Seafarers' Wages Bill [ Lords ] (First sitting)

Grahame Morris Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[Gavin Newlands]

It is a pleasure to see you in the Chair, Mr Davies, and to lead this worthy but anaemic debate. On that basis, I hope that the Minister will be generous when discussing the amendments before us. The amendments are in my name and that of my hon. Friend the Member for Glasgow East.

A couple of these amendments are straightforward. Amendment 42 would change the definition of a ship or vessel, and amendment 43 would ensure consistency in the definition of a seaman. The amendments are intended to ensure that the legislation aligns with existing definitions of both “seaman” and “ships” in the Merchant Shipping Act 1995. I thank the Law Society of Scotland for highlighting these issues.

Having differing definitions in law between the Bill and existing legislation for no apparent good reason—although we will hear what the Minister says—does not seem to be a particularly efficient route to go down. After all, the workers that the Bill is intended to cover are already seamen under current definitions and, on the face of it, the Bill does not aim to change that.

Similarly, if there is already a legal definition of a ship in statute, it seems useful to maintain that definition here. Indeed, when the Bill was in the House of Lords, Baroness Vere made a similar point in relation to the definition of a harbour, pointing to the existence of the Harbours Act 1964. Therefore there should be no reason why a similar principle cannot apply in this case. If there are good reasons why a new definition specifically relating to the provisions in the Bill is needed, I will be happy to hear it, but logic would suggest that using the existing definitions would be far simpler.

Amendments 67 and 48 are designed to deal with the fact that workers operating in the renewables industry, which will be increasing exponentially in the coming years, are currently excluded from the Bill. There are two methods of dealing with that under the amendments. They relate to the UK exclusive economic zone and to the renewable energy zone. The exclusive economic zone almost entirely matches the renewable energy zone, save for an area just under 200 miles north-west of Cape Wrath and more than 100 miles north of North Rona. Because our proposal is aimed particularly at protecting those seafarers engaged in work supporting renewables installations in UK waters, it seemed more appropriate to try to use the renewable energy zone rather than the EEZ, but we have given both a try. If the Minister wants to accept either, I will be perfectly happy with whichever one he chooses.

At the moment, the Bill’s extent is limited to the UK and its territorial waters—that is, the 12 nautical mile limit. That excludes the EEZ and REZ, which go to 200 miles. Our proposal would simply ensure that ships and seafarers engaged in work to support renewables installations were not inadvertently omitted from enjoying legislative protection simply because those zones are not listed in the Bill while territorial waters are referred to.

I note that the Minister in the Lords, Baroness Vere, had to correct the record after incorrectly stating that these workers were already covered by national minimum wage legislation. Workers in the oil and gas industries are entitled to national minimum wage protection. It would be ludicrous if their colleagues doing the same difficult and dangerous job, but supporting renewable industries, were denied the right to protections and to national minimum wage equivalence. This is, on the face of it, a fairly minor proposal. However, it would help to protect thousands of workers—a number that we hope will grow hugely over coming years—and would ensure that renewables were not just better for the planet but better for our workers.

[Grahame Morris (Easington) (Lab)]

Would it be convenient to discuss amendment 67 at this point, Mr Davies?

[The Chair]

It certainly would.

[Grahame Morris]

Thank you, Mr Davies. It is a pleasure to serve under your chairmanship.

I welcome the fact that the Government have introduced some measures to address the appalling injustice experienced by the P&O seafarers, 800 of whom were summarily sacked by Zoom on 17 March in the most appalling fashion. However, I cannot help reflecting on the fact that this is something of a missed opportunity. I understand that the terms of the Bill are, by their very nature, narrow. Nevertheless, it is complicated legislation and it does throw up a number of anomalies, which I hope the Government will recognise and address during Committee or perhaps at Third Reading. Given the overall situation that we face with the reduction in the number of UK-based seafarers, this is a golden opportunity.

Two former Shipping Ministers are members of the Committee. With the right hon. Member for South Holland and The Deepings, we have had previously a discussion about the opportunities, given the huge public investment in offshore wind and offshore renewables more generally as part of the zero-carbon strategy, to provide employment opportunities, particularly in coastal towns such as mine. Sadly, that opportunity has been missed.

[Sir John Hayes (South Holland and The Deepings) (Con)]

As the hon. Gentleman has cited me, I ought to be driven to action, so let me say this. He will remember that, as Minister, I commissioned the “Maritime Growth Study”, and part of that study was a consideration of exactly the matters that he is describing. We need to recruit, to skill and to retain more UK seafarers. That is something that, frankly, most Governments, of all persuasions, have neglected over a long time, so the problem is deeply rooted. We have allowed the erosion of our merchant navy for a considerable time, so I entirely endorse what the hon. Gentleman has said. Skills matter, people matter, and jobs matter.

[Grahame Morris]

I thank the right hon. Gentleman for that intervention. I agree with his comments. My wish, and indeed that of the maritime trade unions—RMT and Nautilus International—is that the seafarers’ charter and the Government’s nine-point plan embodied in the maritime 2050 strategy be placed on the face of the Bill. That would address many of their concerns, which were echoed by the right hon. Gentleman.

I respectfully point out that the noble Lord Hendy raised the issue of the lack of minimum wage protection for crew working in the offshore wind and offshore renewable energy supply chain beyond the limits of the UK’s territorial waters. At present, crews working on servicing offshore oil and gas across the UK continental shelf are entitled to protection under the national minimum wage legislation that this Bill relates to. However, crew who sometimes work on the same ships but service the offshore wind turbines in the UK exclusive economic zone are not entitled to that protection. That would seem unfair to any impartial observer and is leading to serious cases of exploitation. It is a glaring anomaly that the Bill should address.

We also have the exclusion of UK seafarers from the growing labour market, which is directly linked to the UK economy. These jobs would not exist but for a huge investment from the UK Government and the UK taxpayer. It is quite a travesty that we are not providing the protections that would ensure those jobs go to UK-based seafarers. I would like that to be addressed. That is the purpose of amendment 67.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. We hope to work co-operatively with the Government. The common good dictates that workers should be treated with dignity and respect in the workplace, and at the least they should be paid the national minimum wage, but as the hon. Member for Paisley and Renfrewshire North pointed out, international maritime law is incredibly complicated legislation when it comes to looking at economic terms and the definition of ships. Renewables hold a very positive future for the United Kingdom. We need to ensure that this sector comes within scope of the Bill, as my hon. Friend the Member for Easington suggested.

Labour has tabled multiple amendments, along with other colleagues on the Opposition Benches, to extend the definition of to whom the Bill applies. The right hon. Member for South Holland and The Deepings in his often-erudite way points it out: this is about making Britain a greater maritime nation. That depends on the jobs on offer and the skills we train our maritime workers with. We must ensure British workers can get those jobs on our coastal waters and that when they do they are fairly paid, with at least the national minimum wage.

[The Parliamentary Under-Secretary of State for Transport (Mr Richard Holden)]

It is a pleasure to serve under your chairmanship today, Mr Davies, and I thank all right hon. and hon. Members present for taking part. It was particularly gracious of the hon. Member for Wythenshawe and Sale East, and indeed the hon. Member for Kingston upon Hull East, to note the complexities around international maritime law relating to this piece of legislation. I will address some of those points a little bit further when I address some of the amendments later on.

Broadly, the Bill will play an important role in improving seafarers’ welfare and working conditions, and I am pleased that, today, we are taking another step towards it becoming law. There is broad support for the Bill, and I hope that during the course of our discussion, I will be able to address colleagues’ concerns and questions relating to the amendments. I have tabled several broader amendments in my own name: while they may appear great in number, the majority of them—as Members will see when we go through them—are consequential on a small number of changes to the Bill that will improve the functioning of the legislation.

To address hon. Members’ concerns, following on from our continued stakeholder engagement, particularly as we develop our secondary legislation, we have identified some areas of the Bill that would benefit from the improvements made by our amendments. As hon. Members have said, the Bill was introduced at pace to respond quickly to P&O’s disgraceful treatment of its seafarers. It is right that we continue to listen to stakeholders and examine how the Bill will function, and I make no apology for taking every opportunity to ensure the right outcome for seafarers.

Clause 1 sets out the services to which the Bill will apply, namely services for the carriage of persons or goods by ship, with or without vehicles, between a place outside the United Kingdom and a place in the United Kingdom. In other words, the Bill applies to international services, as the majority of seafarers on domestic services between places within the UK will be entitled to the UK minimum wage under existing legislation.

[Grahame Morris]

I recognise that this is a complex piece of legislation and that trying to understand its finer points is quite testing, but could I seek a point of clarification in relation to apprentices? As I am sure the Minister will recall, when Peter Hebblethwaite, the chief executive of P&O Ferries, dismissed those 800 seafarers, he also dismissed the apprentices. Will the Minister indicate whether the wage bands in the UK national minimum wage, to which clause 2 refers, will apply to apprentices as well as the hundreds of directly employed seafarers? The apprentice wage is £4.81 per hour, which does not seem like a princely sum to me.

[Mr Holden]

I thank the hon. Member for raising that point. The banding is an issue that we will address fully through the UK national minimum wage equivalence in the regulations that will come forward at a later stage. We intend for it to mirror the national minimum wage in the UK, and will set that out through secondary legislation. There are exemptions for services provided by fishing vessels and services for the purpose of leisure or recreation, in line with other maritime employment legislation and to account for the different remuneration practices in those areas.

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Although the UK has certain sovereign rights and associated jurisdiction within the EEZ, it is not UK territory and to describe it as a place within the UK could be seen as the UK expanding its territorial reach. As the Bill is currently drafted, services between a port in the UK and an installation in the EEZ would be in scope of the Bill if they called at a UK port regularly, meaning at least 120 times. If this amendment were accepted, those services would no longer be in scope. Perversely, it would bring services calling from a place outside the UK to such installations into scope, and those seafarers cannot be said to have close ties to the UK, so we do not consider it appropriate for the Bill to apply to them.

[Grahame Morris]

I do not mean to be picky, but can I just point out a contradiction? The scope of the Bill covers seafarers who are working on the continental shelf on oil and gas installations and the servicing of those, but not seafarers who are in the offshore wind turbine energy sector or those working on the continental shelf. It seems a contradiction to leave out that whole section of seafarers.

[Mr Holden]

I thank the hon. Member for his point. Everybody will be covered if on a boat that moves to and from those platforms at least 120 times a year, but the expansion of the UK’s exclusive economic zone to cover that area would bring, as other hon. Members have said, particular complexity regarding international maritime law. I will come to that when we address the amendments to clause 2.

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[Mr Holden]

My understanding is that it is for the whole year. The schedules for these operators are based on a whole year; it is very rare that they are not. These are big operations that do not dip in and out. They are not easy to set up; they often involve long-standing arrangements with port authorities, and are based on the whole year. However, if the hon. Gentleman would like to write to me following this sitting, I will obviously respond to any particular issues or examples he wishes to raise.

[Grahame Morris]

I hope this intervention does not prejudice the fact that I would like to speak to amendment 67, which stands in my name and that of a number of colleagues.

[The Chair]

No, not at all.

[Grahame Morris]

Could the Minister give a bit of clarification in relation to Government amendment 1? I welcome the fact that the amendment creates a duty, rather than a power; presumably, that was in response to the concerns raised on Second Reading about the conflict of interest. Let us not forget that some harbour authorities are owned by shipping companies, and may well be reluctant to apply sanctions and fines if there is a conflict of interest.

Regarding the level of fines, proposed new subsection (3A) to clause 3 refers to

“a fine not exceeding level 4 on the standard scale.”

Could the Minister indicate what level of fine that is? My information is that it is £2,500. Would it not be advantageous to set it at level 5, which is unlimited? A fine of £2,500 does not seem like much of a disincentive.

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[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.

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[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—

[Grahame Morris]

I thank the hon. Lady for giving way. I recognise the examples of Denmark and one other seafaring nation—I have forgotten which one at the moment—but they have sectoral collective bargaining. Their standards and pay rates are generally much higher. I hope she would acknowledge that. We are looking at a far lower level—just at the national minimum wage, without all of the package that I want to refer to in relation to pensions, accommodation and other things, roster patterns in particular.

[Mrs Elphicke]

I am grateful to the hon. Gentleman. Indeed, I would like later to come back in the relevant section in relation to roster patterns, which are very important.

I am giving the Danish example as a reason why we need clarity to exclude the provision from our calculation of national minimum wage. It is not appropriate or correct to exclude food and accommodation when someone is on their ferry. They work—too often—two weeks on, two weeks off. They are stuck on that ferry. They must have food and a place to put their head down. They will probably have a poor night’s sleep or a poor day’s sleep when they are off rota. It is absolutely essential that we have clarity so that, unlike in Denmark and other countries, for the purposes of our application of the minimum wage legislation in relation to seafarers operating in our own territorial waters, it would be the same if I was working at McDonald’s, or anywhere else, or working at sea. I ask the Minister to reflect on this matter and to consider whether he can give us some more assurance that that is indeed the intent behind the Bill, because it is a very important point, given the fact that there is different maritime practice even among European neighbours from a business perspective.

If I may, I will touch briefly on the desire to have improved rights for seafarers. The Minister has mentioned bilateral discussions. Again, it would be helpful for us to understand whether the bilateral discussions coming up in March with our Prime Minister and President Macron are intended to include some of the issues around seafarers that we have mentioned, because it will only be through a strong bilateral arrangement across short straits that we can ensure that we get the best possible safety and working conditions for our seafarers.

[Grahame Morris]

I agree with much of what the hon. Member has just said. I may have misunderstood—[Interruption.] Well, it is the first time; every day is a school day.

Can the Minister clarify something that he said earlier, which may well address our concerns? It is in relation to amendment 62. Did he indicate that on the point just made by the hon. Member, namely that, as the amendment says:

“provision prohibiting deductions from remuneration for accommodation costs, food or other entitlements”

will be addressed through regulation by the Secretary of State? I see that he is nodding, so that is good news indeed.

If I may, I will speak to amendment 62, which was tabled by my colleagues on the Front Bench and I, and amendment 47, which is very similar and which was tabled by the SNP. Both amendments address a broader question. I appreciate that the Bill is trying to address one specific issue by putting in place measures to prevent the actions of rogue bosses, such as the management of P&O, from being replicated by other ferry operators; I understand that.

However, what the Government must understand is that the motivation for P&O and others—I know that we will come on to nationality-based pay discrimination later—is that P&O made far more savings from changing the roster pattern and reducing the crewing than it did from reducing the wages by paying staff, who were mostly able seamen from India, less than the minimum wage. The Government must acknowledge that and if we are going to address this issue, we need some remediation.

[Karl Turner]

I remind the Committee of the disaster of the Herald of Free Enterprise—193 passengers and crew lost their lives. The inquiry found that that disaster was down to one issue: crew fatigue. My concern is that that could happen again. Five or six months on, two weeks off, seven days a week, 12 hours a day—it is obvious what could occur.

[Grahame Morris]

I thank my hon. Friend for that powerful intervention and for reminding us of the consequences of fatigue and of reducing staffing to unsafe levels. It is not just a matter of opinion and a concern expressed by the RMT and Nautilus International; a number of academic studies from Cardiff University and others, which I believe the Department has copies of, demonstrate just how important it is that we address this issue.

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[The Chair]

Order. I have been very generous with interventions, but I must remind Members that interventions are supposed to be just that: interventions, not mini-speeches. If we could back to interventions being interventions, I would very much appreciate it.

[Grahame Morris]

Thank you, Mr Davies. I will hurry along.

To reinforce the point made by the hon. Member for Dover, I say to the Minister—I am sure he is aware of this—that some academic studies into crew fatigue were published in 2012 by Cardiff University. Further research is provided by the EU’s Horizon project and the World Maritime University’s EVREST report, and all the evidence highlights the dangers of crew fatigue caused by long hours. I believe the replacement crews on the Dover-Calais ferry were working 12-hour shifts, seven days a week, for up to 17 weeks without a break, when they slept on the ship. That must be a cause for concern in terms of health and safety.

In conclusion, I say to the Minister that we really need a maximum roster pattern in the seafarers’ charter. For the ferry sector, two weeks on, two weeks off is the pattern favoured internationally and by the maritime unions, for health and safety reasons as much as anything. I urge the Minister to work with the maritime trade unions and the Labour party in respect of this issue, and on refining the seafarers’ charter to get this right and to help restore jobs, fair pay agreements and training programmes, starting with the ferry sector.

[Simon Lightwood (Wakefield) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Davies. I rise to speak in favour of amendment 62, which stands in my name and those of my hon. Friends, on the deduction of accommodation, food costs and other entitlements, and of amendment 45, which stands in the name of the hon. Member for Paisley and Renfrewshire North, on preventing port hopping.

The intention of amendment 62 is to prevent operators from deducting accommodation, food and other costs from the national minimum wage equivalent. We do, of course, welcome the intention to ensure that operators pay a national minimum wage equivalent to those who have close working relationships with the UK, but as we have heard, significant elements of the provisions and their enforcement must be strengthened to prevent avoidance, which we know is rife in the sector.

First, the minimum wage provision has an offset allowing employers to deduct costs for providing accommodation. That is clearly ripe for abuse and must be ruled out explicitly. We know that P&O could potentially deduct £1,035 and Irish Ferries nearly £490 from a non-qualifying seafarer’s wages, if the accommodation offset is available to them under the secondary legislation provided for in the Bill.

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[Gavin Newlands]

I rise to support amendment 63. Given the stroppy point at the end of the Minister’s last contribution, I reassure him—[Interruption.] Oh, it was a humorous point; well, that is for each individual to judge. I point out to the Minister that the right hon. Member for Epsom and Ewell (Chris Grayling) has been retained as the Scottish Government’s ferries tsar from now on, so we will not have to worry about that. For the purposes of Hansard, that was sarcasm, lest I have to correct the record at a later date.

The point that has just been made is essentially this: as the Bill currently stands, the Government are hiding behind harbour authorities by expecting them—and with the amendments before us, now compelling them, under fear of prosecution—to carry out the enforcement work. Given the complex nature of the issues we are dealing with, I understand what the Government are doing, but maritime employment rules and minimum wage rules are complicated.

The Maritime and Coastguard Agency will need to be trained in labour market employment issues. HMRC employment enforcement officials responsible for enforcing the minimum wage will need training in seafarer and maritime practices and maritime law. Additional resourcing and time will potentially be needed to make this work. The MCA is responsible for the enforcement of the Bill’s powers, but is not named or listed in clause 6 or anywhere else. A dual role for the MCA and HMRC national minimum wage inspections must be clearly established, otherwise the Bill could have unintended consequences for qualifying seafarers’ existing national minimum wage rights.

The nine-point plan included a specific action to ask HMRC to dedicate UK national minimum wage resource to the maritime sector. The Department for Transport has told trade unions that HMRC has since stated that there is no disproportionate risk of seafarers not being paid the national minimum wage. I have no clue how it has come to that conclusion, given everything that has gone on, and that statement is despite Peter Hebblethwaite’s open admission to the joint Select Committee on 24 March that P&O ferries are now paying an average well below the national minimum wage, not to mention the evidence amassed by the RMT and detailed in annex 2 to its briefing.

The Government should consider using redundant Brexit customs processing facilities built at great expense in ports that host operators and vessels in scope of this Bill to provide bases for the inspectors from the MCA, HMRC and the International Transport Workers’ Federation, which will assist in the enforcement of the legislation. The MCA and the ITF perform essential port state control functions to protect and uphold minimum international seafarer welfare standards in the maritime labour convention. It is for that reason that we support new clause 8 in the name of the hon. Member for Easington.

I suspect the Government may not accept the new clause, but it would be pretty obscene if we were to see evidence of nationality-based pay discrimination. We very much support the new clause. I hope the Minister is generous, for a change.

[Grahame Morris]

I support the arguments put forward by my colleagues on the Front Bench. Will the Minister give some clarification? I noted what I thought was an assurance in his comments. Our amendment 63 is an attempt to make the enforcement process clearer, in terms of ensuring that the inspectors have the requisite not just powers but information, from HMRC in particular, in order to carry out the task that the Bill assigns to them. I wonder whether the Minister could clarify—maybe I am missing something; I heard him say that it would be the Maritime and Coastguard Agency that would be the inspectors. Could that function be delegated to the harbour authority or to staff of the harbour authority acting on behalf of the MCA? I would appreciate if he could clarify that point in his summing up.

Nationality-based pay discrimination is the elephant in the room. We must get to grips with it. I realise that the issue is incredibly complicated because of international treaties, but we need to get to the kernel of the issue because this is what is happening. Unscrupulous ferry operators in the sector are displacing UK-based seafarers on a “fire and rehire” basis, which Labour finds anathema.

There were Conservative MPs who were incandescent at the tactics employed by P&O Ferries on 17 March—St Patrick’s day—in that terrible action it took. We must see if we can address that, and the hon. Member for Paisley and Renfrewshire North made a good suggestion about using the expertise from the International Transport Workers’ Federation as part of the collective effort, particularly where the issues relate to seafarers from overseas. I wonder if the Minister might consider not only that, but the suggestion to use the facilities that were built—at some cost to the public purse—for the Brexit customs processing facilities and consider whether those not being used adequately could also be used for that purpose.

[Mr Holden]

I would like to provide some clarification on the points made initially by the hon. Member for Easington. The Maritime and Coastguard Agency is the relevant enforcement agency, not the harbour authority. Furthermore, it would be unlawful to delegate powers in this space to harbour authorities, so I wanted to make that clear. In response to a point made by the hon. Member for Paisley and Renfrewshire North, the Maritime and Coastguard Agency does not need to be named in the Bill because it enforces on behalf of the Secretary of State. This is normal drafting for Government agencies that are subsidiaries of Departments.

The Department has obviously engaged extensively with HMRC on this issue. The truth is, as this is not enforcing national minimum wage legislation but trying to get the national minimum wage equivalent, the amount of information that HMRC holds in respect to many of these people is either nil or incredibly limited, as many of them will not be UK taxpayers. HMRC has been clear that it is happy to share anything it can to make enforcement easier, but it is not in the exact same space. HMRC already enforces national minimum wage for seafarers who qualify for it, but within this legislation we reflect that much of that falls out of the normal scope of UK legislation.

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[Grahame Morris]

On that specific point, I am sure the Minister can clear up the issue I want to raise. The surcharge relates to ports and harbour authorities competing with one another. Will the surcharge be consistent or will it vary from one port and harbour authority to another?

[Mr Holden]

That will be clarified through the tariff regulations, which we will introduce. It will depend on the nature of the ship and the size of it, but we aim for consistency in terms of different vessels in different areas, and a tariff will be established.

The clause provides a power to make regulations that will make provision to—

[Grahame Morris]

rose—

[Mr Holden]

I hope that what I am about to say will answer the hon. Gentleman’s question. The clause will make provision for publication of a determination to impose surcharges; set out how the imposition of a surcharge is to be notified to the operator; set out the period within and the manner in which a surcharge must be paid; and make provision for notification of a surcharge to the Secretary of State and publication of the fact that a surcharge has been imposed. Surcharges paid under the clause may be retained by the harbour authority for the delivery of any of their functions, or for shore-based welfare facilities for seafarers.

I turn to Government amendments 13, 14, 16, 17, 19 and 20. As with the Government amendments to clause 3, these amendments, along with the amendments introducing new clauses 2, 3 and 4, will make the previously discretionary powers of harbour authorities to impose a surcharge mandatory duties, and set out the circumstances in which these duties should be exercised.

As discussed in relation to clause 3, from our continued engagement with port stakeholders we have been informed that harbour authorities are unlikely to exercise their power to impose a surcharge unless directed to. The direction-making power was intended as a back-up power and was not intended to be used as the primary means. However, this is all part of addressing that issue and ensuring the effective functioning of the Bill.

New clauses 2, 3 and 4 therefore set out the circumstances in which a harbour authority is under a duty to impose a surcharge. In summary, new clause 2 sets out surcharges to be imposed when an equivalence declaration is not provided in time; new clause 3 sets out when a declaration relates only to part of a year; and new clause 4 sets out when a service is operated inconsistently with a declaration.

Amendment 13 amends clause 7 to remove the discretionary power for harbour authorities to impose surcharges, which is now replaced with the new duties set out in new clauses 2, 3 and 4. As a result, there is no need for regulations that make provision as to the publication of a determination to impose surcharges and that will be removed by amendment 17. Subsections 1 to 4 of clause 7, which are removed by amendment 13, are replaced by new clauses 2, 3 and 4, which provide for duties to impose surcharges and the circumstances in which those duties apply. Amendment 14 is consequential on amendment 13.

Amendment 16 provides that a duty to impose a surcharge is subject to direction-making powers of the Secretary of State under clause 11, as amended by amendments 32 to 34, to not comply with their duties or to comply with their duties in a particular way. I will discuss the powers of direction in greater detail when we come to clause 11. It also provides that a harbour authority that fails to comply with a duty to impose a surcharge is guilty of an offence and liable, as previously mentioned, on summary conviction to a fine not exceeding level 4 on the standard scale. As with the offence for not requesting a declaration, this will be enforced by the Maritime and Coastguard Agency and is essential to ensure that the Bill functions properly.

Amendment 19 provides for regulations to make provision requiring a harbour authority that has imposed a surcharge to notify the Secretary of State if the surcharge is not paid in the required timeframe. It is necessary for the Secretary of State to be aware of circumstances where harbour access is likely to be refused, in order to monitor the operation of the Bill, take steps to mitigate disruption caused by the refusal of access if necessary, which will be pertinent in relation to very busy sea lanes, and consider if a direction should be issued to the harbour authority under clause 11(2), as amended by amendments 32 and 33, in circumstances where the refusal of access might cause damage to key passenger services or national resilience. Amendment 52 is consequential on amendment 44 to clause 3.

This group of amendments also relates to clause 8 of the bill, which provides a process for the making of objections to surcharges imposed by harbour authorities under clause 7. As the Bill currently stands, an interested party may make an objection to a harbour authority’s determination to impose a surcharge, the tariff of surcharges specified by a harbour authority, or the imposition of a surcharge or its amount.

The Secretary of State will then consider the objection and any representations made and may decide to approve the decision to which the objection relates, or to direct the harbour authority to revoke the determination, revise the tariff, revoke the imposition of a surcharge, or increase or decrease the amount of the surcharge. The Secretary of State will communicate the decision to the harbour authority and the objector and publish it online.

The Secretary of State may also direct the harbour authority to repay any surcharges required as a result of a decision under this clause. If a harbour authority does not comply with a direction given by the Secretary of State under the clause, they will be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. It should be noted that where an objection has been made to a harbour authority’s determination to impose a surcharge, an interested person cannot make another objection to that same determination. I shall respond to other amendments as they are moved.