UK Maritime Industry

Drew Hendry Excerpts

Thursday 12th January 2017 Westminster Hall

[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.

[Melanie Onn (Great Grimsby) (Lab)]

I thank the hon. Gentleman for raising the important question of the number of women employed in the industry, because there is a significant shortage. The right hon. Member for Orkney and Shetland (Mr Carmichael) raised the matter of vacancies, training and how much more effort could go into bringing more women into the industry. I have seen in the Humber ports a number of women playing an important and valuable role in the portside industry.

[Drew Hendry]

I welcome that comment, and will talk some more about such opportunities.

The wage deal that has been struck adds to the CalMac public sector contractor deal that runs in Scotland; it was named the Living Wage Foundation’s Scottish champion in 2016. Let us be straight about it: fair pay and conditions attract people to the industry and we should support that. All seafarers should have the national minimum wage, as my hon. Friend the Member for Glasgow South West (Chris Stephens) mentioned. However, while the RMT and Nautilus International have welcomed the actions in Scotland, they have sounded a code blue over the health of the Maritime and Coastguard Agency in the UK. They say that it is in crisis over current rates of recruitment and retention:

“In the view of the Maritime unions, it is no exaggeration to say that the MCA is in crisis. At current rates of recruitment and retention it will soon reach the stage where maritime safety is compromised because the regulator simply does not have sufficient number of qualified staff to discharge its core statutory duties, particularly vessel safety surveys and inspections.”

They also say that they are

“disappointed that the Government rejected the Transport Select Committee’s recommendation for ‘an independent review of how the Maritime and Coastguard Agency will successfully take on new responsibilities without a proportionate increase in its resources.’.”

I join them in that disappointment over those opportunities.

While I am talking about the MCA, I want to mention that at the moment it has the final say over ship-to-ship transfers in the Moray firth. I hope that the Minister will take on board the strength of feeling of the communities around the coast in my constituency and those of my colleagues about the order for ship-to-ship, and that he will consider that we have many times called—and still do—for power over that to be devolved to the Scottish Parliament.

The UK Government will need to get their act together on employment opportunities. According to their own transport figures—this relates to recruitment—more than half of UK seafarers are over 41 years old. Only 3% are women. Women make up only 28% to 30% of uncertified officers and ratings, and the bulk of those jobs are in catering. Men take up almost 100% of the engineering jobs. Brexit will no doubt pose challenges, but we should also consider that a high number of EU nationals are employed. For example, Polish people alone make up 16% of non-UK holders of certificates of equivalent competency for the UK shipping industry.

Things will not be helped, either, by the approach that is taken to looking after cadets. I was involved in trying to arrange the rescue of cadets from the Hanjin Louisiana, when the ship was moored offshore because the company had gone into administration. Four young cadets from Scotland were trapped on board for well over a month, with supplies scarce and not knowing what was going to happen. They were stuck there with limited communication, through email only. The UK Government were slow to get into action and attempt to look after them.

To move on to the maritime sector plan for business, as the right hon. Member for Orkney and Shetland mentioned, a great deal of the economy is affected by shipping. The hon. Member for Isle of Wight (Mr Turner) mentioned the complexities that we will face in the future. Peter Karlsen of Norbulk Shipping has said:

“The shipping industry in the UK will view the referendum result negatively, as does most business. It is a potential disruption to trade, movement of goods and labour. We are facing years of complex negotiations to divorce ourselves from the EU.”

He continues:

“Whether it remains as attractive to foreign investors or entrepreneurs, especially from the EU, to establish and conduct business here is uncertain.”

A lot needs to be done to put confidence into the UK maritime industry.

Of course, there are questions: what is to be done about freedom of movement, migrant workers, a customs union, and rights to operate in domestic trades of EU members who maintain flag-based cabotage restrictions? Will there be slower turnarounds that affect volume? I could go on and talk about employment law and contract. There are many questions but no answers yet and the clock is ticking. Of course in Scotland our preference is to stay in the single market and maintain a customs union. That is what we should do.

I want to conclude with some points about the MCA and safety. There is a long-running issue in the west of Scotland in particular as to emergency towing vessels. Two are required in the north of Scotland. One should be berthed in Stornaway to cover the west coast, the Northern Isles and, in particular, the Minches. We have had near things with the MV Parida, the oil rig the Transocean Winner famously coming to ground off the coast, and even HMS Astute, a nuclear submarine, running aground off Skye. We need to make sure that action will be taken, and there will not be another six years of ignoring communities and their representatives.

I want to finish with some questions. As to the towing vessels, when will the UK Government stop ignoring the needs of the people who work and live in, and know, the west of Scotland, and the many warning incidents that have been racked up, each edging closer to the possibility of a disaster? What lessons will they learn from the Hanjin Louisiana incident, and will they ensure cadets’ rights under the maritime labour convention the next time such an incident occurs? Would they take action or make representations to shipowners and flag states if there was evidence of seafarers being mistreated, or of the contravention of MLC-ILO measures? What plans do they have to tackle the recruitment and retention problem in the MCA? What initiatives are they taking or have they planned with respect to the incredible age and gender imbalance in UK shipping?

--- Later in debate ---

[Pat Glass (North West Durham) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Walker. This has been a very full debate, with many important contributions. I pay particular tribute to the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing the debate. I was going to say that Opposition Members welcome it, but judging by the tone of the debate as a whole, I think it is welcomed right across the House, and I look forward to what the Minister will have to say at the end.

I would like first to give credit where it is due. I very rarely give credit to the Scottish Government, but I will on this occasion. I welcome the announcement by the Scottish Government of changes to the charter agreement for the two Seatruck vessels operating between Aberdeen, Shetland and the Orkneys.

However, I have to be fair: we have heard a lot about maritime companies paying less than the national minimum wage. On Scotland’s only commercial maritime freight link to the continent, the hourly rate paid to Lithuanian seafarers can be as low as £1.64. Justifiably, we get angry when we hear about modern-day slavery on ships in the far east harvesting prawns, but we are prepared to see £1.64 an hour paid within our own waters, so I think that although a great job has been done, there is much more to do.

[Drew Hendry]

The hon. Lady will of course be aware that that shipping route is in international waters and the Scottish Government have no locus over the pay rates of that company.

[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.