent announcement war-risk insurance will extend to every ship that travels within 1000 miles of the Somalia coast. Does anyone know how much of that ~$500 million is potentially collected as tax by the British government?

The Royal Navy currently has 9 warships at sea in that region, but none are currently conducting anti-piracy patrols. Why should they, the British government has become so cheap when it comes to the Royal Navy maybe the extra revenues from piracy related war-risk premiums will provide enough funding for a full years worth of Royal Navy fleet operations in 2010?

Well, I did say maybe.

It is a few months old, but a good CRS report on the costs of piracy can be found here (PDF).