Seafarers' Wages Bill [ Lords ] (First sitting)
Tuesday 17th January 2023
(1 year, 10 months ago)
Public Bill CommitteesSeafarers’ Wages Act 2023 View all Seafarers’ Wages Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 17 January 2023 - (17 Jan 2023)
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
We are now sitting in public, and the proceedings are being broadcast. Before we begin, I have a couple of preliminary announcements. Hansard colleagues will be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings.
We will first consider the programme motion on the amendment paper, and then a motion to enable the reporting of written evidence for publication. I hope that we can take these matters formally.
Ordered,
That—
(1) the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 17 January) meet at 2.00pm on Tuesday 17 January;
(2) the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Tuesday 17 January.— (Mr Holden.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Mr Holden.)
The Chair
Copies of written evidence that the Committee receives will be made available in the Committee Room and will be circulated to Members by email.
We will now begin line-by-line consideration of the Bill. The selection and groupings list for today’s sittings is available in the room. It shows how the clauses and selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and groupings list shows the order of debates.
Decisions on each amendment, and on whether each clause should stand part of the Bill, are taken when we come to the relevant clause. A Member who has put their name to the lead amendment in a group is called first; other Members are then free to catch my eye to speak on all or any of the amendments in that group. I ask Members to stand in the normal way if they want to speak on a particular amendment, including the SNP spokesman as well—that would be really helpful. A Member may speak more than once in a single debate.
At the end of a debate on a group of amendments, I shall call the Member who moved the lead amendment again. Before they sit down, they will need to indicate if they wish to withdraw the amendment or seek a decision. If any Member wishes to press any other amendment in a group to a vote, they will need to let me know in advance.
Clause 1
Services to which this Act applies
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
I beg to move amendment 42, in clause 1, page 1, line 10, leave out “any kind” and insert “every description”.
This amendment would bring the definition of ship into line with that under the Merchant Shipping Act 1995.
The Chair
With this it will be convenient to discuss the following:
Amendment 67, in clause 1, page 1, line 11, at end insert—
‘“place in the United Kingdom” includes energy installations within the UK Exclusive Economic Zone.’
Clause 1 stand part.
Amendment 43, in clause 2, page 1, line 14, leave out paragraphs (a) and (b) and insert—
‘(a) who is employed or engaged in any capacity on board any ship providing a service to which this Act applies,
(b) whose employment or engagement on board the ship is carried out in relation to the provision of the service, and’.
This amendment would bring the definition of seafarer into line with the definition of “seaman” under the Merchant Shipping Act 1995.
Clause 2 stand part.
Amendment 48, in clause 4, page 3, line 18, leave out “or its territorial waters” and insert
‘, its territorial waters, or within the Renewable Energy Zone as specified by The Renewable Energy Zone (Designation of Area) Order 2004.’
This amendment would ensure that seafarers engaged in work supporting offshore wind installations are covered by Act.
Gavin Newlands
It is a pleasure to see you in the Chair, Mr Davies, and to lead this worthy but anaemic debate. On that basis, I hope that the Minister will be generous when discussing the amendments before us. The amendments are in my name and that of my hon. Friend the Member for Glasgow East.
A couple of these amendments are straightforward. Amendment 42 would change the definition of a ship or vessel, and amendment 43 would ensure consistency in the definition of a seaman. The amendments are intended to ensure that the legislation aligns with existing definitions of both “seaman” and “ships” in the Merchant Shipping Act 1995. I thank the Law Society of Scotland for highlighting these issues.
Having differing definitions in law between the Bill and existing legislation for no apparent good reason—although we will hear what the Minister says—does not seem to be a particularly efficient route to go down. After all, the workers that the Bill is intended to cover are already seamen under current definitions and, on the face of it, the Bill does not aim to change that.
Similarly, if there is already a legal definition of a ship in statute, it seems useful to maintain that definition here. Indeed, when the Bill was in the House of Lords, Baroness Vere made a similar point in relation to the definition of a harbour, pointing to the existence of the Harbours Act 1964. Therefore there should be no reason why a similar principle cannot apply in this case. If there are good reasons why a new definition specifically relating to the provisions in the Bill is needed, I will be happy to hear it, but logic would suggest that using the existing definitions would be far simpler.
Amendments 67 and 48 are designed to deal with the fact that workers operating in the renewables industry, which will be increasing exponentially in the coming years, are currently excluded from the Bill. There are two methods of dealing with that under the amendments. They relate to the UK exclusive economic zone and to the renewable energy zone. The exclusive economic zone almost entirely matches the renewable energy zone, save for an area just under 200 miles north-west of Cape Wrath and more than 100 miles north of North Rona. Because our proposal is aimed particularly at protecting those seafarers engaged in work supporting renewables installations in UK waters, it seemed more appropriate to try to use the renewable energy zone rather than the EEZ, but we have given both a try. If the Minister wants to accept either, I will be perfectly happy with whichever one he chooses.
At the moment, the Bill’s extent is limited to the UK and its territorial waters—that is, the 12 nautical mile limit. That excludes the EEZ and REZ, which go to 200 miles. Our proposal would simply ensure that ships and seafarers engaged in work to support renewables installations were not inadvertently omitted from enjoying legislative protection simply because those zones are not listed in the Bill while territorial waters are referred to.
I note that the Minister in the Lords, Baroness Vere, had to correct the record after incorrectly stating that these workers were already covered by national minimum wage legislation. Workers in the oil and gas industries are entitled to national minimum wage protection. It would be ludicrous if their colleagues doing the same difficult and dangerous job, but supporting renewable industries, were denied the right to protections and to national minimum wage equivalence. This is, on the face of it, a fairly minor proposal. However, it would help to protect thousands of workers—a number that we hope will grow hugely over coming years—and would ensure that renewables were not just better for the planet but better for our workers.
Grahame Morris (Easington) (Lab)
Would it be convenient to discuss amendment 67 at this point, Mr Davies?
Grahame Morris
Thank you, Mr Davies. It is a pleasure to serve under your chairmanship.
I welcome the fact that the Government have introduced some measures to address the appalling injustice experienced by the P&O seafarers, 800 of whom were summarily sacked by Zoom on 17 March in the most appalling fashion. However, I cannot help reflecting on the fact that this is something of a missed opportunity. I understand that the terms of the Bill are, by their very nature, narrow. Nevertheless, it is complicated legislation and it does throw up a number of anomalies, which I hope the Government will recognise and address during Committee or perhaps at Third Reading. Given the overall situation that we face with the reduction in the number of UK-based seafarers, this is a golden opportunity.
Two former Shipping Ministers are members of the Committee. With the right hon. Member for South Holland and The Deepings, we have had previously a discussion about the opportunities, given the huge public investment in offshore wind and offshore renewables more generally as part of the zero-carbon strategy, to provide employment opportunities, particularly in coastal towns such as mine. Sadly, that opportunity has been missed.
Sir John Hayes (South Holland and The Deepings) (Con)
As the hon. Gentleman has cited me, I ought to be driven to action, so let me say this. He will remember that, as Minister, I commissioned the “Maritime Growth Study”, and part of that study was a consideration of exactly the matters that he is describing. We need to recruit, to skill and to retain more UK seafarers. That is something that, frankly, most Governments, of all persuasions, have neglected over a long time, so the problem is deeply rooted. We have allowed the erosion of our merchant navy for a considerable time, so I entirely endorse what the hon. Gentleman has said. Skills matter, people matter, and jobs matter.
Grahame Morris
I thank the right hon. Gentleman for that intervention. I agree with his comments. My wish, and indeed that of the maritime trade unions—RMT and Nautilus International—is that the seafarers’ charter and the Government’s nine-point plan embodied in the maritime 2050 strategy be placed on the face of the Bill. That would address many of their concerns, which were echoed by the right hon. Gentleman.
I respectfully point out that the noble Lord Hendy raised the issue of the lack of minimum wage protection for crew working in the offshore wind and offshore renewable energy supply chain beyond the limits of the UK’s territorial waters. At present, crews working on servicing offshore oil and gas across the UK continental shelf are entitled to protection under the national minimum wage legislation that this Bill relates to. However, crew who sometimes work on the same ships but service the offshore wind turbines in the UK exclusive economic zone are not entitled to that protection. That would seem unfair to any impartial observer and is leading to serious cases of exploitation. It is a glaring anomaly that the Bill should address.
We also have the exclusion of UK seafarers from the growing labour market, which is directly linked to the UK economy. These jobs would not exist but for a huge investment from the UK Government and the UK taxpayer. It is quite a travesty that we are not providing the protections that would ensure those jobs go to UK-based seafarers. I would like that to be addressed. That is the purpose of amendment 67.
Mike Kane (Wythenshawe and Sale East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies. We hope to work co-operatively with the Government. The common good dictates that workers should be treated with dignity and respect in the workplace, and at the least they should be paid the national minimum wage, but as the hon. Member for Paisley and Renfrewshire North pointed out, international maritime law is incredibly complicated legislation when it comes to looking at economic terms and the definition of ships. Renewables hold a very positive future for the United Kingdom. We need to ensure that this sector comes within scope of the Bill, as my hon. Friend the Member for Easington suggested.
Labour has tabled multiple amendments, along with other colleagues on the Opposition Benches, to extend the definition of to whom the Bill applies. The right hon. Member for South Holland and The Deepings in his often-erudite way points it out: this is about making Britain a greater maritime nation. That depends on the jobs on offer and the skills we train our maritime workers with. We must ensure British workers can get those jobs on our coastal waters and that when they do they are fairly paid, with at least the national minimum wage.
Karl Turner (Kingston upon Hull East) (Lab)
I do not want to detain the Committee for long, but I want to speak briefly to this issue. The rapidly falling number of British ratings in the maritime industry is a crying shame, and the former Minister, the right hon. Member for South Holland and The Deepings, is right: all Governments of all political persuasions have failed to address that issue. They have addressed officers, to an extent, but they have not anywhere near sufficiently addressed ratings.
The Bill could be dramatically improved were the Government to agree to include energy installations. That area is growing exponentially. The Bill is a golden opportunity to recruit, train and encourage kids in schools in my constituency who live in the shadow of the docks, looking over at those vessels going out to sea and wondering whether they could possibly dream of having a job in that industry.
I commend the Government on bringing forward this legislation in good time. The former Transport Secretary, the right hon. Member for Welwyn Hatfield (Grant Shapps), and the former Minister, the hon. Member for Witney, must have worked incredibly hard to put together this complex legislation—this area is particularly complex. However, we could go further and do better, and I call on the Government to think carefully about including energy installations in the Bill.
The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)
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.
Grahame Morris
I recognise that this is a complex piece of legislation and that trying to understand its finer points is quite testing, but could I seek a point of clarification in relation to apprentices? As I am sure the Minister will recall, when Peter Hebblethwaite, the chief executive of P&O Ferries, dismissed those 800 seafarers, he also dismissed the apprentices. Will the Minister indicate whether the wage bands in the UK national minimum wage, to which clause 2 refers, will apply to apprentices as well as the hundreds of directly employed seafarers? The apprentice wage is £4.81 per hour, which does not seem like a princely sum to me.
Mr Holden
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.
Grahame Morris
I do not mean to be picky, but can I just point out a contradiction? The scope of the Bill covers seafarers who are working on the continental shelf on oil and gas installations and the servicing of those, but not seafarers who are in the offshore wind turbine energy sector or those working on the continental shelf. It seems a contradiction to leave out that whole section of seafarers.
Mr Holden
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.
Gavin Newlands
I hear what the Minister is saying—that workers will be covered under the Bill if they visit a harbour 120 times or more per year—but that might not be the case for some. Clearly, the hon. Member for Easington and I are not going to get what we desire in this Committee this morning. Would the Minister commit to the Department for Transport looking at this issue six months after the passage of the Bill to see who is actually being covered by the legislation?
Mr Holden
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.
Virginia Crosbie (Ynys Môn) (Con)
I thank the Minister for bringing forward this important Bill. We in Ynys Môn, like others across the UK, were very shocked by the actions of P&O in Q1 last year. Holyhead is the second busiest ro-ro port in the UK, and Stena is one of the island’s largest employers. It is working with the Isle of Anglesey County Council on its freeport bid.
I wanted to sit on this Bill Committee because Anglesey is known as energy island. We have a significant amount of renewable energy. We have Morlais and Minesto, as well as BP Mona and BP Morgan looking at offshore wind. The Bill is focused on improving protections and welfare for seafarers, which is important in these challenging times, and is particularly important for Anglesey, which certainly needs investment in apprenticeships and skills. In terms of this amendment, will the Minister confirm that those who are looking to invest in the renewable sector and in ports can be reassured?
Mr Holden
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.
Gavin Newlands
I thank the Minister for his comprehensive response. I hear what he is saying on the definitions. The amendments on the definition of vessel and seafarer were intended as probing amendments to ascertain why there was a difference. We will keep an eye on any potential unintended consequences, but I will withdraw the amendment. I am disappointed by what the Minister said about those in the offshore renewable industry. I hear what he said: he thinks that they will be covered. He has promised to write to me before Report; if the issue is not dealt with satisfactorily, we may well revisit it on Report. However, on the basis of his answers and his promise, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
Clause 3
Power to request declaration
Mr Holden
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”.
The Chair
With this it will be convenient to discuss the following:
Amendment 44, in clause 3, page 2, line 15, leave out “the harbour” and insert “any UK Harbour”.
Amendment 45, in clause 3, page 2, line 15, leave out “120” and insert “52”.
Government amendments 2 to 6.
Amendment 46, in clause 3, page 2, line 23, leave out “the harbour authority” and insert
“all relevant harbour authorities to which the declaration is applicable”.
Clause 3 stand part.
Government amendment 7.
Amendment 47, in clause 4, page 3, line 6, at end insert—
“(c) pension and other payments to be made that formulate a part of seafarer remuneration in relation to a service to which this Act applies.”
Amendment 62, in clause 4, page 3, line 10, at end insert—
“(c) provision prohibiting deductions from remuneration for accommodation costs, food or other entitlements.”
Amendment 49, in clause 4, page 3, line 16, at end insert—
“(5A) The national minimum wage equivalent must not be adjusted to account for accommodation, food, or other items exempted from being charged to seafarers under international convention”.
This amendment will mean that deductions cannot be made for food, accommodation or other exempted items under convention and will facilitate future changes being made with respect to changes in permissible deductions.
Clause 4 stand part.
Amendment 39, in clause 14, page 9, line 13, at end insert—
“‘equivalence declaration’ has the meaning given by section 3(2);”.
See Amendment 1.
Amendment 40, in clause 14, page 9, line 25, at end insert—
“‘relevant year’ has the meaning given by section 3(4A);”.
See Amendment 1.
Clause 13 stand part.
Government new clause 1—Offence of operating service inconsistently with declaration.
Mr Holden
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.
Mrs Natalie Elphicke (Dover) (Con)
The port of Dover is one of those directly affected and, given the situation in relation to P&O, which affected so many seafarers in my constituency, it is a particular concern. In relation to clauses 3 and 4, I would be grateful if my hon. Friend the Minister could confirm that he will take into account the considerable concerns of port operators about how the declarations—with the regulations underpinning them—will be managed and administered, because that is not within the usual business of port operators; it is an exception to the way in which they ordinarily operate. I know—I say this on behalf of the port of Dover in particular—that although of course they will play their part in ensuring that seafarers have the right terms and conditions, they want to ensure that they know what they have to do and how they are supposed to do it, that there is no room for dispute and that they are given the support that they need to be able to administer this.
Mr Holden
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.
Gavin Newlands
On amendment 5, was any thought given to the possible unintended consequence of setting a specified date in regulation, namely that it might allow operators to consider means of circumventing the legislation through port hopping? As was passed on to me, it is Nautilus’s belief that, for that reason, it should be a 12-month rolling period. Has the Department considered that?
Mr Holden
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.
Gavin Newlands
I thank the Minister for giving way once again. Perhaps I should have intervened slightly earlier, as I have a query about amendment 7. The amendment allows for declarations to be made for part of the year. As it stands, declarations relate to 120 visits a year. If it is a partial year—say six months, for ease—will it still be 120 visits over those six months, or will it be a pro rata number of visits for that partial period?
Mr Holden
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.
Grahame Morris
I hope this intervention does not prejudice the fact that I would like to speak to amendment 67, which stands in my name and that of a number of colleagues.
Grahame Morris
Could the Minister give a bit of clarification in relation to Government amendment 1? I welcome the fact that the amendment creates a duty, rather than a power; presumably, that was in response to the concerns raised on Second Reading about the conflict of interest. Let us not forget that some harbour authorities are owned by shipping companies, and may well be reluctant to apply sanctions and fines if there is a conflict of interest.
Regarding the level of fines, proposed new subsection (3A) to clause 3 refers to
“a fine not exceeding level 4 on the standard scale.”
Could the Minister indicate what level of fine that is? My information is that it is £2,500. Would it not be advantageous to set it at level 5, which is unlimited? A fine of £2,500 does not seem like much of a disincentive.
Mr Holden
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?
David Linden (Glasgow East) (SNP)
It is a great pleasure to serve under your chairmanship, Mr Davies. I will start by returning to some of the comments I made on Second Reading. The Bill is far too narrow in scope. Considering the egregious behaviour of P&O, we could be doing much more. I hope the Minister will look at some of the amendments.
I rise to speak to amendments 44 to 47 and 49 in my name and that of my hon. Friend the Member for Paisley and Renfrewshire North. I should point out that amendment 49 is not dissimilar to Labour’s amendment 62, which we clearly support. In speaking to these amendments, I also want to oppose Government amendment 1, which would doubtless knock out our amendment 45. I will deal first with the issue of port hopping and national minimum wage equivalence.
In clause 3, the requirement to produce a declaration of national minimum wage equivalence is applied to services that call at a harbour 120 times a year. That is the result of a change made following consultation on the draft Bill, which had proposed covering ships that called at a port or UK harbour 52 times a year—once a week. In July, in response to the consultation, the RMT—the National Union of Rail, Maritime and Transport Workers, to which I pay tribute—proposed that the definition in the Bill should be this:
“Seafarers working on ferry services that are frequently operated from UK ports (at least once a week).”
However, following consultation, the Government changed the Bill to apply it to services calling 120 times a year.
The impact assessment says that part of the reason for the change is this:
“The more regularly a seafarer calls at a UK port, the closer their ties to the UK.”
I certainly believe, as I think the Government did, that calling at a UK port once a week is a sufficiently close tie between a seafarer and the UK economy. Indeed, their lordships speaking in support of the shipping and ports industry stated that the Government’s plans contravened the international maritime conventions, specifically the UN convention on the law of the sea.
It is my understanding that the British Ports Association has legal advice that the Bill will not work and will be subject to legal challenge, including on the ground that it infringes the UN convention on the law of the sea. Indeed, the International Chamber of Shipping has also raised the matter, as the shipping industry’s de minimis crewing practices and flagging policies rest on the assertion of innocent passage in international waters between states.
Grahame Morris
The hon. Gentleman is making relevant and sensible points. On the issue of the 120 days, we have concerns, which I am sure he shares, that there are so many exclusions that the Bill will be like a colander—full of holes. The original proposal was 52 times a year, or once a week. What will be the impact of the Bill on the offshore continental shelf with respect to the frequency of the use of supply vessels? Will the figure of 120 days effectively exclude them from the legislation? I suspect it will.
David Linden
I am grateful to the hon. Gentleman for making that point, which gets to both the nub of the issue and a source of real concern for me. He is right to talk about the colander effect, and not making the legislation sufficiently tight means that in many cases companies will exploit the measure, as has he eloquently outlined. Let us be honest: the legislation was introduced because a company sought—within the law—to exploit people, and it would be a dereliction of duty by the House and by the Committee if we did not seek to tighten the Bill in such a way as to ensure that industry cannot get away with using such practices.
Gavin Newlands
My hon. Friend has referred to the House of Lords, but on Second Reading in this place, the Secretary of State said in terms of the number of visits to harbour:
“We think the definition in the Bill at the moment will capture the vast majority of the services we wish to capture.”—[Official Report, 19 December 2022; Vol. 725, c. 66.]
The Secretary of State referred to “the vast majority”, but this relates to the national minimum wage. Why should we be happy with a majority, rather than ensuring that all employees get the minimum wage?
David Linden
Even if people were not around last night, it will not come as a huge surprise that the Government are not particularly wild about standing up for workers’ rights. We on this side of the Committee happen to be of the view that we should be doing everything we can to try to support workers—[Interruption.] The hon. Member for Crewe and Nantwich chunters. I am more than happy to give way if he wants to stand up and speak. If he wants just to make a wee bit of noise behind the Minister, he is welcome to do so.
We support returning to the stricter criterion of 52 calls per year, which is what amendment 45 seeks to do. This is a key test of the Government’s commitment to seafarer welfare, and they failed in the Lords when they narrowly defeated Lord Tunnicliffe’s amendment that aimed to restore the criterion of 52 annual harbour calls.
National minimum wage and domestic employment law are difficult to enforce and apply in the maritime sector. That is why employers such as Stena Line, which employs UK crew on international routes from UK ports in Cypriot-registered vessels, enter collective bargaining agreements with domestic maritime trade unions. The UK Chamber of Shipping estimated that up to 45 major ferry routes served the UK economy in 2020, but that is subject to change. For example, P&O closed Hull-Zeebrugge in October 2021, but DFDS opened an unaccompanied freight service between Sheerness and Calais earlier that year.
In my view, the Bill should cover crew working for operators of containers, bulk carriers, cargo ships and vessels working in the offshore energy supply chain, as well as ferries. In 2018, the RMT estimated that extending the national minimum wage to cover domestic and offshore energy routes would bring 13,000 seafarer ratings into scope. The impact assessment for the Bill estimates only the cost to employers, not the number of seafarers who would be covered by the Bill.
I am concerned that the Government have dismissed out of hand the unions’ concerns over avoidance techniques. Port hopping, as we often refer to it, remains a genuine avoidance technique that becomes far easier to use the more frequently a vessel calls at a UK harbour. At 120 calls per year, it would be far easier for operators to make minor changes to scheduled port calls in order to avoid the legislation. A threshold of 52 calls, which was in the Government’s original proposals, would be far tighter. It was changed only after consultation with industry, although the trade unions supported 52 calls. I go back to the point that if the Bill is about protecting workers—the very workers who were so cruelly shafted by P&O—then it is incumbent on the Government to listen to the voices of those workers and trade unions, not the voices of industry. That is the whole reason we are here.
Disappointingly, the Minister in the Lords, Baroness Vere, was unconvinced that that avoidance technique could be used. She said:
“I do not think operators would play switcheroo with UK ports because, frankly, their customers would not put up with it.”—[Official Report, House of Lords, 26 October 2022; Vol. 824, c. 1506.]
The translation of that is, once again, “Leave it to the markets. The markets will dictate.” If we have learned anything over the course of the last few months in this House and during the P&O debacle, it is that simply leaving it to the markets is not a great idea. I am not reassured that the logistics market will self-regulate. The recent merger between Cobelfret and Seatruck Ferries, two operators who have been paying seafarers below national minimum wage on regular international services from UK ports for years, frankly, also increases the prospect of avoidance techniques.
I hope that has outlined just some of our concerns on the issue. For those reasons, I will formally seek to divide the Committee and vote against Government amendment 1.
Mrs Elphicke
I will take the opportunity to speak to these clauses and amendments. They cover the short straits, and first I will comment specifically on the issue of 120 calls per year. Looking at the short straits, according to figures from the UK Chamber of Shipping, the number of port calls meets the threshold by 30 to 40 times in relation to the Dover-Calais and Dover-Dunkirk lines: around 4,000 port calls that are made would come within the legislation. Whenever we set a threshold, it is important to set it with reference to the matter that we are addressing. The evidence is very clear that 120 days is a relevant and, indeed, low threshold in relation to the particular services that we are seeking to address within the remit of this important Bill, which, as has been discussed, very much has my short straits of Dover at its heart.
I am conscious that some good points have been made in relation to seafarers more generally. I hope that we can show some global leadership on this issue. I have been pleased to have the opportunity to speak at great length about seafarers’ rights with my hon. Friend the Member for Witney when he was Ports Minister. Although I can understand the remit being extended in the way that is being sought within the remit of the Bill, we need to look at seafarers’ rights more generally, as well as those bilateral agreements.
I now turn to amendments 47, 62 and 49. The Minister made some helpful comments in introducing this section, but I ask him, if I may press him further, for an assurance of the position, particularly relating to the calculation for food and accommodation. If I were to work in McDonalds—indeed, I did so for a very long time and enjoyed it greatly—I could have a certain amount of food on my food break if I were to work for four hours. If I were to work for the entire day, I would get much more McDonalds food—very tasty. That food would be free to me as a worker and that is the principle that we want to see for those at land and within our waters.
However, I think that some of the concerns that have been raised must not be seen only through the lens of our own domestic legislation in relation to the minimum wage and its calculation. I have taken some time to look at how these issues are treated within our national minimum wage legislation on land and issues such as accommodation—staying on ship would not, in my view, fall within the current definition of “accommodation” and its applicability for national living wage purposes. But it is right that these issues have been raised and that they are looked into carefully as we go through because, in relation to the operation of seafarers, particularly on these routes, our domestic provisions are not the market provision for these matters. The market for this is global; the conditions are global and international. When we talk about common market practice, it is within a global and international setting, with different countries applying different regimes to their seafarers.
When it comes to seafarers’ rights, we tend to think that this means countries who are very international, such as the Philippines and others, but I will give the Minister a directly relevant example to this food and accommodation issue. The Danish Maritime Authority allows for seafarers’ food subsistence allowance to be deducted from the calculation of national minimum wage. It is a matter for negotiation, either collective agreement or individual contracting, but, none the less, in the application of their calculation of national minimum wage, they do—
Grahame Morris
I thank the hon. Lady for giving way. I recognise the examples of Denmark and one other seafaring nation—I have forgotten which one at the moment—but they have sectoral collective bargaining. Their standards and pay rates are generally much higher. I hope she would acknowledge that. We are looking at a far lower level—just at the national minimum wage, without all of the package that I want to refer to in relation to pensions, accommodation and other things, roster patterns in particular.
Mrs Elphicke
I am grateful to the hon. Gentleman. Indeed, I would like later to come back in the relevant section in relation to roster patterns, which are very important.
I am giving the Danish example as a reason why we need clarity to exclude the provision from our calculation of national minimum wage. It is not appropriate or correct to exclude food and accommodation when someone is on their ferry. They work—too often—two weeks on, two weeks off. They are stuck on that ferry. They must have food and a place to put their head down. They will probably have a poor night’s sleep or a poor day’s sleep when they are off rota. It is absolutely essential that we have clarity so that, unlike in Denmark and other countries, for the purposes of our application of the minimum wage legislation in relation to seafarers operating in our own territorial waters, it would be the same if I was working at McDonald’s, or anywhere else, or working at sea. I ask the Minister to reflect on this matter and to consider whether he can give us some more assurance that that is indeed the intent behind the Bill, because it is a very important point, given the fact that there is different maritime practice even among European neighbours from a business perspective.
If I may, I will touch briefly on the desire to have improved rights for seafarers. The Minister has mentioned bilateral discussions. Again, it would be helpful for us to understand whether the bilateral discussions coming up in March with our Prime Minister and President Macron are intended to include some of the issues around seafarers that we have mentioned, because it will only be through a strong bilateral arrangement across short straits that we can ensure that we get the best possible safety and working conditions for our seafarers.
Grahame Morris
I agree with much of what the hon. Member has just said. I may have misunderstood—[Interruption.] Well, it is the first time; every day is a school day.
Can the Minister clarify something that he said earlier, which may well address our concerns? It is in relation to amendment 62. Did he indicate that on the point just made by the hon. Member, namely that, as the amendment says:
“provision prohibiting deductions from remuneration for accommodation costs, food or other entitlements”
will be addressed through regulation by the Secretary of State? I see that he is nodding, so that is good news indeed.
If I may, I will speak to amendment 62, which was tabled by my colleagues on the Front Bench and I, and amendment 47, which is very similar and which was tabled by the SNP. Both amendments address a broader question. I appreciate that the Bill is trying to address one specific issue by putting in place measures to prevent the actions of rogue bosses, such as the management of P&O, from being replicated by other ferry operators; I understand that.
However, what the Government must understand is that the motivation for P&O and others—I know that we will come on to nationality-based pay discrimination later—is that P&O made far more savings from changing the roster pattern and reducing the crewing than it did from reducing the wages by paying staff, who were mostly able seamen from India, less than the minimum wage. The Government must acknowledge that and if we are going to address this issue, we need some remediation.
Karl Turner
I remind the Committee of the disaster of the Herald of Free Enterprise—193 passengers and crew lost their lives. The inquiry found that that disaster was down to one issue: crew fatigue. My concern is that that could happen again. Five or six months on, two weeks off, seven days a week, 12 hours a day—it is obvious what could occur.
Grahame Morris
I thank my hon. Friend for that powerful intervention and for reminding us of the consequences of fatigue and of reducing staffing to unsafe levels. It is not just a matter of opinion and a concern expressed by the RMT and Nautilus International; a number of academic studies from Cardiff University and others, which I believe the Department has copies of, demonstrate just how important it is that we address this issue.
Mrs Elphicke
I had expected to speak on this issue when we reached new clause 5, but since we are talking about roster patterns, I will comment on it. The capsizing of the Herald of Free Enterprise was an absolute tragedy that we—the RMT and all of us down in Dover—come together to remember every year. It is such an important thing to remember, and I am grateful to the hon. Member for Kingston upon Hull East for mentioning it in this context.
Does the hon. Member for Easington agree that what we have seen, particularly in relation to Irish Ferries joining the short sea route, is that the Maritime and Coastguard Agency has a role at the moment in making sure that the standards of training are appropriate? We saw that the roster patterns, training patterns and crewing patterns in relation to Irish Ferries coming into Dover were changed from those that applied elsewhere in its operations. We also saw the MCA take action in relation to P&O when it tried and failed to stand up its new structures. I would like to see the MCA be stronger and firmer, and taking better action—
The Chair
Order. I have been very generous with interventions, but I must remind Members that interventions are supposed to be just that: interventions, not mini-speeches. If we could back to interventions being interventions, I would very much appreciate it.
Grahame Morris
Thank you, Mr Davies. I will hurry along.
To reinforce the point made by the hon. Member for Dover, I say to the Minister—I am sure he is aware of this—that some academic studies into crew fatigue were published in 2012 by Cardiff University. Further research is provided by the EU’s Horizon project and the World Maritime University’s EVREST report, and all the evidence highlights the dangers of crew fatigue caused by long hours. I believe the replacement crews on the Dover-Calais ferry were working 12-hour shifts, seven days a week, for up to 17 weeks without a break, when they slept on the ship. That must be a cause for concern in terms of health and safety.
In conclusion, I say to the Minister that we really need a maximum roster pattern in the seafarers’ charter. For the ferry sector, two weeks on, two weeks off is the pattern favoured internationally and by the maritime unions, for health and safety reasons as much as anything. I urge the Minister to work with the maritime trade unions and the Labour party in respect of this issue, and on refining the seafarers’ charter to get this right and to help restore jobs, fair pay agreements and training programmes, starting with the ferry sector.
Simon Lightwood (Wakefield) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Davies. I rise to speak in favour of amendment 62, which stands in my name and those of my hon. Friends, on the deduction of accommodation, food costs and other entitlements, and of amendment 45, which stands in the name of the hon. Member for Paisley and Renfrewshire North, on preventing port hopping.
The intention of amendment 62 is to prevent operators from deducting accommodation, food and other costs from the national minimum wage equivalent. We do, of course, welcome the intention to ensure that operators pay a national minimum wage equivalent to those who have close working relationships with the UK, but as we have heard, significant elements of the provisions and their enforcement must be strengthened to prevent avoidance, which we know is rife in the sector.
First, the minimum wage provision has an offset allowing employers to deduct costs for providing accommodation. That is clearly ripe for abuse and must be ruled out explicitly. We know that P&O could potentially deduct £1,035 and Irish Ferries nearly £490 from a non-qualifying seafarer’s wages, if the accommodation offset is available to them under the secondary legislation provided for in the Bill.
Mr Holden
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.
Sir John Hayes
My experience as a Minister was that Government lawyers never assured us that we were in a strong legal position on anything—at most, they offer a 50:50 chance. The Minister might want to think again about the comments made in Committee; the terms and conditions seem to be critical. The Government—the Minister, in particular—deserve great praise for this legislation, but it would be a grave error to get pay right but not get terms and conditions right at the same time.
Mr Holden
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.
The Chair
With this it will be convenient to discuss the following:
Government amendment 9.
Clause stand part.
Government amendments 10 to 12.
Amendment 63, in clause 6, page 4, line 37, at end insert—
‘(6A) An inspector may request information from—
(a) an officer of Revenue and Customs, or
(b) Maritime and Coastguard Agency,
if they consider it necessary for either of the purposes specified in subsection (2), and the authority to which the request was made must respond within 14 days.”
Clause 6 stand part.
New clause 8—Report: evidence of nationality-based pay discrimination—
‘(1) The Secretary of State must produce and publish a report setting out any evidence of nationality-based pay discrimination against non-qualifying seafarers.
(2) The evidence referred to in subsection (1) must include, but need not be limited to, aggregated data drawn from—
(a) minimum wage equivalence declarations requested by harbour authorities;
(b) information provided in response to notices under section 5;
(c) evidence from inspections under section 6; and
(d) any other sources of information as the Secretary of State considers appropriate.”
Mr Holden
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.
Mike Kane
I rise to speak in favour of amendment 63 and new clause 8. My hon. Friend the Member for Wakefield gave specific examples of deductions made by Irish Ferries and P&O; as he said, this is all about compliance. In his nine-point plan, the right hon. Member for Welwyn Hatfield (Grant Shapps), now the Business Secretary, pledged to involve His Majesty’s Revenue and Customs in ensuring compliance with minimum wage legislation, but the Bill does not include a direct role for HMRC, which is the only expert in minimum wage compliance. That is like delegating something to a port and harbours board, to the Maritime and Coastguard Agency or to anybody, but it is not the Government taking responsibility for the matter. That clearly must be addressed, and I ask the Minister to address it. Port operators are not experts in minimum wage compliance or in establishing whether the minimum wage is being properly enforced.
Maritime and Coastguard Agency officials will need to be trained in labour market enforcement issues, and HMRC national minimum wage enforcement officials will need to be trained in seafarer and maritime employment practices and law. What provision is there in the Bill for that? I do not see much at all. However, the Department for Transport told the trade unions that His Majesty’s Revenue and Customs has stated that there is no disproportionate risk of seafarers not being paid the national minimum wage. If this is not enforced properly, it is wide open, and I think most Members with any common sense will think it is wide open. On 24 March, Peter Hebblethwaite, the former chief executive officer of P&O Ferries, openly admitted to a joint sitting of the Transport Committee and the Business, Energy and Industrial Strategy Committee that P&O Ferries was paying an average well below the national minimum wage. How does clause 5 tackle what Peter Hebblethwaite said to this House?
Amendment 63 would ensure that an inspector may request from His Majesty’s Revenue and Customs or the Maritime and Coastguard Agency such information as is necessary to ensure that the operator is compliant with the national minimum wage. Further, complaints of non-payment of the national minimum wage have been consistently submitted to His Majesty’s Revenue and Customs. [Interruption.] I am slightly interrupted by the right hon. Member for South Holland and The Deepings—that will be His Majesty’s Revenue and Customs on the phone right now, agreeing with my comments to the Committee. Complaints have been submitted by the RMT on behalf of foreign seafarers, but the third-party process does not require His Majesty’s Revenue and Customs to report back on the outcome or progress in investigating those complaints. How will we, as elected Members, and the industry see how the measures in the Bill progress once they have been implemented by Parliament? There is no provision for that. Amendment 63 would ensure a timescale for response of 14 days, so that the outcome of the measures in the Bill will be crystal clear and transparent.
Gavin Newlands
I rise to support amendment 63. Given the stroppy point at the end of the Minister’s last contribution, I reassure him—[Interruption.] Oh, it was a humorous point; well, that is for each individual to judge. I point out to the Minister that the right hon. Member for Epsom and Ewell (Chris Grayling) has been retained as the Scottish Government’s ferries tsar from now on, so we will not have to worry about that. For the purposes of Hansard, that was sarcasm, lest I have to correct the record at a later date.
The point that has just been made is essentially this: as the Bill currently stands, the Government are hiding behind harbour authorities by expecting them—and with the amendments before us, now compelling them, under fear of prosecution—to carry out the enforcement work. Given the complex nature of the issues we are dealing with, I understand what the Government are doing, but maritime employment rules and minimum wage rules are complicated.
The Maritime and Coastguard Agency will need to be trained in labour market employment issues. HMRC employment enforcement officials responsible for enforcing the minimum wage will need training in seafarer and maritime practices and maritime law. Additional resourcing and time will potentially be needed to make this work. The MCA is responsible for the enforcement of the Bill’s powers, but is not named or listed in clause 6 or anywhere else. A dual role for the MCA and HMRC national minimum wage inspections must be clearly established, otherwise the Bill could have unintended consequences for qualifying seafarers’ existing national minimum wage rights.
The nine-point plan included a specific action to ask HMRC to dedicate UK national minimum wage resource to the maritime sector. The Department for Transport has told trade unions that HMRC has since stated that there is no disproportionate risk of seafarers not being paid the national minimum wage. I have no clue how it has come to that conclusion, given everything that has gone on, and that statement is despite Peter Hebblethwaite’s open admission to the joint Select Committee on 24 March that P&O ferries are now paying an average well below the national minimum wage, not to mention the evidence amassed by the RMT and detailed in annex 2 to its briefing.
The Government should consider using redundant Brexit customs processing facilities built at great expense in ports that host operators and vessels in scope of this Bill to provide bases for the inspectors from the MCA, HMRC and the International Transport Workers’ Federation, which will assist in the enforcement of the legislation. The MCA and the ITF perform essential port state control functions to protect and uphold minimum international seafarer welfare standards in the maritime labour convention. It is for that reason that we support new clause 8 in the name of the hon. Member for Easington.
I suspect the Government may not accept the new clause, but it would be pretty obscene if we were to see evidence of nationality-based pay discrimination. We very much support the new clause. I hope the Minister is generous, for a change.
Grahame Morris
I support the arguments put forward by my colleagues on the Front Bench. Will the Minister give some clarification? I noted what I thought was an assurance in his comments. Our amendment 63 is an attempt to make the enforcement process clearer, in terms of ensuring that the inspectors have the requisite not just powers but information, from HMRC in particular, in order to carry out the task that the Bill assigns to them. I wonder whether the Minister could clarify—maybe I am missing something; I heard him say that it would be the Maritime and Coastguard Agency that would be the inspectors. Could that function be delegated to the harbour authority or to staff of the harbour authority acting on behalf of the MCA? I would appreciate if he could clarify that point in his summing up.
Nationality-based pay discrimination is the elephant in the room. We must get to grips with it. I realise that the issue is incredibly complicated because of international treaties, but we need to get to the kernel of the issue because this is what is happening. Unscrupulous ferry operators in the sector are displacing UK-based seafarers on a “fire and rehire” basis, which Labour finds anathema.
There were Conservative MPs who were incandescent at the tactics employed by P&O Ferries on 17 March—St Patrick’s day—in that terrible action it took. We must see if we can address that, and the hon. Member for Paisley and Renfrewshire North made a good suggestion about using the expertise from the International Transport Workers’ Federation as part of the collective effort, particularly where the issues relate to seafarers from overseas. I wonder if the Minister might consider not only that, but the suggestion to use the facilities that were built—at some cost to the public purse—for the Brexit customs processing facilities and consider whether those not being used adequately could also be used for that purpose.
Mr Holden
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.
Gavin Newlands
On that point, if I can refer back to the point I made in my speech, does the Minister agree with HMRC—despite all the evidence to the contrary: not just P&O, but many other operators—that there is no disproportionate risk of seafarers not being paid the national minimum wage? Does he think that that is credible?
Gavin Newlands
Of seafarers particularly not being paid the national minimum wage compared to other sectors.
Mr Holden
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.
The Chair
With the leave of the Committee, I will put a single question on these amendments.
Amendments made: 10, in clause 6, page 4, line 7, after “is” insert “or at any time was”.
This is consequential on Amendment 7.
Amendment 11, in clause 6, page 4, line 8, leave out “a national minimum wage” and insert “an”.
See Amendment 1.
Amendment 12, in clause 6, page 4, line 21, leave out “declaration” and insert “statement”.—(Mr Holden.)
This is consequential on Amendment 1.
Clause 6, as amended, ordered to stand part of the Bill.
Clause 7
Imposition of Surcharges
Mr Holden
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.
The Chair
With this it will be convenient to discuss the following:
Amendment 64, in clause 7, page 5, line 32, leave out subsections (5) and (6) and insert—
‘(5) The Secretary of State must by regulations provide for a national tariff of surcharges by which the amount of the surcharge is to be determined.”
Government amendment 14.
Amendment 50, in clause 7, page 5, line 33, after “regulations” insert—
“, where the minimum surcharge to be imposed on an operator where Subsection (2) applies shall be no less than 300 per cent of the difference between the amount calculated as the national minimum wage equivalence for the operator and the amount in total paid by that operator”.
Government amendment 15.
Amendment 51, in clause 7, page 5, line 36, leave out “specified by a harbour authority”.
Amendment 52, in clause 7, page 5, line 37, leave out “the authority” and insert “each authority”.
Government amendments 16 and 17.
Amendment 65, in clause 7, page 5, line 43, leave out paragraph (e).
Government amendments 18 and 19.
Amendment 53, in clause 7, page 6, line 1, leave out subsection (8) and insert—
‘(8) Monies collected by a harbour authority under this section must be transferred to the Secretary of State at a frequency of not less than twice per calendar year for disbursement towards the costs of shore-based welfare facilities for seafarers.”
This amendment would ensure that revenue from surcharges is passed to the Secretary of State for Transport rather than being held by harbour authorities and would direct UK Government spending to welfare facilities.
Amendment 54, in clause 7, page 6, line 3, leave out paragraph (a).
Government amendment 20.
Clause 7 stand part.
Government amendment 21.
Amendment 55, in clause 8, page 6, line 10, leave out “specified by a harbour authority”.
This amendment is consequential on earlier amendments relating to the surcharge.
Amendment 57, in clause 8, page 6, line 14, at end insert—
‘(2A) Any objection must be made to the Secretary of State within a length of time which may be specified by regulations. Any objection made after this time period will be considered void.”
This amendment allows the Secretary of State to set a time limit for any objections to be lodged.
Government amendments 22 and 23.
Amendment 56, in clause 8, page 7, line 1, leave out “to direct the harbour authority”.
Clause 8 stand part.
Government new clause 2—Imposition of surcharges: failure to provide declaration in time.
Government new clause 3—Imposition of surcharges: in-year declaration that is prospective only.
Government new clause 4—Imposition of surcharges: operating inconsistently with declaration.
Mr Holden
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.
Grahame Morris
On that specific point, I am sure the Minister can clear up the issue I want to raise. The surcharge relates to ports and harbour authorities competing with one another. Will the surcharge be consistent or will it vary from one port and harbour authority to another?
Mr Holden
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
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.