Seafarers’ Wages Bill [HL]

Baroness Randerson Excerpts

Wednesday 12th October 2022 Grand Committee

[Lord Hendy (Lab)]

My Lords, I will speak to Amendment 8, which is simply an elaboration of the points that my noble friend Lord Berkeley has already made. The proposal here is to delete “the harbour” and insert “a harbour”. What lies behind that is catching those vessels that might do what I understand is referred to as harbour-hopping, where, in order to decrease the frequency with which they are recorded in any particular port, they go to a nearby port every so often to reduce the number.

My second point, which my noble friend Lord Berkeley and I have addressed, and my noble friend Lord Tunnicliffe has a slight variant on, is whether 120 occasions a year is far too high. It will exclude a lot of vessels that do weekly ferrying, which we would want to catch. If I may speak for my noble friend Lord Berkeley as well as myself, the reason we think it should be 50 is that, quite often, a ship may be serviced for a couple of weeks a year and it may not therefore achieve the full 52 occasions, even if it is running a weekly service.

[Baroness Randerson (LD)]

My Lords, I want to clarify what the debate has thrown up so far. I fear that the Government are guilty of mission creep on this, which may have occurred with the very best of intentions, but there is certainly confusion as a result. As outlined by the noble Lord, Lord Berkeley, a move from 120 calls to 52 would inadvertently bring in a much broader range of shipping.

The noble Lord, Lord Hendy, just touched on another issue that needs clarity, and I have three specific questions that it is important that the Minister answers clearly. If she cannot do that at this moment, we would all appreciate correspondence on this. First, on the move from “ships” to “services”, can we have absolute clarity on what a service is? How would it be covered if, for example, there is a refitting such as that just referred to by the noble Lord, Lord Hendy? I anticipate all sorts of ways in which companies will seek to avoid inclusion through the way they configure services, so we need clarity on the definition of “services”.

Secondly, in summing up the first group of amendments, the Minister again used the phrase

“close ties to the UK”.

This is at the core of the whole thing. Can we have a definition that will stand up in a court of law of exactly what the Government mean by that?

Thirdly, I am sure we would all be grateful if the Minister could address the concerns of the DPRRC, to which my noble friend Lady Scott referred.

[Lord Fairfax of Cameron (Con)]

My Lords, I apologise; I have only just arrived, because I was detained elsewhere. I want to pick up on the point of the noble Lord, Lord Berkeley, about ferries. Ferries have been referred to, so maybe the Minister can clarify this later. I need to read the Bill again, line by line, but nowhere does it refer to “ferries”. It refers to “ships”. In the current energy crisis, for example, you may have a service of tankers of diesel fuel coming in with the required regularity. They might be caught by the Bill, because of the frequency with which they call on the UK as part of their service, but they are certainly not ferries. The Minister will confirm this later, but I do not believe we should use the language of “ferries”, when we are in fact talking about ships.

[Baroness Vere of Norbiton (Con)]

My Lords, I am again grateful to noble Lords for sharing their thoughts on this group of amendments. The thrust of the amendments in this group is very much around probing the scope of the Bill in terms of the services and ships to which it applies. As the noble Lord, Lord Tunnicliffe, noted, I will write. I do not think he was implying that my oral replies are not carefully thought through—maybe he was—but the letter will be perfect. Noble Lords should await further information in the letter, but I will try to cover as many points as I can.

I look at this borderline, grey-area conversation that noble Lords are having, and at the back of my mind I keep thinking, “What sort of an operator are you if you will go to a different port in order to drop your frequency down to be just under or over any particular target so that you don’t have to pay your seafarers the national minimum wage equivalent in UK waters?”

[Baroness Randerson (LD)]

P&O?

[Baroness Vere of Norbiton (Con)]

Well, because of that we will come on to why it is so important that the Bill refers to services rather than ships; otherwise, quite frankly, you could do that, and all sorts of very interesting things. I will try to go through some of the amendments and think carefully about how we make sure that we reassure operators and trade associations about what a service is. Indeed, there is a question about what a harbour is. The good thing is that we have a definition of a harbour, in the Harbours Act 1964 and the Harbours Act (Northern Ireland) 1970. That is what a harbour is, so I will put that one to bed.

--- Later in debate ---

[Baroness Vere of Norbiton (Con)]

Of course, the noble Lord has much more experience aboard such vessels than me, and I will take his word about some of the conditions on ships. Indeed, we heard during Covid how what happened on ships was very distressing for some people and extremely disappointing. I take all of that on board but I go back to: I cannot fix the entire world today but what I can fix is what is before the Committee in terms of the scope of this Bill.

The noble Lord, Lord Berkeley, mentioned specific types of services, such as coasters—which apparently take English clay around the coast, et cetera—and cruise ships. This is why it is so important to do this based on the service and its frequency rather than what it is actually providing. Coasters might be caught but if they are doing only domestic work they will be caught anyway because they are in UK waters and they are caught if it is port to port within the UK, but if they are doing a run frequently—say three times a week across to France—they will be caught, and I do not see why they should not be. I have no problem with that. Let us catch them. The people working on such vessels most likely have close ties to the UK and those vessels clearly have close ties to the UK because they dock here so frequently, so it does not matter where the ship is flagged or where the employment contract is. It is the fact that it spends a lot of its time in UK waters and enters UK ports on a very frequent basis. This frequency is important.

I note that two noble Lords have tabled amendments to go down to 52 occasions from 120. We looked at this very carefully during the consultation. My current view—and of course we are going to go away and consider this—is that 52 would catch too many vessels that we did not intend to catch and would be overreach in terms of the current settlement with the international shipping community. Again, we might be entering the sort of territory where the unintended consequences would be quite significant. I go back to the fact that this is a narrow Bill, it has a narrow scope, it does a very specific thing, and I would like it to do that specific thing on services which dock here 120 times a year.

Amendments 7 and 8 refer to this issue of “a harbour”, “the harbour” or “harbours”. We have established what “a harbour” is—so that is done—and we are very clear that the service is to a particular harbour. It is not to “a harbour” within the UK because Calais-Dover is not the same as a service running from Calais to any other harbour. The route is specified. It is the same route, not using the same ships, high frequency to a specific harbour. We think that is quite clear.

The noble Baroness, Lady Randerson, asked for a definition of “close ties”. I do not think I will ever be able to get to that but we have been able to define what a “service” is. Those services have close ties. It is descriptive language to define what these services are, but it is merely that. It is not something that will be legally defined and taken forward.

[Baroness Randerson (LD)]

Do I understand, then, that the Government are unable or unwilling to define “close ties”?

[Baroness Vere of Norbiton (Con)]

The Government are very willing to define what these services are and, by implication, those have close ties to the UK. I can probably come up with lots of other clever descriptors to define these sorts of services. A large container ship stopping at the UK once a month does not have close ties to the UK; it is an international container ship, shipping around wheat or whatever it might be shipping. We can think of some other language, but once we have nailed what the service is, where it goes, how frequently it goes and which ships it utilises, then we have defined it. That is it, we are done. That is the definition that works legally because it has hard boundaries and can be fairly well defined, I think.

I absolutely appreciate that Amendment 27 is a probing amendment. We intend to provide guidance to harbour authorities, and that guidance will be consulted on. We can define what the service is but we need to help harbour authorities to fully understand those definitions. We will consult with the industry to make sure that there is absolute clarity. I would not say that the guidance should be put on a statutory footing; that is not entirely necessary in this particular case.

I turn finally to Amendment 37. I have of course seen the DPRRC report. It was published only a few days ago so I beg your Lordships’ leave just to say that, at this stage, we are considering what is in it. We are taking it very seriously; I reassure the noble Lord, Lord Tunnicliffe, that we take all DPRRC reports very seriously. We will publish our response to it before Report so noble Lords will have the opportunity to peruse that. I have no doubt that we will be able to have further conversations about that.

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[Lord Berkeley (Lab)]

My Lords, I speak briefly to oppose Clauses 4 and 9 standing part of the Bill. Again, this goes back to what I spoke about earlier in terms of the legality of this legislation. It comes from the International Chamber of Shipping, which says:

“The vessel declaration requirements envisaged in the Bill … contravene the international frameworks and principles governing seafarers’ remuneration, which confer jurisdiction to the flag State. Notwithstanding the fact that NMWe”—


national minimum wage—

“payments and declarations would be limited to work done while a ship is in UK waters / ports (to address ‘extraterritorial reach’ concerns), this would still amount to an excessive claim to prescriptive jurisdiction, contrary to the fundamental principle of flag State jurisdiction, i.e., that a vessel’s flag State has overall responsibility for the employment conditions aboard a vessel. UNCLOS Article 94 (Duties of the flag State), specifies that the flag State shall ‘exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag’. It would further be contrary to the universal norm that port States will not regulate the ‘internal affairs’ or ‘internal economy’ of visiting foreign vessels (a principle that includes employment conditions).”

This may seem a long way away from ships going between the UK and close waters, but it indicates that what vessels from further afield—which may or may not get tied up in this—will do may be something that the UK finds unpalatable. In other words, if they start doing this to show up the UK as not complying with the UNCLOS requirements, it could be difficult. Again, I would be grateful if the Minister could write to me on this; indeed, we may need a meeting with our legal experts to see how important this is and what can be done about it.

[Baroness Randerson (LD)]

My Lords, we do not have any amendments in this group, but I take this opportunity simply to make the point that we share the concern of those noble Lords who do have amendments in this group. These are important issues that reflect the reasonable fear that employers could use tactics that circumvent the measures in the Bill.

One thing that has been speculated on is that seafarers could be paid at a lower rate when they are outside UK waters to compensate for the higher rate that they must be paid in UK waters. There are things about which the Government can do nothing, but it is really important that the things that can be got right are looked at carefully to ensure that they are absolutely on the nail. I point in particular to Amendment 26 in the name of the noble Lord, Lord Tunnicliffe, to emphasise the importance of monitoring the effectiveness of this legislation and engaging with the trade unions. P&O’s tactics—the audacity with which they were announced surprised everyone, I think—exposed the weakness of the current safeguards. However, if the Government attempt to plug the loophole but fail to do so effectively, I fear that P&O would not be alone and other owners would attempt to do something similar—perhaps not as blatantly as the way in which P&O did it, but it certainly could undermine legislation further if the Government’s efforts here are not fully effective.

[Lord Tunnicliffe (Lab)]

My Lords, I will speak on the two amendments in my name in this group, but I commend the other amendments to the Minister’s study, because it is important to achieve clarity on some of these issues.

On Amendment 25, my original involvement with these sorts of issues was in an analogous industry—transport—where I was a shop steward and subsequently an industrial relations manager. In the crew situation, issues with roster patterns and pensions are every bit as important as wages. The way that rosters are handled in particular can have a serious impact on remuneration and a massive impact on quality of life. It is important that there is a proper impact report on these issues, ideally within 90 days.

This leads on to Amendment 26, because this and other issues would be much enhanced if we could develop a proper relationship with the trade unions. The importance of this from the point of view of the trade union movement is exemplified by an appeal—for want of a better term—to the International Labour Organization from the general secretary of Nautilus; the general secretary of the RMT, Mick Lynch; the general secretary of the TUC, Frances O’Grady; the acting general secretary of the European Transport Workers’ Federation; the general secretary of the International Transport Workers’ Federation; and the general secretary of the International Trade Union Confederation. I read those out to emphasise that this is a heavy coalition of the trade union movement. Their appeal is set out in a document that I hope the Minister has seen, which centres on what happened at P&O. It helps one to understand how broad detailing and managing the employment conditions of crew is and how important it is to get a hold of this to make sure that crews are properly looked after, both in their remuneration and conditions of work. I therefore commend Amendment 26 to the Minister.

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[Lord Mountevans (CB)]

My Lords, the case for the Secretary of State being responsible for surcharges was very well made by the noble Baroness, Lady Scott, and the noble Lord, Lord Berkeley. To summarise, it sits much better with the Secretary of State. We have a situation in which the port authority is normally providing a service to the owner; the owner-operator is therefore a customer. To be, in effect, levying a fine on your customer is an unnatural state of affairs. In the interests of transparency and consistency, we should have one entity in the land deciding these things. They can vary from port to port and there may be special circumstances, but it is desirable to have one authority making the surcharge across the land.

[Baroness Randerson (LD)]

My Lords, I start by thanking the noble Lords, Lord Berkeley and Lord Mountevans, for joining us on some of these amendments. I will briefly underline some of the points that my noble friend and those noble Lords made.

The complexity of expecting ports to do what is essentially the Government’s job for them will undermine the effectiveness of this legislation. Think about the use of the term “surcharge”. You pay a surcharge when you use a service voluntarily; it has no implication of illegality. If, however, a company finds itself paying a surcharge according to the rubric of this Bill when it becomes legislation, it will have broken the law. In other words, it is paying a surcharge as a fine—and a fine should be called a fine. I urge the Minister to look again at the phraseology here. Let us be clear: if companies are going to be fined, let us call it a fine.

The other issue is the complexity of expecting ports to deny access to the harbour. The international law on denying access to a harbour is complex and it would be difficult for them to do so. They would have to be absolutely sure that there is no question of danger to life. As a result, they will err on the side of caution and it will not happen. As both the noble Lord, Lord Berkeley, and my noble friend Lady Scott said, detaining ships is a normal course of events. It is not done frequently but it is done, and for safety reasons as well. I urge the Government to have the courage of their convictions and give these powers to the Secretary of State, because they are much more appropriately those of the Secretary of State.

It is not as if the Government do not want to be involved, because Clause 11 gives them wide-ranging powers of direction. It essentially gives them control, so the Government want that control behind the scenes but do not have the courage to put their name on the notices. That is a strange approach, so I urge them to rethink the way this is to be done. The impact would be that well-meaning and very important legislation could be undermined. At the same time, it would put our ports in a difficult position, make their relationship with ship owners more complex and create for them, as other noble Lords said, a conflict of interest.

[Lord Tunnicliffe (Lab)]

My Lords, I have a couple of amendments in this group. The first is Amendment 12, which would create a minimum fine of £1 million. Whether that is the right figure, I am not sure, but the real concern is about the size of the owners; I believe that P&O’s owners have made $721 million in the past six months. There is a real risk that, if businesses of this size take an almost doctrinal opposition to the measure—the P&O debacle showed such a doctrinal opposition to reasonable conditions on board ships—a fine that is not substantial becomes just a cost of business. That would be regrettable; I am sure that it is not the Government’s intention but I would value some feedback from the Minister. How does one assure oneself that the fines are sufficiently large to impinge on the decision-making of these companies? There is a concern that good companies do the right thing anyway. The trouble is that we have a very real example in the recent past of one of these companies not doing the right thing; that is what provoked this legislation.

The second area concerns naming the inspector or inspectors. I tabled my amendment here to draw out how the world will know that this is happening. Organisations that have either a principal inspector or someone like that as a named individual are so much clearer as to who will be held to account for appropriate levels of activity. As a minimum, I hope that the Minister will be able to give me a feel for how quickly inspectors will be appointed and how many of them there will be, as well as assure us that there is adequate inspection capability. We know that this whole issue of minimum wage enforcement is pretty difficult in a land situation; at sea, it will be much more difficult to get the details to know whether an offence or the wrong charge has been committed.

With that, I come to the amendments in the name of the noble Baroness, Lady Scott, regarding the Secretary of State having the authority to determine the tariff, which will really be a fine. I think that harbour authorities are about harbours. I can see why they perhaps must be drawn in at one level but when it comes to becoming a policeman, in essence, that is what the state should be doing. I agree with the general thrust that this should be the Secretary of State’s responsibility.

Finally, I hope that the Government will give careful consideration to the amendments addressing the DPRRC’s concerns.