I last visited the ship two years ago, already long marooned at its berth. Returning last week, Great Yarmouth had become a near-prison for its Indian captain and crew, waiting for their back pay that never came. The Malaviya Twenty is a silent symbol of the sinking British shipping industry. Why was an Indian ship employed to ply to and from British ports, servicing the British oil industry and British wind farms? Because a foreign-registered ship could pay its crew a third of a British crew’s wages or less: despite government guidance, the UK minimum wage isn’t currently enforceable. With the oil industry downturn, the Malaviya’s owners stopped paying the crew and there the ship stayed, arrested by maritime authorities. But soon the crew will be free.

Captain Rastogi and his last four crew finally won a high court case, helped by the Nautilus International union and the International Transport Workers’ Federation. The Admiralty marshal agreed that the ship could be sold to pay the port and the crew: the law says the private port gets first dibs, so the sale price matters to the crew. On the day I visited, prospective buyers were inspecting, ready for next week’s auction. The captain reckons it will raise enough to cover backpay of £180,000, after port charges.

This isn’t a one-off: foreign companies have stranded other hapless unpaid crews: one ship was recently left in Sharpness with no food. Though working in British waters between British ports, foreign ships are cheaper and use foreign labour, with a disastrous effect on British sailors. The US requires all internal port-to-port ships to be US-built and crewed – and there is nothing to stop Britain demanding all such UK shipping is EU-flagged. Instead, Britain has lobbied against tighter EU rules, even though the shipping industry is a prime example of the damage done by an unfettered free market. Only a third of British-owned ships fly a British red ensign; the rest use low-pay countries’ flags of convenience.

There’s no chance that the UK will take back control of its shipping or rule its own waves after Brexit, either, since – as so often – Britain has been the strongest lobby in Europe against reform – while issuing most “certificates of equivalent competency” to foreign mariners.

The romance of seafaring traditions on this sceptred isle was the leitmotif of Brexiteer nationalism. Our island story, they said, never truly belonged in Europe. Once free of Brussels, the nation of Sir Francis Drake will buccaneer across the seven seas, bringing home untold new traded wealth from new worlds.

But Drake would tell the Brexiteers they need ships. In a generation, the number has shrunk by three quarters, to 452 merchant vessels in 2016. Sixty years ago the UK merchant navy had 18% of world tonnage; now it’s just 0.8%. There were 75,000 British seafarers 40 years ago, today only 23,000. In July, the Baltic Exchange dropped London down the international shipping ranking. That Titanic-style picture of doughty sailors Nigel Farage and Kate Hoey on the prow of a Thames tourist boat was a good parody of the state of Brexit Britain’s shipping.

Brexit has just caused Britain to lose the London anti-piracy ​​headquarters of the EU ​​naval ​​force

Since 95% of goods arrive by sea, we are now almost wholly dependent on mainly Chinese and other Asian shipping companies. Nautilus is not alone in warning of potential “sea strangulation”. Without its own ships, an island can be held hostage for want of food, oil and gas. For good or ill, the Falklands adventure could never be mounted again: British-registered merchant ships were requisitioned as troop carriers and hospital ships, but a government can’t commandeer foreign vessels.

In the real world of pirates and buccaneers, Brexit has just caused Britain to lose the London anti-piracy headquarters of the EU naval force, handing over to Spain and the French port of Brest. That’s despite its success in combating Somali pirates off the Horn of Africa, with only one attack so far this year. The European commission says the UK must be treated as a non-EU country without the same access to EU security databases and military procurement programmes. So as our Major General Charlie Strickland hands over to Spain’s Vice-Admiral Antonio Martorelli Lacave, who exactly is taking back control of what?

And in yet another Brexit glancing blow, and more jobs lost, the EU is deregistering three UK shipyards for use as shipbreakers to recycle EU-registered ships.

All these “technical” Brexit mishaps fall below the news radar, but once you lift the stone in any industry, myriad misfortunes appear. As all workforces are left dangling, seafarers too have no idea whether EU maritime health and safety standards will be upheld post-Brexit. Britain’s cavalier free-market attitude towards its shipping industry suggests more deregulation.

Next time the offshore wind industry proclaims the good news that it is close to profit without subsidy, ask whose ships service those wind farms – and whether their crews are subject to UK laws and pay rates. Companies get away with counting offshore wind farms and oil rigs as outside British jurisdiction. But their profits shouldn’t come from undercutting UK crews with pay rates no British-based crew could live on. The unions talk of policymakers’ “sea-blindness” over Brexit.

Captain Rastogi, son of an Indian navy commodore, has had to guard his ship to stop it being claimed as abandoned. Confined to Great Yarmouth wharf, he is taken aback by the town’s poverty. The other surprise, he says, is Britain’s lost sense of the sea and its once great shipping industry.

Brexiteers make cunning use of the emotional tug of our seafaring history, but the global freedoms they promise threaten to be merely for employers to take more control over pay and conditions.

• Polly Toynbee is a Guardian columnist