UK Maritime Industry

Charles Walker Excerpts

Thursday 12th January 2017 Westminster Hall

[Several hon. Members rose—]

[Mr Charles Walker (in the Chair)]

Order. Since so many colleagues want to speak, I shall impose a limit of five minutes.

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[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Walker. I was expecting to sum up as the Front-Bench spokesman.

[Mr Charles Walker (in the Chair)]

You are allowed to have 10 minutes, Mr Hendry.

[Drew Hendry]

That is fine. I am happy to speak now, so thank you very much, Mr Walker. It is a pleasure to serve under your chairmanship. I congratulate the right hon. Member for Orkney and Shetland (Mr Carmichael) on securing this important debate. I agree with the praise that he has given to seafarers and to the contribution that they make not only to island communities, but to coastal communities in Scotland and around the UK.

The Minister said that the right hon. Gentleman’s comments struck a chord. I hope some of mine will strike a chord as well, and I hope my questions will be answered, although I must give warning that I have many questions, so perhaps saving them might be the best thing to do. This is about the future of the UK maritime industry, and the right hon. Member for Orkney and Shetland (Mr Carmichael) said it was about leadership. He is right: the future needs a vision and a plan—for employment, fair conditions, business and safety, as well as to attract young people and, especially, correct the lack of young women in the industry.

To begin with employment and fair conditions, I join the right hon. Member for Orkney and Shetland in being delighted that there is now an agreement in principle to end the long-running issue about the freight vessel serving the Northern Isles. The new charter basis will allow the wage issue to be resolved and crew members will be paid the minimum wage. The new arrangements come into effect next month, which is to be welcomed. I shall not go through the details, which he covered.

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[Liz Saville Roberts]

I will indeed.

[Mr Charles Walker (in the Chair)]

I will give everyone five minutes, but Members have to be mindful of interventions—particularly those who have already spoken.

[Albert Owen]

The hon. Lady talked about women crew members on merchant ships. Will she join me in paying tribute to the RNLI for the increasing number of women who are on our lifeboats, saving lives?

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[Martyn Day (Linlithgow and East Falkirk) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Walker. I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for initiating the debate. I confess that before my election, I had little real knowledge of the modern industry, but I have been steadily learning from my contacts and visits to Forth Ports Grangemouth. I have also attended trips on to ships with the local seafarers mission, which I cannot praise enough for doing such a fantastic job in supporting workers, and I have had talks with and briefings from the RMT and Nautilus, as well as haulage contractors in my area. I am grateful to all those bodies for assisting me during the past 18 months.

Grangemouth is of course Scotland’s largest container port. It is also Scotland’s largest port, with the site covering 386 acres. Grangemouth lies at the centre of Scotland’s industrial heartland. It is situated midway between the main Scottish cities of Glasgow and Edinburgh and is served by the M9 motorway, with links to the national motorway network, and is also well rail-linked.

Approximately 9 million tonnes of cargo are handled through the dock facilities each year. With about 150,000 containers and as much as 30% of Scotland’s GDP going through the port, it is the UK’s largest feeder port and the only one that exports more than it imports. Locally, Forth Ports employs some 200 people within the port and supports a further 1,000 jobs within the port estate. Therefore, the industry’s significance to my constituency cannot be overstated, although it may often be overlooked by those driving past the gates.

Almost no topic can be debated nowadays without some reference to the issues surrounding Brexit, and this debate is no exception. The maritime industry plays a major role in helping to facilitate the wider freedom of trade in goods. Given the volumes and patterns of freight, leaving the EU will have implications for the shipping sector. One specific concern is about UK flag ships losing their right to operate in the domestic trades of those EU member states that maintain flag-based cabotage restrictions. The economists Oxera have said that changes to the costs of trade with the EU are

“likely to affect the volumes and patterns of freight activity at ports, while the need for new customs checks on imports and exports is likely to cause considerable congestion at UK and mainland European ports.”

Given the nature of the work at Grangemouth, that is a real concern, although any negative impact could clearly be mitigated through European economic area membership or free trade agreements. The industry’s importance to our countries’ ability to trade worldwide and not just with Europe is key, especially with more than 90% of all trade being handled through our ports. Given that we are an island nation, that is not likely to change, but it leads to questions about how it is done and the role of seafarers, without whom that trade just would not be possible.

The role of seafarers is perhaps the most concerning aspect of the maritime industry. Since 2011, the number of UK ratings has declined by 25%, while the number of UK seafarers has decreased by some 13%. That portends a very serious risk of loss of skills and may even threaten the viability of our home-grown industry, unless training and employment rates improve significantly. That skills deficit is set to be compounded further by future retirals of an increasingly ageing workforce. I would like to take this opportunity to commend the work of the RMT and its SOS 2020 campaign to highlight that threat to the UK seafarers skills base.

While we face that decline in skilled seafarers, there is in fact a global surplus of ratings, with many of the ratings in the international shipping industry coming from cheaper-wage economies. That is compounded by exploitative practices by some operators, which abuse the complexities of the national minimum wage regulations and pay scandalous rates of pay to some seafarers. That has been much commented on today, so I will just add my disappointment that many seafarers are not receiving a fair wage. Confusion and complexity surrounding the NMW needs to be addressed by the Government. In particular, the meaning of the term “ordinarily working in the UK” needs to be made crystal clear. I would welcome hearing from the Minister how that can best be achieved and how the situation whereby there are current cases of two people working on the same ship and doing the same job but being paid different amounts based largely on nationality can be addressed.

My trade union contacts have flagged up with me the following issue, which highlights the point succinctly and demonstrates the international dimension. The Norwegian international flag register is the second register for Norway. It is not allowed to cabotage in Norway and does not pay tax there. I am told that these ships are among the worst offenders. The majority of these ships operating from Aberdeen stay in the UK permanently, with some not having left for more than 10 years. They have on board Norwegian nationals who receive Norwegian rates of pay, but non-Norwegians are employed on what has been described to me as “peanuts”. The fact that such issues can be so clearly identified must mean that solutions are not beyond conception. I look forward to the Minister’s summing-up.

[Mr Charles Walker (in the Chair)]

Thank you very much, colleagues, for your conciseness and your co-operation. The hon. Member for Great Grimsby (Melanie Onn) could have had two minutes, but she would prefer to ask the Minister a question. It will obviously be up to the Minister to decide whether to take that intervention, but I know that the hon. Lady would like to ask a question as opposed to making a speech. The Front Benchers will have 11 minutes each, which will allow the mover of the motion to have two minutes at the end.

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[Pat Glass]

I am simply pointing out that the company is operating in our waters and that we need collectively to do something about it.

We are an island nation, a net importer, and we are now leaving the European Union. We have the largest port sector in Europe in terms of tonnage handled and, as has been said, we have millions of ferry passengers every year. Our economic, social and security interests will depend more than at any time since the second world war on seafarers and a resilient UK maritime skills base. It is probably worth putting this in context. At the time of the Falklands war in 1982, the UK had a strong merchant naval sector; we employed 58,000 UK seafarers. That figure has now shrunk by almost 60% to 23,000. That is the context in which we are working.

Sub-national minimum wages continue to blight the lives of seafarers working on UK domestic and short sea journeys. I have seen figures alleging that at least eight operators along 11 short sea routes to and from the UK are underpaying more than 800 crew. In my own area, on ships crossing from Newcastle to Amsterdam, DFDS pays its staff £2.93 an hour—less than £3. I took a recent weekend trip to Amsterdam, which I really enjoyed, but quite honestly, if I had known that—well, I feel really uncomfortable about it. As a result of this debate, I will be writing to DFDS and other companies to say that it is simply not acceptable.

At present, passengers and businesses are travelling on Condor Ferries to the Channel Islands on vessels crewed by seafarers earning as little as £2.40 an hour. On freight-only ships, the pay is as low as £1.64 an hour. That is not acceptable. Prior to the national living wage increase for over-24s last April, it was estimated that 8,300 ratings were working the UK shipping industry for rates of pay below the national minimum wage. That was in April last year; the figure is now considerably higher than 8,300. Increasingly, companies are recruiting outside the UK to crew their ships with non-UK seafarers, particularly ratings, in order to profit from these sub-national minimum wage rates.

This is not a new problem. It has to be said that this goes well beyond the current Government. Beyond the simple injustices, we can see the cost of not having acted in the past. This legalised exploitation has systematically undermined maritime jobs in the UK, damaged the skill base and driven up unemployment rates in seafarer communities across the UK. Since 2011 alone, the number of UK ratings has fallen by 25%. If we end the pay exploitation in shipping, we can help to reverse the decline of our merchant navy. This need not be a party political issue, but one of sense, fairness and humanity.

There are three points that I would like the Minister to take forward from this debate. First, he has already committed to review the application of pay legislation across the shipping industry imminently. However, as we have already heard, that has already happened—the Carter review did it—so this is just a case of setting a timeframe and getting it implemented. Secondly, can the Minister give a date for when we can expect publication of updated guidance to HMRC on enforcement of the national minimum wage for seafarers? Thirdly, when will he publish the outcomes of the review of the existing protections in part 5 of the Equality Act 2010 against nationality-based pay discrimination for seafarers? That work was completed in April last year, yet 10 months later it has still not been published.

However, as we have heard, pay is only part of the problem and part of the solution. More than 70% of deck and 74% of engine ratings are now aged over 40. We are heading for a shortfall in trained and skilled seafarers. If we take no action, that will be filled by non-UK staff. The Select Committee on Transport warned over two years ago that the Government needed to act on funding, on approved standards for maritime apprenticeships, on the take-up of apprenticeships in the industry, on setting annual statutory targets for seafarer training and on including the number of trainee ratings in annual seafarer statistics. We would like to know from the Minister when we will get some action on that.

One area of maritime growth where the Government have not dragged their feet is on the recommendations to make the UK shipping register more commercially responsive, in the form of a Government corporation. I would gently point out to the Minister some other areas where this and former Governments have rushed to privatise—the rail industry, the energy industry and the water industry come to mind. Recent attitude polls among the electorate now show that the majority of our constituents—in some cases over 90%—want to see those decisions reversed, because they see formerly Government-owned, privatised industries making massive profits, but customers paying massive bills and getting a poor service. I would gently ask the Minister whether he will properly and carefully consider the costs and benefits of transforming the UK shipping register, fully consider all the options and also promise that this House will be given time to scrutinise those options?

Before closing, I wish to press the Minister on leaving the EU. At the moment we know nothing about the Government’s wider maritime priorities, at a time when we need a clear direction on maritime issues that would inform the Brexit negotiations. How will any changes to the single market affect shipping and seafarers? Will there be customs checks? Will there be tariffs? Is his Department feeding into the Brexit negotiations on these matters? If it is, will he tell us how?

In closing, I hope the Minister can elaborate on his Government’s plans for Brexit, or at least recognise that maritime is an exceptional issue that needs to take precedence. He must also assure the House about the future of the shipping register, along with the timeframe and process for any reforms. Will he outline his priorities for seafarer training and skills, and say whether he will set targets for recruitment? Finally, I look forward to him addressing the key point to come out of this debate about seafarer pay and conditions.

[Mr Charles Walker (in the Chair)]

We have a lot to get through. Will the Minister be mindful to leave a minute or so at the end for Mr Carmichael to wind up?

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[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.