Seafarers' Wages Bill [ Lords ] (Second 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: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Chair
I remind Members that the Committee will finish at 5pm, regardless of where we have reached in our discussions.
Clause 7
Imposition of surcharges
Amendment proposed (this day): 13, in clause 7, page 5, line 8, leave out subsections (1) to (4).—(Mr Holden.)
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.
Question again proposed, That the amendment be made.
The Chair
I remind the Committee that with this we are discussing 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 and19.
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.
Mike Kane (Wythenshawe and Sale East) (Lab)
It is an absolute pleasure to serve under your chairmanship, Ms Harris.
At the close of the morning sitting, Mr Davies happily interrupted me in full flow about the Laffer curve. I often hear hon. Members talk about the Laffer curve, and earlier the Minister referred to all the tax giveaways implemented by this Government, but I remind Government Members that we are the most taxed society in modern history. Government Members enjoy talking about the nanny state and postcode lotteries, but I worry about how the clause will be implemented by different harbours. The Secretary of State will have enormous powers—a Labour Secretary of State could be implementing the regulations—and will have to play judge and jury between the various ports, harbour companies, the Maritime and Coastguard Agency and others. That is my big worry about the clause.
I rise to speak in favour of amendment 64 in my name and the names of Opposition members of the Committee. The Bill as drafted poses a risk that the surcharge regime will be different between harbours, and too small to have any effect on operator employment practices. Operators could choose to pay the surcharge to continue to use the ports, avoiding any penalty charge set out in clause 9. Will the Minister tell us what happens to penalties if they are charged? Where do they go? Will he seek to fund onshore mariner and seafarer welfare services from the charges? I am keen to hear more about that.
Many operators do not just run ferry services but operate ports as well—P&O itself operates a port. So the Government are potentially asking operators to fine themselves, which is perverse. Ministers must think again.
I note that the Secretary of State said he would use retained powers to decide which port could enforce fines, but he must set a national tariff for surcharges and designate a Government agency to collect them. Agreements and publication of the tariff of surcharges are subject to secondary regulations set out in clause 7. That could undermine the unlimited fines that can be imposed on operators for offences created elsewhere in the Bill, because the tariff will be based only on the differential between the amount paid the seafarers and the national minimum wage equivalence for UK work. Our amendment would give the Secretary of State the powers to set a national tariff of surcharges, which the harbour authorities would then enforce under direction. That would prevent ports from being prosecuted by competitors, and prevent harbour authorities from competing on the level of surcharge company operators would have to pay. That surcharge should not be given to the harbour authorities to use as they see fit, but should clearly be given to support seafarer welfare facilities. It would be wrong for operators to spend on their own businesses the fines levied for exploitation of seafarers. That is why we support amendments 53 and 54 in the names of SNP colleagues.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to serve with you in the Chair, Ms Harris. I will address amendments 51, 52, 55, 56 and 58, which stand in my name and that of my hon. Friend the Member for Glasgow East. We will also be supporting amendment 64—we have signed the amendment —in the name of the hon. Member for Wythenshawe and Sale East.
Ultimately, we want this legislation, in whatever form it takes at Royal Assent, to stick. That is what we are seeking to ensure today. The surcharges and penalties envisaged have to be realistic to have any effect. The hon. Member for Wythenshawe and Sale East raised the possibility of operators who own ports surcharging other operators who use those ports. If we end up in a position where operators allege sharp practice on the part of other operators and take legal action, it is workers who will be caught in the middle. P&O Ferries can afford the lawyers; poorly paid staff cannot. Setting a national tariff will remove the element of discretion from harbour authorities and ensure that all harbours and all operators across the board pay the same surcharge, regardless of which harbour has jurisdiction.
With all due respect to the harbour authorities, shifting the onus to the Secretary of State would also be a clear sign of how seriously the Government will take infringements. It is one thing for an operator to take on a port, but quite another to decide to take on the Department for Transport, if they know they are in the wrong. The likes of P&O might have deep pockets, but ultimatel, there will be no escape from a law that is properly enforced by the state.
As things stand, the level of surcharge that will be levied on operators in breach of the legislation is set entirely by the harbour authority, with reference to the regulations that will be laid at some point by the Secretary of State. My concern is that if the level of surcharge is set too low—we spoke this morning about the level of fines that could be levied—there would be no or very little disincentive for operators to pay below the national minimum wage equivalent. We saw with P&O that even flagrant lawbreaking was no disincentive whatever.
Grahame Morris (Easington) (Lab)
I completely agree with the line the hon. Member is pursuing here—that the fines should present a disincentive to breach the provisions of the legislation—but would he clarify a point on the minimum surcharge? The amendment says it would 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”.
We learned in the debates on the previous clause that more than 50% of the savings that P&O were making were not from wages but from the changes in roster patterns. Should that be taken into account as well?
Gavin Newlands
I thank my colleague on the Transport Committee for making that point. It is very important, and he is absolutely right. I spoke about the impact of rostering on Second Reading. I am sure we will come on to the seafarers’ charter and the issues around that later on. My amendment seeks to amend the Bill in front of us, but I would love for us to be taking the whole situation into account, rather than just the wage. We will discuss that point in more detail a bit later on.
The Insolvency Service refused to undertake criminal proceedings against P&O Ferries or its corporate leadership, despite Mr Hebblethwaite’s appearance in front of the Select Committees’ joint hearing, when he freely admitted that he and his colleagues conspired over a lengthy period of time to systematically break the law and treat their workforce dreadfully. P&O clearly took the view that the chances of facing any real penalty for their actions were slim and, ultimately, they were proved to be right.
The Bill sets no minimum level of surcharge that would be levied on operators found to be in violation of the law. If the surcharge is set at a rate lower than the difference between compliance and non-compliance, there is nothing to prevent rogue operators from paying below the national minimum wage equivalent, making a declaration to that effect, paying the surcharge and still sailing away with full pockets, exactly as P&O Ferries did. [Interruption.]
The Chair
Order. I remind colleagues not to have private conversations during Committee sittings.
Gavin Newlands
Thank you, Ms Harris. Amendment 50 would make clear the cost operators would face if they were caught flouting the law. It is deliberately punitive. We picked 300%, but I would be happy to go higher.
The amendment would also have the effect of continually updating itself through reference to the national minimum wage equivalent rate, rather than to an absolute cash figure. We know that those involved in drafting statutory instruments will have their work cut out to say the least over the coming months if the Government’s Retained EU Law (Revocation and Reform) Bill is passed. My amendment would save them the trouble of updating this legislation every time that the rate needs to be updated. Indeed, the Government’s own response to the consultation on the Bill stated:
“We envisage that the rate of surcharge will be set by the SHA with reference to the NMWe deficit, which is the difference between the amount that seafarers are actually paid and the amount they would have been paid if they had qualified for NMW for that work.”
All our amendment would do is ensure that the reference to that deficit is fixed and a deterrent, rather than just a price that they pay for doing business.
I am sure that the current Secretary of State wants to see rogue operators caught and held to account, but he may not always be in this place or be the Minister. If future Ministers and Secretaries of State place less value on seafarers’ wages and conditions, they can amend the regulations, without much recourse to this place and probably without much fuss, to remove any deterrent effect that a surcharge may have. Of course, it is open to set a surcharge higher than 300%, but my amendment would ensure that the minimum is fixed in statute and cannot be amended without a new Bill and Act, thus making it more difficult to remove.
I would be happy to hear from the Minister what the level of surcharge is because, to be honest, it was quite difficult to pick up what he was saying in his oration before the Committee adjourned this morning. It was rather like a horse-racing commentary, so I did not quite pick up his opposition to our amendments. Maybe he is backing our amendments; I did not actually hear. I would be happy to hear what he actually thinks about these issues.
I will now speak to amendments 53 and 54. The Bill makes no orders or compulsion on where the proceeds of any surcharge levied by harbour authorities should go, as the hon. Member—and sometimes Friend—for Wythenshawe and Sale East said. Given that the reason for the surcharge is the mistreatment of workers, it seems apposite that the proceeds of a crime such as this should be directed to its victims. It would remain open to the Secretary of State to direct money to the harbour authority in question to spend on welfare facilities for seafarers, but that would be a decision for the Secretary of State, not for the harbour authority. Equally, it would be open to the Secretary of State to spend the money directly through the Department for Transport or other agencies, or to divert it to one of the many charities and trade unions that provide welfare services to seafarers in our ports and harbours.
We all hope that no surcharges will actually need to be levied under the legislation; equally, we all know that P&O Ferries is one of a number of operators that do not treat their staff with the respect and dignity that they deserve. When harbour authorities and the Secretary of State start to exercise their powers and collect surcharges, we need to ensure that those moneys do not disappear in a black hole somewhere or get set aside for the general running costs of a port. Unfortunately, that is exactly what the Bill, as it stands, allows. I would be happy to hear some clarification from the Minister regarding exactly where these moneys will go and whether the regulations will make clear that the surcharges are not to be spent keeping the lights on or building more infrastructure to handle the implications of Brexit. That is not what should happen. My amendment would end that possibility once and for all.
I forgot that I had so many amendments to speak to. Amendment 57 is essentially aimed at ensuring that any objections to a surcharge being levied are made in a reasonable timeframe. It is not too great a stretch of the imagination to foresee a company—again, such as P&O Ferries—being levied with a surcharge, procrastinating on payment and, months later, objecting to the surcharge, thus prolonging the process even further. Setting a time limit would prevent these kinds of frivolous uses of the objection procedure while still allowing genuine objections to be lodged. I can see nothing in the Bill to prevent objections being lodged and then withdrawn, so it would still be open to trade unions and others to lodge on a holding basis, as it were, while retaining the right to explore their options along the way. If the Minister will advise what time limits for objection will be in the regulations when laid, I may well be happy to withdraw that particular amendment.
The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)
I thank everybody for coming back. I am sorry that my speed of speaking was so swift earlier; I shall try to keep these comments at a more temperate pace. I will pick up on a couple of points from hon. Members, then enter into a little more of the briefing.
Tariffs or surcharges will be set by each harbour authority, but they will be in accordance with the regulations made under clause 7. As the hon. Member for Paisley and Renfrewshire North said, we also hope that the surcharges will never be required, but we need to have them to ensure proper practice. Opposition amendment 50 seeks to set out in the Bill how the surcharge is to be calculated. Currently, the Bill provides that harbour authorities will set the tariff of surcharges in accordance with the regulations. It is important that the surcharges disincentivise operators from not providing equivalence declarations, and we agree that surcharges should be high enough to act as a disincentive. We will consult on the levels of the tariffs to be set in the regulations. We do not want to commit to setting the level in the Bill, but please be assured that we are going to take everything into consideration in the drafting of the regulations.
Amendments 51, 52 and 56 seem to be designed to take responsibility for setting the surcharge away from the harbour authorities. Harbour authorities have been given this duty given their proximity to operators as their customers. The tariff must be set in accordance with regulations, but harbour authorities are well placed to determine within those regulations what the surcharge should be in each case. However, we will consider this position further before Report.
Amendment 53 would remove the option for harbour authorities to keep the surcharge for any of their functions, and would mean that moneys would be transferred to the Secretary of State for disbursement . The Bill already allows moneys to be spent by the harbour authority for the purpose of shore-based welfare facilities. I can see that to make the Secretary of State an intermediary places great faith in the speedy actions of the Government in all cases, but there is a possibility that this transaction would put a significant administrative burden on the Department were it to be dealt with on a case-by-case basis and would delay seafarers seeing the benefit of this money.
Amendments 54 and 68 would remove the harbour authority’s ability to spend moneys collected from the surcharge on the discharge of their functions. This is not intended to be a profit-making mechanism, but I am happy to review this function as intended before Report, because we need to ensure the surcharge is high enough to act as a disincentive.
Amendment 65 would remove the power to make regulations providing for the notification of a surcharge to the Secretary of State. The power to make regulations providing for the notification of the surcharge to the Secretary of State is an important mechanism to deter non-compliance. The mechanism of the Bill relies heavily on the monitoring of enforcement, and, as the imposition of the surcharge is a duty under the Bill, it is important that the Secretary of State is notified in this process.
I understand the importance of making it clear that it is the imposition of the surcharge that must be notified to the Secretary of State. I have thus tabled Government amendment 18, which provides for notification to the Secretary of State of the imposition of a surcharge. I hope colleagues are reassured by that.
Grahame Morris
I am grateful for the explanation. The Minister said amendment 65; did he mean amendment 64 in relation to the powers of the Secretary of State to set regulations? Can the Minister have a quick look at that? It is a point that in the earlier clauses he had indicated he was going to look at again before Report, so that we have a consistent level set by the Secretary of State in regulation. Could the Minister clarify that?
Mr Holden
The hon. Member is quite right. I should have been referring to amendment 64. What I was referring to in that section was Government amendment 18, which relates to Opposition amendment 65. I am about to come on to amendment 64; I did try to reference the hon. Member’s comments earlier, but I will come on to them now.
Amendment 64 would require the Secretary of State to make regulations setting out a national tariff of surcharges, as I indicated earlier, removing any role for harbour authorities in setting surcharge tariffs. The surcharge is an important mechanism to deter non-compliance, and the Government consider it reasonable and proportionate for harbour authorities to play some role, alongside the national tariff setting under clause 7. It is envisaged that a schedule of rates for the surcharge will be set by the harbour authority with reference to the estimated difference between the amount that seafarers are paid and the amount they would have been paid if they had qualified for national minimum wage. This is expected not to be an exact calculation, but to be based on estimates of the number of seafarers involved. The detail of how that will be worked out will be set out in regulations, and we will work closely with industry to ensure we get it right. It is important that surcharges are relevant to the circumstances of the service in scope, and harbour authorities are well placed to make that call given their proximity to services. We have, however, heard the concerns raised by the ports industry and others, so we will consider the matter further ahead of Report.
Gavin Newlands
On Government amendment 15 and the tariff of surcharge being at the discretion of harbour authorities, how much consideration has the Department given to the possibility of surcharge shopping and other conflicts of interests, both of which have been raised here and in the other place?
Mr Holden
That is a fair point. We have considered the matter, but we will be setting a national tariff in regulations following wide consultation, which will then be looked at by the individual harbour authorities. The cost implications of operators changing routes in order to shop around between what we expect to be minor cost differences mean that we do not expect it to be a particular issue.
Amendment 57 would allow for regulations setting a time limit under which an objection to a surcharge can be made. We think it is unlikely that there will be delays in objections to surcharges, but we are none the less happy to continue to consider that point ahead of Report, because it is important to get these things right and to have the right disincentives. We do not want to create strange situations that could act against seafarers’ interests.
Amendment 13 agreed to.
Amendments made: 14, in clause 7, page 5, line 32, leave out second “the” and insert “a”.
See Amendment 13.
Amendment 15, in clause 7, page 5, line 33, leave out from “regulations” to end of line 35.
This amendment is consequential on the removal of clause 11(3) (see Amendment 34).
Amendment 16, in clause 7, page 5, line 37, at end insert—
“(6A) A duty to impose a surcharge is subject to any direction given by the Secretary of State under section 11(2)(a).
(6B) A harbour authority which fails to comply with a duty to impose a surcharge is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.”
See Amendment 13.
Amendment 17, in clause 7, page 5, line 39, leave out paragraph (a).
See Amendment 13.
Amendment 18, in clause 7, page 5, line 43, after “notification of” insert “the imposition of”.
This is a drafting clarification.
Amendment 19, in clause 7, page 5, line 44, at end insert—
“(7A) Regulations may make provision requiring a harbour authority that has imposed a surcharge to notify the Secretary of State if so much of the period within which the surcharge must be paid as is specified in the regulations has expired without the surcharge having been paid in accordance with regulations under subsection (7)(d).”
See Amendment 13.
Amendment 20, in clause 7, page 6, line 6, at end insert—
“(10) In this Act, ‘surcharge’ means a charge under section (Imposition of surcharges: failure to provide declaration in time), (Imposition of surcharges: in-year declaration that is prospective only) or (Imposition of surcharges: operating inconsistently with declaration).”—(Mr Holden.)
See Amendment 13.
Clause 7, as amended, ordered to stand part of the Bill.
Clause 8
Questions to surcharges
Amendments made: 21, in clause 8, page 6, line 9, leave out paragraph (a).
This is consequential on Amendment 13 and the amendments relating to it.
Amendment 22, in clause 8, page 6, line 36, leave out subsection (7).
This is consequential on Amendment 13 and the amendments relating to it.
Amendment 23, in clause 8, page 6, line 41, leave out paragraph (a).—(Mr Holden.)
This is consequential on Amendment 13 and the amendments relating to it.
Clause 8, as amended, ordered to stand part of the Bill.
Clause 9
Refusal of harbour access for failure to pay surcharge
The Chair
With this it will be convenient to discuss the following:
Government amendments 25 to 28.
Amendment 58, in clause 9, page 7, line 32, at end insert—
“(e) where there is need to provide crew with access to urgent medical or welfare facilities or undertake crew repatriation.”
Government amendments 29 and 30.
Amendment 70, in clause 9, page 7, line 32, at end insert—
“(3A) Where a harbour authority may not refuse access to a harbour under subsection (3), it may instead detain a ship providing a service to which this Act applies, provided that the conditions in subsection (1) are met.
(3B) The Secretary of State may by regulations make provision about the detention of a ship under subsection (3A).”
Clause stand part.
New clause 6—Detention of vessels for failure to pay surcharge—
“(1) A ship providing a service to which this Act applies may be detained by a person appointed by the Secretary of State for the purposes of this section if—
(a) a harbour authority has imposed a surcharge on the operator of the service in respect of the entry into its harbour by any ship providing that service, and
(b) the operator has not paid the surcharge in accordance with provision made by or under this Act.
(2) It does not matter for the purposes of subsection (1) whether an objection has been made to the surcharge under section 8.”
Mr Holden
It is a pleasure to serve under your chairmanship, Ms Harris.
As currently drafted, clause 9 allows harbour authorities to refuse access to a harbour if an operator has not paid a surcharge as required in accordance with the Bill. The provision is intended to incentivise payment of surcharges and to make payment a condition of access to UK harbours. There are exceptions where a harbour authority may not refuse access: in cases of force majeure; where there are overriding safety concerns; where there is a need to reduce or minimise the risk of pollution; or where there is a need to rectify deficiencies on the ship.
Grahame Morris
The Minister is being very helpful. Will he list the categories that fall under, or explain how he would describe, “force majeure”? He mentioned a couple of categories. Is that an exhaustive list?
Mr Holden
I will happily provide the Committee with a full list ahead of Report stage. We are talking about serious incidents where life is at risk, but I am happy to write to the hon. Gentleman with further detail.
The method of communicating refusal of access will be set out in regulations. The clause provides that nothing in section 33 of the Harbours, Docks and Piers Clauses Act 1847 prevents refusal of access to a harbour under this section. Access can be refused, irrespective of whether an objection has been made under clause 8. This revision is a key tool in ensuring compliance with the policy intention of the Bill.
The amendment imposes a mandatory duty on harbour authorities to refuse access to a harbour, instead of a discretionary power to do so, as I mentioned earlier with regard to implementing the surcharges. As with those amendments to clauses 3 and 7, the reason for the amendment is to ensure the effective functioning of the Bill so that harbour authorities do not simply wait to be directed by the Secretary of State.
Grahame Morris
It is a pleasure to serve under your chairmanship, Ms Harris. In this group, I will speak to amendment 70 in my name and to new clause 6.
The Minister explained the reasoning behind his proposal to refuse access to a harbour. Amendment 70 proposes that the ship should be detained within a port. That is far more in line with international maritime law. The denial of harbour access is a matter of some concern. For harbour authorities or, indeed, the Secretary of State to suspend access is dangerous and likely to be ineffective. I therefore support the detention of non-compliant vessels within a UK harbour. The trade unions, the RMT—National Union of Rail, Maritime and Transport Workers—and I believe Nautilus International, also support that view, in order to provide a punishment for non-compliance that is more in line with international maritime regulatory standards governing operators’ behaviours.
I respectfully point out that the Maritime and Coastguard Agency’s port state control powers, which already exist under the maritime labour convention, are the only mechanism for inspecting crew employment and welfare standards. Every month, foreign flag vessels detained following those inspections are posted by the Maritime and Coastguard Agency on the Government’s website. The power that I propose would be a welcome addition to the port state control responsibilities that the MCA discharges for foreign flag vessels working from UK ports.
Only denying access to ports is not a realistic or sustainable punishment, especially as it relies to some extent on vessels not sailing to the UK if they are found to be non-compliant. Amendment 70 and new clause 6, in relation to vessels that fail to pay the surcharge, would be much more effective. There is also the possibility that capacity in another port would be blocked, if a ship were detained outside the port, perhaps in another harbour or even in a different jurisdiction. It is not clear whether the bilateral agreements the Government are negotiating—the Minister referred to them earlier, in particular that with France, but there are also those with Ireland, the Netherlands, Belgium, Spain, Denmark and Norway—would take account of that. I would be interested in the Government’s response to that point.
There is a welfare issue. It is outside the scope of this Bill, but there have been occasions where, certainly during the course of the pandemic, a number of vessels were laid up. I do not know if comes under the category of force majeure. Many tens of thousands—even hundreds of thousands—of seafarers were unable to access proper conditions. I know there were issues about the spreading of infection and so on, but putting that to one side, surely in terms of welfare it would make far more sense to detain the vessels within the port, rather than outside.
Gavin Newlands
I rise to speak to amendment 58. I am minded to support amendment 70 and new clause 6 in the name of the hon. Member for Easington. Perhaps counterintuitively, I am looking to add another exception to the list that could allow a rogue operator’s ship access to harbour, because I do not want seafarers or workers caught in the middle. As things stand, where an operator has been refused access for not paying the surcharge even when a crew welfare issue has been identified, such as a long overdue change of crew, the Bill would allow harbour authorities to continue blocking access to the operator. That could put the crew in the middle of a tug of war between the harbour authority and the operator.
We do not want a situation where the harbour authority is legally able to prevent access to a port when a ship has genuine need to seek access to ensure the safety and health of its crew. I know that most harbours take their responsibility for crew welfare seriously, but we do not want a situation where rogue operators are able to say, “We would love to take crew welfare seriously, but we couldn’t access the nearest harbour because we didn’t take it seriously in the first place, by paying below the national minimum wage.” There should be no excuses when it comes to employee safety.
Adding crew welfare to the list of exceptions to the harbour authority’s right to refuse access would provide some extra piece of mind for seafarers, and ensure that they have the protections, not the operator. It is the seafarers we are looking to protect. The amendment would clearly not prevent harbours from refusing access where the five conditions do not apply and, on that level, does not seek to water down the options available to hit those who refuse to pay a surcharge.
The Neptune declaration was established during the covid pandemic as it became clear that public health restrictions on access to ports were severely impacting on the capacity for ships to change over. Part of that declaration is a commitment that operators should make all reasonable efforts to accommodate crew changes, including when the vessel has to make a reasonable deviation. That should apply even as we have moved beyond the worst of the pandemic, and our legislation should reflect that declaration, which is why we have tabled the amendment.
Mike Kane
I rise to signal our support for amendment 70 and new clause 6 in the name of my hon. Friend the Member for Easington, who spoke well about seafarer welfare.
To give a personal example, over the past 30 years, my wife and I have enjoyed the hospitality, archaeology and beauty of the Orkney Islands. Over those 30 years, we have seen the number of cruise ships docking at Kirkwall go through the roof. There are days when the visitor numbers can double the population of the islands. When I visit the beautiful St Magnus Cathedral in the heart of Kirkwall, I now see—around the back or further up the high street—the welfare lines of mariners waiting for handouts or warm clothes, or going to the post office to send telegrams or money back home to their loved ones. Those lines get longer and longer every year.
I echo the concerns that the power for harbour authorities to suspend access to operators that are not paying crew at least the national minimum wage in UK territorial waters is probably dangerous and ineffective. I would welcome the Minister’s consideration of that. By denying ships access to those harbours, we are denying those crews, who are some of the poorest people in society—they are flown in from all over the world to give us the leisure experience we want on cruises—access to give welfare to those back home. That is less a political and more a humanitarian issue that our ports and harbours increasingly have to deal with.
Mr Holden
I thank hon. Members and welcome the spirit of amendment 58, which aims to provide urgent welfare facilities when they are needed. The Government believe, however, that those would be covered by clause 9(3), under which crew would be provided with access to urgent medical or welfare facilities or to undertake other emergency measures. We support the intention behind the amendment; in urgent cases concerning safety, a ship should be able to access the harbour under the framework that we have set out. Where an incident was not safety-related or related to the welfare of the crew and was therefore not covered by the force majeure exception, the ship would not be permitted access to the harbour.
Mrs Natalie Elphicke (Dover) (Con)
The concern, and I am pleased to hear the Minister has some sympathy for it, is that we do not want seafarers caught in the middle of the bad behaviour of bosses. I appreciate that the provision to which he draws our attention relates to that, but will he further consider whether that needs to be broader to protect seafarers?
Mr Holden
Members on both sides of the Committee are raising a similar issue about welfare. As an additional safeguard, the Secretary of State has the power to direct a harbour authority not to comply with its duty to refuse access. That will ensure that access is not denied—this has to be in rare circumstances for the Bill to work—where it would cause damage by disrupting key passenger services and supply chains. There are rare instances in which the Secretary of State has an overriding power, but on the broad swathe of trying to provide welfare, our view is that that is covered already under clause 9(3).
Gavin Newlands
Will the Minister tell us what part of clause 9(3) would cover the welfare of seafarers? Clause 9(3)(a) is on force majeure and paragraph (b) is on overriding safety concerns—might it be that one?
Mr Holden
The Bill states that
“a harbour authority may not refuse access to a harbour—
(a) in cases of force majeure;
(b) where there are overriding safety concerns;
(c) where there is a need to reduce or minimise the risk of pollution;
(d) where there is a need to rectify deficiencies on the ship.”
Both force majeure and overriding safety concerns for the crew, as well as for the ship, would be covered.
Members can be reassured that the list of exceptions directly reflect the circumstances in which access to a port may be provided. Existing legislation— namely regulation 13 of the Merchant Shipping (Port State Control) Regulations 2011, SI 2011 No. 2601— also covers this issue. I therefore think that the area of safety and crew welfare in exceptional circumstances is covered by legislation and the extra powers that are available to the Secretary of State.
Robert Courts (Witney) (Con)
Does the Minister think that clause 11(2), which contains the power for the Secretary of State to direct harbour authorities
“to exercise, or not to exercise, any of their powers under this Act”
might be relevant here?
Mr Holden
My hon. Friend is right; that is exactly what I referred to following the question from my hon. Friend the Member for Dover. We have the provisions under clause 9(3) and those under clause 11 on the directional powers of the Secretary of State. We have a belt-and-braces approach, which is why I do not think Opposition amendment 58 is required.
New clause 6 is also aligned with amendment 70 and is basically about whether ships can be brought in. The Bill provides for a voluntary compliance mechanism whereby the provision of equivalence declarations, and payment of surcharges if a declaration is not provided, are conditions of access to ports. If an operator chooses to neither provide a declaration nor pay a surcharge, it will be refused access.
If that were replaced by a power of detention by the MCA, as new clause 6 seeks to do, that would be a disproportionate and inappropriate mechanism. Detention of ships can carry significant costs to the ports and wider local authorities in relation not only to looking after them, but by blocking berths. For some small harbours, this can also be particularly challenging as it blocks other access to the port. That is not the case if ships are refused access.
I have heard concerns that refusal of access is unworkable as it might result in ships mid-passage being unable to dock. However, we do not expect the Bill to work that way in practice. By virtue of the requirement that harbour authorities request an equivalence declaration only when ships providing a service call at a UK harbour on at least 120 occasions in a year, all services captured are almost certain to be on short routes, and notification of refusal of access would take place before the ship has set sail from the port of origin.
As set out in clause 9, we will set out in regulations how the harbour authority is to communicate refusal of access. Once a harbour authority has imposed surcharges, the operator will be on notice that ships providing the service will be refused access to the harbour once the period for payment of the surcharge expires, if it remains unpaid. There is an additional safeguard regarding the Secretary of State’s powers of guidance in this circumstance.
We are satisfied that the compliance process of surcharges and refusal of access, supported by the enforcement powers of the MCA, is an appropriate and effective mechanism to incentivise payments. I hope that the new clause is withdrawn.
I also say to the hon. Member for Easington that, fundamentally, the business model of these operators is that they can get things in and off the ships. By stopping them getting access to the ports, we would disrupt a business model that, by design, is on a tight turnaround. They will not survive long if they are unable to get those things into ports quickly. This is also about driving compliance with the national minimum wage equivalent for seafarers, which is what we are trying to achieve. I urge the hon. Member not to press the new clause.
Amendment 24 agreed to.
Amendments made: 25, in clause 9, page 7, line 23, leave out “and”.
This is consequential on Amendment 26.
Amendment 26, in clause 9, page 7, line 24, leave out from “with” to end of line 25 and insert—
“regulations under section 7(7)(d), and
(c) the period within which the surcharge must be paid has expired.”
This amendment is consequential on Amendment 24 and is meant to clarify the circumstances in which refusal of harbour access is required.
Amendment 27, in clause 9, page 7, line 27, at end insert—
“(2A) Subsection (1) does not apply in relation to any surcharge imposed under subsection (3)(a) or (4) of section (Imposition of surcharge: failure to provide declaration in time) which would, if paid, be required to be refunded under subsection (5) of that section.”
This amendment is consequential on the new clause to which it refers.
Amendment 28, in clause 9, page 7, line 28, leave out “may” and insert “must”.
This is consequential on Amendment 24.
Amendment 29, in clause 9, page 7, line 32, at end insert—
“(3A) The duty under subsection (1) is also subject to any direction given by the Secretary of State under section 11(2)(a).”
This is consequential on Amendment 32.
Amendment 30, in clause 9, page 7, line 32, at end insert—
“(3B) A harbour authority which fails to comply with subsection (1) is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.”—(Mr Holden.)
This is consequential on Amendment 24.
Amendment proposed: 70, in clause 9, page 7, line 32, at end insert—
“(3A) Where a harbour authority may not refuse access to a harbour under subsection (3), it may instead detain a ship providing a service to which this Act applies, provided that the conditions in subsection (1) are met.
(3B) The Secretary of State may by regulations make provision about the detention of a ship under subsection (3A).”—(Grahame Morris.)
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
Government amendment 31.
Amendment 59, in clause 11, page 8, line 2, after “may” insert—
“following consultation with relevant stakeholders”.
This amendment would impose a duty on the Secretary of State to consult relevant stakeholders before giving guidance to harbour authorities as provided in clause 11(1).
Amendment 60, in clause 11, page 8, line 4, after “may” insert—
“following consultation with relevant stakeholders”.
This amendment would impose a duty on the Secretary of State to consult relevant stakeholders before giving directions to one or more harbour authorities as provided in clause 11(2).
Government amendments 32 to 36.
Clause 11 stand part.
Government amendments 37 and 38.
Mr Holden
Clause 10 specifies that in England, Wales and Northern Ireland, proceedings relating to offences under the Bill will be prosecuted by the Secretary of State. In practice, the Secretary of State will do so through the Maritime and Coastguard Agency. In Scotland, all criminal prosecutions are brought by the Lord Advocate.
This provision ensures that there is a clear and consistent process for the prosecution of offences under the Bill, and that such proceedings are handled by the appropriate Government agency. The clause is a critical component of the Bill’s enforcement mechanism and it will help to ensure compliance with its provisions.
Clause 11 as drafted will give the Secretary of State the power to give guidance to harbour authorities on how to exercise their powers under the Bill. The clause also allows the Secretary of State to issue directions to harbour authorities, requiring them to exercise or not exercise their powers under the Bill or to exercise them in a particular way.
Grahame Morris
The Minister is being patient and I appreciate that. Will he clarify the difference between “guidance” and “direction”? I ask because, on an earlier clause, we agreed that harbour authorities will now have a duty rather than a power. I wonder whether the Secretary of State’s “guidance” is a weaker term than a “direction”. Will he explain the difference?
Mr Holden
As drafted, the Bill is weaker, and that is why we are replacing the provisions with a duty in all these areas, in order to strengthen the requirement. Whether, in some such areas, it was “guidance” or other wording, there will now be a “duty”. That makes the Bill harder, ensuring that the harbour authorities have to do things.
Sir John Hayes (South Holland and The Deepings) (Con)
Further to the intervention from the hon. Member for Easington and given that what we are debating is on the face of the Bill, are we talking about statutory guidance that will be issued? Guidance, as the Minister knows, is complex, in law and in statute.
Mr Holden
I think we are talking slightly at cross purposes on this point. We are removing some of the things that were guidance for harbour authorities and an element of duty is now being opposed on them. That is what the Government amendments do.
The powers in clause 11 include the power to direct our harbour authorities to impose or not to impose a surcharge, whether generally or in any case or circumstances, and to impose a surcharge of an amount specified in the direction instead of the amount determined by the harbour authority’s tariff. That provision was intended as a safeguard in the event that a harbour authority did not impose surcharges in circumstances where an operator had not provided an equivalence direction, and to provide an incentive for the harbour authority to perform its role objectively.
Harbour authorities would have been required to have regard to any guidance under the clause and to comply with any direction given to them under the clause. Failure to comply with a direction under the clause is an offence punishable on summary conviction to a fine not exceeding level 4 on the standard scale. That provision was designed to help to ensure compliance with the Bill’s provisions and to achieve its policy objectives.
Government amendments 31 and 35 remove the Secretary of State’s power under the Bill to give statutory guidance to harbour authorities. That is a consequence of changing harbour authorities’ powers under the Bill to mandatory duties. We will still provide guidance to harbour authorities, which we intend to consult on, but that will not have a statutory basis. Amendment 36 is consequential on those changes. The reason why there will not be a statutory basis is that harbour authorities will already have a statutory duty.
Sir John Hayes
That answers my question. Essentially, the statutory duties need the guidance about those duties to be issued, rather than it being of itself statutory guidance. The Minister has made that abundantly clear in an eloquent and persuasive way.
Mr Holden
I thank my right hon. Friend for his generous assessment of my ability to describe the Bill’s provisions.
Government amendments 32 to 34 redefine the circumstances in which directions may be given to harbour authorities by the Secretary of State. As the powers are now duties, there is no longer a need for the Secretary of State to direct harbour authorities to exercise their functions. If they do not exercise those functions, they will be liable for prosecution, so the Secretary of State does not need to intervene. Amendment 15 to clause 7 is consequential on that change.
Gavin Newlands
I rise to speak to amendments 59 and 60, which, as the Committee will be pleased to hear, I can dispose of in fairly short order. On clause 12, I will speak to amendments on removing some of the Secretary of State’s untrammelled powers. That argument happens in just about every Bill Committee—certainly every Bill Committee that I am on—because scrutiny and accountability are a good thing. I know that it is out of fashion for Governments to willingly draft scrutiny into legislation these days, but amendments 59 and 60 seek a stakeholder consultation before the Secretary of State can direct harbour authorities, which would provide for an additional layer of scrutiny.
A requirement on the Secretary of State to consult will help to ensure the openness and transparency of the Secretary of State’s actions. Imposing a duty to consult will ensure that any guidance is exposed to critical comment from stakeholders, which may improve said guidance. The Delegated Powers and Regulatory Reform Committee said that the power in clause 11 was “a completely open-ended power”, and that the whole Bill could therefore be modified by directions that are not subject to any form of parliamentary scrutiny.
The Government accepted that argument in the other place in relation to clause 3 and amended it appropriately, so I would be very keen to hear the Minister’s explanation of why the same principle is not applicable to clause 11, taking into account that, in responding to the points about the powers to direct in clause 11, Baroness Vere said:
“We have looked very carefully at the powers of direction for the Secretary of State in Clause 11. We have concluded that to remove them would significantly reduce the effectiveness of the Bill. These powers of direction form an important part of the compliance mechanism under the Bill.”—[Official Report, House of Lords, 26 October 2022; Vol. 824, c. 1513.]
Our amendments do not seek to remove the powers, merely to add a layer of scrutiny. [Interruption.] I slow down as I am about to conclude, to allow the Minister to get back to his seat. What could possibly be wrong with an additional layer of scrutiny?
Sir John Hayes
I intervened on the Minister earlier, on the issue of guidance, because, now that he is clear that the guidance issued is of a more general nature—rather than the specific statutory guidance that would have been necessary to effect the provisions of the Bill, which will now be provided by powers in the Bill implicitly—that provides the opportunity for the Minister to ensure that that guidance is contextualised around the broader narrative.
I mentioned earlier the 2015 “Maritime growth study”, which I commissioned regarding skills and recruitment of people to the sector. That study also recommended that the Government develop
“a vision and set of strategic objectives”
with “quantifiable targets and goals”. I wonder if, in issuing guidance around this Bill to those in the sector, the Minister can ensure that the context is precisely the delivery of those recommendations.
If I might add to that briefly, that report also recommended a ministerial working group for maritime growth to implement a national strategy accordingly. I wonder whether any progress has been made on that. The Minister may not have an immediate answer to that, but I would welcome his further reflection on it during the passage of this legislation.
Mr Holden
I thank both the hon. Member for Paisley and Renfrewshire North and my right hon. Friend for their views on this. Just to be clear, Opposition amendment 59 would require the Government to consult with relevant stakeholders before issuing guidance. As per amendments 31 to 35, tabled in my name, there is no longer a provision for statutory guidance, given the responsibilities under the new duty. However, as we intend to provide some guidance to harbour authorities, I would assure hon. Members on both sides of the Committee that we intend to consult widely on any guidance that is issued, and it is unnecessary to say as much on the face of the Bill.
On the points that my right hon. Friend the Member for South Holland and The Deepings raised about the broader maritime growth strategy, I would be very happy to write to him with any specific updates that we have. I know that this is an important area that he feels passionate about.
Opposition amendment 60—this will be similar to my response to amendment 59—would require the Government to consult with relevant stakeholders before issuing directions. As per amendments 32, 33 and 34, tabled in my name, directions can only be made to instruct the harbour authority not to comply with its duties in a particular way. The need to use those powers of direction might arise when there are issues of welfare, national resilience, or the need to import medical supplies, and a ship should not be refused access. Such scenarios may be very time-sensitive, and the need to consult could significantly slow down that process. We assure hon. Members that we will consult where possible, but on that specific point—it is the reverse, as it were—it would not be appropriate to make that a legal requirement on the face of the Bill because of those issues.
Amendments 37 and 38, tabled in my name, change the power to make a direction to specify a harbour authority in respect of a particular harbour regarding the power to make those regulations. That is consequential on the amendments to convert harbour authority powers into duties, as, now that harbour authorities are required to request declarations, impose surcharges and refuse access to harbours, it is important that they have clarity on the relevant harbour authority for a particular harbour. The amendments will further ensure consistency and reduce the administrative burden of giving directions on a case-by-case basis.
Question put and agreed to.
Clause 10 accordingly ordered to stand part of the Bill.
Clause 11
Guidance and directions
Amendments made: 31, in clause 11, page 8, line 2, leave out subsection (1).
This removes the Secretary of State’s power under the Bill to give guidance to harbour authorities, in consequence of changing harbour authorities’ powers into duties.
Amendment 32, in clause 11, page 8, line 6, leave out
“exercise, or not to exercise, any of their powers under”
and insert
“not do anything they would otherwise be under a duty to do by reason of”.
This and the following amendment redefine the circumstances in which directions may be given to harbour authorities.
Amendment 36, in clause 11, page 8, line 16, leave out subsection (6).—(Mr Holden.)
This is consequential on Amendment 31.
Clause 11, as amended, ordered to stand part of the Bill.
Clause 12
Regulations
Gavin Newlands
I beg to move amendment 61, in clause 12, page 8, line 33, leave out subsection (3) and insert—
“(3) A statutory instrument containing (whether alone or with other provision) regulations made by a Minister of the Crown under any of the following provisions may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament—
(a) section 3 (power to request declaration);
(b) section 4 (nature of declaration);
(c) section 7 (imposition of surcharges);
(d) section 9 (refusal of harbour access for failure to pay surcharge).
(3A) Any other statutory instrument containing regulations made by a Minister of the Crown under any provision of this Act is subject to annulment in pursuance of a resolution of either House of Parliament.”
This amendment ensures that regulations under clauses 3, 4, 7 and 9 of the Bill are subject to the affirmative resolution procedure.
The Chair
With this it will be convenient to discuss the following:
Amendment 66, in clause 12, page 8, line 33, leave out
“is subject to annulment in pursuance of a resolution of either”
and insert
“may not be made unless a draft of the instrument has been laid before and approved by resolution of each”.
Clause stand part.
Gavin Newlands
I was on tenterhooks there: I was not sure whether I would have to leave expeditiously for the Standing Order No. 24 debate application in the Chamber, but thankfully that has been resolved.
As trailed when I spoke previously, amendment 61 seeks to amend the legislation in a similar fashion to Labour’s amendment 66. I am not precious about which amendment the Minister accepts. Clause 12 concerns the power to make regulations by statutory instrument and currently sets out that regulations made under the legislation are subject to the negative resolution procedure, as is always the case these days—other than for those in respect of clause 15, I should add in fairness. Given the potential nature and impact of the provisions that may be made by regulations under clauses 3, 4, 7 and 9, it would be appropriate for such regulations to be subject to the affirmative resolution procedure, to enhance the scrutiny of the regulations of this Parliament. At one point, the Government were keen for this Parliament to “take back control”. I hope the Minister can exert that with these amendments.
Mike Kane
I rise to speak in favour of amendment 61, in the name of the SNP Members, and amendment 66. The proposal is self-explanatory but important. The regulations under the Bill hand very broad powers to Ministers. It would be important for the House to consider and approve the regulations that will be made.
Grahame Morris
The ground has been very well covered. I am just wondering, particularly in relation to amendment 61, tabled by my colleagues from the SNP, about the impact of the earlier Government amendments. The Secretary of State has quite extensive powers in relation to the declaration, the imposition of surcharges, and directions to harbour authorities. I am sure that that must have been taken into account, but it does seem, given the extensive powers being conferred on the Secretary of State, that it would be reasonable to have reference to the affirmative procedure in the Bill and to specify which sections require delegated power for the Secretary of State. Therefore I support amendments 61 and 66.
Mr Holden
Clause 12 empowers the Secretary of State to make regulations to provide further details on the implementation of the Bill’s provisions. The regulations made under the legislation will be subject, as it stands, to the negative resolution procedure. The regulations may make different provisions for different cases, for example to take account of different types of ship services, such as freight ferries and container ships, and different non-qualifying seafarers—for example, there may be different surcharge rates according to age. The regulations may also confer discretion on specified persons and contain consequential, supplementary, incidental or transitional provisions. This provision gives the Government the flexibility to adapt the regulations as needed to ensure that the Bill’s provisions are effectively implemented and to achieve the Bill’s policy objectives as quickly as possible.
Amendments 61 and 66 seek to ensure that regulations under clauses 3, 4, 7 and 9 are subject to the affirmative resolution procedure, rather than the negative resolution procedure as currently. We expressly considered why it is appropriate that each regulation-making power was negative in our delegated powers memo, and the Delegated Powers and Regulatory Reform Committee did not raise any concerns about the procedure for the remaining regulation-making powers in the Bill. Indeed, the only regulation-making power that the Committee recommended be subject to the affirmative procedure has now been removed from the Bill.
Although we have tweaked certain regulation-making powers, we do not consider that this changes the appropriateness of the negative procedure, and we will be providing a supplementary delegated powers memorandum for the Committee to consider in due course. Switching to the affirmative procedure is not a good use of parliamentary time and would slow down the implementation of the Bill. I request that the amendments be withdrawn so that we can get on with protecting seafarers as quickly as possible.
Gavin Newlands
I thank the Minister for that response. Surely it is for Parliament to decide the best use of parliamentary time. I think we have let the Minister off with enough this afternoon, so I will push the amendment to a vote.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
Government amendment 41.
Clause 15 stand part.
Mr Holden
I will be very swift, because this is very much just definitions and terms. Clause 14 provides definitions of terms used throughout the Bill to ensure clarity and consistency in the interpretation of its provisions. The definitions will help to ensure that the Bill is applied consistently and coherently, and will facilitate its effective implementation. Clause 15 provides for the extent, commencement, and short title of the Bill. Amendment 41, in my name, removes the privilege amendment inserted by the Lords and is a purely procedural matter.
Question put and agreed to.
Clause 14, as amended, accordingly ordered to stand part of the Bill.
Clause 15
Extent, commencement and short title
Amendment made: 41, in clause 15, page 10, line 1, leave out subsection (6).—(Mr Holden.)
This removes the privilege amendment inserted by the Lords.
Clause 15, as amended, ordered to stand part of the Bill.
New Clause 1
Offence of operating service inconsistently with declaration
“(1) The operator of a service to which this Act applies is guilty of an offence if—
(a) the operator provides a harbour authority with an equivalence declaration in respect of the service for a relevant year, and
(b) subsection (2) or (3) applies.
(2) This subsection applies if the equivalence declaration is provided before the beginning of the relevant year and—
(a) the service is operated inconsistently with the declaration at the beginning of the relevant year, or
(b) at any later time during the relevant year the service starts to be operated inconsistently with the declaration and the operator fails to notify the harbour authority within four weeks of—
(i) the fact that the service has started to be so operated, and
(ii) the time when it started to be so operated.
(3) This subsection applies if the equivalence declaration is provided during the relevant year and—
(a) at the time the declaration is provided the service is being operated inconsistently with the declaration, or
(b) at any later time during the relevant year the service starts to be operated inconsistently with the declaration and the operator fails to notify the harbour authority within four weeks of—
(i) the fact that the service has started to be so operated, and
(ii) the time when it started to be so operated.
(4) A person guilty of an offence under this section is liable on summary conviction—
(a) in England and Wales, to a fine, or
(b) in Scotland and Northern Ireland, to a fine not exceeding level 5 on the standard scale.”—(Mr Holden.)
This is connected with the group of amendments introduced by Amendment 1. It provides for an offence of acting inconsistently with an equivalence declaration, in place of the offence in clause 3(5) and (6). It caters for the fact that a declaration may be provided before, during or after the year to which it relates.
Brought up, read the First and Second time, and added to the Bill.
New Clause 2
Imposition of surcharges: failure to provide declaration in time
“(1) This section applies if—
(a) a harbour authority requests the operator of a service to which this Act applies to provide the authority with an equivalence declaration in respect of the service for a relevant year, and
(b) the operator does not provide an equivalence declaration in the prescribed form and manner before the end of the prescribed period.
(2) If the prescribed period expires before the beginning of the relevant year, the harbour authority must impose a charge on the operator of the service in respect of each occasion when a ship providing the service enters its harbour between—
(a) the beginning of the relevant year, and
(b) whichever is the earlier of—
(i) the end of the relevant year, and
(ii) the time when the operator provides the authority with an equivalence declaration in respect of the service for the relevant year in the prescribed form and manner.
(3) If the prescribed period expires during the relevant year, the harbour authority must—
(a) impose a charge on the operator of the service in respect of each occasion when a ship providing the service entered its harbour between—
(i) the beginning of the relevant year, and
(ii) the end of the prescribed period, and
(b) impose a charge on the operator of the service in respect of each occasion when a ship providing the service enters its harbour between the expiry of the prescribed period and whichever is the earlier of—
(i) the end of the relevant year, and
(ii) the time when the operator provides the authority with an equivalence declaration in respect of the service for the relevant year in the prescribed form and manner.
(4) If the prescribed period expires after the end of the relevant year, the harbour authority must impose a charge on the operator of the service in respect of each occasion when a ship providing the service entered its harbour during the relevant year.
(5) But charges imposed by a harbour authority under subsection (3)(a) or (4) must be refunded if—
(a) at any time after the end of the prescribed period the operator provides the authority with an equivalence declaration in respect of the service for the relevant year in the prescribed form and manner, and
(b) the declaration is within section 4(1C) or (1D).
(6) For the purposes of this section, in relation to an equivalence declaration which an operator of a service is required to provide—
‘prescribed period’ means the period within which the operator is required to provide the declaration in accordance with regulations under section 3(4)(za);
‘prescribed form and manner’ means the form and manner in which the operator is required to provide the declaration in accordance with regulations under section 3(4)(a) and (b).”—(Mr Holden.)
This and the following new clauses set out the circumstances in which surcharges must be imposed. In summary, surcharges are to be imposed when an equivalence declaration is not provided in time (this new clause); when a declaration relates only to part of a year (NC3); or when a service is operated inconsistently with a declaration (NC4).
Brought up, read the First and Second time, and added to the Bill.
New Clause 3
Imposition of surcharges: in-year declaration that is prospective only
“(1) This section applies if—
(a) a harbour authority requests the operator of a service to which this Act applies to provide the authority with an equivalence declaration in respect of the service for a relevant year,
(b) the operator provides the declaration during the relevant year in accordance with regulations under section 3(4), and
(c) the declaration is within subsection (1B) of section 4 (and not also within subsection (1C) of that section).
(2) The harbour authority must impose a charge on the operator of the service in respect of each occasion when a ship providing the service entered its harbour between the beginning of the relevant year and the time the declaration was provided.”—(Mr Holden.)
See NC2.
Brought up, read the First and Second time, and added to the Bill.
New Clause 4
Imposition of surcharges: operating inconsistently with declaration
“(1) This section applies if—
(a) the operator of a service to which this Act applies has provided a harbour authority with an equivalence declaration in respect of the service for a relevant year, and
(b) either—
(i) the operator notifies the authority that at a specified time after the declaration was provided the service was, or started to be, operated inconsistently with the declaration, or
(ii) the authority has reasonable grounds to believe that, at a time after the declaration was provided, the service was, or started to be, operated inconsistently with the declaration.
(2) The harbour authority must impose a charge on the operator in respect of each occasion when a ship providing the service entered or enters the harbour between—
(a) the time mentioned in subsection (1)(b)(i) or (ii), and
(b) the end of the relevant year.
(3) But if after the time mentioned in subsection (1)(b)(i) or (ii) the operator provides the harbour authority with a fresh equivalence declaration in respect of the service for the relevant year, the authority must not impose a charge under this section in respect of an occasion when a ship providing the service enters the harbour after the fresh declaration is provided (unless this section applies again by reference to that or a later declaration).”—(Mr Holden.)
See NC2.
Brought up, read the First and Second time, and added to the Bill.
New Clause 5
Implementation and monitoring
“(1) Within six months of this Act being passed, the Secretary of State must publish a report on the implementation of, and monitoring of the effects of, this Act.
(2) The report must include—
(a) an assessment of the impact of this Act on—
(i) roster patterns,
(ii) pensions, and
(iii) wages of seafarers;
(b) a statement as to whether further legislation will be introduced by the Government as a result of the findings of the assessment under paragraph (a);
(c) a strategy for engaging with trade unions for the purposes of monitoring the implementation of this Act, including in reference to conventions of the International Labour Conference;
(d) a strategy for monitoring the establishment of minimum wage corridor agreements with international partners of the United Kingdom, insofar as any such agreement ensures that any non-qualifying seafarer is remunerated for UK work at a rate that is equal to or exceeds the rate that would otherwise be required under this Act;
(e) an assessment of the interaction between this Act and existing international agreements or international maritime law, including reference to any litigation that has arisen as a result of this Act.
(3) The report must be laid before each House of Parliament.”—(Mike Kane.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss
New clause 7—Report: remuneration of seafarers—
“Within one year of the date of Royal Assent to this Act, the Secretary of State must lay before Parliament a report setting out an assessment of—
(a) the impact of this Act on the remuneration of seafarers, and
(b) whether there is any evidence that, as a result of this Act, seafarers have been dismissed and re-engaged on lower wages at or closer to the National Minimum Wage.”
Mike Kane
I rise to speak in support of new clauses 5 and 7. Earlier this year, the House stood completely united against the action taken by P&O Ferries. We had oral questions that day in the House, and the former Minister, the hon. Member for Witney, was at the Dispatch Box when the news filtered through that this company had sacked some 800 British workers with no notice. Eight hundred livelihoods were lost because a rogue company made a calculation that it was cheaper to break the law than to abide by it.
A married couple who had been employees of P&O for 14 years spoke to a colleague of mine about the reward for their years of loyal service—summary dismissal by a pre-recorded video message, and then being marched off the ships that they lived and worked on by private security guards, treated like criminals. That was the human face of P&O’s criminal act. It is the reality of a business model that has been allowed to prevail for far too long on our seas—a business model predicated and dependent on exploitation.
The P&O scandal was supposed to represent a line in the sand for seafarers’ rights. The Secretary of State’s predecessor was clear about that: the Government would work with
“unions and operators to agree common levels of seafarer protection on those routes.”—[Official Report, 30 March 2022; Vol. 711, c. 841.]
He was right, because seafarers’ exploitation is every bit as much about conditions as it is about pay. Baroness Vere of Norbiton, the Minister in the other place, said that the Government would act on that wider exploitation only
“where it is proven that it is appropriate to do so.”
Let me briefly give the House an illustrative example of why that is so important. An agency worker can be contracted on the Dover-Calais service at the shamefully low rate of £4.75 an hour. As is common in the industry, such workers could be expected to work up to 91 hours a week, on board, full time, for 17 weeks at a time. My hon. Friend the Member for Kingston upon Hull East reminded us of the Herald of Free Enterprise and what happened there. Outside UK waters, those workers would not be entitled to any pension, the minimum wage or any sick pay. I ask Members to imagine a season of winter storms in the Irish sea or the North sea, where sleep is almost impossible, and to imagine spending up to 17 weeks on board, responsible for the safety of passengers and that vessel.
The industry has already learnt from painful experience about the dangers, but the Bill does nothing to address exploitative crewing and rostering practices. That is why we must see a legally binding seafarers’ charter on the face of the Bill—one that ends the race to the bottom from which P&O Ferries has benefited; one that smashes the business model dependent on the manipulation of vulnerable workers from around the world. That is precisely what our new clause 5 is about.
Turning to new clause 9, the then Prime Minister himself said that P&O Ferries would face “criminal sanctions”. The then Transport Secretary said that it would be placed under “criminal investigation”. He demanded that the boss, Peter Hebblethwaite, stand down. He even demanded that P&O rename its ships, stating that it was completely wrong for them to sail under such names as the Spirit of Britain or the Pride of Kent. Six months on, however, that chief executive—
Mike Kane
Thank you, Ms Harris. That chief executive stays in place. The point is that if P&O Ferries or any of its low-cost rivals wanted to do that again, nothing in the Bill will stop it from doing so. That is why new clause 9 is important, because it clearly establishes fines and personal liability for a failure to abide by the legislation.
Mike Kane
Indeed. Given the track record of shameful companies such as P&O, we have to change.
My final concluding remarks, Ms Harris, are to thank you for your excellent chairing for the first time in such a Committee. I also thank Mr Davies for his excellent deliberations as Chair this morning, and the Minister, because the Bill was brought to the House in the right spirit, for trying to do something. Members across the Committee recognise that, and I thank all those who participated and contributed. With that, I also thank staff at the Department for Transport and the Clerks of the House.
Mrs Elphicke
It is to be noted that new clauses 5 and 7 concern reports about whether more needs to be done. I think we agree across the Committee and more widely that what happened in the P&O case was a spark to firm action going forward.
We touched on the issue of roster patterns earlier on, but I want to address it specifically. We know it is something the Maritime and Coastguard Agency has looked at on the short straits. For me, the new clauses do not address the fundamental question of who will be responsible for ensuring appropriate and safe working conditions on that route. That responsibility sits with the MCA, but concerns have rightly been raised about individual operations, and new clause 5 will not go any way to addressing those particular concerns. I think the bilateral agreements being discussed may form a route to looking at some of the issues, particularly those that apply to the route between Dover and France.
Turning to pensions and wages more broadly, this is the first piece of legislation of its type. There are a number of mechanisms in this place, including the Transport Committee, which has shown to be diligent in its support of not just the P&O workforce but transport matters more generally. There are additional forums in this place that provide the correct routes and opportunities to assess whether this legislation is reaching its objectives and intent.
On new clause 7, it is important that the remuneration of affected seafarers is assessed and considered. I have been encouraged during discussions I have had on remuneration with DFDS, which operates on the Dover-Calais route, to hear that it embraces the opportunity to have these conversations about improving conditions for seafarers. But as regards the Bill, part of the nine-point plan is a comprehensive approach to tackling this issue following the appalling actions of P&O. Overburdening the Bill with additional requirements for statutory reports and assessments may actually delay the important work we all have to do—be it bilateral or voluntary agreements or other options.
Karl Turner (Kingston upon Hull East) (Lab)
I am interested in why the hon. Lady thinks putting the requirement to report into a statutory format would create a delay. How on earth does she believe it would delay anything?
Mrs Elphicke
I thank the hon. Gentleman for his question. Let me explain. This Bill is a piece of legislation that has been brought forward very quickly—in a number of months. I think we would all agree with that, considering the time that things take in this place, but it has a number of journeys to continue on. The first reports under the proposals here would take some time—within six months for the first report. This work is ongoing with the Department right now. I do not want to wait six months. What happens if France says, “Let’s not conclude the bilaterals. Let’s wait for your report.” It is absolutely right that Transport Ministers and the Secretary of State keep us updated and that they are accountable in this place to us all, as they are through the Transport Committee and on the Floor of the House, to make sure that the legislation does what it says, but I do not want to be waiting on a report for six months or a year; I want action now for the workers on the short straits.
Gavin Newlands
I rise to support new clause 5 and must start by congratulating or commending—through heavily gritted teeth, it must be said—the DFT drafting team for drafting the Bill so narrowly that the only recourse we have is to ask for reports on the protections for seafarers on these very important issues.
New clause 5 follows the work done on the seafarers’ charter, work which unfortunately appears to be stuck in the long grass. One of the reasons given by the Minister in the Lords to oppose the original amendment by Lord Tunnicliffe was the 90-day timeframe. The hon. Member for Dover has just said that she does not want to wait. The original amendment was for 90 days; we have had to up that to six months, because the Government rejected that amendment and referred to six months.
The issues outlined in the new clause are real and serious. We have reports of seafarers employed by P&O Ferries—that is, the people employed to replace those they sacked illegally—working 17 weeks straight on board. That is simply unacceptable. A tired and overworked crew is a dangerous crew at sea.
Karl Turner
The crucial point about safety is that the Dover to Calais run involves an incredibly fast turnaround and the work is incredibly intensive. It is not just that these exploited seafarers are working 17 weeks on, 12 or 13 hours a day, seven days a week. They are going to and fro, and the most dangerous part of that run is pulling into the harbour and coming back out. The work is intensive and incredibly dangerous. Does the hon. Gentleman agree?
Gavin Newlands
I could not agree more—rather them than me. It is bizarre that sometimes we argue around the fringes of these issues. We are talking about such dangerous and onerous work for weeks on end, and we are quibbling over whether we pay them the national minimum wage or not. It beggars belief. We cannot trade safety for the profits of DP World.
This is not just an issue of fairness at work. It is an issue of human and environmental safety. It is just over 30 years since the Braer wrecked on Shetland and caused an ecological disaster that I suspect we all remember well, even three decades on. If we have seafarers around our shores working 17 weeks straight with no oversight and no action, sooner or later we will have another Braer or, even worse, a Herald of Free Enterprise.
Similarly, on wages and pensions, we know what many seafarers are expected to put up with. The key point of this Bill is to prevent wages falling below the national minimum wage equivalent, but we also hope it will have the additional impact of improving wages across the board in the industry. If minimum wages go up, there could be benefits for those who are already earning more than that floor.
We know that the Government currently support a voluntary charter for seafarers, and the Minister repeated that again today. I say in all sincerity to the Minister and the Government Members sitting behind him: what good is a voluntary charter when we have operators such as P&O Ferries, which was content not only to break the law but to sit in front of a Select Committee and freely admit to breaking it? A voluntary charter has about as much legal effect as the back of a fag packet, and if P&O Ferries is happy to break the law, it will not look back as it smashes a charter to shreds.
Putting these elements of the charter in the Bill will at least give the Government firm legal ground in assessing how this legislation has benefited the industry and its employees. Again, the new clause calls for nothing more than a report, as the hon. Member for Dover said, on the main issues from the charter. It commits the Government to nothing, except a report. If the Government are serious about a real seafarers’ charter developed in partnership with trade unions and aimed at protecting exploited workers, they have nothing to fear from accepting this new clause.
I turn to new clause 7 in the name of the hon. Member for Easington, and supported by myself and my hon. Friend the Member for Glasgow East. Last July, we saw the publication of the nine-point plan for seafarers. No. 6 on that plan was to develop a statutory code for “fire and rehire” practices, and failures to engage in employee consultations. Sadly, that has progressed no further.
Members may remember that I have certainly highlighted and challenged companies that have used fire and rehire over recent years since its first big deployment in this country by British Airways. Many Opposition Members have repeatedly asked the Government to bring in legislation to end it, as is the case in most of Europe, with some of us introducing multiple Bills to that effect. Despite all the evidence to the contrary, the Government felt that a simple change to guidance would solve the worst of the problem.
Fire and rehire seems to be used disproportionately in the transport sector, by British Airways, Menzies Aviation and Go North West to name just three. Elements of it were deployed by P&O Ferries last year—another charge to add to its self-declared rap sheet, which the RMT said amounted to one of the
“most shameful acts in the history of British industrial relations”.
While some Government Members may have views that differ from mine on the RMT, I hope they would at least agree with them on the depths to which P&O Ferries plumbed last year.
Seafarers are particularly vulnerable to fire and rehire. The particular circumstances of the maritime industry, surrounded by international treaties and conventions, mean that workers are subject to greater exploitation overall than those on land. We saw with P&O how that exploitation can be deployed by a company that is happy to willingly and publicly break the law and make no secret of it. It is a practice that has absolutely no place in a modern society. Our workplaces are not those of a Dickensian novel, yet the legislation that regulates the power dynamic between employer and employee is stuck in the Victorian age.
The UK is almost unique in Europe on fire and rehire. Most other countries in Europe have embraced modernity and made their employment laws fit for the future. P&O Ferries could not have pulled off its scam in most European countries, just as BA’s parent company did not attempt fire and rehire in Ireland or Spain. New clause 5 would not prevent fire and rehire in itself—amendments 71 and 72 tabled by me and my hon. Friend the Member for Glasgow East would have offered greater protection but they were deemed out of scope, so I will not refer to them any further in case I am called to order by the Chair.
However, new clause 5 would ensure that any instances, attempted or otherwise, in connection with seafarers within scope of this legislation are reported by the Secretary of State to Parliament. That will give this place the opportunity to again look at legislation not only in this specific sector, but also across the whole economy. Hopefully by that time, Government Members will finally have made the jump from warm words to tough action, and we will see legislation put on the books to put an end to fire and rehire and an end to these rogue companies. It quite frankly a disgrace that the UK lags so far behind the rest of our neighbours. We can start the process of remedying that disgrace and dragging our employment laws into the 21st century by adopting this new clause.
Sir John Hayes
I rise briefly to address new clause 5, which has much to recommend it. The hon. Gentleman was right to talk about a seafarers’ charter, which has been long called for. He was right to recognise the need for engagement with the trade unions. When I was the Minister, I had a positive dialogue with the RMT maritime section, as my former shadow Minister, the hon. Member for Kingston upon Hull East, will know. It is also right, as I said earlier, that we understand that pay should be seen in a broader context, as the new clause recommends. I called earlier for a strategy that looked at the whole maritime sector, pertinent to the matters we have been discussing today, which would identify common concerns across ports, business services, manufacturing, engineering, science and all the other ancillary industries linked to maritime.
It seems critical to recognise that seafarers are particularly vulnerable to exploitation because of the peripatetic nature of their employment. Where people take advantage of that vulnerability, we need to act. We have moved on from the dark days when economic liberalism prevailed and we thought the free market would solve everything—at least I hope we have. This country has a proud maritime past. One thinks of great seafarers such as Drake, Captain Cook and Lord Nelson, who are heroes, whatever the liberal bourgeoisie, with their doubt-filled, guilt-ridden preoccupations, may think. We can have a maritime future that is just as great, but that must be built on the right terms and conditions, pay and circumstances for our seafarers.
My only reservation about the new clause, which is why despite teasingly suggesting that I might support it, I will not, is that it does not actually go far enough. I would want to do still more. The Government are to be commended for introducing the legislation, and my hon. Friend the Member for Dover in particular is to be commended for championing the interests of seafarers on the back of the awful events that have been reflected on today, when P&O behaved so disgracefully. I say to the Minister let this be the beginning of new thinking about how we can revitalise the maritime sector by doing right by the people who work in it.
Grahame Morris
I am grateful for the opportunity to speak on the new clauses.
New clause 7 is in my name and that of my hon. Friends the Members for Glasgow East and for Paisley and Renfrewshire North. We are using the F-word, aren’t we: fire and rehire. In the context of this new clause and new clause 5, I remind Members of the awful circumstances of the sacking of the seafarers on the P&O Ferries. The Minister has brushed aside all attempts by the Opposition to amend the Bill and address concerns about the number of days in port. That means that the Bill’s scope is incredibly narrow. I am afraid that many seafarers who might have anticipated being afforded a degree of protection will be terribly disappointed. Given the powers we have conferred on the Secretary of State, I think it is completely reasonable to suggest that the Government should produce a report within a year of Royal Assent to assess whether they have been effective. Indeed, the Minister and his predecessors have suggested that if those powers are not effective, further measures would be introduced to ensure that seafarers are protected from unscrupulous rogue employers.
New clause 5 relates to important issues that the Government need to address, not least the fact that the 2018 regulations were breached by P&O Ferries. When Peter Hebblethwaite, the chief executive of P&O Ferries, addressed a joint session of the Transport Committee and the Business, Energy and Industrial Strategy Committee—the hon. Member for Paisley and Renfrewshire North and I are members of the Transport Committee—he was quite open about the three areas of law that he had breached. In fact, he was quite boastful, which was shaming in my opinion. I believe that the 2018 regulations, which P&O Ferries breached, are up for revocation under the Retained EU Law (Revocation and Reform) Bill. I understand, however, that an agreement was reached to retain a number of labour protections in UK law, so I am looking to the Minister for some reassurance on that. If that is the case, I hope that appropriate action will be taken to keep those protections in place for those who Members on both sides of Committee acknowledge to be an extremely vulnerable employment group because of the nature of their work.
Before we lose sight of it, the whole purpose of the Bill is to protect pay, working hours, pensions and other remunerated conditions of seafarer employment on ferries. We rehearsed many of the arguments on Second Reading, and it is the belief of many on the Opposition Benches that the Bill’s scope needs to be widened to more effectively cover employment issues, as well as minimum pay, for seafarers working on those ferry routes.
I am rather disappointed about the seafarers’ charter. I know that it has had a number of iterations; we have at least two former Shipping Ministers on the Committee: the right hon. Member for South Holland and The Deepings and the hon. Member for Witney. I think it started off as the—this is a bit of a tongue-twister—fair ferries framework agreement. It was then the fair ferries charter and then the seafarers’ charter. But it still has not been published, as far as I am aware, and it is only voluntary. If it were in the Bill and we could have some confidence that employers would have to implement it, we would have major reassurance.
Mr Holden
I will write to the hon. Member for Easington on the specific issue of the Retained EU Law (Revocation and Reform) Bill. I will start now by saying that there have been some strong and robust improvements from this Bill, not the least of which is the imposition of a duty on the harbour operators, which I think goes a long way to addressing many of the concerns expressed at earlier stages by hon. Members.
I would like to reflect on a couple of comments from my hon. Friend the Member for Dover. She mentioned the bilateral agreements and how important they are. With us legislating in this way and other countries now starting to look to the legislation for their own societies, perhaps the hon. Member for Paisley and Renfrewshire North will reflect on how it is Britain leading the way in this space—a little.
In terms of the Laffer curve, I did not think I would see my right hon. Friend the Member for South Holland and The Deepings and the hon. Member for Wythenshawe and Sale East perhaps come out on the same side of things, but they do seem to have reflected a general, cross-party consensus that it is important to act in the best interests of working Britain. That is entirely what this legislation is designed to do.
Regarding fire and rehire, which has been mentioned by several hon. Members but is outside the scope of this Bill, I want to put it on record that BEIS will be launching a consultation and code of practice on fire and rehire shortly.
David Linden (Glasgow East) (SNP)
Can the Minister tell the Public Bill Committee how many consultations and letters BEIS has issued about fire and rehire? There is cross-party agreement in this House about what the problem is, so why do the Government have to take forward yet another consultation on it?
Mr Holden
I do speak for the Government but, on the specifics of what BEIS has been up to, I urge the hon. Member to speak to a BEIS Minister. But I do understand the broad thrust of his point. Where we are taking action here today is regarding seafarers.
The hon. Member makes quite an important point: how many consultations and reports can be had? The Opposition are currently proposing two more reports in their new clauses 5 and 7, both of which seek to legislate for the Government to produce a report. The first seeks to legislate for the Government to produce a report within six months of the Bill being passed on its implementation and monitoring. A number of the points that are sought to be included in such a report are well beyond the scope of the Bill. As hon. Members have said, the Bill is focused very much on the remuneration of seafarers who do not qualify for the national minimum wage. Six months after the Bill has been passed, there will be little to report on—hopefully very little indeed, as people will be complying with it. Indeed, the Bill will not be brought into force until secondary legislation is in place, and it is not expected that that will be the case within a short space of time after the Bill has passed.
Let me turn to the detail of the new clause, in particular subsection (2)(a). As a matter of course, we will be conducting a post-implementation review of the Act within five years of it being passed that will cover pensions and pay, as covered in the impact assessment. In any event, pensions and roster patterns are outside the scope of the Bill, and any effect on rostering would be indirect and challenging to distinguish from other factors.
Subsection (2)(b) goes beyond the implementation and monitoring of the Bill itself, and is therefore out of scope. We do not have plans to legislate further than is necessary, but that does not mean that we will not take action on areas beyond the matter of minimum pay, which we all know is not the only aspect of seafarer welfare that requires attention. As hon. Members have mentioned, as part of the nine-point plan, a new seafarers’ charter will be launched as a voluntary agreement, which aims to improve long-term employment and welfare conditions for seafarers. It covers a far wider range of employment protections than is currently covered by the Bill.
Gavin Newlands
The Minister confirms again that the seafarers’ charter, when it is published, will be voluntary. Does he think that P&O Ferries and other operators—perhaps Irish Ferries—will sign up to the charter?
While I am on my feet, I forgot to say in my earlier contribution that I also add my thanks to everyone on the Committee, given that this is my last contribution on the Committee. I thank the team, the Clerks, the Doorkeepers, Hansard and of course yourself, Ms Harris, and your glamorous assistant this afternoon, Mr Davies, who chaired us so ably this morning.
Mr Holden
I hope that people do sign up. The entire aim of the Bill is not to have people being fined but to drive best practice, so I hope that, in time, operators that have not operated in a positive way towards employees in the past, in a way that we would like to see, will sign up.
Karl Turner
The Minister must accept that, when we consider the shocking and utterly disgraceful behaviour of P&O Ferries, companies such as that—and Irish Ferries, which I respectfully submit is equally as bad—will not do anything if it is just a “hope”. We need to put things in statute to force these bad employers to behave in a way that is acceptable. That is the truth of it. Hoping is not enough; unlimited fines are necessary as well.
Mr Holden
As the hon. Member will know, we are indeed legislating, but we are looking at the seafarers’ charter. The Government are not opposed to looking at this again if the voluntary charter is not successful, but it steps in the right direction. We will see how it plays out. I do not want to see a race to the bottom; I want to see standards rising, and we think that the voluntary charter will be a step in that direction. We have had to legislate in order to deliver another element of what we are looking to do.
Karl Turner
The analogy for fining a company such as P&O Ferries 2,500 quid is a bit like slapping a parking ticket on the windscreen of a Bentley for parking in a disabled bay. They are just laughing at it. In reality, the fines need to be punitive. They need to be threatening and to make the company realise that if it behaves in this intolerable, disgraceful manner, it will be fined savagely and brought to justice. That is the only way we will get the results that the Government want—I agree that the Government intend to do the right thing, but we need the punitive tool to make it happen.
Mr Holden
I appreciate exactly what the hon. Gentleman is saying, but I think we have strayed a little from new clauses 5 and 7.
The scope of the Bill is limited to ensuring that seafarers are paid the equivalent of the UK national minimum wage and it is not concerned with broader relationships. Furthermore, there is no requirement for crews to be unionised, so it would be an unusual requirement to put so much focus on that, as the new clause proposes. That does not mean that the Government are not looking to work with the unions, as we have done throughout the process and will continue to, as we look at the regulations to come.
The requirement to publish a strategy for monitoring the establishment of corridors would also be out of the scope of the Bill. In any event, it would be inappropriate and potentially counterproductive to provide a running commentary on live negotiations with international partners, such as those with the French Republic, which I mentioned earlier.
On proposed subsection (2)(e), we do not consider that the proposals in the Bill interfere with rights and obligations under international law, including the United Nations convention on the law of the sea. We therefore we do not deem it necessary to state as such in the Bill, or to have an obligation to assess the interaction between international law and the Bill on the face of the legislation.
Measures taken under the Bill will not interfere with the right of innocent passage, so as to breach the obligations under UNCLOS. The Bill requirements will apply and be enforced only as a condition of entry to UK ports in which the UK has jurisdiction over visiting ships, and where the right of innocent passage does not apply. Vessels visiting a port are not in innocent passage and not merely passing through territorial sea, so associated restrictions on the exercise of jurisdiction as set out in UNCLOS do not apply.
The measures that may be taken under the Bill can be applied only to a narrow subset of services with a close connection to the UK: services on a regular scheduled service, determined by clear, objective criteria—for example, services for the carriage of persons or goods by ship between a place in the UK and a place outside the UK that will have entered the harbour on at least 120 occasions in the period of a year. Given the huge number of additional areas that the new clause would bring in scope, I cannot accept it.
New clause 7 would require an assessment of the impact of the Bill
“on the remuneration of seafarers”
and also whether there is any evidence that, as a result of the Bill,
“seafarers have been dismissed and re-engaged on lower wages at or closer to the National Minimum Wage”
within one year of the Bill being passed. This is simply not feasible. Again, one year after the Bill receives Royal Assent would be far too early to see the real impact. I have already made the point that we will naturally be looking at the legislation five years after implementation. Also, as I have said, there will already be a delay between Royal Assent and the Bill becoming fully operative.
In any event, it is not necessary to include that as a requirement on the face of the Bill. As a matter of course, we will conduct a post-implementation review. I hope I have provided colleagues with enough reassurance to withdraw new clause 7 with confidence.
Question put, That the clause be read a Second time.
David Linden
I beg to move, That the clause be read a Second time.
It is a great pleasure to serve under your chairmanship, Ms Harris. I am conscious that I am the only thing stopping people getting out of this room, but I want to reflect on the fact that the Minister said, “Let’s not look at commissioning reports.” I do not necessarily agree and I did not vote that way, and actually, new clause 9 is specifically about putting into statute how to deal with some of the directors. For the remainder of the debate, I will refer to the new clause as “the Hebblethwaite amendment”.
Throughout this Committee’s proceedings, we have spoken about the importance of teeth and of tightening things up. One reason why we have come to this point and why the legislation is necessary in the first place is the actions of company directors and bosses who have decided to act in such a way as to exploit the workers, as was the case at P&O. If we are going so far as to pass the Bill, which the SNP supports—although we would have liked to have seen more amendments to it—let us at least make sure that it has the teeth to deal with the some of these individuals, who are not exactly reputable.
Let us start with Peter Hebblethwaite, the CEO of P&O, who was paid £325,000 a year before bonuses. Let us remember that this is a man who admitted to a Select Committee of this House that he knew that the action he was undertaking as company director was illegal, but he proceeded anyway, and he had the gall to say that he would do it again.
I absolutely agree with the RMT’s general secretary, Mick Lynch, who said:
“Gangster capitalists should not be rewarded for their appalling employment practices; they should be punished with the full force of law.”
That is exactly what my new clause seeks to do: to make sure that we have in statute the ability to deal with these capitalist gangsters who seek to ride roughshod over seafarers, if hon. Members will pardon the pun.
Let us not forget that this man was responsible for the unlawful sacking of 786 seafarers by a pre-recorded message on Zoom in March last year. He is already out there promoting himself again, scot-free—I think he has had a promotion at DP World. The kind of person this legislation would manage to tackle, if they fell foul of it, is one who admitted breaking the law when questioned by members of a Select Committee, as I said, and who used handcuff-trained, balaclava-wearing security guards to remove dedicated, unionised seafarers, replacing them with non-unionised workers, many of whom are paid a fraction of the UK minimum wage. After experienced crew were fired, the UK coastguard repeatedly detained P&O Ferries’ ships for a lack of crew training, including fire safety and lifeboat drills. He was responsible for a non-unionised P&O Ferries crew from Malta working 17 weeks straight with no shore leave. Let us not forget that this is a gentleman whose company took millions of pounds from the British Government in subsidies during covid-19. I could go on about how utterly unfit Peter Hebblethwaite is, and how he has caused so much distress to many constituents of the hon. Member for Dover.
Karl Turner
Is it right that an obvious calculation that would have been made about sacking 786 British seafarers and replacing them with exploited, poorly paid staff was that nothing was going to be done in terms of person liability? It was almost encouraged. Indeed, I would go further to say that it was done on the basis that, first, nothing would happen personally, and secondly, this particular Tory Government would turn a blind eye. That is the truth of what happened, is it not?
David Linden
The hon. Member is spot on. The reality is that this gentleman factored in that he would appear before a Select Committee, that it would be uncomfortable and that he would probably have to get some crisis comms advice. I rather suspect that Peter Hebblethwaite is walking around waving the fact that he has been able to withstand all this pressure from Parliament as a feather in his cap. He will see it as some sort of virtue that he can sell to future employers. The hon. Member is absolutely spot on: the fact that there is no personal liability means that these kinds of directors will behave with impunity.
New clause 9 does not mandate Members to vote for a report. It mandates us, on a moral basis, to vote for action to ensure that a company director who was as egregious as Peter Hebblethwaite can never again get away with that. Members of this House have a responsibility to stand up for their constituents. On that basis, I have tabled the new clause.
Mrs Elphicke
I wish to speak about this new clause, because we are all of the view that Peter Hebblethwaite should not be allowed to be a director. I made a formal complaint to the Insolvency Service on directors disqualification for the whole of that board. The Insolvency Service has still not completed its civil proceedings, although it has said that it is not minded to take criminal proceedings. It is clearly unacceptable that company bosses are allowed to act in that way and that directors disqualification does not apply.
This is a specific Bill dealing with a specific set of circumstances. I would like the relevant Department to look at why the Company Directors Disqualification Act 1986 and the criminal obligations in the Insolvency Service did not apply to this specific case. I have made representations to the appropriate Ministers accordingly.
I completely agree with the sentiments expressed by the hon. Member for Kingston upon Hull East, except his view that the Government have not taken any action. Throughout the P&O situation, we have walked literally shoulder to shoulder in support of people.
Karl Turner
I think the hon. Lady misunderstood what I said; perhaps I was not clear enough. I did not say that the Government have not taken action. Of course they have—we have a Bill. That is a start. It is not strong enough by any stretch of the imagination, frankly, but it is a start, and I commend the Ministers who were responsible for putting it together on an incredibly speedy timescale. However, the fact is that the calculation was made that the Government would turn a blind eye. That is the suggestion that I put to the Committee, and I think it is right. That was the reality of it—that nothing would happen.
Mrs Elphicke
I thank the hon. Gentleman for that intervention. That is clearly rubbish, because the Government at the time, including the then Secretary of State, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), took immediate action—action that no one expected to be taken—as did the Minister at the time, my hon. Friend the Member for Witney. I was involved directly in that action along with the then Secretary of State, the then Prime Minister and a number of Government Ministers, including my hon. Friend the Member for Witney, in relation to this issue. That action is the reason why we have the nine-point plan and why we have the Bill.
Opposition Members will always say that whatever the Government do does not go far enough. However, I have to say, in representing the people in Dover who were specifically affected by P&O, that I am very proud of the action that we have taken across the Chamber and so far in this House. I want to see the Bill put on the statute book at pace.
David Linden
The hon. Lady is talking about the importance of taking action. Other than a pretty toe-curling Select Committee appearance and a couple of bad media interviews, the only action I have seen so far is that Peter Hebblethwaite has received a promotion. He is still able to act as a company director, so for the sake of the hon. Lady’s constituents, I ask her to reflect on the fact that until such a time as Peter Hebblethwaite is unable to act as a director and get away with such behaviour in future, that action will not be enough.
Mrs Elphicke
As I said, I do not think that Peter Hebblethwaite should be a director and I am taking steps to ask the Insolvency Service to remove him.
Mrs Elphicke
I will come back to the hon. Gentleman in a moment. What we have seen with P&O is why I think the right place for tackling this is through the Department for Business, Energy and Industrial Strategy, which I have been encouraging to look at this issue. P&O did not do this once or twice, but three times: it promoted someone to be chief executive who did what the bosses wanted, and then that person either got a payout and got moved on, or got a payout and got promoted. We have seen a pattern of behaviour where people at the senior level have been rewarded for doing what is in the owners’ interests, to the detriment of the company as a whole. We need to look at that, because that pattern of business behaviour is very clear on the face of it and it ought to have been clear to Companies House. We should look at that in relation to not just P&O, but other companies.
Karl Turner
I am sorry that the hon. Lady thinks what I said was “clearly rubbish”. The point that I was making—I will try to be calm—is that there was no deterrent. That should be the test. If she is satisfied that the Bill will deter all the bad employers from potentially following suit and making the same calculation—that things cannot be affected in a way that deters them from taking such terrible actions—that is fine, and she is content with the Bill. My point is that the Bill does not provide a deterrent, but the new clause proposed by the hon. Member for Glasgow East definitely does by making that director personally liable.
Mrs Elphicke
I think we have already explored how adding the odd report here or there will not be the game changer that is needed to ensure that acts like this do not happen again. That is why the Bill is part of an overall strategy and a nine-point plan, as the Government have set out.
New clause 9 would go considerably further than the obligations that already apply to non-compliance with the minimum wage regime. That regime includes criminal and civil penalties, so I do not think that the new clause would sit with the existing provisions on the statute book for civil and criminal liability in relation to the minimum wage regime. It is important that enforcement is effective and that it works. New provisions should fit in with existing legislation, and not conflict with or confuse it.
I fully share the sentiment of making those responsible for P&O—not just Peter Hebblethwaite but other directors on the board—personally criminally responsible, but unfortunately the new clause does not get us to that position. Personal liability is not just about wages; we need to ensure that there is appropriate liability and responsibility for the very serious issues that we have discussed with respect to safety at sea. Although I support the sentiment behind the new clause, I do not think that it would achieve the objectives that have been expressed.
Karl Turner
I had not intended to speak, but I am afraid that I have been motivated by the hon. Member for Dover to say a few words. I am confused. I am not trying to be awkward or to put her under any particular pressure, but I am truly confused by her suggestion that the new clause does not fit, as I think she said, with minimum wage legislation. Frankly, that is just nonsense. She will have to answer to her constituents who go on those ferries day in, day out—passengers, not crew.
The tragedy is that, because of what P&O Ferries did, the crew are exploited foreign workers. The passengers are probably worried, as I would be if I was travelling on one of those ferries, about seafarer fatigue. They are probably worried about the fact that people are doing 17 weeks with very few rest breaks. They are working seven days a week, for 12 and 13 hours a day, and might be charged for accommodation and grub. That is the problem that people will foresee. Respectfully, the hon. Member should think carefully about not supporting the new clause. It is no good saying that she respects the sentiment; she ought to agree with the new clause and vote with the Opposition.
Mrs Elphicke
I thank the hon. Gentleman for giving way, and I ask for a bit of latitude in responding. It is disappointing that Opposition Members are determined to get their headlines and try to make a point of difference. They are trying to say that we on the Government Benches are not working for the people and the seafarers when we are the people leading this legislation. I was clear that the new clause does not go so far as to work for safety. On rosters, asking for a report is not a serious attempt to deal with the issue. We know that a serious attempt will mean the rosters being dealt with outside this legislation. The Minister has set out issues in relation to—
Karl Turner
Thank you, Ms Harris, but I have to answer the hon. Lady. After the terrible incident in which P&O Ferries sacked 786 men and women British seafarers with the deliberate intent of replacing them with exploited people who are on £2 or £3 an hour, what came next was the MCA tying vessels up—arresting those P&O ferries—because they were not considered safe. I am sticking within the scope of the new clause, Ms Harris. I think there are one or two of us here who are lawyers; there are at least two barristers on the Conservative Benches and, although it has been a long time since I was in practice, I am certainly qualified as a lawyer. To those of us who are lawyers, the very idea that those directors should not be held responsible in law and there is going to be no personal liability is just—[Interruption.] I am sorry if the Minister—the yawning Minister—is incredibly bored. He must forgive me if I am keeping him awake. This is an important point. The idea that personal liability should not apply is frankly pathetic. [Interruption.] I am not trying to make a political point. [Interruption.]
The Chair
Order. This is not appropriate behaviour from either side. I call Karl Turner to finish up.
Karl Turner
I was accused of making a political point. I am not. I have to answer, Ms Harris; I cannot be accused of making a political point when I am not.
The reality is that the new clause would provide some deterrents. Currently, the Bill contains no real deterrent. I want to work with the Government.
Gavin Newlands
Does the hon. Gentleman not share my astonishment at some of the comments from the hon. Member for Dover and the right hon. Member for South Holland and The Deepings, who said they could not support new clauses and amendments because they did not go far enough—that ire should be directed at the Minister—yet here we have a new clause that confers personal liability and they cannot back that either?
Karl Turner
I agree entirely with the hon. Gentleman. This new clause would provide an actual deterrent to prevent other bad employers from copying what happened with P&O Ferries. I can see that I am testing the patience of the Chair, so I am going to conclude there. Thank you for your indulgence, Ms Harris.
Mr Holden
Just before we finish, I want to say that it is a pleasure to have served under your chairmanship this afternoon, Ms Harris. We are both virgins on the Bill Committee Front Benches in our respective ways, under the supreme guidance of Mr Davies, which has been superb.
The new clause would create criminal offences for directors of companies operating a service to which the Bill applies where the service is operated inconsistently with an equivalence declaration or the operator has failed to comply with a request for a declaration. While I understand and share the anger against some of the bosses who, as my hon. Friend the Member for Dover mentioned, carry out such underhand employment practices, introducing such offences to the Bill would not improve its effectiveness. There is already a robust compliance mechanism that will provide a severe disincentive against operators that pay less than the national minimum wage equivalent.
Lia Nici (Great Grimsby) (Con)
This is the Seafarers’ Wages Bill, and I think we all agree, across the House, that further action and other Bills are needed. However, this Bill will be a disincentive to companies that think they can act improperly and take on cheap foreign labour rather than looking after staff on a proper minimum wage or more. That is exactly what the Bill is meant to do.
Mr Holden
My hon. Friend makes a very sensible point. The Bill is a big step in the right direction in delivering for seafarers and countering some of the issues we have seen.
It will already be a criminal offence for operators to operate a service inconsistent with a declaration, and we do not think it is necessary for directors to be held personally liable for that offence. It would not be appropriate for directors to be guilty of an offence of failing to provide a declaration, as there is no obligation for them to do so. While the intention is that surcharges will be a sufficient disincentive against operators failing to pay at least the national minimum wage equivalent, it is open to operators not to provide an equivalence declaration, in which case surcharges will be imposed.
The existing compliance mechanism of surcharges for failure to provide a declaration and the criminal offences for operating inconsistently with a declaration will have considerable financial and reputational implications for operators. I do not think anybody here today can say that P&O Ferries has not experienced a reputational impact—not only that, but a legislative impact—from its behaviour over the last few years. Personal liability for directors is therefore not necessary.
I want to leave one thought in the minds of hon. Members on both sides of the Committee. The Insolvency Service is currently undertaking a civil investigation, which, among other things, will assess various individuals’ fitness to be directors.
Mr Holden
As the hon. Member knows all too well, he and I are very much on the same page and would like the Insolvency Service to report as soon as possible, but it is an independent organisation and we cannot comment on ongoing investigations. The entire basis of the new clause tabled by the hon. Member for Glasgow East, which Opposition Back Benchers have spoken about too—that they want something that could disqualify someone—is there in what is being looked at. It is maintained via the Insolvency Service. While I cannot comment on the individual case, I think it is clear that what everybody wants to achieve is already there. I understand why Members are trying to invent another offence, but it is not necessary, as what the hon. Member for Glasgow East seeks to achieve can already be done through current legislation.
David Linden
I am not sure that is the case, given that Peter Hebblethwaite can continue to act with impunity and had a promotion recently.
I will not seek to make this party political; I have been tempted to in the past, but I will not. I was interested in the point the hon. Member for Dover made in an exchange that was probably the hottest point of our proceedings today. I offer a hand of friendship; I will act as the Cilla Black of Parliament and bring us all together. If the hon. Lady says that she appreciates the sentiment behind new clause 9 but wants it to go further, I am happy to work with her.
On that basis, I will not press the new clause to a Division in Committee, but I ask the hon. Lady to join me for a cup of tea at some point to help me look at how to strengthen it. Then we can bring it back for a vote on the Floor of the House during remaining stages. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Bill, as amended, to be reported.