UK Maritime Sector

Chris Stephens Excerpts

Thursday 16th September 2021 Westminster Hall

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

It is a pleasure to serve under your stewardship, Sir George. I congratulate the right hon. Member for North Durham (Mr Jones) on securing the debate, and thank the Backbench Business Committee for allowing it.

Such debates are all too rare. That, in itself, is an illustration of what the briefing from Nautilus calls “sea blindness”. One of the biggest difficulties the maritime industry faces is getting the political attention it needs in just about every respect—whether for its own development, for health and safety on vessels, or for minimum wage implementation. It all happens far from sight at sea. This debate is a welcome opportunity for those of us with an interest in the maritime industry to put some of those concerns on the record.

It has been a difficult couple of years for those working in our maritime industry. During lockdown, many seafarers found themselves in difficult situations, caught between different lockdown regulations—testing, tracing, self-isolating—in different countries. In its briefing, Nautilus highlights its survey, which shows that about 11,000 maritime professionals fell through all the gaps in the safety nets; none was able to get assistance from the job retention scheme or the self-employment income support scheme. That statistic illustrates the different way in which the maritime industries work compared to those based onshore.

Both the right hon. Member for North Durham and the hon. Member for Waveney (Peter Aldous) believe that this is an industry with a future, and I endorse that sentiment. However, I would say that there is nothing inevitable about the UK maritime sector having a bright future; it will require a determined and driven strategic agenda from the Government to ensure that that actually happens.

We have seen the issue at different times over the years. Going back 15 or 20 years, the Blair Government introduced the tonnage tax—a really good, welcome initiative. However, it never really achieved its full potential, beyond getting tonnage to flag under the red ensign, because it was difficult for the Government to get the conditionality attached to it: getting the number of officers trained under the tonnage tax, and then getting the shipping companies that had trained them to keep them on. There was a commitment to train officers in order to qualify under the tonnage tax. After that box was ticked, there was a commitment to retain them for a year, but after that, there was a cliff edge. There was a glut of one-year post-qualification officers.

That is the challenge facing the Government, and I do not envy them. It is difficult for any individual country to take on companies operating in an effectively global environment. This is probably the best working definition of a global industry. In its briefing, the RMT illustrates some of the challenges affecting the enforcement of minimum wage legislation. This was something of particular concern a few years ago, when I discovered that many of those working on the freight ships going from Aberdeen to Shetland, in my constituency, were deemed by Her Majesty’s Revenue and Customs not to be in its remit for enforcing the minimum wage because the boats operated in international waters. Its definition of international water is being outside the 12-mile limit.

I give credit to HMRC and the Government for having closed some of the loopholes, but we know that many of the jobs advertised will come nowhere near the level of minimum wage protection. The RMT briefing for today quotes some examples of that:

“The expansion of Irish Ferries into Dover is a case in point. Irish ferries pay below the National Minimum Wage to its Cypriot registered ships”.

That is Irish Ferries coming into Dover in Cypriot registered ships—seeing that, one begins to understand the complexity of international shipping. It continues:

“as revealed by recent inspection of the WB Yeats by the Inspector for International Transport Workers Federation (ITF) in France (Irish Ferries have blocked ITF access in UK and Irish ports)”.

It then quotes the pay rates on the W. B. Yeats, Rosslare to Cherbourg, in June 2021. A bar and galley steward gets an hourly rate of £6.47; an able seafarer has an hourly rate of £6.89; both a cook and a plumber had an hourly rate of £7.42; a receptionist earned £7.69; and a bosun earned £9.39. In fact, going back a few years, some of the ships that were operating in the North sea were paying figures that were less than half the lowest figures in the RMT briefing. It shows that, because of the way the industry is structured and operates, enforcement of conditions is a game of regulatory whack-a-mole.

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

I am grateful to my good friend for giving way. I congratulate him on the work that he has done in the last couple of years to ensure that national minimum wage rates are paid to seafarers. Does he agree that what we would like to hear about from the Minister is a proactive approach to ensuring the enforcement of the national minimum wage?

[Mr Carmichael]

I thank the hon. Gentleman, who is characteristically generous. Others in the House, him included, have been working on the issue as well. It comes back to the first point I made: as a former Prime Minister used to say, sunlight is the best disinfectant. People like us, talking about issues like that, on occasions like this, do allow pressure to be brought bear, which ultimately leads to progress being made.

The right hon. Member for North Durham spoke about the need for a more proactive, and less competition based, approach to the awarding of contracts. In principle I agree with him, and I understand what he is saying when offering comparators from Europe and around the world.

To sound one note of caution, as the hon. Member for Glasgow South West (Chris Stephens) knows, we have a difficult recent history of this north of the border. Two ferries are being procured from a shipyard owned by the Scottish Government: the replacement for the Glen Sannox and Hull 802—so called because, although it is now heading towards five years overdue, it still does not have a name. Partnership between Government and industry of the sort that the right hon. Member for North Durham is talking about worked very effectively with the procurement of the aircraft carriers and is something we should be taking seriously. However, the rigours of private sector involvement are needed to ensure that these ferries are obtained on time and give value to the taxpayer, as well as giving longer-term security for the workforce in the domestic shipyards we have left.

We saw this week that, in the tender for the construction of the two ferries to serve Islay and Jura, two of the shipyards tendering are in Turkey, one is Romanian, and one is in Poland. Not a single shipyard in Scotland or anywhere else in the United Kingdom is now being invited to tender by the Scottish Government. That shows that we need to have the strategy that everyone else has spoken about. If we have a gesture here on a difficult news day there, we do not do any favours for the people who work in these shipyards, never mind island communities such as Islay and Jura.

--- Later in debate ---

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

As always, it is a pleasure to see you in the Chair, Sir George. I think you are the first Chair in a Westminster Hall debate taking place during a reshuffle who is not of the governing party, so I do not need to send you good wishes for the reshuffle. I see that the Minister is still in his place, which I think we will take as good news for now.

I thank the right hon. Member for North Durham (Mr Jones) and everyone who has contributed to this excellent debate. It has been very enjoyable listening to everyone. Of course, a debate such as this would not be the same if I did not mention that I am still proud to represent the Govan shipyards and the workers there, who are the undisputed greatest shipbuilders in the world. I am pleased that BAE Systems is now looking at shipyard investment and at ensuring that it can build ships more efficiently at the Govan site. That is something that I hope the Minister will take cognisance of, because many of us believe that the Government have a role to play in providing finance and helping companies to invest in their shipyards so that they can compete—not just for defence contracts, but for contracts elsewhere.

I very much agree with the right hon. Member for North Durham about the fleet solid support ship contracts. A number of us in the APPG have been chipping away at the issue for a while. I have always found it quite fascinating that we were told they were not defence ships, because I have tabled parliamentary questions to ask what weaponry there would be on fleet solid support ships. I have received a long list, so I am bewildered as to why they are not designated as defence ships, but it seems that progress is being made.

I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for his charitable interpretation of the CalMac ferries situation, because my personal view on that is probably not repeatable in Hansard. Those of us who advocated remaining in the EU, such as the right hon. Member and me, have always felt—I certainly have, as someone from a public sector background —that one of the weaknesses of the case was the EU public procurement rules. It would help if the Minister outlined whether the Government are looking at the procurement rules and perhaps making it easier for local authorities and public bodies to provide contracts to local suppliers in various situations.

I want to associate myself with the comments made about seafarers, because it really is important that the national minimum wage is now enforced. Many of us were grateful that the Government changed the rules so that the national minimum wage would apply. It is now important that that is enforced, because the RMT, in its excellent briefing, has already given us examples of where it is not being enforced, and where seafarers are not being paid the national minimum wage. I recognise that the Government produce a list every year, and it certainly would not surprise me if some of the shipping companies appear on that, but perhaps the Minister could outline what work his Department and Her Majesty’s Revenue and Customs are doing to ensure that there is real enforcement.

The maritime economy is very important both to the Scottish economy and that of these islands. It is estimated that the direct value of the maritime economy to the UK’s gross value added was £46.1 billion in 2017, supporting 200,000 jobs directly and 1 million jobs both directly and directly. Shipping alone contributed £6 billion to the economy in 2020, representing 19% of all transportation, and the UK’s shipping fleet is the 24th largest in the world. Some £9.9 billion of the GVA is added to Scotland, with 41,000 jobs directly supported. Apart from the seafarers’ situation, workers in the maritime sector are usually highly skilled and well paid. According to Maritime UK, they are 42% more productive than the average worker. Pre pandemic, the sector was predicted to grow by 15% between 2018 and 2023, but obviously that has been disrupted, and the true level of growth remains to be seen.

It is also important that we should recognise the value of Scotland’s maritime economy and marine environment, and protect the environment while growing that economy in a sustainable way. Scotland has 60% of the UK’s fishing waters and an abundance of marine resources. It is important to treat those as national assets, to be protected, developed and enhanced, not just for this generation but for future generations.

Scotland included shipping, defence and marine tourism in its previous national marine plan. That will be developed into a maritime strategy, and a dedicated agency will be established to put Scotland’s marine assets at the heart of the blue economy. The Scottish Government have pledged support for the growth of sustainable marine tourism to turnover of more than £0.5 billion by 2025.

There are great opportunities to explore greater maritime trade with the UK, and we should be ambitious to increase direct trade with the European Union. I want to see that 102% rise in direct shipping to France since the Brexit barriers were put in place, because the EU sees it as harder to ship through England to Scotland. Brexit has led to direct shipping and ferry routes to Spain and Calais.

We ask the UK Government to commit to serious and sufficient investment in the maritime sector. Historically, the UK Government have not included international aviation and shipping in their carbon budgeting—although they have changed that now, which is important, as I am sure the Minister agrees. It is important to include shipping emissions, as they can make up 3% of carbon emissions every year. Decarbonisation should be a key part of investment in the maritime sector going forward.

I congratulate all hon. Members on their fine contributions today on the maritime sector. As someone who represents a great shipyard community, I will support other hon. Members in ensuring that we have a thriving maritime sector going forward.