Seafarers’ Wages Bill [HL]

Lord Tunnicliffe Excerpts

Wednesday 26th October 2022 Lords Chamber

[Lord Tunnicliffe (Lab)]

My Lords, to make some general comments, we welcome the Bill. I think everybody has been shocked by P&O’s behaviour, but this goes a bit deeper than that. I had no idea how badly seamen are paid. It is disgraceful. This is clearly a worldwide problem, and there are problems with addressing it from a singular point of view.

I also object to the criticism of my noble friend by the noble Lord, Lord Forsyth, because this has been a normal Bill. We could not vote in Grand Committee for the usual conventional reasons. It was well debated—the noble Lord would know that if he had been present. Essentially, Amendment 2 is a judgment about degree, and we come to a different judgment than the Government. While we support the Bill in general, we have amendments where we think that a little finesse will make it more effective. A weekly service is the sort of thing that should be within the scope of the Bill. While we will not press Amendment 1, we will support the noble Lord if he wants to press his Amendment 2 to a Division.

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

My Lords, I am very grateful for all contributions on this first group. I appreciate the support from Members on my own side; it is always good for the Minister to know that there are a range of views and that people are thinking about the Bill and taking it seriously—it is a very serious Bill.

The noble Lord, Lord Tunnicliffe, mentioned the welfare of seafarers. He is absolutely right and there are mechanisms, which the UK is deeply embedded in and has been for a very long time, which work internationally, as many noble Lords will know, to try to improve the conditions and pay of seafarers. However, that is not under discussion today. As pointed out by the noble Lord, Lord Greenway, this is an important part of the nine-point plan that Ministers set out earlier in the year, but the Bill is narrow in scope and effect. That is for many reasons but a key one is that we have to be mindful of the extent to which we are legislating; we have to be mindful that we do not overreach, because that might have some very serious unintended consequences that we would later regret. That is why, throughout the drafting of the Bill, we have had at the front of our minds not only international law but our international obligations; that is critical. Although I accept that there are many things that noble Lords would very much like to do for seafarers—and that, probably, on the face of it, I would like to do too —the reality is that, as a Government, we have to be sensible and potentially a bit boring. We must stay in our lane and make sure that we do not overreach, because the consequences would be very significant.

There are two amendments in this group. The first brings back the old chestnut of “the harbour” versus “a harbour”. I am grateful to the noble Lord, Lord Berkeley, for enabling that discussion once more. I cannot go much further than I went in Committee; I just state that it is absolutely important that unless we say “the harbour”, we cannot define what a service is. A service is from one point—the point—to another point. It is of great regret that the word “a” crept into the letter, but noble Lords can imagine that that was the overarching ambition: from a point overseas to a point in the UK, but “the harbour” within a place overseas and a place in the UK. Because we have defined it that way, from “the harbour” to “the harbour”, we capture the high-frequency services that, let us recall, can be serviced by any vessel—you can put another vessel in when one is off being maintained or whatever—but it is always between two specified harbours.

The second part of that definition—the harbour to the harbour—that is very important is

“120 occasions in the year”.

That, essentially, defines a service that has close ties. The second point about this is that unless you define it as “the harbour” to “the harbour”, it would be incredibly difficult to enforce the Bill, because the Bill relies on one harbour authority being responsible for monitoring and enforcement. Individual harbours may be able to anticipate that a particular service will call in its harbour 120 times a year, perhaps because that service has been doing so for years, if not decades. That harbour authority may not be able to anticipate whether a particular operator has services to other ports, so how would the enforcement and monitoring work in those circumstances?

The noble Lord, Lord Berkeley, brought up an example about, I think, a former Transport Secretary and ships that could be brought in to operate services, but he reinforced the point I am trying to make: it is not about the ships or the specific seafarers on a particular service; it is the service itself that we must make sure falls within the Bill’s scope.

I am content that we have defined the scope well. I am a little disappointed that I have not given sufficient explanation such that the noble Baroness, Lady Randerson, is content, but I feel that we are there and have clarified exactly what would happen. In response to concerns raised about services suddenly deciding to go to another port so that they do not have to pay seafarers a fair wage, as I said in Committee, I do not think that would be commercially viable. I do not think operators would play switcheroo with UK ports because, frankly, their customers would not put up with it. I do not think that point works.

I hope the noble Lord will withdraw the amendment to change “the harbour” to “a harbour”. It would make the entire Bill not worth the paper it is written on, and it would not function in the way that I know the noble Lord wants it to function.

I turn now to Amendment 2, which seeks to decrease the threshold frequency from 120 times a year to 52. The figure of 120 was arrived at following very thorough and extensive consultation and bilateral discussions with industry and other stakeholders. We have looked incredibly carefully at the patterns of services, noted by the noble Baroness, Lady Randerson, and at maritime traffic data by type to reach the figure in the Bill. The scope of the Bill captures services calling 120 times a year on purpose. It is a very specific number that balances the need to maintain close ties with wanting to do the very best we can for seafarers.

The rationale is clear. It covers the vast majority of passenger ferries, including ro-pax, non-passenger ferries and ro-ro services calling at the UK. Critically, it focuses the Bill on short sea services, which justifies the connection to the UK and therefore the UK-equivalent level protection of pay. We do not want to bring into scope some of the high-frequency deep sea container services. That would not be our intention at all and, as my noble friend Lord Forsyth mentioned, would completely change the scope of the Bill and would go against the Government’s intention.

For the UK to impose pay requirements for seafarers on foreign-flagged ships that call at its ports only once week would risk being seen as an overreach by international partners. It would weaken the justification for the UK taking legislative action. As my noble friend Lord Forsyth said, we must tread with care. I appreciate that the noble Lord’s intention is to protect as many seafarers as possible, but the Government can justifiably legislate only for those with close ties to the UK. To seek to do more could risk making the Bill inoperable and could damage the UK’s reputation internationally.

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[Lord Hendy (Lab)]

My Lords, as a member of the Delegated Powers and Regulatory Reform Committee, I support all these amendments. The Government accepted the committee’s recommendation in relation to Clause 3 and introduced Amendment 3; they should also concede Amendments 6 to 9, and preferably Amendment 10.

The problem is that the Government have made harbours the enforcers of the Bill, in particular by way of imposing surcharges. That reveals the flawed structure of the legislation. The arguments are by now familiar so I will outline only three of them.

First, the national minimum wage equivalent for seafarers should not be enforced by harbours, some of which are wholly conflicted since they share ownership with the shipping lines they are to police. I do not understand how the noble Baroness could say in her letter to us of 21 October:

“The Government is confident that there are no conflicts of interest.”


Instead, the declaration of compliance should be received by, and the prime enforcement body should be, a state authority. The obvious candidate is the MCA.

Secondly, there should have been provision for seafarers or their unions to enforce the national minimum wage equivalent, not least by making the entitlement to it contractual.

Thirdly and lastly, enforcement by way of surcharge is, with respect, inappropriate. It is a penalty and the noble Baroness’s letter to us, of 21 October, says of surcharges that

“Rather than being a punitive measure, its purpose is to make it not worthwhile for an operator to underpay their seafarers.”


Of course that is so, but then there is no distinction of purpose between a fine and a surcharge. One suspects that the real reason that a surcharge is preferred to a fine is that it avoids the stigma of a criminal sanction, which is, if that is true, an unattractive justification given that we are all here seeking to prevent repetition of the disgraceful behaviour of companies such as P&O Ferries. Such companies should be stigmatised by criminal prosecution if they underpay their seafarers.

[Lord Tunnicliffe (Lab)]

I thank the Minister for Amendment 3. Moving on to Amendments 6, 7, 8, 9 and 10, I am more sympathetic with the Government than any of the previous speakers. These sorts of powers are necessary. Arguably, the way pressure is put on harbours to do the right thing is wrong, but it is the way the drafters of the Bill have chosen.

I wish the Government would get back to the tradition of doing what the DPRRC says, which way back, when I sat on those Benches, we did. However, none of those things will probably happen and, certainly, I do not feel it is an issue over which we would support dividing the House. I would, however, recommend that the Minister allay some of the fears that these clauses have provoked, by reading into the record the statement made to the DPRRC on 25 October, particularly, from the bottom of the page in the report:

“The policy intention is that this power would only be used in the following circumstances”


and all those circumstances, to the end of that document. In the best Pepper v Hart frame, the world would then have easy access to those limitations, much improving the likelihood of the Government sticking to those limitations. Of course, if she wants to amend the document more fully, I would not be averse to her bringing this back at Third Reading. However, I can tell from her demeanour there is not a prayer of that, so would she agree to putting those assurances into the record?

[Baroness Vere of Norbiton (Con)]

I will indeed take option A from the noble Lord, Lord Tunnicliffe. I accept that we do not want our powers to be overreaching. I believe there is a good justification for these powers, and I will happily read into the record the circumstances in which the Government believe it would be justified to use these powers.

I will quickly address the amendment from the noble Lord, Lord Berkeley. I do not believe he will press it to a vote because it would remove all of Clause 11 and then it would remove the guidance for the harbour authorities, so it would be incredibly messy.

Let us focus on the second element of the concerns from the DPRRC. We have very carefully reflected on its recommendations. 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. Without that power of direction given to the Secretary of State, there will be no means of correction if the harbour authorities do not exercise their powers under the Bill, or if they exercise their powers inappropriately. Given that noble Lords have raised concerns about potential conflicts of interest between harbour authorities’ commercial interests and statutory functions, these powers also provide a safeguard against this risk. I assure noble Lords that the power is not intended to have general effect to allow the Secretary of State simultaneously to direct all harbour authorities to exercise or not to exercise their powers under the Bill, or to exercise them in a particular way. Nor is it intended to modify the character of the Bill itself by means of direction.

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[Lord Hendy (Lab)]

My Lords, I support this amendment for the reasons put forward by the noble Baroness. In the Minister’s letter to us of 21 October, she said that sufficient notice will be given of a contravention that will result in refusal of access, so that a vessel will not start its voyage. If that is so—which many doubt—the same notice that the vessel will be detained for transgression will no doubt preclude it coming to port as well. If adequate notice is not given, detention is safer for the vessel, its cargo, its passengers and other vessels than if the defaulting vessel is refused access just outside the port in question. The arrest of ships for non-payment of debts that are payable to seafarers, the port or third parties is a common and international practice. I for one am at a loss to understand why the Government do not accept that practice here.

[Lord Tunnicliffe (Lab)]

My Lords, there is quite a good case for the noble Baroness’s amendment, but I accept that the Government have, I hope, expended an awful lot of effort working through the intricacies of how this will happen. I fear that passing the amendment at this point would unduly stop this extremely important Bill’s progress. I hope that the Government’s judgment is correct, and that they come back very rapidly with emergency legislation if it proves to be incorrect.

[Baroness Vere of Norbiton (Con)]

My Lords, the amendment in this group in the name of the noble Baroness, Lady Scott of Needham Market, relates to the refusal of access. The refusal of access is one way in which we establish the provision of national minimum wage declarations as a condition of access to ports. If this were replaced by a power of detention by the MCA, this would become a punitive measure and go beyond the voluntary mechanism envisaged by the Bill. Detention of vessels is a disproportionate and inappropriate mechanism in these circumstances. Detention of ships can also carry a significant cost to the port by blocking a berth, which is not the case if they are refused access.

The noble Baroness, Lady Randerson, has previously expressed concerns that refusal of access is unworkable as it might result in ships mid-passage being unable to dock, but this is not how the Bill will work in practice. By virtue of the high-frequency requirement, all services captured are almost certain to be on short routes, and access refusal would take place before a ship has set sail from the origin port. As set out under Clause 9, we will set out in detail in the regulations how the harbour authority is to communicate refusal of access, which will ensure that sufficient notice is given to prevent this possibility happening and to provide notice for users of the service to make alternative arrangements. We will of course be consulting closely with the ports on these draft regulations.

As an additional safeguard, the Secretary of State has a power to direct the harbour authority as to how or whether it discharges its power to refuse access, which will ensure that access is not denied where it would cause damage by disrupting key passenger services and supply chains critical for national resilience.

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Moved by

[Lord Tunnicliffe]

5: After Clause 9, insert the following new Clause—
“Implementation and monitoring
(1) Within 90 days 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.”Member’s explanatory statement
This amendment would mean that the Secretary of State must publish a report on the implementation and monitoring of this Act.

[Lord Tunnicliffe (Lab)]

My Lords, P&O’s behaviour shocked all sides of the House. Until that happened, I suspect—I cannot know this—that few of us understood just how badly seafarers are treated. It provoked the Government into introducing this Bill and I thank them for that, but it is only a first step. It also reminded us just how badly some private companies will behave if not restrained by sensitive law and regulation.

The Bill addresses pay, but only in a narrow area. As a former pilot shop steward, and subsequently an industrial relations manager, I know how critical these other issues are. This amendment is our attempt to address them.

Subsections (2)(a) and (2)(b) of our proposed new clause address rosters, pensions and wages and require the Government to determine whether further legislation is required. We expect that it will be.

Subsection (2)(c) requires the Government to set out how they intend to engage with trade unions in monitoring the implementation of the Act.

Proposed new subsection (2)(d) touches on the extremely important initiative of establishing international minimum wage corridors, so that seafarers are properly protected for the whole of their employment in these corridors. The Government have already started work on this issue and this amendment will strengthen their arm. It is important for the House to understand what these corridors will achieve. If carried out effectively, they will extend the effect of the Bill so that it has real bite at the two ends of the route—and, I hope, sensibly in between.

Proposed new subsection (2)(e) will require an important assessment of how the Act will interact with existing maritime laws and agreements.

This amendment will strengthen the Bill in a sensitive way. I beg to move.

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[Baroness Vere of Norbiton (Con)]

My Lords, this final group contains one amendment in the name of the noble Lord, Lord Tunnicliffe. I have listened very carefully to what the noble Lord had to say and to all noble Lords who participated in this debate.

In my response I will have bad news and then good news. First, I will address why the amendment as it stands is not appropriate. As my noble friend Lord Balfe pointed out, I am afraid that after 90 days, to coin a phrase, nothing will have changed. There will not be regulations in place, the guidance will not be in place and there will be little, if anything, actually to report on. Therefore, the fundamental premise of having a report in 90 days will, unfortunately, not achieve what the noble Lord is looking for.

Looking at the detail of the amendment, proposed new subsection (2)(a) goes back to the point that my noble friend Lord Balfe made. It is true that we pass laws but we do not forget about them; there is always the process of the post-implementation review, but we would have to wait five years for that. I accept that that is a long way away and possibly not ideal, but it would cover pensions and pay. I will retain the position that to cover rostering would be a challenge because there are many different impacts on rostering. It may be that we can decouple them but I would not want to make that commitment now.

Proposed new subsection (2)(b) goes beyond the implementation and monitoring of the Bill. I understand that noble Lords wish to probe the UK Government’s plans for legislation, but I cannot say that we currently have plans to legislate further than is necessary. I have already noted that we must tread with caution, but we are already taking action on the areas beyond the matter of minimum pay, which, as I think noble Lords will all agree—indeed, as I agree—is not the only aspect of seafarer welfare that requires attention.

Noble Lords, including the noble Lord, Lord Hendy, mentioned the seafarers’ charter; I will get an update for him on where we are with it. In government terms, if the latest version was published in August, that is not as bad as I feared; I thought the noble Lord might have said April. But I will provide a written update afterwards on where we are and what the next steps are, because that is incredibly important.

Turning to proposed new subsection (2)(c), we always engage with the unions and recognise the importance of doing so. We have discussed the Bill with the unions. I do not feel that a written strategy of union engagement would be helpful; it would not be flexible enough and may miss things or include things that are no longer appropriate, and it would mean that we would be too constrained. I am absolutely sure that noble Lords would be the first people to write to me if they felt that unions were somehow being cut out of discussions.

Proposed new subsection 2(d) refers to

“a strategy for monitoring the implementation of”

bilateral wage corridors. Again, I appreciate the noble Lord’s interest in this important area and we are working hard to seek agreements. However, publishing a strategy for the implementation of a bilateral wage corridor may in itself be counterproductive, as many noble Lords discussed in Committee. These corridors will be memorandums of understanding and backed up by domestic legislation in each country, so their implementation will be different in different countries. Proposed new subsection (2)(d) would be a step too far in the current circumstances.

On proposed new subsection (2)(e), we do not consider that the Bill’s proposals interfere with rights and obligations under international law, including the United Nations Convention on the Law of the Sea, or UNCLOS. We therefore would not deem it necessary to state as much in the Bill.

In potentially better news, although I cannot commit to legislating for a report, I can reassure noble Lords that we are currently looking at governance structures to deliver Maritime 2050. Noble Lords will know about that very important document; it sets out the Government’s vision and ambitions for the future of the British maritime sector. This governance structure will include the delivery of the nine-point plan. Furthermore, the Government are planning annual joint industry and government progress reports—it is almost as though my noble friend Lord Balfe read my notes beforehand. Every year we will have an annual joint report between the industry and government. It will include progress on the nine-point plan, implementation of the Bill, the seafarers’ charter and an update on bilateral wage corridor negotiations. I feel that is pretty much what noble Lords are looking for. On the basis of this reassurance, I hope the noble Lord feels content to withdraw his amendment.

[Lord Tunnicliffe (Lab)]

I almost feel that the noble Baroness totally agrees with me but not quite enough. The amendment is meant to be helpful—it is helpful. I note that she more or less said that virtually everything in the amendment was right. I just want this in the Bill, so I feel that I have to divide the House on this point.