The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)

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It is a pleasure to serve under your chairmanship today, Mr Davies, and I thank all right hon. and hon. Members present for taking part. It was particularly gracious of the hon. Member for Wythenshawe and Sale East, and indeed the hon. Member for Kingston upon Hull East, to note the complexities around international maritime law relating to this piece of legislation. I will address some of those points a little bit further when I address some of the amendments later on.

Broadly, the Bill will play an important role in improving seafarers’ welfare and working conditions, and I am pleased that, today, we are taking another step towards it becoming law. There is broad support for the Bill, and I hope that during the course of our discussion, I will be able to address colleagues’ concerns and questions relating to the amendments. I have tabled several broader amendments in my own name: while they may appear great in number, the majority of them—as Members will see when we go through them—are consequential on a small number of changes to the Bill that will improve the functioning of the legislation.

To address hon. Members’ concerns, following on from our continued stakeholder engagement, particularly as we develop our secondary legislation, we have identified some areas of the Bill that would benefit from the improvements made by our amendments. As hon. Members have said, the Bill was introduced at pace to respond quickly to P&O’s disgraceful treatment of its seafarers. It is right that we continue to listen to stakeholders and examine how the Bill will function, and I make no apology for taking every opportunity to ensure the right outcome for seafarers.

Clause 1 sets out the services to which the Bill will apply, namely services for the carriage of persons or goods by ship, with or without vehicles, between a place outside the United Kingdom and a place in the United Kingdom. In other words, the Bill applies to international services, as the majority of seafarers on domestic services between places within the UK will be entitled to the UK minimum wage under existing legislation.

Mr Holden

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I thank the hon. Member for raising that point. The banding is an issue that we will address fully through the UK national minimum wage equivalence in the regulations that will come forward at a later stage. We intend for it to mirror the national minimum wage in the UK, and will set that out through secondary legislation. There are exemptions for services provided by fishing vessels and services for the purpose of leisure or recreation, in line with other maritime employment legislation and to account for the different remuneration practices in those areas.

Mr Holden

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I thank the hon. Member for his point. Everybody will be covered if on a boat that moves to and from those platforms at least 120 times a year, but the expansion of the UK’s exclusive economic zone to cover that area would bring, as other hon. Members have said, particular complexity regarding international maritime law. I will come to that when we address the amendments to clause 2.

Mr Holden

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I will happily write to the hon. Gentleman before Report with any further details.

For the reasons I have set out, we cannot accept amendment 67, but I do understand the concern about the national minimum wage entitlement for workers on energy platforms in the EEZ. Offshore wind farms and the renewables sector are critical to meeting our net zero target. The Department for Business, Energy and Industrial Strategy regularly reviews the national minimum wage legislation to ensure that it is fit for the current workforce and businesses. We hope that this national minimum wage equivalence legislation will also reflect those changes over time as well.

Mr Holden

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I thank my hon. Friend for that intervention—[Interruption.] I did not quite catch what the hon. Member for Glasgow East was saying from a sedentary position. My hon. Friend the Member for Ynys Môn raises some important points. I know she has been a massive campaigner, whether on that nuclear power station in her patch or, as she has raised more specifically today, on the issues around the freeport and the port of Holyhead, which is crucial for our work across the Irish sea. I can confirm to her that the sector is incredibly important, and we recognise how important such jobs are for her community and for coastal communities around the country. That is one of the reasons we are bringing forward this legislation today.

Clause 2 sets out what is meant by a non-qualifying seafarer. This is a person who

“(a) works on a ship providing a service to which this Act applies”—

as defined in clause 1—

“(b) whose work on the ship is carried out in relation to the provision of the service, and

(c) who fails to qualify for the national minimum wage in respect of that work merely because, for the purposes of the National Minimum Wage Act 1998, the person does not work, or does not ordinarily work, in the United Kingdom.”

Paragraph (c) clarifies why they are referred to as “non-qualifying”—they do not meet the criteria—and that is why they need the protection that this Bill provides.

I appreciate that the intention of amendment 43 is to bring the definition of seafarer into line with the definition of “seaman” under the Merchant Shipping Act 1995, as is the intention of the amendments to clause 1 in the name of the hon. Member for Paisley and Renfrewshire North. However, it is vital that we maintain consistency with the terms used in other employment legislation, such as the National Minimum Wage Act 1998 and the National Minimum Wage Regulations 2015. That is where the terminology in the Bill comes from.

There is a risk of incorrect interpretation if we were to accept the amendment, as it may lead to the Bill being interpreted differently from other employment legislation, which is not our intention. Therefore, we need to retain the word “work” in this Bill, rather than moving to “employed or engaged”, as the amendment seeks. There are lots of different connotations of the word “employed” in particular. I hope the hon. Member for Paisley and Renfrewshire North can see from what the Government are proposing that we do intend to cover all the issues he raises.

Amendment 48 seeks to extend the application of the Bill to the exclusive economic zone. Although we hope that appropriate wage rates will extend beyond our waters—indeed, we are having international conversations with partners, particularly those around the North sea, to try to ensure that—this Bill has been carefully calibrated after thorough consultation to focus on work undertaken close to the UK as part of ensuring that the Bill does not interfere with rights and obligations under international law, in particular the United Nations convention on the law of the sea. However, as discussed on amendment 67, seafarers on services from UK ports to offshore wind installations in the EEZ would be covered by the Bill for the portion of their journey that takes place in UK territorial waters, provided that the service calls at a UK port 120 times a year.

Mr Holden

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I beg to move amendment 1, in clause 3, page 2, line 3, leave out subsections (1) to (3) and insert—

“(1) Subsection (2) applies where a harbour authority has reasonable grounds to believe that ships providing a service to which this Act applies will enter, or have entered, its harbour on at least 120 occasions during a relevant year.

(2) The harbour authority must, within such period as is determined by regulations, request that the operator of the service provide the authority with a national minimum wage equivalence declaration (in the rest of this Act, an ‘equivalence declaration’) in respect of the service for the relevant year.

(3) The duty under subsection (2) is subject to any direction given by the Secretary of State under section 11(2)(a).

(3A) A harbour authority which fails to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.”

This is the first of a number of amendments concerning national minimum wage equivalence declarations. Taken together, they impose a duty on harbour authorities to request declarations (as it stands, the Bill confers a power to do so). Declarations are to be requested in respect of years determined by regulations and must be provided within a period set out in regulations. Also, as a drafting change, “national minimum wage equivalence declaration” is abbreviated to “equivalence declaration”.

Mr Holden

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As currently drafted, clause 3 confers on harbour authorities the powers to provide that the operator of a service within scope of the Bill provides a national minimum wage equivalence declaration. The nature of the declaration is set out in clause 4, so I will address it when we turn to that clause, but it is essentially a declaration to the effect that they pay any seafarers on board who do not qualify for the national minimum wage at least the national minimum wage equivalent for the time that they worked in the UK or its territorial waters.

A harbour authority may not request an equivalence declaration in respect of any year unless it appears to the authority that ships providing the service will have used the harbour on at least 120 occasions in that year. Clause 3 also includes a power for the Secretary of State to make regulations as to the form of the national minimum wage equivalence declarations and the manner in which declarations are to be provided. Finally, it makes it an offence for an operator to operate a service inconsistently with the declaration and fail to inform the harbour authority within a certain period.

Clause 4 sets out the nature of an equivalence declaration. As it stands, subsection (1) provides that an equivalence declaration in respect of a service to which the Bill applies is a declaration to the effect that either

“there will be no non-qualifying seafarers working on ships providing the service”

or non-qualifying seafarers working on ships providing the service will be paid at least the national minimum wage equivalent for their work on that service in the UK or its territorial waters.

The national minimum wage equivalent will be at an hourly rate specified further in regulations—the hon. Member for Easington asked about that earlier. Regulations may make provision for the hourly rate at which non-qualifying seafarers are remunerated in any period in respect of any work, which may include any provision referred to in subsections 2(2) to (6) of the National Minimum Wage Act 1998, or provision relating to currency conversion. Regulations may also make provision for whether, or the extent to which, a non-qualifying seafarer’s work in relation to a service is carried out in the UK or its territorial waters.

In making regulations under clause 4, the Secretary of State must

“seek to secure that a non-qualifying seafarer is…remunerated at a rate equal to the national minimum wage equivalent only if their remuneration is in all the circumstances broadly equivalent to the remuneration they would receive if they qualified for the national minimum wage.”

That essentially means that we will seek to ensure that the total pay that a seafarer receives for time worked in the UK and its territorial waters is, as a result of the regulations, no less than if they had qualified for the national minimum wage.

We will run a public consultation on the regulations, and my officials are working closely with stakeholders and officials in the Department for Business, Energy and Industrial Strategy and His Majesty’s Revenue and Customs to draft them. As the public consultation takes place, I hope that hon. Members will be able to see what happens.

Mr Holden

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I thank my hon. Friend for those points. They are particularly important. I do not think that we would be here today if it was not for her huge campaigning efforts on behalf of her constituents in relation to the awful actions of P&O. I absolutely agree with her that how this is implemented must be taken into account. I am sure that her port will be consulted as part of the broader consultation as regulations are brought forward, and I urge her and other interested hon. Members to take part in the consultations as we move forward.

Amendment 1, tabled in my name, turns the discretionary power to request an equivalence declaration into a mandatory duty—this is quite an important change, which hon. Members mentioned at earlier stages—where the harbour authority has reasonable grounds to believe that ships providing a service will enter, or have entered, its harbour on at least 120 occasions during a relevant year. Reasonable grounds may include a service’s schedule in previous years, or may arise from the normal communications that a harbour authority would have with operators using its ports.

The period within which a harbour authority must request an equivalence declaration will be determined by regulations, which will come forward. A harbour authority that fails to comply with its duty to request an equivalence declaration will be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. The duty will be subject to directions made by the Secretary of State, which I will discuss in further detail when we come to clause 11, which has an important bearing on this aspect of the legislation.

This amendment is part of a larger set of amendments that will also make the formerly discretionary powers for harbour authorities to impose surcharges, and to refuse access to their harbour, into duties, which is something that Opposition Members raised extensively at earlier stages. As things currently stand, where a harbour authority does not exercise its powers in the circumstances provided for in the Bill, the Secretary of State has powers to direct harbour authorities to do that. We want to see it turned into a duty because, through continued engagement with port stakeholders, we have been informed that harbour authorities are unlikely to exercise their powers without being directed to, and the direction-making power actually was intended as a back-up power and was not intended to be used as the primary means of ensuring that the regulations are met and a minimum wage equivalent is paid. It would be a significant administrative burden on the Department if every instance had to have an imposition from the Secretary of State, and that would undermine the effective functioning of the legislation.

The change from discretionary powers to duties will strengthen the Bill by ensuring that harbour authorities must request declarations, impose surcharges and refuse access to their harbour where appropriate, without requiring the intervention of the Secretary of State at every juncture. The intention is that we will ensure that operators of services in the scope of the Bill are made subject to the requirements, and the process will be made simpler for harbour authorities.

Amendments 2 and 5, tabled in my name, are consequential on amendment 1. Amendment 2 expands the existing power in clause 3(4) by adding a new paragraph that allows regulations to make provision

“as to the period within which equivalence declarations are to be provided”

by operators. Where an operator does not provide an equivalence declaration within that period, the harbour authority must impose surcharges under the new clause 2. This ensures that the point at which their duty begins to apply is clear to harbour authorities.

Amendment 5 makes provision for declarations to relate to a fixed relevant year, starting on a date to be set out in regulations. Providing a fixed relevant year will ensure that harbour authorities and operators are all working to the same period, providing consistency and certainty for harbour authorities to comply with their duties, reducing administrative burdens and making enforcement much more straightforward.

Mr Holden

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The hon. Gentleman makes a fair point. I will come to the broader concerns around port hopping that hon. Members have raised at previous stages. We do not think it will be an issue. I will come back to the hon. Gentleman at a later stage; if he continues to have an issue, perhaps he can raise it then.

Amendment 5 makes provision for declarations in a fixed year. These amendments are therefore necessary to ensure the effective functioning of the Bill, and will do just that.

Amendments 3 and 4, tabled in my name, abbreviate

“national minimum wage equivalence declaration”

to “equivalence declaration”—that is all. This is a minor drafting change intended to improve the Bill by simplifying a frequently used term.

Amendments 39 and 40 to clause 14 are consequential on amendments 1 and 5, and give the phrases “equivalence declaration” and “relevant year” the same meaning as in clause 3.

Amendment 7, tabled in my name, allows for equivalence declarations to be provided before, during or after the year to which they relate, and for declarations to relate to part of a year. The amendment will prevent any gaps in coverage in declarations and requires harbour authorities to request a declaration whenever it becomes clear to them that a service is in scope of the Bill. A harbour authority must request a declaration from an existing service before the relevant year starts if it has reasonable grounds to believe that a ship will call at its harbour 120 times during the year. In the event that, part way through a year, a harbour authority has reasonable grounds to believe that ships providing the service will have entered the harbour at least 120 times, it must request a declaration part way through that year, or at the end of the year if it was not clear until that point.

Amendment 6 removes subsections (5) and (6) of clause 3, which provide for the offence of operating inconsistently with an equivalence declaration. New clause 1 provides for an offence adapted to the proposed new system for equivalence declarations. Amendment 6 and new clause 1 therefore also cater for the fact that an equivalence declaration may, as a result of amendment 7, be provided before during or after the relevant year to which it relates.

Subsections (2)(a) and (3)(a) of new clause 1 mean it will be a criminal offence to operate a service inconsistently with a declaration from the start of the relevant year or at the time a declaration is provided during a relevant year. This will ensure that the new offence covers all circumstances in which an equivalence declaration may be requested, and provides legal certainty to operators as to when they may be guilty of an offence.

Clause 13 provides definitions of “harbour” and “harbour authority” that align with the definitions in the Harbours Act 1964 in England, Wales and Scotland, and the Harbours Act (Northern Ireland) 1970 in Northern Ireland. This will ensure consistency with existing legislation and help to clearly identify the relevant authorities for the purposes of the Bill. The clause also currently provides that where there is more than one harbour authority in respect of a harbour,

“the Secretary of State may by direction specify which of them is to be treated as the harbour authority in respect of the harbour”

for the purposes of the Bill. This provision is intended to avoid any uncertainty as to which is the relevant harbour authority for a particular harbour, and avoid multiple harbour authorities exercising powers in respect of a single service, which will help to ensure that the Bill’s provisions are applied consistently and effectively.

Mr Holden

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My understanding is that it is for the whole year. The schedules for these operators are based on a whole year; it is very rare that they are not. These are big operations that do not dip in and out. They are not easy to set up; they often involve long-standing arrangements with port authorities, and are based on the whole year. However, if the hon. Gentleman would like to write to me following this sitting, I will obviously respond to any particular issues or examples he wishes to raise.

Mr Holden

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I thank the hon. Member for the first point he made, about the amendment creating a duty rather than a power. That is exactly why we have done this; hon. Members from across the House made the point, and I am glad that we have got there.

I am fully aware of the issue around level 4 and the levels of fines. I will write to the hon. Member about the specifics, and we can discuss them during the Bill’s later stages, but my understanding is that there were specific reasons behind that decision, related to different fine levels in different parts of the United Kingdom; I raised that issue myself in earlier discussions with officials. We will happily look at it again, because as the hon. Member has rightly said, I do not want it to be a lesser offence for the port operator to not comply with its duty than to comply with its duty. That is a very sensible and important point, and I will happily write to the hon. Member to explain why we have arrived at our position.

Opposition amendments 44 and 46 aim to change the applicability of the Bill from “the harbour” to “any UK harbour”, and from “the harbour authority” to

“all relevant harbour authorities to which the declaration is applicable”.

As hon. Members will be aware, the Bill refers to “the harbour” rather than “a harbour” in order to keep the focus on particular services calling between two specific ports. The scope of the Bill encompasses services calling at the harbour in question at least 120 times a year. In particular, the effective enforcement of the Bill relies on there being one harbour authority responsible for monitoring and enforcement of a service. Individual harbours may be able to anticipate that a particular service will call in that harbour 120 times in the year, especially if that service has done so in previous years or via volume of a new service. However, it would be very difficult for a harbour to anticipate whether a particular operator will have services to other harbours that would amount to 120 calls in harbours in the UK per year.

The amendments would also create confusion about which harbour authority should request an equivalence declaration, and which is therefore responsible for imposing a surcharge. For example, if an operator operated two services using the same ships interchangeably, with one calling at one port 60 times a year and another calling at another port 60 times a year, which would be responsible for requesting a declaration or imposing a surcharge?

Mr Holden

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I will not go over all the points that I made earlier, but I will address some of the specific issues raised by hon. Members. My hon. Friend the Member for Dover mentioned bilateral meetings between the Prime Minister and the President of the French Republic. There have been positive discussions between officials to date; I do not know if this will be raised specifically, but the discussions have been very positive. The Transport Secretary is also hoping to visit France at some point in the not-too-distant future.

My hon. Friend the Member for Dover and the hon. Members for Easington and for Wakefield mentioned deductions. We will have a proper public consultation on the draft regulations in this space. I have already noted—as I hope hon. Members have—the Low Pay Commission’s recent recommendations that this issue should be looked at. I hope hon. Members will take part in the consultation and contribute to the regulations as they are being drafted, without feeling the need to press specific amendments to a vote today.

The hon. Member for Paisley and Renfrewshire North raised the issue of the British Ports Association. We have not seen its legal advice—if he would like to share it with us, that would be lovely—but we do not believe it has a strong legal position.

Mr Holden

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My right hon. Friend makes an important point. We are looking into the terms and conditions, which will be there in the regulations, and we will have a wide public consultation. He is absolutely right: we want to get this right.

The legal issue raised by the hon. Member for Wakefield was about legal risk in the 52 versus 120 days element. When a ship stops at multiple points in Norway, for example, then has one trip a week to the UK, to argue that it should be covered by UK legislation rather than Norwegian legislation would put it into a very difficult international legal position. Under international maritime law, that would expose us to greater legal risk for the entirety of the legislation, rather than on specific points. I hope hon. Members understand.

The hon. Member for Glasgow East made a number of comments. On the broad issues, at least, I say to him that the Government have raised the threshold at which people pay income tax, taking millions of people out of tax. They have introduced the national living wage and reduced the age at which people qualify for it. Moreover, and in a massive and long-term benefit for huge numbers of people, they have expanded auto-enrolment in pensions to hugely benefit working people. His comments were broadly ill judged and, in a certain way, bringing forward this conversation today shows our commitment to delivering for working people. While I appreciate that everyone in the Scottish National party is an expert on ferries these days, I am not sure they are when it comes to this legislation.

Mr Holden

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I have finished my comments already.

Question put, That the amendment be made.

Mr Holden

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I beg to move amendment 8, in clause 5, page 3, line 22, after “is” insert “or at any time was”.

This is consequential on Amendment 7.

Mr Holden

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As previously, I will address the clauses and speak to the amendments, including those from the Opposition. Clause 5 allows the Secretary of State—in practice, operating through the Maritime and Coastguard Agency—by notice to require operators to provide information for the purpose of establishing whether a service is being operated consistently with an equivalence declaration provided by the operator. It is an offence for an operator to fail to provide information required by the Secretary of State under this clause or to provide information that is false or misleading.

An offence under this clause is punishable on summary conviction by a fine in England and Wales, or by a fine not exceeding level 5 on the standard scale in Scotland and Northern Ireland. The sort of information that the Maritime and Coastguard Agency may request under this clause may include, but is not limited to, payslips, seafarer employment agreements and payroll information.

Clause 6 empowers an inspector appointed by the Secretary of State to board a ship in a harbour in the United Kingdom or enter any premises for the purposes of establishing whether a service is being operated consistently with an equivalence declaration, or of verifying information provided under clause 5. In practice, this will be an inspector from the Maritime and Coastguard Agency, which is responsible for enforcement in many areas in this sector and is the most appropriate agency for the job.

It is an offence for any person to intentionally obstruct an inspector in the exercise of their powers; to fail without reasonable excuse to comply with a requirement imposed by this clause, or to prevent another person from completing such a requirement; or to make a statement that the person knows is false or misleading, or recklessly make a statement which is false or misleading, in purported compliance with a requirement imposed under this clause. Such an offence is punishable on summary conviction by a fine in England and Wales, or a fine not exceeding level 5 on the standard scale in Scotland and Northern Ireland.

This clause, together with requests for information under clause 5, will allow the Maritime and Coastguard Agency to play an enforcement role in checking whether a service is being operated consistently with a declaration. In practice, this will be done through intelligence-based checks in the event of credible evidence suggesting a service may be being operated inconsistently with a declaration and random spot checks. It is important to distinguish the enforcement role from the harbour authority’s role in the compliance process, which is mostly administrative. Harbour authorities are not required to make inquiries as to whether a service is being operated consistently with a declaration.

Amendment 8, tabled in my name, is consequential on amendment 7 to clause 4, which allows for equivalence declarations to be provided before, during or after the year to which they relate and for declarations to relate to part of a year. Amendment 9 is a minor drafting change to abbreviate “national minimum wage equivalent declaration” to “equivalence declaration”, as discussed with respect to amendments 1, 3 and 4.

Amendment 10 to clause 6, tabled in my name, is consequential on amendment 7 to clause 4, which allows for equivalence declarations to be provided before, during or after the year to which they relate and for declarations to relate to part of a year. Amendments 11 and 12 to clause 6 are consequential on the abbreviation of “national minimum wage equivalence declaration” to “equivalence declaration”. In particular, amendment 12 changes the word “declaration” in clause 6(4)(c) to “statement”, so that this is not confused with the term “equivalence declaration”.

Opposition amendment 63 to clause 6 seeks to ensure that inspectors are able to access the appropriate information from Government agencies in order to exercise their enforcement powers. This is unnecessary, as the Maritime and Coastguard Agency will be the relevant enforcement agency and so will already have access to its own information. We have discussed data access with His Majesty’s Customs and Revenue, and it is considered unlikely that it would hold relevant information on seafarers in the scope of the Bill, as they are not already entitled to national minimum wage. As such, we do not consider it necessary to include information-sharing provisions in the Bill, as the MCA is the relevant authority.

Opposition new clause 8 would require the Government to produce and publish a report setting out any evidence of nationality-based pay discrimination against non-qualifying seafarers. Under the Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011, limited nationality-based discrimination is permitted. Under the Bill, we will not have the relevant evidence to which the new clause refers. Nationality is not relevant to whether someone is a non-qualifying seafarer, so we do not intend for declarations to require operators to provide information relating to nationality. Such information would also not be requested by a notice under clause 5, as it is not relevant to whether the national minimum wage equivalent is being paid. The Government are conducting a post-implementation review of the Equality Act 2010, which will consider nationality-based pay discrimination. I request that the Opposition do not press the new clause.

Mr Holden

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I would like to provide some clarification on the points made initially by the hon. Member for Easington. The Maritime and Coastguard Agency is the relevant enforcement agency, not the harbour authority. Furthermore, it would be unlawful to delegate powers in this space to harbour authorities, so I wanted to make that clear. In response to a point made by the hon. Member for Paisley and Renfrewshire North, the Maritime and Coastguard Agency does not need to be named in the Bill because it enforces on behalf of the Secretary of State. This is normal drafting for Government agencies that are subsidiaries of Departments.

The Department has obviously engaged extensively with HMRC on this issue. The truth is, as this is not enforcing national minimum wage legislation but trying to get the national minimum wage equivalent, the amount of information that HMRC holds in respect to many of these people is either nil or incredibly limited, as many of them will not be UK taxpayers. HMRC has been clear that it is happy to share anything it can to make enforcement easier, but it is not in the exact same space. HMRC already enforces national minimum wage for seafarers who qualify for it, but within this legislation we reflect that much of that falls out of the normal scope of UK legislation.

Mr Holden

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Sorry, could I ask the hon. Member what the disproportionate risk was in reference to?

Mr Holden

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Part of the issue here is that we are trying to address the national minimum wage equivalence. This is beyond normal UK territorial extent, which is the issue at stake here, which is why we are doing legislation that goes beyond our normal boundaries and does butt up against some of those international maritime obligations that we have, whether that is the case for inland ferries or anything else within the UK. I am not an expert on what HMRC has said, but I assume that what it has said is correct. I imagine there are other elements in the broader economy, where perhaps there are greater language barriers and piecework, where HMRC targets the normal national minimum wage legislation and where it sees the greatest abuses. That is why I am sure HMRC is quite clear in its thinking.

I urge Members, based on what I have said in response to the amendments, to withdraw them, and, if not, to support the Government and vote down the Opposition’s amendments.

Mr Holden

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I beg to move amendment 13, in clause 7, page 5, line 8, leave out subsections (1) to (4).

This is the first of a number of amendments and new clauses which, taken together, require harbour authorities to impose surcharges (as opposed to merely allowing them to do so) and set out the circumstances in which they must do so. The circumstances are related to the fact that equivalence declarations may be provided before, during or after the year to which they relate.

Mr Holden

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I rise to speak to the Government amendments, the Opposition amendments, clauses 7 and 8 and Government new clauses 2 to 4.

As drafted, clause 7 empowers a harbour authority to impose a surcharge on an operator. The power applies in the event that the operator fails to provide an equivalence declaration under clause 3, or if it appears to the authority that the operator has committed an offence under clause 3(5). Where such a determination is made, the harbour authority may impose a surcharge on the operator on any occasion when a ship providing the service enters the harbour.

The amount of the surcharge is to be determined by a published tariff of surcharges set by the harbour authority in accordance with regulations made under the clause.

Mr Holden

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That will be clarified through the tariff regulations, which we will introduce. It will depend on the nature of the ship and the size of it, but we aim for consistency in terms of different vessels in different areas, and a tariff will be established.

The clause provides a power to make regulations that will make provision to—

Mr Holden

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I hope that what I am about to say will answer the hon. Gentleman’s question. The clause will make provision for publication of a determination to impose surcharges; set out how the imposition of a surcharge is to be notified to the operator; set out the period within and the manner in which a surcharge must be paid; and make provision for notification of a surcharge to the Secretary of State and publication of the fact that a surcharge has been imposed. Surcharges paid under the clause may be retained by the harbour authority for the delivery of any of their functions, or for shore-based welfare facilities for seafarers.

I turn to Government amendments 13, 14, 16, 17, 19 and 20. As with the Government amendments to clause 3, these amendments, along with the amendments introducing new clauses 2, 3 and 4, will make the previously discretionary powers of harbour authorities to impose a surcharge mandatory duties, and set out the circumstances in which these duties should be exercised.

As discussed in relation to clause 3, from our continued engagement with port stakeholders we have been informed that harbour authorities are unlikely to exercise their power to impose a surcharge unless directed to. The direction-making power was intended as a back-up power and was not intended to be used as the primary means. However, this is all part of addressing that issue and ensuring the effective functioning of the Bill.

New clauses 2, 3 and 4 therefore set out the circumstances in which a harbour authority is under a duty to impose a surcharge. In summary, new clause 2 sets out surcharges to be imposed when an equivalence declaration is not provided in time; new clause 3 sets out when a declaration relates only to part of a year; and new clause 4 sets out when a service is operated inconsistently with a declaration.

Amendment 13 amends clause 7 to remove the discretionary power for harbour authorities to impose surcharges, which is now replaced with the new duties set out in new clauses 2, 3 and 4. As a result, there is no need for regulations that make provision as to the publication of a determination to impose surcharges and that will be removed by amendment 17. Subsections 1 to 4 of clause 7, which are removed by amendment 13, are replaced by new clauses 2, 3 and 4, which provide for duties to impose surcharges and the circumstances in which those duties apply. Amendment 14 is consequential on amendment 13.

Amendment 16 provides that a duty to impose a surcharge is subject to direction-making powers of the Secretary of State under clause 11, as amended by amendments 32 to 34, to not comply with their duties or to comply with their duties in a particular way. I will discuss the powers of direction in greater detail when we come to clause 11. It also provides that a harbour authority that fails to comply with a duty to impose a surcharge is guilty of an offence and liable, as previously mentioned, on summary conviction to a fine not exceeding level 4 on the standard scale. As with the offence for not requesting a declaration, this will be enforced by the Maritime and Coastguard Agency and is essential to ensure that the Bill functions properly.

Amendment 19 provides for regulations to make provision requiring a harbour authority that has imposed a surcharge to notify the Secretary of State if the surcharge is not paid in the required timeframe. It is necessary for the Secretary of State to be aware of circumstances where harbour access is likely to be refused, in order to monitor the operation of the Bill, take steps to mitigate disruption caused by the refusal of access if necessary, which will be pertinent in relation to very busy sea lanes, and consider if a direction should be issued to the harbour authority under clause 11(2), as amended by amendments 32 and 33, in circumstances where the refusal of access might cause damage to key passenger services or national resilience. Amendment 52 is consequential on amendment 44 to clause 3.

This group of amendments also relates to clause 8 of the bill, which provides a process for the making of objections to surcharges imposed by harbour authorities under clause 7. As the Bill currently stands, an interested party may make an objection to a harbour authority’s determination to impose a surcharge, the tariff of surcharges specified by a harbour authority, or the imposition of a surcharge or its amount.

The Secretary of State will then consider the objection and any representations made and may decide to approve the decision to which the objection relates, or to direct the harbour authority to revoke the determination, revise the tariff, revoke the imposition of a surcharge, or increase or decrease the amount of the surcharge. The Secretary of State will communicate the decision to the harbour authority and the objector and publish it online.

The Secretary of State may also direct the harbour authority to repay any surcharges required as a result of a decision under this clause. If a harbour authority does not comply with a direction given by the Secretary of State under the clause, they will be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. It should be noted that where an objection has been made to a harbour authority’s determination to impose a surcharge, an interested person cannot make another objection to that same determination. I shall respond to other amendments as they are moved.

The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)

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I thank everybody for coming back. I am sorry that my speed of speaking was so swift earlier; I shall try to keep these comments at a more temperate pace. I will pick up on a couple of points from hon. Members, then enter into a little more of the briefing.

Tariffs or surcharges will be set by each harbour authority, but they will be in accordance with the regulations made under clause 7. As the hon. Member for Paisley and Renfrewshire North said, we also hope that the surcharges will never be required, but we need to have them to ensure proper practice. Opposition amendment 50 seeks to set out in the Bill how the surcharge is to be calculated. Currently, the Bill provides that harbour authorities will set the tariff of surcharges in accordance with the regulations. It is important that the surcharges disincentivise operators from not providing equivalence declarations, and we agree that surcharges should be high enough to act as a disincentive. We will consult on the levels of the tariffs to be set in the regulations. We do not want to commit to setting the level in the Bill, but please be assured that we are going to take everything into consideration in the drafting of the regulations.

Amendments 51, 52 and 56 seem to be designed to take responsibility for setting the surcharge away from the harbour authorities. Harbour authorities have been given this duty given their proximity to operators as their customers. The tariff must be set in accordance with regulations, but harbour authorities are well placed to determine within those regulations what the surcharge should be in each case. However, we will consider this position further before Report.

Amendment 53 would remove the option for harbour authorities to keep the surcharge for any of their functions, and would mean that moneys would be transferred to the Secretary of State for disbursement . The Bill already allows moneys to be spent by the harbour authority for the purpose of shore-based welfare facilities. I can see that to make the Secretary of State an intermediary places great faith in the speedy actions of the Government in all cases, but there is a possibility that this transaction would put a significant administrative burden on the Department were it to be dealt with on a case-by-case basis and would delay seafarers seeing the benefit of this money.

Amendments 54 and 68 would remove the harbour authority’s ability to spend moneys collected from the surcharge on the discharge of their functions. This is not intended to be a profit-making mechanism, but I am happy to review this function as intended before Report, because we need to ensure the surcharge is high enough to act as a disincentive.

Amendment 65 would remove the power to make regulations providing for the notification of a surcharge to the Secretary of State. The power to make regulations providing for the notification of the surcharge to the Secretary of State is an important mechanism to deter non-compliance. The mechanism of the Bill relies heavily on the monitoring of enforcement, and, as the imposition of the surcharge is a duty under the Bill, it is important that the Secretary of State is notified in this process.

I understand the importance of making it clear that it is the imposition of the surcharge that must be notified to the Secretary of State. I have thus tabled Government amendment 18, which provides for notification to the Secretary of State of the imposition of a surcharge. I hope colleagues are reassured by that.

Mr Holden

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The hon. Member is quite right. I should have been referring to amendment 64. What I was referring to in that section was Government amendment 18, which relates to Opposition amendment 65. I am about to come on to amendment 64; I did try to reference the hon. Member’s comments earlier, but I will come on to them now.

Amendment 64 would require the Secretary of State to make regulations setting out a national tariff of surcharges, as I indicated earlier, removing any role for harbour authorities in setting surcharge tariffs. The surcharge is an important mechanism to deter non-compliance, and the Government consider it reasonable and proportionate for harbour authorities to play some role, alongside the national tariff setting under clause 7. It is envisaged that a schedule of rates for the surcharge will be set by the harbour authority with reference to the estimated difference between the amount that seafarers are paid and the amount they would have been paid if they had qualified for national minimum wage. This is expected not to be an exact calculation, but to be based on estimates of the number of seafarers involved. The detail of how that will be worked out will be set out in regulations, and we will work closely with industry to ensure we get it right. It is important that surcharges are relevant to the circumstances of the service in scope, and harbour authorities are well placed to make that call given their proximity to services. We have, however, heard the concerns raised by the ports industry and others, so we will consider the matter further ahead of Report.

Mr Holden

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That is a fair point. We have considered the matter, but we will be setting a national tariff in regulations following wide consultation, which will then be looked at by the individual harbour authorities. The cost implications of operators changing routes in order to shop around between what we expect to be minor cost differences mean that we do not expect it to be a particular issue.

Amendment 57 would allow for regulations setting a time limit under which an objection to a surcharge can be made. We think it is unlikely that there will be delays in objections to surcharges, but we are none the less happy to continue to consider that point ahead of Report, because it is important to get these things right and to have the right disincentives. We do not want to create strange situations that could act against seafarers’ interests.

Amendment 13 agreed to.

Amendments made: 14, in clause 7, page 5, line 32, leave out second “the” and insert “a”.

See Amendment 13.

Amendment 15, in clause 7, page 5, line 33, leave out from “regulations” to end of line 35.

This amendment is consequential on the removal of clause 11(3) (see Amendment 34).

Amendment 16, in clause 7, page 5, line 37, at end insert—

“(6A) A duty to impose a surcharge is subject to any direction given by the Secretary of State under section 11(2)(a).

(6B) A harbour authority which fails to comply with a duty to impose a surcharge is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.”

See Amendment 13.

Amendment 17, in clause 7, page 5, line 39, leave out paragraph (a).

See Amendment 13.

Amendment 18, in clause 7, page 5, line 43, after “notification of” insert “the imposition of”.

This is a drafting clarification.

Amendment 19, in clause 7, page 5, line 44, at end insert—

“(7A) Regulations may make provision requiring a harbour authority that has imposed a surcharge to notify the Secretary of State if so much of the period within which the surcharge must be paid as is specified in the regulations has expired without the surcharge having been paid in accordance with regulations under subsection (7)(d).”

See Amendment 13.

Amendment 20, in clause 7, page 6, line 6, at end insert—

“(10) In this Act, ‘surcharge’ means a charge under section (Imposition of surcharges: failure to provide declaration in time), (Imposition of surcharges: in-year declaration that is prospective only) or (Imposition of surcharges: operating inconsistently with declaration).”—(Mr Holden.)

See Amendment 13.

Clause 7, as amended, ordered to stand part of the Bill.

Clause 8

Questions to surcharges

Amendments made: 21, in clause 8, page 6, line 9, leave out paragraph (a).

This is consequential on Amendment 13 and the amendments relating to it.

Amendment 22, in clause 8, page 6, line 36, leave out subsection (7).

This is consequential on Amendment 13 and the amendments relating to it.

Amendment 23, in clause 8, page 6, line 41, leave out paragraph (a).—(Mr Holden.)

This is consequential on Amendment 13 and the amendments relating to it.

Clause 8, as amended, ordered to stand part of the Bill.

Clause 9

Refusal of harbour access for failure to pay surcharge

Mr Holden

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I beg to move amendment 24, in clause 9, page 7, line 19, leave out “may” and insert “must”.

This amendment imposes a duty on harbour authorities to refuse access in the circumstances set out in the bill (as opposed to giving them a power to do so).

Mr Holden

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It is a pleasure to serve under your chairmanship, Ms Harris.

As currently drafted, clause 9 allows harbour authorities to refuse access to a harbour if an operator has not paid a surcharge as required in accordance with the Bill. The provision is intended to incentivise payment of surcharges and to make payment a condition of access to UK harbours. There are exceptions where a harbour authority may not refuse access: in cases of force majeure; where there are overriding safety concerns; where there is a need to reduce or minimise the risk of pollution; or where there is a need to rectify deficiencies on the ship.

Mr Holden

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I will happily provide the Committee with a full list ahead of Report stage. We are talking about serious incidents where life is at risk, but I am happy to write to the hon. Gentleman with further detail.

The method of communicating refusal of access will be set out in regulations. The clause provides that nothing in section 33 of the Harbours, Docks and Piers Clauses Act 1847 prevents refusal of access to a harbour under this section. Access can be refused, irrespective of whether an objection has been made under clause 8. This revision is a key tool in ensuring compliance with the policy intention of the Bill.

The amendment imposes a mandatory duty on harbour authorities to refuse access to a harbour, instead of a discretionary power to do so, as I mentioned earlier with regard to implementing the surcharges. As with those amendments to clauses 3 and 7, the reason for the amendment is to ensure the effective functioning of the Bill so that harbour authorities do not simply wait to be directed by the Secretary of State.

Mr Holden

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I thank hon. Members and welcome the spirit of amendment 58, which aims to provide urgent welfare facilities when they are needed. The Government believe, however, that those would be covered by clause 9(3), under which crew would be provided with access to urgent medical or welfare facilities or to undertake other emergency measures. We support the intention behind the amendment; in urgent cases concerning safety, a ship should be able to access the harbour under the framework that we have set out. Where an incident was not safety-related or related to the welfare of the crew and was therefore not covered by the force majeure exception, the ship would not be permitted access to the harbour.

Mr Holden

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Members on both sides of the Committee are raising a similar issue about welfare. As an additional safeguard, the Secretary of State has the power to direct a harbour authority not to comply with its duty to refuse access. That will ensure that access is not denied—this has to be in rare circumstances for the Bill to work—where it would cause damage by disrupting key passenger services and supply chains. There are rare instances in which the Secretary of State has an overriding power, but on the broad swathe of trying to provide welfare, our view is that that is covered already under clause 9(3).

Mr Holden

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The Bill states that

“a harbour authority may not refuse access to a harbour—

(a) in cases of force majeure;

(b) where there are overriding safety concerns;

(c) where there is a need to reduce or minimise the risk of pollution;

(d) where there is a need to rectify deficiencies on the ship.”

Both force majeure and overriding safety concerns for the crew, as well as for the ship, would be covered.

Members can be reassured that the list of exceptions directly reflect the circumstances in which access to a port may be provided. Existing legislation— namely regulation 13 of the Merchant Shipping (Port State Control) Regulations 2011, SI 2011 No. 2601— also covers this issue. I therefore think that the area of safety and crew welfare in exceptional circumstances is covered by legislation and the extra powers that are available to the Secretary of State.

Mr Holden

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My hon. Friend is right; that is exactly what I referred to following the question from my hon. Friend the Member for Dover. We have the provisions under clause 9(3) and those under clause 11 on the directional powers of the Secretary of State. We have a belt-and-braces approach, which is why I do not think Opposition amendment 58 is required.

New clause 6 is also aligned with amendment 70 and is basically about whether ships can be brought in. The Bill provides for a voluntary compliance mechanism whereby the provision of equivalence declarations, and payment of surcharges if a declaration is not provided, are conditions of access to ports. If an operator chooses to neither provide a declaration nor pay a surcharge, it will be refused access.

If that were replaced by a power of detention by the MCA, as new clause 6 seeks to do, that would be a disproportionate and inappropriate mechanism. Detention of ships can carry significant costs to the ports and wider local authorities in relation not only to looking after them, but by blocking berths. For some small harbours, this can also be particularly challenging as it blocks other access to the port. That is not the case if ships are refused access.

I have heard concerns that refusal of access is unworkable as it might result in ships mid-passage being unable to dock. However, we do not expect the Bill to work that way in practice. By virtue of the requirement that harbour authorities request an equivalence declaration only when ships providing a service call at a UK harbour on at least 120 occasions in a year, all services captured are almost certain to be on short routes, and notification of refusal of access would take place before the ship has set sail from the port of origin.

As set out in clause 9, we will set out in regulations how the harbour authority is to communicate refusal of access. Once a harbour authority has imposed surcharges, the operator will be on notice that ships providing the service will be refused access to the harbour once the period for payment of the surcharge expires, if it remains unpaid. There is an additional safeguard regarding the Secretary of State’s powers of guidance in this circumstance.

We are satisfied that the compliance process of surcharges and refusal of access, supported by the enforcement powers of the MCA, is an appropriate and effective mechanism to incentivise payments. I hope that the new clause is withdrawn.

I also say to the hon. Member for Easington that, fundamentally, the business model of these operators is that they can get things in and off the ships. By stopping them getting access to the ports, we would disrupt a business model that, by design, is on a tight turnaround. They will not survive long if they are unable to get those things into ports quickly. This is also about driving compliance with the national minimum wage equivalent for seafarers, which is what we are trying to achieve. I urge the hon. Member not to press the new clause.

Amendment 24 agreed to.

Amendments made: 25, in clause 9, page 7, line 23, leave out “and”.

This is consequential on Amendment 26.

Amendment 26, in clause 9, page 7, line 24, leave out from “with” to end of line 25 and insert—

“regulations under section 7(7)(d), and

(c) the period within which the surcharge must be paid has expired.”

This amendment is consequential on Amendment 24 and is meant to clarify the circumstances in which refusal of harbour access is required.

Amendment 27, in clause 9, page 7, line 27, at end insert—

“(2A) Subsection (1) does not apply in relation to any surcharge imposed under subsection (3)(a) or (4) of section (Imposition of surcharge: failure to provide declaration in time) which would, if paid, be required to be refunded under subsection (5) of that section.”

This amendment is consequential on the new clause to which it refers.

Amendment 28, in clause 9, page 7, line 28, leave out “may” and insert “must”.

This is consequential on Amendment 24.

Amendment 29, in clause 9, page 7, line 32, at end insert—

“(3A) The duty under subsection (1) is also subject to any direction given by the Secretary of State under section 11(2)(a).”

This is consequential on Amendment 32.

Amendment 30, in clause 9, page 7, line 32, at end insert—

“(3B) A harbour authority which fails to comply with subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.”—(Mr Holden.)

This is consequential on Amendment 24.

Amendment proposed: 70, in clause 9, page 7, line 32, at end insert—

“(3A) Where a harbour authority may not refuse access to a harbour under subsection (3), it may instead detain a ship providing a service to which this Act applies, provided that the conditions in subsection (1) are met.

(3B) The Secretary of State may by regulations make provision about the detention of a ship under subsection (3A).”—(Grahame Morris.)

Question put, That the amendment be made.

Mr Holden

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Clause 10 specifies that in England, Wales and Northern Ireland, proceedings relating to offences under the Bill will be prosecuted by the Secretary of State. In practice, the Secretary of State will do so through the Maritime and Coastguard Agency. In Scotland, all criminal prosecutions are brought by the Lord Advocate.

This provision ensures that there is a clear and consistent process for the prosecution of offences under the Bill, and that such proceedings are handled by the appropriate Government agency. The clause is a critical component of the Bill’s enforcement mechanism and it will help to ensure compliance with its provisions.

Clause 11 as drafted will give the Secretary of State the power to give guidance to harbour authorities on how to exercise their powers under the Bill. The clause also allows the Secretary of State to issue directions to harbour authorities, requiring them to exercise or not exercise their powers under the Bill or to exercise them in a particular way.

Mr Holden

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As drafted, the Bill is weaker, and that is why we are replacing the provisions with a duty in all these areas, in order to strengthen the requirement. Whether, in some such areas, it was “guidance” or other wording, there will now be a “duty”. That makes the Bill harder, ensuring that the harbour authorities have to do things.

Mr Holden

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I think we are talking slightly at cross purposes on this point. We are removing some of the things that were guidance for harbour authorities and an element of duty is now being opposed on them. That is what the Government amendments do.

The powers in clause 11 include the power to direct our harbour authorities to impose or not to impose a surcharge, whether generally or in any case or circumstances, and to impose a surcharge of an amount specified in the direction instead of the amount determined by the harbour authority’s tariff. That provision was intended as a safeguard in the event that a harbour authority did not impose surcharges in circumstances where an operator had not provided an equivalence direction, and to provide an incentive for the harbour authority to perform its role objectively.

Harbour authorities would have been required to have regard to any guidance under the clause and to comply with any direction given to them under the clause. Failure to comply with a direction under the clause is an offence punishable on summary conviction to a fine not exceeding level 4 on the standard scale. That provision was designed to help to ensure compliance with the Bill’s provisions and to achieve its policy objectives.

Government amendments 31 and 35 remove the Secretary of State’s power under the Bill to give statutory guidance to harbour authorities. That is a consequence of changing harbour authorities’ powers under the Bill to mandatory duties. We will still provide guidance to harbour authorities, which we intend to consult on, but that will not have a statutory basis. Amendment 36 is consequential on those changes. The reason why there will not be a statutory basis is that harbour authorities will already have a statutory duty.

Mr Holden

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I thank my right hon. Friend for his generous assessment of my ability to describe the Bill’s provisions.

Government amendments 32 to 34 redefine the circumstances in which directions may be given to harbour authorities by the Secretary of State. As the powers are now duties, there is no longer a need for the Secretary of State to direct harbour authorities to exercise their functions. If they do not exercise those functions, they will be liable for prosecution, so the Secretary of State does not need to intervene. Amendment 15 to clause 7 is consequential on that change.

Mr Holden

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I thank both the hon. Member for Paisley and Renfrewshire North and my right hon. Friend for their views on this. Just to be clear, Opposition amendment 59 would require the Government to consult with relevant stakeholders before issuing guidance. As per amendments 31 to 35, tabled in my name, there is no longer a provision for statutory guidance, given the responsibilities under the new duty. However, as we intend to provide some guidance to harbour authorities, I would assure hon. Members on both sides of the Committee that we intend to consult widely on any guidance that is issued, and it is unnecessary to say as much on the face of the Bill.

On the points that my right hon. Friend the Member for South Holland and The Deepings raised about the broader maritime growth strategy, I would be very happy to write to him with any specific updates that we have. I know that this is an important area that he feels passionate about.

Opposition amendment 60—this will be similar to my response to amendment 59—would require the Government to consult with relevant stakeholders before issuing directions. As per amendments 32, 33 and 34, tabled in my name, directions can only be made to instruct the harbour authority not to comply with its duties in a particular way. The need to use those powers of direction might arise when there are issues of welfare, national resilience, or the need to import medical supplies, and a ship should not be refused access. Such scenarios may be very time-sensitive, and the need to consult could significantly slow down that process. We assure hon. Members that we will consult where possible, but on that specific point—it is the reverse, as it were—it would not be appropriate to make that a legal requirement on the face of the Bill because of those issues.

Amendments 37 and 38, tabled in my name, change the power to make a direction to specify a harbour authority in respect of a particular harbour regarding the power to make those regulations. That is consequential on the amendments to convert harbour authority powers into duties, as, now that harbour authorities are required to request declarations, impose surcharges and refuse access to harbours, it is important that they have clarity on the relevant harbour authority for a particular harbour. The amendments will further ensure consistency and reduce the administrative burden of giving directions on a case-by-case basis.

Question put and agreed to.

Clause 10 accordingly ordered to stand part of the Bill.

Clause 11

Guidance and directions

Amendments made: 31, in clause 11, page 8, line 2, leave out subsection (1).

This removes the Secretary of State’s power under the Bill to give guidance to harbour authorities, in consequence of changing harbour authorities’ powers into duties.

Amendment 32, in clause 11, page 8, line 6, leave out

“exercise, or not to exercise, any of their powers under”

and insert

“not do anything they would otherwise be under a duty to do by reason of”.

This and the following amendment redefine the circumstances in which directions may be given to harbour authorities.

Amendment 36, in clause 11, page 8, line 16, leave out subsection (6).—(Mr Holden.)

This is consequential on Amendment 31.

Clause 11, as amended, ordered to stand part of the Bill.

Clause 12

Regulations

Mr Holden

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Clause 12 empowers the Secretary of State to make regulations to provide further details on the implementation of the Bill’s provisions. The regulations made under the legislation will be subject, as it stands, to the negative resolution procedure. The regulations may make different provisions for different cases, for example to take account of different types of ship services, such as freight ferries and container ships, and different non-qualifying seafarers—for example, there may be different surcharge rates according to age. The regulations may also confer discretion on specified persons and contain consequential, supplementary, incidental or transitional provisions. This provision gives the Government the flexibility to adapt the regulations as needed to ensure that the Bill’s provisions are effectively implemented and to achieve the Bill’s policy objectives as quickly as possible.

Amendments 61 and 66 seek to ensure that regulations under clauses 3, 4, 7 and 9 are subject to the affirmative resolution procedure, rather than the negative resolution procedure as currently. We expressly considered why it is appropriate that each regulation-making power was negative in our delegated powers memo, and the Delegated Powers and Regulatory Reform Committee did not raise any concerns about the procedure for the remaining regulation-making powers in the Bill. Indeed, the only regulation-making power that the Committee recommended be subject to the affirmative procedure has now been removed from the Bill.

Although we have tweaked certain regulation-making powers, we do not consider that this changes the appropriateness of the negative procedure, and we will be providing a supplementary delegated powers memorandum for the Committee to consider in due course. Switching to the affirmative procedure is not a good use of parliamentary time and would slow down the implementation of the Bill. I request that the amendments be withdrawn so that we can get on with protecting seafarers as quickly as possible.

Mr Holden

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I will be very swift, because this is very much just definitions and terms. Clause 14 provides definitions of terms used throughout the Bill to ensure clarity and consistency in the interpretation of its provisions. The definitions will help to ensure that the Bill is applied consistently and coherently, and will facilitate its effective implementation. Clause 15 provides for the extent, commencement, and short title of the Bill. Amendment 41, in my name, removes the privilege amendment inserted by the Lords and is a purely procedural matter.

Question put and agreed to.

Clause 14, as amended, accordingly ordered to stand part of the Bill.

Clause 15

Extent, commencement and short title

Amendment made: 41, in clause 15, page 10, line 1, leave out subsection (6).—(Mr Holden.)

This removes the privilege amendment inserted by the Lords.

Clause 15, as amended, ordered to stand part of the Bill.

New Clause 1

Offence of operating service inconsistently with declaration

“(1) The operator of a service to which this Act applies is guilty of an offence if—

(a) the operator provides a harbour authority with an equivalence declaration in respect of the service for a relevant year, and

(b) subsection (2) or (3) applies.

(2) This subsection applies if the equivalence declaration is provided before the beginning of the relevant year and—

(a) the service is operated inconsistently with the declaration at the beginning of the relevant year, or

(b) at any later time during the relevant year the service starts to be operated inconsistently with the declaration and the operator fails to notify the harbour authority within four weeks of—

(i) the fact that the service has started to be so operated, and

(ii) the time when it started to be so operated.

(3) This subsection applies if the equivalence declaration is provided during the relevant year and—

(a) at the time the declaration is provided the service is being operated inconsistently with the declaration, or

(b) at any later time during the relevant year the service starts to be operated inconsistently with the declaration and the operator fails to notify the harbour authority within four weeks of—

(i) the fact that the service has started to be so operated, and

(ii) the time when it started to be so operated.

(4) A person guilty of an offence under this section is liable on summary conviction—

(a) in England and Wales, to a fine, or

(b) in Scotland and Northern Ireland, to a fine not exceeding level 5 on the standard scale.”—(Mr Holden.)

This is connected with the group of amendments introduced by Amendment 1. It provides for an offence of acting inconsistently with an equivalence declaration, in place of the offence in clause 3(5) and (6). It caters for the fact that a declaration may be provided before, during or after the year to which it relates.

Brought up, read the First and Second time, and added to the Bill.

New Clause 2

Imposition of surcharges: failure to provide declaration in time

“(1) This section applies if—

(a) a harbour authority requests the operator of a service to which this Act applies to provide the authority with an equivalence declaration in respect of the service for a relevant year, and

(b) the operator does not provide an equivalence declaration in the prescribed form and manner before the end of the prescribed period.

(2) If the prescribed period expires before the beginning of the relevant year, the harbour authority must impose a charge on the operator of the service in respect of each occasion when a ship providing the service enters its harbour between—

(a) the beginning of the relevant year, and

(b) whichever is the earlier of—

(i) the end of the relevant year, and

(ii) the time when the operator provides the authority with an equivalence declaration in respect of the service for the relevant year in the prescribed form and manner.

(3) If the prescribed period expires during the relevant year, the harbour authority must—

(a) impose a charge on the operator of the service in respect of each occasion when a ship providing the service entered its harbour between—

(i) the beginning of the relevant year, and

(ii) the end of the prescribed period, and

(b) impose a charge on the operator of the service in respect of each occasion when a ship providing the service enters its harbour between the expiry of the prescribed period and whichever is the earlier of—

(i) the end of the relevant year, and

(ii) the time when the operator provides the authority with an equivalence declaration in respect of the service for the relevant year in the prescribed form and manner.

(4) If the prescribed period expires after the end of the relevant year, the harbour authority must impose a charge on the operator of the service in respect of each occasion when a ship providing the service entered its harbour during the relevant year.

(5) But charges imposed by a harbour authority under subsection (3)(a) or (4) must be refunded if—

(a) at any time after the end of the prescribed period the operator provides the authority with an equivalence declaration in respect of the service for the relevant year in the prescribed form and manner, and

(b) the declaration is within section 4(1C) or (1D).

(6) For the purposes of this section, in relation to an equivalence declaration which an operator of a service is required to provide—

‘prescribed period’ means the period within which the operator is required to provide the declaration in accordance with regulations under section 3(4)(za);

‘prescribed form and manner’ means the form and manner in which the operator is required to provide the declaration in accordance with regulations under section 3(4)(a) and (b).”—(Mr Holden.)

This and the following new clauses set out the circumstances in which surcharges must be imposed. In summary, surcharges are to be imposed when an equivalence declaration is not provided in time (this new clause); when a declaration relates only to part of a year (NC3); or when a service is operated inconsistently with a declaration (NC4).

Brought up, read the First and Second time, and added to the Bill.

New Clause 3

Imposition of surcharges: in-year declaration that is prospective only

“(1) This section applies if—

(a) a harbour authority requests the operator of a service to which this Act applies to provide the authority with an equivalence declaration in respect of the service for a relevant year,

(b) the operator provides the declaration during the relevant year in accordance with regulations under section 3(4), and

(c) the declaration is within subsection (1B) of section 4 (and not also within subsection (1C) of that section).

(2) The harbour authority must impose a charge on the operator of the service in respect of each occasion when a ship providing the service entered its harbour between the beginning of the relevant year and the time the declaration was provided.”—(Mr Holden.)

See NC2.

Brought up, read the First and Second time, and added to the Bill.

New Clause 4

Imposition of surcharges: operating inconsistently with declaration

“(1) This section applies if—

(a) the operator of a service to which this Act applies has provided a harbour authority with an equivalence declaration in respect of the service for a relevant year, and

(b) either—

(i) the operator notifies the authority that at a specified time after the declaration was provided the service was, or started to be, operated inconsistently with the declaration, or

(ii) the authority has reasonable grounds to believe that, at a time after the declaration was provided, the service was, or started to be, operated inconsistently with the declaration.

(2) The harbour authority must impose a charge on the operator in respect of each occasion when a ship providing the service entered or enters the harbour between—

(a) the time mentioned in subsection (1)(b)(i) or (ii), and

(b) the end of the relevant year.

(3) But if after the time mentioned in subsection (1)(b)(i) or (ii) the operator provides the harbour authority with a fresh equivalence declaration in respect of the service for the relevant year, the authority must not impose a charge under this section in respect of an occasion when a ship providing the service enters the harbour after the fresh declaration is provided (unless this section applies again by reference to that or a later declaration).”—(Mr Holden.)

See NC2.

Brought up, read the First and Second time, and added to the Bill.

New Clause 5

Implementation and monitoring

“(1) Within six months of this Act being passed, the Secretary of State must publish a report on the implementation of, and monitoring of the effects of, this Act.

(2) The report must include—

(a) an assessment of the impact of this Act on—

(i) roster patterns,

(ii) pensions, and

(iii) wages of seafarers;

(b) a statement as to whether further legislation will be introduced by the Government as a result of the findings of the assessment under paragraph (a);

(c) a strategy for engaging with trade unions for the purposes of monitoring the implementation of this Act, including in reference to conventions of the International Labour Conference;

(d) a strategy for monitoring the establishment of minimum wage corridor agreements with international partners of the United Kingdom, insofar as any such agreement ensures that any non-qualifying seafarer is remunerated for UK work at a rate that is equal to or exceeds the rate that would otherwise be required under this Act;

(e) an assessment of the interaction between this Act and existing international agreements or international maritime law, including reference to any litigation that has arisen as a result of this Act.

(3) The report must be laid before each House of Parliament.”—(Mike Kane.)

Brought up, and read the First time.

Mr Holden

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I will write to the hon. Member for Easington on the specific issue of the Retained EU Law (Revocation and Reform) Bill. I will start now by saying that there have been some strong and robust improvements from this Bill, not the least of which is the imposition of a duty on the harbour operators, which I think goes a long way to addressing many of the concerns expressed at earlier stages by hon. Members.

I would like to reflect on a couple of comments from my hon. Friend the Member for Dover. She mentioned the bilateral agreements and how important they are. With us legislating in this way and other countries now starting to look to the legislation for their own societies, perhaps the hon. Member for Paisley and Renfrewshire North will reflect on how it is Britain leading the way in this space—a little.

In terms of the Laffer curve, I did not think I would see my right hon. Friend the Member for South Holland and The Deepings and the hon. Member for Wythenshawe and Sale East perhaps come out on the same side of things, but they do seem to have reflected a general, cross-party consensus that it is important to act in the best interests of working Britain. That is entirely what this legislation is designed to do.

Regarding fire and rehire, which has been mentioned by several hon. Members but is outside the scope of this Bill, I want to put it on record that BEIS will be launching a consultation and code of practice on fire and rehire shortly.

Mr Holden

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I do speak for the Government but, on the specifics of what BEIS has been up to, I urge the hon. Member to speak to a BEIS Minister. But I do understand the broad thrust of his point. Where we are taking action here today is regarding seafarers.

The hon. Member makes quite an important point: how many consultations and reports can be had? The Opposition are currently proposing two more reports in their new clauses 5 and 7, both of which seek to legislate for the Government to produce a report. The first seeks to legislate for the Government to produce a report within six months of the Bill being passed on its implementation and monitoring. A number of the points that are sought to be included in such a report are well beyond the scope of the Bill. As hon. Members have said, the Bill is focused very much on the remuneration of seafarers who do not qualify for the national minimum wage. Six months after the Bill has been passed, there will be little to report on—hopefully very little indeed, as people will be complying with it. Indeed, the Bill will not be brought into force until secondary legislation is in place, and it is not expected that that will be the case within a short space of time after the Bill has passed.

Let me turn to the detail of the new clause, in particular subsection (2)(a). As a matter of course, we will be conducting a post-implementation review of the Act within five years of it being passed that will cover pensions and pay, as covered in the impact assessment. In any event, pensions and roster patterns are outside the scope of the Bill, and any effect on rostering would be indirect and challenging to distinguish from other factors.

Subsection (2)(b) goes beyond the implementation and monitoring of the Bill itself, and is therefore out of scope. We do not have plans to legislate further than is necessary, but that does not mean that we will not take action on areas beyond the matter of minimum pay, which we all know is not the only aspect of seafarer welfare that requires attention. As hon. Members have mentioned, as part of the nine-point plan, a new seafarers’ charter will be launched as a voluntary agreement, which aims to improve long-term employment and welfare conditions for seafarers. It covers a far wider range of employment protections than is currently covered by the Bill.

Mr Holden

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I hope that people do sign up. The entire aim of the Bill is not to have people being fined but to drive best practice, so I hope that, in time, operators that have not operated in a positive way towards employees in the past, in a way that we would like to see, will sign up.

Mr Holden

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As the hon. Member will know, we are indeed legislating, but we are looking at the seafarers’ charter. The Government are not opposed to looking at this again if the voluntary charter is not successful, but it steps in the right direction. We will see how it plays out. I do not want to see a race to the bottom; I want to see standards rising, and we think that the voluntary charter will be a step in that direction. We have had to legislate in order to deliver another element of what we are looking to do.

Mr Holden

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I appreciate exactly what the hon. Gentleman is saying, but I think we have strayed a little from new clauses 5 and 7.

The scope of the Bill is limited to ensuring that seafarers are paid the equivalent of the UK national minimum wage and it is not concerned with broader relationships. Furthermore, there is no requirement for crews to be unionised, so it would be an unusual requirement to put so much focus on that, as the new clause proposes. That does not mean that the Government are not looking to work with the unions, as we have done throughout the process and will continue to, as we look at the regulations to come.

The requirement to publish a strategy for monitoring the establishment of corridors would also be out of the scope of the Bill. In any event, it would be inappropriate and potentially counterproductive to provide a running commentary on live negotiations with international partners, such as those with the French Republic, which I mentioned earlier.

On proposed subsection (2)(e), we do not consider that the proposals in the Bill interfere with rights and obligations under international law, including the United Nations convention on the law of the sea. We therefore we do not deem it necessary to state as such in the Bill, or to have an obligation to assess the interaction between international law and the Bill on the face of the legislation.

Measures taken under the Bill will not interfere with the right of innocent passage, so as to breach the obligations under UNCLOS. The Bill requirements will apply and be enforced only as a condition of entry to UK ports in which the UK has jurisdiction over visiting ships, and where the right of innocent passage does not apply. Vessels visiting a port are not in innocent passage and not merely passing through territorial sea, so associated restrictions on the exercise of jurisdiction as set out in UNCLOS do not apply.

The measures that may be taken under the Bill can be applied only to a narrow subset of services with a close connection to the UK: services on a regular scheduled service, determined by clear, objective criteria—for example, services for the carriage of persons or goods by ship between a place in the UK and a place outside the UK that will have entered the harbour on at least 120 occasions in the period of a year. Given the huge number of additional areas that the new clause would bring in scope, I cannot accept it.

New clause 7 would require an assessment of the impact of the Bill

“on the remuneration of seafarers”

and also whether there is any evidence that, as a result of the Bill,

“seafarers have been dismissed and re-engaged on lower wages at or closer to the National Minimum Wage”

within one year of the Bill being passed. This is simply not feasible. Again, one year after the Bill receives Royal Assent would be far too early to see the real impact. I have already made the point that we will naturally be looking at the legislation five years after implementation. Also, as I have said, there will already be a delay between Royal Assent and the Bill becoming fully operative.

In any event, it is not necessary to include that as a requirement on the face of the Bill. As a matter of course, we will conduct a post-implementation review. I hope I have provided colleagues with enough reassurance to withdraw new clause 7 with confidence.

Question put, That the clause be read a Second time.

Mr Holden

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Just before we finish, I want to say that it is a pleasure to have served under your chairmanship this afternoon, Ms Harris. We are both virgins on the Bill Committee Front Benches in our respective ways, under the supreme guidance of Mr Davies, which has been superb.

The new clause would create criminal offences for directors of companies operating a service to which the Bill applies where the service is operated inconsistently with an equivalence declaration or the operator has failed to comply with a request for a declaration. While I understand and share the anger against some of the bosses who, as my hon. Friend the Member for Dover mentioned, carry out such underhand employment practices, introducing such offences to the Bill would not improve its effectiveness. There is already a robust compliance mechanism that will provide a severe disincentive against operators that pay less than the national minimum wage equivalent.

Mr Holden

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My hon. Friend makes a very sensible point. The Bill is a big step in the right direction in delivering for seafarers and countering some of the issues we have seen.

It will already be a criminal offence for operators to operate a service inconsistent with a declaration, and we do not think it is necessary for directors to be held personally liable for that offence. It would not be appropriate for directors to be guilty of an offence of failing to provide a declaration, as there is no obligation for them to do so. While the intention is that surcharges will be a sufficient disincentive against operators failing to pay at least the national minimum wage equivalent, it is open to operators not to provide an equivalence declaration, in which case surcharges will be imposed.

The existing compliance mechanism of surcharges for failure to provide a declaration and the criminal offences for operating inconsistently with a declaration will have considerable financial and reputational implications for operators. I do not think anybody here today can say that P&O Ferries has not experienced a reputational impact—not only that, but a legislative impact—from its behaviour over the last few years. Personal liability for directors is therefore not necessary.

I want to leave one thought in the minds of hon. Members on both sides of the Committee. The Insolvency Service is currently undertaking a civil investigation, which, among other things, will assess various individuals’ fitness to be directors.

Mr Holden

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As the hon. Member knows all too well, he and I are very much on the same page and would like the Insolvency Service to report as soon as possible, but it is an independent organisation and we cannot comment on ongoing investigations. The entire basis of the new clause tabled by the hon. Member for Glasgow East, which Opposition Back Benchers have spoken about too—that they want something that could disqualify someone—is there in what is being looked at. It is maintained via the Insolvency Service. While I cannot comment on the individual case, I think it is clear that what everybody wants to achieve is already there. I understand why Members are trying to invent another offence, but it is not necessary, as what the hon. Member for Glasgow East seeks to achieve can already be done through current legislation.