Seafarers' Wages Bill [ Lords ] (Second sitting)

(Limited Text - Ministerial Extracts only)

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[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

[Mr Holden]

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

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

[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.

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[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.

Division 3

Ayes: 6

Noes: 10

Clause 9, as amended, ordered to stand part of the Bill.

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Division 4

Ayes: 7

Noes: 10

Clause 12 ordered to stand part of the Bill.

--- Later in debate ---

[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.

--- Later in debate ---

I will explain what I want to ensure even if we cannot get the changes that we want in the Bill in relation to 52 days instead of 120 days—that provision is taking out a whole lot of seafarers who we were hoping would be covered by the Bill. To be fair, 52 days was in the initial iteration of the Bill, but it was subsequently taken out. The very least that we can ask for is to have some monitoring of the effectiveness of the measures that the Minister assures us will address the issues that we are all concerned about.

[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.

Division 5

Ayes: 7

Noes: 10

New Clause 8

--- Later in debate ---

Division 6

Ayes: 7

Noes: 10

--- Later in debate ---

[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.

[Mike Kane]

When will the Insolvency Service report? We keep asking, but we do not get an answer.

[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.