Seafarers' Wages Bill [ Lords ] (First sitting)

David Linden Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

Deductions for accommodation are not explicitly prohibited by the maritime labour convention. Normal practice across the industry is that accommodation is provided free of charge, as it is essential to allow seafarers to do their jobs on board. We also note the Low Pay Commission’s recent recommendation that such deductions should not be allowed for seafarers who do qualify for the national minimum wage. We will be setting out the detail of how national minimum wage equivalence is to be determined in regulations, including the position on deductions. This has been the case for the national minimum wage legislation today in the UK, so the use of secondary legislation in this way is entirely consistent with existing practice and will ensure we get this complex matter right. We will be holding a public consultation on the draft regulations after the Bill has received Royal Assent.

[David Linden (Glasgow East) (SNP)]

It is a great pleasure to serve under your chairmanship, Mr Davies. I will start by returning to some of the comments I made on Second Reading. The Bill is far too narrow in scope. Considering the egregious behaviour of P&O, we could be doing much more. I hope the Minister will look at some of the amendments.

I rise to speak to amendments 44 to 47 and 49 in my name and that of my hon. Friend the Member for Paisley and Renfrewshire North. I should point out that amendment 49 is not dissimilar to Labour’s amendment 62, which we clearly support. In speaking to these amendments, I also want to oppose Government amendment 1, which would doubtless knock out our amendment 45. I will deal first with the issue of port hopping and national minimum wage equivalence.

In clause 3, the requirement to produce a declaration of national minimum wage equivalence is applied to services that call at a harbour 120 times a year. That is the result of a change made following consultation on the draft Bill, which had proposed covering ships that called at a port or UK harbour 52 times a year—once a week. In July, in response to the consultation, the RMT—the National Union of Rail, Maritime and Transport Workers, to which I pay tribute—proposed that the definition in the Bill should be this:

“Seafarers working on ferry services that are frequently operated from UK ports (at least once a week).”

However, following consultation, the Government changed the Bill to apply it to services calling 120 times a year.

The impact assessment says that part of the reason for the change is this:

“The more regularly a seafarer calls at a UK port, the closer their ties to the UK.”

I certainly believe, as I think the Government did, that calling at a UK port once a week is a sufficiently close tie between a seafarer and the UK economy. Indeed, their lordships speaking in support of the shipping and ports industry stated that the Government’s plans contravened the international maritime conventions, specifically the UN convention on the law of the sea.

It is my understanding that the British Ports Association has legal advice that the Bill will not work and will be subject to legal challenge, including on the ground that it infringes the UN convention on the law of the sea. Indeed, the International Chamber of Shipping has also raised the matter, as the shipping industry’s de minimis crewing practices and flagging policies rest on the assertion of innocent passage in international waters between states.

[Grahame Morris]

The hon. Gentleman is making relevant and sensible points. On the issue of the 120 days, we have concerns, which I am sure he shares, that there are so many exclusions that the Bill will be like a colander—full of holes. The original proposal was 52 times a year, or once a week. What will be the impact of the Bill on the offshore continental shelf with respect to the frequency of the use of supply vessels? Will the figure of 120 days effectively exclude them from the legislation? I suspect it will.

[David Linden]

I am grateful to the hon. Gentleman for making that point, which gets to both the nub of the issue and a source of real concern for me. He is right to talk about the colander effect, and not making the legislation sufficiently tight means that in many cases companies will exploit the measure, as has he eloquently outlined. Let us be honest: the legislation was introduced because a company sought—within the law—to exploit people, and it would be a dereliction of duty by the House and by the Committee if we did not seek to tighten the Bill in such a way as to ensure that industry cannot get away with using such practices.

[Gavin Newlands]

My hon. Friend has referred to the House of Lords, but on Second Reading in this place, the Secretary of State said in terms of the number of visits to harbour:

“We think the definition in the Bill at the moment will capture the vast majority of the services we wish to capture.”—[Official Report, 19 December 2022; Vol. 725, c. 66.]

The Secretary of State referred to “the vast majority”, but this relates to the national minimum wage. Why should we be happy with a majority, rather than ensuring that all employees get the minimum wage?

[David Linden]

Even if people were not around last night, it will not come as a huge surprise that the Government are not particularly wild about standing up for workers’ rights. We on this side of the Committee happen to be of the view that we should be doing everything we can to try to support workers—[Interruption.] The hon. Member for Crewe and Nantwich chunters. I am more than happy to give way if he wants to stand up and speak. If he wants just to make a wee bit of noise behind the Minister, he is welcome to do so.

We support returning to the stricter criterion of 52 calls per year, which is what amendment 45 seeks to do. This is a key test of the Government’s commitment to seafarer welfare, and they failed in the Lords when they narrowly defeated Lord Tunnicliffe’s amendment that aimed to restore the criterion of 52 annual harbour calls.

National minimum wage and domestic employment law are difficult to enforce and apply in the maritime sector. That is why employers such as Stena Line, which employs UK crew on international routes from UK ports in Cypriot-registered vessels, enter collective bargaining agreements with domestic maritime trade unions. The UK Chamber of Shipping estimated that up to 45 major ferry routes served the UK economy in 2020, but that is subject to change. For example, P&O closed Hull-Zeebrugge in October 2021, but DFDS opened an unaccompanied freight service between Sheerness and Calais earlier that year.

In my view, the Bill should cover crew working for operators of containers, bulk carriers, cargo ships and vessels working in the offshore energy supply chain, as well as ferries. In 2018, the RMT estimated that extending the national minimum wage to cover domestic and offshore energy routes would bring 13,000 seafarer ratings into scope. The impact assessment for the Bill estimates only the cost to employers, not the number of seafarers who would be covered by the Bill.

I am concerned that the Government have dismissed out of hand the unions’ concerns over avoidance techniques. Port hopping, as we often refer to it, remains a genuine avoidance technique that becomes far easier to use the more frequently a vessel calls at a UK harbour. At 120 calls per year, it would be far easier for operators to make minor changes to scheduled port calls in order to avoid the legislation. A threshold of 52 calls, which was in the Government’s original proposals, would be far tighter. It was changed only after consultation with industry, although the trade unions supported 52 calls. I go back to the point that if the Bill is about protecting workers—the very workers who were so cruelly shafted by P&O—then it is incumbent on the Government to listen to the voices of those workers and trade unions, not the voices of industry. That is the whole reason we are here.

Disappointingly, the Minister in the Lords, Baroness Vere, was unconvinced that that avoidance technique could be used. She said:

“I do not think operators would play switcheroo with UK ports because, frankly, their customers would not put up with it.”—[Official Report, House of Lords, 26 October 2022; Vol. 824, c. 1506.]

The translation of that is, once again, “Leave it to the markets. The markets will dictate.” If we have learned anything over the course of the last few months in this House and during the P&O debacle, it is that simply leaving it to the markets is not a great idea. I am not reassured that the logistics market will self-regulate. The recent merger between Cobelfret and Seatruck Ferries, two operators who have been paying seafarers below national minimum wage on regular international services from UK ports for years, frankly, also increases the prospect of avoidance techniques.

I hope that has outlined just some of our concerns on the issue. For those reasons, I will formally seek to divide the Committee and vote against Government amendment 1.

[Mrs Elphicke]

I will take the opportunity to speak to these clauses and amendments. They cover the short straits, and first I will comment specifically on the issue of 120 calls per year. Looking at the short straits, according to figures from the UK Chamber of Shipping, the number of port calls meets the threshold by 30 to 40 times in relation to the Dover-Calais and Dover-Dunkirk lines: around 4,000 port calls that are made would come within the legislation. Whenever we set a threshold, it is important to set it with reference to the matter that we are addressing. The evidence is very clear that 120 days is a relevant and, indeed, low threshold in relation to the particular services that we are seeking to address within the remit of this important Bill, which, as has been discussed, very much has my short straits of Dover at its heart.

I am conscious that some good points have been made in relation to seafarers more generally. I hope that we can show some global leadership on this issue. I have been pleased to have the opportunity to speak at great length about seafarers’ rights with my hon. Friend the Member for Witney when he was Ports Minister. Although I can understand the remit being extended in the way that is being sought within the remit of the Bill, we need to look at seafarers’ rights more generally, as well as those bilateral agreements.

I now turn to amendments 47, 62 and 49. The Minister made some helpful comments in introducing this section, but I ask him, if I may press him further, for an assurance of the position, particularly relating to the calculation for food and accommodation. If I were to work in McDonalds—indeed, I did so for a very long time and enjoyed it greatly—I could have a certain amount of food on my food break if I were to work for four hours. If I were to work for the entire day, I would get much more McDonalds food—very tasty. That food would be free to me as a worker and that is the principle that we want to see for those at land and within our waters.

However, I think that some of the concerns that have been raised must not be seen only through the lens of our own domestic legislation in relation to the minimum wage and its calculation. I have taken some time to look at how these issues are treated within our national minimum wage legislation on land and issues such as accommodation—staying on ship would not, in my view, fall within the current definition of “accommodation” and its applicability for national living wage purposes. But it is right that these issues have been raised and that they are looked into carefully as we go through because, in relation to the operation of seafarers, particularly on these routes, our domestic provisions are not the market provision for these matters. The market for this is global; the conditions are global and international. When we talk about common market practice, it is within a global and international setting, with different countries applying different regimes to their seafarers.

When it comes to seafarers’ rights, we tend to think that this means countries who are very international, such as the Philippines and others, but I will give the Minister a directly relevant example to this food and accommodation issue. The Danish Maritime Authority allows for seafarers’ food subsistence allowance to be deducted from the calculation of national minimum wage. It is a matter for negotiation, either collective agreement or individual contracting, but, none the less, in the application of their calculation of national minimum wage, they do—

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[Mr Holden]

My right hon. Friend makes an important point. We are looking into the terms and conditions, which will be there in the regulations, and we will have a wide public consultation. He is absolutely right: we want to get this right.

The legal issue raised by the hon. Member for Wakefield was about legal risk in the 52 versus 120 days element. When a ship stops at multiple points in Norway, for example, then has one trip a week to the UK, to argue that it should be covered by UK legislation rather than Norwegian legislation would put it into a very difficult international legal position. Under international maritime law, that would expose us to greater legal risk for the entirety of the legislation, rather than on specific points. I hope hon. Members understand.

The hon. Member for Glasgow East made a number of comments. On the broad issues, at least, I say to him that the Government have raised the threshold at which people pay income tax, taking millions of people out of tax. They have introduced the national living wage and reduced the age at which people qualify for it. Moreover, and in a massive and long-term benefit for huge numbers of people, they have expanded auto-enrolment in pensions to hugely benefit working people. His comments were broadly ill judged and, in a certain way, bringing forward this conversation today shows our commitment to delivering for working people. While I appreciate that everyone in the Scottish National party is an expert on ferries these days, I am not sure they are when it comes to this legislation.

[David Linden]

Will the Minister give way?

[Mr Holden]

I have finished my comments already.

Question put, That the amendment be made.

Seafarers' Wages Bill [ Lords ] (Second sitting)

David Linden Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[Mr Holden]

I will write to the hon. Member for Easington on the specific issue of the Retained EU Law (Revocation and Reform) Bill. I will start now by saying that there have been some strong and robust improvements from this Bill, not the least of which is the imposition of a duty on the harbour operators, which I think goes a long way to addressing many of the concerns expressed at earlier stages by hon. Members.

I would like to reflect on a couple of comments from my hon. Friend the Member for Dover. She mentioned the bilateral agreements and how important they are. With us legislating in this way and other countries now starting to look to the legislation for their own societies, perhaps the hon. Member for Paisley and Renfrewshire North will reflect on how it is Britain leading the way in this space—a little.

In terms of the Laffer curve, I did not think I would see my right hon. Friend the Member for South Holland and The Deepings and the hon. Member for Wythenshawe and Sale East perhaps come out on the same side of things, but they do seem to have reflected a general, cross-party consensus that it is important to act in the best interests of working Britain. That is entirely what this legislation is designed to do.

Regarding fire and rehire, which has been mentioned by several hon. Members but is outside the scope of this Bill, I want to put it on record that BEIS will be launching a consultation and code of practice on fire and rehire shortly.

[David Linden (Glasgow East) (SNP)]

Can the Minister tell the Public Bill Committee how many consultations and letters BEIS has issued about fire and rehire? There is cross-party agreement in this House about what the problem is, so why do the Government have to take forward yet another consultation on it?

[Mr Holden]

I do speak for the Government but, on the specifics of what BEIS has been up to, I urge the hon. Member to speak to a BEIS Minister. But I do understand the broad thrust of his point. Where we are taking action here today is regarding seafarers.

The hon. Member makes quite an important point: how many consultations and reports can be had? The Opposition are currently proposing two more reports in their new clauses 5 and 7, both of which seek to legislate for the Government to produce a report. The first seeks to legislate for the Government to produce a report within six months of the Bill being passed on its implementation and monitoring. A number of the points that are sought to be included in such a report are well beyond the scope of the Bill. As hon. Members have said, the Bill is focused very much on the remuneration of seafarers who do not qualify for the national minimum wage. Six months after the Bill has been passed, there will be little to report on—hopefully very little indeed, as people will be complying with it. Indeed, the Bill will not be brought into force until secondary legislation is in place, and it is not expected that that will be the case within a short space of time after the Bill has passed.

Let me turn to the detail of the new clause, in particular subsection (2)(a). As a matter of course, we will be conducting a post-implementation review of the Act within five years of it being passed that will cover pensions and pay, as covered in the impact assessment. In any event, pensions and roster patterns are outside the scope of the Bill, and any effect on rostering would be indirect and challenging to distinguish from other factors.

Subsection (2)(b) goes beyond the implementation and monitoring of the Bill itself, and is therefore out of scope. We do not have plans to legislate further than is necessary, but that does not mean that we will not take action on areas beyond the matter of minimum pay, which we all know is not the only aspect of seafarer welfare that requires attention. As hon. Members have mentioned, as part of the nine-point plan, a new seafarers’ charter will be launched as a voluntary agreement, which aims to improve long-term employment and welfare conditions for seafarers. It covers a far wider range of employment protections than is currently covered by the Bill.

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[David Linden]

I beg to move, That the clause be read a Second time.

It is a great pleasure to serve under your chairmanship, Ms Harris. I am conscious that I am the only thing stopping people getting out of this room, but I want to reflect on the fact that the Minister said, “Let’s not look at commissioning reports.” I do not necessarily agree and I did not vote that way, and actually, new clause 9 is specifically about putting into statute how to deal with some of the directors. For the remainder of the debate, I will refer to the new clause as “the Hebblethwaite amendment”.

Throughout this Committee’s proceedings, we have spoken about the importance of teeth and of tightening things up. One reason why we have come to this point and why the legislation is necessary in the first place is the actions of company directors and bosses who have decided to act in such a way as to exploit the workers, as was the case at P&O. If we are going so far as to pass the Bill, which the SNP supports—although we would have liked to have seen more amendments to it—let us at least make sure that it has the teeth to deal with the some of these individuals, who are not exactly reputable.

Let us start with Peter Hebblethwaite, the CEO of P&O, who was paid £325,000 a year before bonuses. Let us remember that this is a man who admitted to a Select Committee of this House that he knew that the action he was undertaking as company director was illegal, but he proceeded anyway, and he had the gall to say that he would do it again.

I absolutely agree with the RMT’s general secretary, Mick Lynch, who said:

“Gangster capitalists should not be rewarded for their appalling employment practices; they should be punished with the full force of law.”

That is exactly what my new clause seeks to do: to make sure that we have in statute the ability to deal with these capitalist gangsters who seek to ride roughshod over seafarers, if hon. Members will pardon the pun.

Let us not forget that this man was responsible for the unlawful sacking of 786 seafarers by a pre-recorded message on Zoom in March last year. He is already out there promoting himself again, scot-free—I think he has had a promotion at DP World. The kind of person this legislation would manage to tackle, if they fell foul of it, is one who admitted breaking the law when questioned by members of a Select Committee, as I said, and who used handcuff-trained, balaclava-wearing security guards to remove dedicated, unionised seafarers, replacing them with non-unionised workers, many of whom are paid a fraction of the UK minimum wage. After experienced crew were fired, the UK coastguard repeatedly detained P&O Ferries’ ships for a lack of crew training, including fire safety and lifeboat drills. He was responsible for a non-unionised P&O Ferries crew from Malta working 17 weeks straight with no shore leave. Let us not forget that this is a gentleman whose company took millions of pounds from the British Government in subsidies during covid-19. I could go on about how utterly unfit Peter Hebblethwaite is, and how he has caused so much distress to many constituents of the hon. Member for Dover.

[Karl Turner]

Is it right that an obvious calculation that would have been made about sacking 786 British seafarers and replacing them with exploited, poorly paid staff was that nothing was going to be done in terms of person liability? It was almost encouraged. Indeed, I would go further to say that it was done on the basis that, first, nothing would happen personally, and secondly, this particular Tory Government would turn a blind eye. That is the truth of what happened, is it not?

[David Linden]

The hon. Member is spot on. The reality is that this gentleman factored in that he would appear before a Select Committee, that it would be uncomfortable and that he would probably have to get some crisis comms advice. I rather suspect that Peter Hebblethwaite is walking around waving the fact that he has been able to withstand all this pressure from Parliament as a feather in his cap. He will see it as some sort of virtue that he can sell to future employers. The hon. Member is absolutely spot on: the fact that there is no personal liability means that these kinds of directors will behave with impunity.

New clause 9 does not mandate Members to vote for a report. It mandates us, on a moral basis, to vote for action to ensure that a company director who was as egregious as Peter Hebblethwaite can never again get away with that. Members of this House have a responsibility to stand up for their constituents. On that basis, I have tabled the new clause.

[Mrs Elphicke]

I wish to speak about this new clause, because we are all of the view that Peter Hebblethwaite should not be allowed to be a director. I made a formal complaint to the Insolvency Service on directors disqualification for the whole of that board. The Insolvency Service has still not completed its civil proceedings, although it has said that it is not minded to take criminal proceedings. It is clearly unacceptable that company bosses are allowed to act in that way and that directors disqualification does not apply.

This is a specific Bill dealing with a specific set of circumstances. I would like the relevant Department to look at why the Company Directors Disqualification Act 1986 and the criminal obligations in the Insolvency Service did not apply to this specific case. I have made representations to the appropriate Ministers accordingly.

I completely agree with the sentiments expressed by the hon. Member for Kingston upon Hull East, except his view that the Government have not taken any action. Throughout the P&O situation, we have walked literally shoulder to shoulder in support of people.

[Mrs Elphicke]

I thank the hon. Gentleman for that intervention. That is clearly rubbish, because the Government at the time, including the then Secretary of State, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), took immediate action—action that no one expected to be taken—as did the Minister at the time, my hon. Friend the Member for Witney. I was involved directly in that action along with the then Secretary of State, the then Prime Minister and a number of Government Ministers, including my hon. Friend the Member for Witney, in relation to this issue. That action is the reason why we have the nine-point plan and why we have the Bill.

Opposition Members will always say that whatever the Government do does not go far enough. However, I have to say, in representing the people in Dover who were specifically affected by P&O, that I am very proud of the action that we have taken across the Chamber and so far in this House. I want to see the Bill put on the statute book at pace.

[David Linden]

The hon. Lady is talking about the importance of taking action. Other than a pretty toe-curling Select Committee appearance and a couple of bad media interviews, the only action I have seen so far is that Peter Hebblethwaite has received a promotion. He is still able to act as a company director, so for the sake of the hon. Lady’s constituents, I ask her to reflect on the fact that until such a time as Peter Hebblethwaite is unable to act as a director and get away with such behaviour in future, that action will not be enough.

[Mrs Elphicke]

As I said, I do not think that Peter Hebblethwaite should be a director and I am taking steps to ask the Insolvency Service to remove him.

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[Mr Holden]

As the hon. Member knows all too well, he and I are very much on the same page and would like the Insolvency Service to report as soon as possible, but it is an independent organisation and we cannot comment on ongoing investigations. The entire basis of the new clause tabled by the hon. Member for Glasgow East, which Opposition Back Benchers have spoken about too—that they want something that could disqualify someone—is there in what is being looked at. It is maintained via the Insolvency Service. While I cannot comment on the individual case, I think it is clear that what everybody wants to achieve is already there. I understand why Members are trying to invent another offence, but it is not necessary, as what the hon. Member for Glasgow East seeks to achieve can already be done through current legislation.

[David Linden]

I am not sure that is the case, given that Peter Hebblethwaite can continue to act with impunity and had a promotion recently.

I will not seek to make this party political; I have been tempted to in the past, but I will not. I was interested in the point the hon. Member for Dover made in an exchange that was probably the hottest point of our proceedings today. I offer a hand of friendship; I will act as the Cilla Black of Parliament and bring us all together. If the hon. Lady says that she appreciates the sentiment behind new clause 9 but wants it to go further, I am happy to work with her.

On that basis, I will not press the new clause to a Division in Committee, but I ask the hon. Lady to join me for a cup of tea at some point to help me look at how to strengthen it. Then we can bring it back for a vote on the Floor of the House during remaining stages. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

Bill, as amended, to be reported.