P&O Ferries Redundancies

Andy McDonald Excerpts

Tuesday 28th March 2023 Westminster Hall

[Andy McDonald (Middlesbrough) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests. I thank the Minister and my hon. Friend the Member for Wansbeck (Ian Lavery) for his forensic speech, and for granting me permission to say a few words about the appalling redundancies of those 800 seafarers, and the lessons that have not been learned from the experience.

My hon. Friend outlined the outrage we all felt when Peter Hebblethwaite, the CEO, made an incredibly shocking admission in Parliament that he knowingly decided to break the law. I was on the Joint Committee when he told us:

“There is absolutely no doubt that we were required to consult with the unions. We chose not to do so.”

They made a calculated decision to break the law because they reckoned, rightly, that the unions would not accept an offer that would slash workers’ wages. They considered it more expedient to absent themselves from their legal obligations and price in the cost of law-breaking, and engage agency staff on pay as low as £1.80 an hour. They did that safe in the knowledge that any compensation that they would have to hand out to former unionised workers would be offset by the benefits of paying poverty wages to their replacements. They belong in the pages of a Dickens novel, not in 21st-century Britain. The fact that Mr Hebblethwaite remains in post at P&O is staggering. He should be disqualified from being a company director.

[Margaret Greenwood (Wirral West) (Lab)]

Does my hon. Friend share my concern that agency crews are working unsafe roster patterns, being at sea for up to 17 weeks? That has implications for everybody who travels on those ferries.

[Andy McDonald]

My hon. Friend is absolutely right. It is utterly staggering that those are the terms and conditions that these major companies are prepared to inflict on workers. It does not matter whether they are from Britain, Poland or wherever in the world. That they would treat human beings in that way is beyond barbaric. Sadly, the Government have simply not learned the lessons from that scandal. The action taken has been insufficient. The Secretary of State passed the buck to the Insolvency Service, which, after months of prevarication, said it would take no further action.

In lieu of that, Ministers could have imposed an unlimited fine on the company. The Opposition made it clear that we would have supported any necessary changes to legislation, but the Tories let P&O off the hook, I am afraid. Thanks to that inaction, we are witnessing a race to the bottom, which is likely spelling the end of any residual UK maritime workforce. All the while, P&O’s parent company, DP World, announced earlier this month that it had received record profits and a £3 billion final dividend for 2022. It also gets financial help from the Government for the berth at London Gateway.

I fear it is not just companies in the maritime industry that will follow suit; there will be others. Businesses across the economy will know that they can blithely commit such crimes of corporate thuggery, and decimate workers’ rights and protections in the process. I am going to finish, because I want to give the Minister the opportunity to respond. The events of the P&O Ferries scandal serve to underscore how much we need reform of employment rights and protections in this country.

[The Parliamentary Under-Secretary of State for Business and Trade (Kevin Hollinrake)]

It is a pleasure to speak with you in the Chair, Sir Gary. I thank the hon. Member for Wansbeck (Ian Lavery) for bringing forward this important debate.

G. K. Chesterton said:

“Too much capitalism does not mean too many capitalists but too few capitalists”.

I absolutely agree with that. I think there is agreement across the House that the vast majority of employers are decent people who treat their employees properly. However, some of the egregious behaviour we have seen in this case, and in others as well, happens when there is too much power in the hands of a few very large operators that dominate certain sectors. The title of this debate is absolutely right, in that there are lessons we can learn from the case of P&O.

The hon. Member for Wansbeck made lots of points. He said to me before that he did not expect me to respond to them all today, and I probably cannot, but I will write to him about the ones I do not pick up on. Some are dealt with by other Departments such as DFT, but I am keen to facilitate responses on all his points where I can. We are in total agreement here: the behaviour of P&O and its chief executive was disgraceful and gratuitous, running roughshod over UK legislation, as I saw in the testimony referred to by the hon. Member for Middlesbrough (Andy McDonald). That is absolutely appalling, and we must deal with it. Yes, we need to learn the lessons, and we have learned some already. We are determined to look at this issue carefully and to go further where we need to. I think the hon. Member for Wansbeck knows that we have taken some action already, but I fully understand that he might want us to go further.

So much attention has been drawn to this appalling behaviour because it is very unusual. I was an employer for 30 years, and most employers would never have considered not carrying out the requirements around consulting the workforce. That is because it was the right thing to do and because we wanted to have a good reputation as an employer with our existing staff and any staff who would join us in future. There is something fundamentally wrong when an employer can set aside the clear requirements to consult the workforce in these instances.

It is fair to say that the Government were very clear in their condemnation early on. The Secretary of State wrote to P&O to ask it to reverse its decision and asked the Insolvency Service to investigate whether the law was complied with. That investigation has not yet concluded. The criminal side of the investigation has reported back. A senior prosecution barrister looked at the matter and decided there were not sufficient grounds to take forward a criminal prosecution. The civil investigation is still live, and it is important we give it the opportunity to run its course.

We all believe in the principle of due process in these cases. Certainly, there is still a chance, as the hon. Member for Middlesbrough noted, of an up to 15-year ban of a director if there are sufficient grounds, so we should let the Insolvency Service conduct its work. Like others, I urge the service to do that work as quickly as possible so that it can come to a resolution and more lessons will hopefully be learned. Indeed, if lessons are learned, I am keen to take further action where necessary to clamp down on such behaviour.

[Andy McDonald]

Does the Minister accept that we were told that action would be taken urgently and it was not? In that vacuum, there is no reason why DFDS, Stena and other ferry services could not do the exact same thing and more seafarers could lose their jobs.

[Kevin Hollinrake]

The hon. Gentleman raises an important point. I do not accept that no action has been taken, and we are consulting on some things now to try and beef up the requirements in terms of consultation. We have already done some things.

The hon. Member for Wansbeck referred to the Seafarers’ Wages Act and the requirement to pay a minimum wage in UK waters. He is right to say that the seafarers’ charter is a voluntary code for now, and we want to see how that operates. I fully respect his perspective that this should be mandatory across the piece, but when there is a proportionate approach—we do not feel at this point that it is. Nevertheless, we have legislated in that area. That legislation has received Royal Assent and is now law, but the hon. Member for Wansbeck is right that some secondary legislation is required for it to be fully and effectively implemented.

On the Thames freeport, let me clear: we have not given any money to DP World, but we have given money to Thurrock Council. However, some of the land needed to operate a Thames freeport includes land owned by DP World. It would be cutting off noses to spite faces if we said, “You can’t use that land, because of its ownership,” and we do not believe in compulsory purchase, except in certain circumstances. I think that would be the wrong—

[Andy McDonald]

You’ve just done that on Teesside!

[Kevin Hollinrake]

Well, that is a slightly different case.

It was interesting that none of the contributions suggested that we would ban fire and refire. Interestingly, the deputy leader of the Labour party, the right hon. Member for Ashton-under-Lyne (Angela Rayner), said Ministers would not ban the behaviour, judging that it is “acceptable in some circumstances”. So I think we are probably all on the same page in terms of making sure the bar is high on the requirements for anybody using these kinds of tactics and making sure that people cannot just run roughshod over them.

New guidelines from ACAS in 2021 were clear that this kind of action should be taken only as a last resort. In terms of a statutory code of practice, there is a 12-week consultation from January 2023. The principle behind that is that there is a 25% compensation uplift in employment tribunals if consultation requirements are not adhered to. We think that sets a sensible balance between the two. Having said that, I am keen to go further, where we can, and to look at the different provisions we can put in place to make sure that the requirements on employers work in practice. It is clear that has not been the case in this case, which is why we have gone further.

To conclude, I thank the hon. Member for Wansbeck again. He knows I am as incensed as he is by the actions of this employer because they bring into disrepute the good name of many other employers, which cannot be right.

[Andy McDonald]

Just briefly, on fire and rehire, we have to be clear about what we are talking about here. This was not firing and rehiring the same workers; this was firing workers and replacing them with cheaper workers. That is the point that concerns us. If companies get into financial difficulties, there has to be a proper mechanism for protecting people if they have to have lower terms and conditions. That is the point we are making.

[Kevin Hollinrake]

We are totally on the same page. The fire element is the worry here. Setting aside the consultation requirements, hon. Members will remember the case of British Airways, which threatened fire and rehire during the pandemic. It did not go ahead with that tactic, as P&O did, but consulted the workforce and found a way through. That shows why the consultation period is so important. Making sure that the provisions we have work in practice is key.

As I say, we already have the Seafarers’ Wages Act. We will keep the issue under review. We are keen to see the outcome of the Insolvency Service investigation and, as far as I am concerned, where action can be taken, it will be taken. We should bear it in mind that we want to act in a proportionate way. Most employers do the right thing. I have never heard of a case like this one before. Most employers do adhere to consultation requirements. We should celebrate the good employers we have in this country, as well as clamping down on the bad ones, and I am determined that we do so.

Question put and agreed to.