P&O Ferries

Tuesday 29th March 2022 Lords Chamber

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 28 March.

“I know that the whole House has been left appalled and angered by the behaviour exhibited by P&O Ferries towards its workers over the last week. As a Government, we will not stand by and allow hard-working, dedicated British staff to be treated in such a manner.

This morning, my right honourable friend the Transport Secretary wrote to the chief executive of P&O asking him to pause and reconsider and to offer his workers their jobs back on their previous terms, conditions and wages, should they want them. That is because we will return to the House to announce a package of measures that will ensure that the outcomes that P&O Ferries is seeking to achieve through this disastrous move to pay less than the minimum wage cannot be seen through. As a result, it will have no reason left not to reconsider its move.

As I said to the Transport Committee and the Business, Energy and Industrial Strategy Committee last week, as soon as the package of measures has been finalised, we intend to return to the House so that Members can rightly scrutinise it. In the meantime, we continue to review the contracts that P&O Ferries has with the Government, and the Insolvency Service continues to investigate the actions of Peter Hebblethwaite, who brazenly admitted to breaking the law before two committees of this House last week.

I am clear that P&O Ferries cannot and will not be allowed to get away with its actions. I hope the whole House will now support our efforts to ensure just that.”

15:11

[Lord Rosser (Lab)]

A week ago, I asked the Government what had happened to the two commitments given on 25 June 2020 to

“consider other options in regard to these operations”—

that is, low-cost employment models on some ferry routes—and to

“consider whether further changes are required when the Equality Act regulations are reviewed towards the end of this year”,—[Official Report, 25/6/20; col. 431.]

that is, the end of 2020, in relation to nationality-based differential pay in the maritime sector, the only sector where this operates. Last week the Government conceded that the review had not been completed. In other words, the Government have known about the issues over differential pay levels, which are at the heart of this dispute, and have done nothing about them over the past year and three-quarters. As a result, we now have this unacceptable crisis situation with P&O Ferries and DP World: 800 people are losing their jobs and P&O Ferries is taking unacceptable profit-maximising or loss-reduction action that was wholly predictable, as the Government have known for at least one and three-quarter years. Why have the Government failed to act over that period?

[The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)]

My Lords, the Government share the outrage expressed by the noble Lord at the behaviour of DP World and P&O Ferries. When they are developed and ready, which I expect to be shortly, we will update the House on a package of measures to ensure that P&O Ferries cannot see through its plans. We will address the immediate challenges faced by those affected and include measures to strengthen legal protections, including coverage of the national minimum wage.

[Baroness Randerson (LD)]

My Lords, in 2020, when the Government announced that UK seafarers would be entitled to the minimum wage, they made the exception of ships exercising innocent passage and transit passage through UK waters. P&O Ferries is not the only company doing that. Can the Minister explain why the exception was made? Can she tell us whether the Government are aware of any other ferry companies operating in that way which are seeking to exploit this loophole on pay? Can the Government confirm that they will not repeat the PR disaster that P&O Ferries has made by continuing to work with the company on its freeport programme or any other government-based project?

[Baroness Vere of Norbiton (Con)]

I can reassure the noble Baroness that we are looking at all relationships that the Government have with DP World and with P&O Ferries. We will develop our thinking on that as more information comes forward. We are in conversation with the unions and other operators as part of an ongoing, constructive dialogue about the package of measures which will be announced shortly. I reassure the noble Baroness that we are able to provide greater employment rights to seafarers operating in UK waters than to those operating on international services, where the rights are different and come under different law.

[Lord Balfe (Con)]

My Lords, does the Minister accept that, although the Government seemed to be a bit slow off the mark, the measures now taken are appreciated by the many trade unionists who have lost their jobs? I encourage the Government to maintain this pressure on P&O and to look at other ways in which this company can be made to realise that its behaviour is unacceptable and will have consequences.

[Baroness Vere of Norbiton (Con)]

I can reassure my noble friend that we are maintaining the pressure on P&O Ferries. The Secretary of State wrote to the chief executive of P&O Ferries yesterday, explicitly asking him to reconsider the actions that it is taking, to take the opportunity to do right by its workforce, and then to return to the table to have discussions with seafarers to ensure that we can find a way forward.

[Lord Lennie (Lab)]

My Lords, now that Mr Hebblethwaite has apparently rejected the Government’s proposals which they made to him in writing yesterday, where they explained that they wanted him to re-engage the workforce, how will the Government ensure that he does it?

[Baroness Vere of Norbiton (Con)]

I too noticed that a letter from Mr Hebblethwaite had been published on Twitter earlier today. Unfortunately, I do not have an update following that letter. Obviously, we are considering his response and will have an update in due course, while of course working speedily on a package of measures. We note the response from Mr Hebblethwaite; we have views on that.

[Lord Cormack (Con)]

What are we going to do to put Mr Hebblethwaite on the spot and make sure that the 800 people who have been shamefully and appallingly treated get some recompense? What about the remark that he made about compensation? Has he explained what he means by that?

[Baroness Vere of Norbiton (Con)]

We are aware that Mr Hebblethwaite has made a number of remarks recently. We are trying to get to the bottom of them. We are also trying to get to the bottom of the explanations by P&O Ferries for some of the actions that it has taken recently. We are looking at them to establish whether they are legal. We are also aware of some suggestions that there have been breaches of the national minimum wage. Therefore, the Business Secretary has asked the Employment Agency Standards Inspectorate to investigate that. Of course, the Maritime and Coastguard Agency is inspecting every single ship that is due to sail on these routes. To date, two have failed their inspections and therefore further work is required.

[Lord Hendy (Lab)]

The noble Baroness is to be congratulated that a package of measures is to be introduced, late thought it may be, but will that package include the preservation of the right to collective bargaining and consultation, which this company so clearly flouted?

[Baroness Vere of Norbiton (Con)]

When it comes to collective bargaining and negotiations with the unions, we need to get to the bottom of whether the existing law was disregarded in this case. Mr Hebblethwaite seemed to suggest that it might have been, which was unwise.

[Viscount Hailsham (Con)]

Does the inspection by the Maritime and Coastguard Agency extend to the competence of the agency workers who have been recruited or is it simply as to the quality of the ship itself?

[Baroness Vere of Norbiton (Con)]

I can reassure my noble friend that the port state control inspections being undertaken on all affected vessels include a normal PSC inspection. They also look at crew employment contracts, crew qualifications, crew familiarisation and emergency preparedness.

[Lord West of Spithead (Lab)]

My Lords, 40 years ago next month, a task force went to the south Atlantic. It had 73 merchant ships. The bulk of the people on board those were of course British merchant seamen, because when we fight a war with our merchant ships, we need British merchant seamen there. Part of the problem with all the complexity in this area is that it has driven British merchant seamen out of the business. Do the Government have any plans to ensure that we have sufficient merchant seamen for any strategic needs we might have in the future?

[Baroness Vere of Norbiton (Con)]

Yes, the Government are well aware of that issue. We started the work back in 2019 when we published Maritime 2050. We want to ensure that we have British people with the right skills to work on British ships in British-based operations.

[Lord McCrea of Magherafelt and Cookstown (DUP)]

My Lords, surely letters from Ministers will not be sufficient to solve this problem. The deadline for workers to accept the terms put forward by P&O is fast approaching. Legislation will be urgently needed to resolve the situation for workers who have been so cruelly abused by P&O.

[Baroness Vere of Norbiton (Con)]

All I can say to the noble Lord is to reiterate what I have already said: we are working at pace on a package of measures which we hope to announce very shortly.

[Lord Snape (Lab)]

My Lords, does the Minister agree that it is not just P&O, appalling though its conduct has been? Will she answer the question from the Liberal Democrat Front Bench and tell us how many other shipping companies which ply British waters are not meeting the British minimum wage?

[Baroness Vere of Norbiton (Con)]

I do not have that information to hand. However, following our discussions with the operators, I will certainly write to the noble Lord about the package of measures and how they may operate in the future.

[Baroness Bennett of Manor Castle (GP)]

My Lords, a statement made in the other place said that the Government are continuing to review the contracts which P&O Ferries has with them. Does that include reviewing the contracts with DP World, the owner of P&O Ferries and, specifically, the freeports contracts?

[Baroness Vere of Norbiton (Con)]

I reassure the noble Baroness that we are reviewing all of our relationships and contracts with both P&O Ferries and DP World.

[Lord Berkeley (Lab)]

My Lords, following on from the questions from my noble friend Lord Snape and the noble Baroness, Lady Randerson, can the Minister explain the difference in employment rights and arrangements between the various ships operating in UK waters? What are UK waters? Do they include Dover to Calais, Northern Ireland to Scotland or England, and—I think probably not—Dublin to Holyhead? How do these arrangements vary or differ from the contracts for ships which may be registered in the UK but are longer distance and still international, carrying containers or oil? There seems to be a lot of confusion, which I suspect P&O directors are trying to take advantage of by various devious means.

[Baroness Vere of Norbiton (Con)]

The noble Lord has highlighted the complexity of employment law in the maritime sector. The International Labour Organization has the Maritime Labour Convention, which sets out the minimum standards for some key employment and working conditions policy areas. However, it does not go nearly as far as we are able to go from a UK perspective for seafarers who are UK residents, work on a UK-registered vessel and are ordinarily working in the UK. We are able to offer them the same levels of protections as they would get if they were working onshore.