UK Maritime Industry

Alistair Carmichael Excerpts

Thursday 12th January 2017 Westminster Hall

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I beg to move,

That this House has considered the future of the UK maritime industry.

I am grateful to the Backbench Business Committee for allowing us the opportunity to debate this most important industry today, and I am grateful to see so many colleagues from across the House present. We have probably gone beyond the point in the year where we should be wishing each other a happy new year, but given that today we are on the old new year, I can wish you, Mr Walker, and indeed those residents in parts of my constituency such as Foula, where they still keep the old new year, a happy old new year. I say that because the people of Foula—like, indeed, people in island communities throughout the country—can maintain their lifestyle because of the dedication, commitment and professionalism of seafarers. Without seafarers, we who live in island communities simply could not exist in the way we do. Of course, that is true of the nation as a whole because the United Kingdom is an island nation.

The UK maritime industry faces a number of fairly significant challenges. Those are not new. We have been on a track that has taken us mostly down—occasionally up—for some decades. I will start, however, with a rare piece of good news. Hon. Members will have heard me speak before about the situation pertaining to the arrangements involving Seatruck, which provides the freight ferry to the Northern Isles that serves Orkney and Shetland. It was announced yesterday that Serco, which holds the franchise for the service, and Seatruck, which provides the ferries, have been able to do a deal that guarantees that the ratings on the ferries will be paid the minimum wage at the very least. It remains to be seen whether the collective bargaining agreement between the National Union of Rail, Maritime and Transport Workers and NorthLink for the remainder of that franchised public service will be extended to those ferry services, but the guarantee is at least something to welcome.

[Chris Stephens (Glasgow South West) (SNP)]

I congratulate the right hon. Gentleman on securing the debate. Does he agree that it would be helpful if the shipping Minister were to announce today that the national minimum wage would be paid to all seafarers across the United Kingdom?

[Mr Carmichael]

It will not surprise the hon. Gentleman to hear that I will have a fair bit to say about national minimum wage and national living wage enforcement, because that is something that has come very much to the fore this year. It came to my attention in particular through the detention of the Malaviya Seven in Aberdeen and its sister ship, the Malaviya Twenty, in Great Yarmouth. Those ships have been detained by the International Transport Workers Federation as a result of non-payment of the crew’s wages. The ownership of the ships is being contested—the case is winding its way through the courts. I am afraid I have to say that the willingness of the shipowners in those cases to leave the seafarers they employ effectively destitute does them no credit. Sadly, it does not reflect particularly well on the wider industry, either.

Where we have seen some progress—the Seatruck case—is however perhaps the low-hanging fruit. As I see it, that is just the tip of the iceberg. As we speak here in London, there are non-domiciled seafarers, principally Filipinos, working out of Scottish ports, being paid significantly less than the national minimum wage but still having retained by their employment agents—also domiciled outside the EU and also principally Filipinos, I am told—some 32% of their wages in respect of UK tax and national insurance. In some ways, that illustrates the absurdity and inadequacy of the current enforcement arrangements. If these men are not here working as part of the UK, why are they paying UK taxes? If they are here working as part of the UK, why are they not given the protection offered to other UK employees and workers?

The more I find out, the more it seems that the situation facing many seafarers working on ships that in some cases have not left UK waters effectively for decades is just as bad as the situation that led the previous Labour Government to set up the gangmasters licensing system. It may be that at some point we will have to take a similar approach on the position of seafarers.

[The Minister of State, Department for Transport (Mr John Hayes)]

I intervene because it is so often the case that there is not sufficient time at the end to answer all the points made in the debate. The right hon. Gentleman is striking a chord with me, with which I have considerable sympathy, as he will know from our work together in the past. We will do more on this—he can be assured of that—and I hope to say a little more about that at the end.

[Mr Carmichael]

I am immensely grateful to the Minister for that intervention. I know he has a personal and political commitment in this regard and I am delighted that he was able to offer us that assurance again.

This is not just about the treatment of Filipino seafarers; there is also an effect on UK seafarers. First, because of such employment practices, UK seafarers are excluded from employment opportunities that would otherwise be available to them. That also drives down wages for those who are employed. I am told that Stena Line, the largest UK employer of seafarers, cut the hourly rate of pay for ratings employed seasonally—from June to September—from £8.31 to £7.20, which is the minimum wage rate. That is a graphic illustration of the direct impact on UK seafarers.

The situation has a context. For the Government’s purposes, that context is the maritime growth strategy that they commissioned in 2014. That was a good, comprehensive piece of work, and it was welcomed. If anything, it was somewhat overdue, coming the best part of two decades after the previous piece of work had been done. It made a number of recommendations. The most important was that leadership was required from both Government and the industry, including though a more commercial and responsive UK maritime administration within Government and an industry-led promotional body, with more proactive action to replenish and develop the skills needed to maintain our position as a world-leading maritime sector and effective marketing by the industry and Government of what the UK maritime sector has to offer both domestically and internationally to be strengthened.

I could probably do 90 minutes on the maritime growth strategy alone, but in view of the number of others who wish to take part in the debate, I will concentrate on the one aspect that, to my mind, is probably the most significant: training of seafarers. The Minister will know that since the turn of the century, we have had the SMarT—support for maritime training—scheme, which currently holds something in the region of £15 million. The British Chamber of Shipping tells me that it is looking for a doubling of that. I hope the Minister will look at that, because in terms of Government expenditure that is of course a significant ask, but it could bring significant rewards. I hope, though, that when the Minister engages with the industry in respect of that ask, he will not be shy about attaching some strings to any increase in funding.

I am told that a year’s guaranteed employment is on offer for those who are trained as officers under the scheme. That of course would tackle one of the major difficulties that I hear about consistently from constituents who work in the industry: that officers in particular are trained under SMarT scheme funding, but there is no employment for them once they qualify. There has to be a little more detail. We have to do more than simply extend the cliff edge out by one year, so that a situation in which we currently have training followed by no employment does not then become training followed by one year’s employment followed by no employment.

[Karl Turner (Kingston upon Hull East) (Lab)]

I think the right hon. Gentleman is right about the officers being trained under the scheme—15, I think—but only one rating is required to be trained under the deal, and that does not happen either.

[Mr Carmichael]

Indeed, and the hon. Gentleman anticipates my next point. Currently within SMarT training, a minuscule proportion of the fund is allocated to the training of ratings, and even that portion is not being taken up by the industry. When the Minister comes to look at the question of SMarT funding and the training scheme that comes under it, it should not be all about officers; it also needs to be about the training of ratings as well, otherwise we are again only seizing the low-hanging fruit.

My constituents have significant concerns not only about the lack of availability of jobs when the training is concluded, but very often about the quality of the training provided for them. I have been told of one constituent who in five months as a cadet officer was able to speak English on his ship only once. Given that we are talking about predominantly young men who are away from home for the first time, the significance of that as a living experience should not be overlooked.

The Minister and the Government really need to look at the roles of the Merchant Navy Training Board and the Maritime and Coastguard Agency and the lack of joined-up administration between them. We might then see people getting quality training that gets the taxpayer value for the money that they are putting into it. I do not believe there is any shortage of people looking for a career at sea, but there are obvious and significant obstacles being put in their way. The head of UK shipping for Maersk said that it had taken on 34 cadets selected from 936 applications, which illustrates the demand out there for careers in this vital sector.

I want to remind the House what the industry brings to the United Kingdom. According to PricewaterhouseCoopers, the maritime services sector directly contributes £4.4 billion and 10,000 jobs to the UK economy. Shipping in general produces £11 billion and 113,000 jobs. The Baltic and International Maritime Council’s latest five-yearly report to the International Maritime Organisation states that the worldwide shortage of officers is 16,500, which could rise to 92,000 by 2020. That is the scale of the opportunity ahead of us, as a highly respected maritime nation, if we take the right decisions now for the future of our industry.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Carmichael]

We have had a truly excellent debate. Although we have had contributions from 15 right hon. and hon. Members, including the Minister, we have managed to cover the full range of areas, instead of each of us standing up and piece by piece repeating what has already been said. I hope that we will see the debate as not just an event in itself, but the start of a process, and that the Minister will make good on his undertakings this afternoon, both on the prioritisation of policy work and on his continuing engagement with parliamentarians. It is clear that there is a common and shared interest in all parts of the House. For me, it is a matter of some satisfaction and relief that the debate has been as well attended and productive as it has been.

I confess that this is the first time I have sponsored a Back-Bench business debate. When I was last a Back Bencher, there was no such thing as the Backbench Business Committee. I got a bit of a telling-off from the Committee because apparently I did not fill in the form very well. Those things are important; I took its criticisms to heart. When the opportunity arises for a reprise of this debate, I will be able to pray in aid our excellent proceedings this afternoon to ensure that we can keep the issue on the Floor of the House and at the front of public attention, because that is where it belongs.

[Mr Charles Walker (in the Chair)]

I thank all colleagues for their co-operation on time.

Question put and agreed to.

Resolved,

That this House has considered the future of the UK maritime industry.