Automatic Enrolment (Offshore Employment) (Amendment) Order 2020

Baroness Scott of Bybrook Excerpts

Tuesday 19th May 2020 Lords Chamber

[Baroness Burt of Solihull (LD)]

My Lords, both these instruments refer to offshore and maritime workers who, because of their special work circumstances, have never fallen conveniently into any standard worker treatment regarding almost any working conditions you can think of. Indeed, the uncertainties and unusual working hours for these individuals have caused employers as well as government a problem in trying to squeeze them into legislation that would be appropriate for most other categories of worker.

As the Minister said, included in this group are offshore workers, such as those working on oil rigs, and seafarers, from people managing ocean liners to those on container ships. This variety of work types and circumstances has made the very issue of automatic enrolment for pensions a case in point, and the legislation embodied in the Pensions Act 2008 was no exception. As the Minister said, these workers were finally covered from 2012 following consideration of a series of complex issues relating to how the changes would fit in with international maritime law. However, the concept of “ordinarily working” in terms of periods of employment has been reasonably successful in ensuring that offshore and maritime workers are covered.

Today we discuss the renewal of this legislation, which is due to expire in the sunset clause on 1 July 2020. I would be intrigued to learn why the sunset clause was originally built in, since presumably automatic enrolment must be a good thing for all workers, even hitherto relatively prosperous oil-rig workers who have enjoyed better working conditions than many. I anticipate that it would be particularly appropriate in the case of the challenging circumstances of most seafarers, who may well endure a patchy working life, with long periods away from home potentially interspersed with periods of unemployment. I am sure that it would be particularly difficult in these uncertain Covid times for individuals to save regularly and build up their pension pot.

In the first two weeks of lockdown, 40% of North Sea oil workers lost their jobs. Supply ship workers have been hailed as heroes, keeping our supply lines going, while cruise ships are largely stuck off coastlines, unable to sail and their crew stuck on board. I ask the Minister if the challenges of having 150,000 workers in need of a crew change—who are waiting to leave or join ships—have been resolved as far as the UK is concerned. I gather that unions and employers have given the Government one month to facilitate these crew changes, but clearly the delays are taking their toll. Tragically, suicides have been reported as individuals suffer mentally, trapped on board and trying to get home, but unable to because of the lack of organised transport.

On the subject of Covid, on 14 May the Chamber of Shipping asked the Government whether the shipping and offshore industry would be exempted from the reported 14-day quarantine period for travellers entering the UK. Could the Minister please give us an update on that?

I for one am very glad that calls from employers, in the 2018 post-implementation review, potentially to relax some of the regulatory burden have not been heeded by the Government. The Explanatory Notes refer to potential “industry-specific carve-outs”, which could result from a relaxation of the compliance regime. Surely the overriding consideration is that individuals in those somewhat precarious industries are properly protected.

I wish to ask the Minister a couple of questions on paragraph 12 of the Explanatory Memorandum for both statutory instruments, which deals with the impact of the legislation. The total equivalent annual net direct cost to business is reported as only £22 million, and the total annual net benefit to all individuals is—

[Baroness Scott of Bybrook (Con)]

I remind the noble Baroness that we have a three-minute time limit.

[Baroness Burt of Solihull]

I was not aware of that, and I do apologise.

[Baroness Scott of Bybrook]

I am sorry, but we are very tight on time. Thank you.

[Baroness Burt of Solihull]

Understood. I shall draw my comments to a close.

I welcome the legislation: it seems a pragmatic way to protect the interests of workers who have very varied working lives and experience but all need security in their eventual retirement.

--- Later in debate ---

[Lord McKenzie of Luton (Lab)]

My Lords, I too speak in favour of seafarers and offshore workers continuing to be subject to automatic enrolment if they are ordinarily working within the UK, and I support the removal of the sunset provisions that would negate this outcome. The point was raised about why the sunset provisions were there in the first place. If memory serves, it was because some of the complexities of the arrangement were still to be tackled and it was a way of enabling legislation to go forward without losing that issue.

Our position is consistent with our calling for the expansion of automatic enrolment to workers who are not ordinarily or currently covered, and aligns with the Government’s position, as we have heard from the Minister, that all sectors should be covered.

The July 2017 consultation concerning seafarers and offshore workers estimated that the number of workers on the UK continental shelf working in the UK was a little shy of 29,000, with a dropout rate of 10%. I am afraid I missed some of the Minister’s introduction but I think she suggested that the figure was now 26,000; in any event, perhaps she could confirm that. What is the split between seafarers and offshore workers? How does the eligibility for auto-enrolment align with income tax criteria? Are they the same?

We know that since the start of auto-enrolment in 2012 more than 10 million workers have been enrolled in a pension scheme but the work has not been completed, as we know. The Motion today is a missed opportunity to extend auto-enrolment to younger workers, those on lower earnings, the self-employed and those with multiple jobs; to help the gender balance; and to extend economic justice to many of those who have proved to be our front-line saviours these past weeks.

The Government’s commitment to tackling such issues by the mid-2020s will doubtless need some sort of review, given the coronavirus and changes in working patterns and practices, though it is perhaps too soon to make a call on that. What is the position of those who have been furloughed? There was the 3% top-up but can we know whether, and how many, workers would have opted out from those arrangements? The pandemic has highlighted just how—

[Baroness Scott of Bybrook]

My Lords, I am sorry but we have a three-minute time limit on this.

[Lord McKenzie of Luton]

Understood—my apologies. I will leave it there.