Seafarers' Wages Bill [ Lords ] (Second sitting)

Grahame Morris Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to serve with you in the Chair, Ms Harris. I will address amendments 51, 52, 55, 56 and 58, which stand in my name and that of my hon. Friend the Member for Glasgow East. We will also be supporting amendment 64—we have signed the amendment —in the name of the hon. Member for Wythenshawe and Sale East.

Ultimately, we want this legislation, in whatever form it takes at Royal Assent, to stick. That is what we are seeking to ensure today. The surcharges and penalties envisaged have to be realistic to have any effect. The hon. Member for Wythenshawe and Sale East raised the possibility of operators who own ports surcharging other operators who use those ports. If we end up in a position where operators allege sharp practice on the part of other operators and take legal action, it is workers who will be caught in the middle. P&O Ferries can afford the lawyers; poorly paid staff cannot. Setting a national tariff will remove the element of discretion from harbour authorities and ensure that all harbours and all operators across the board pay the same surcharge, regardless of which harbour has jurisdiction.

With all due respect to the harbour authorities, shifting the onus to the Secretary of State would also be a clear sign of how seriously the Government will take infringements. It is one thing for an operator to take on a port, but quite another to decide to take on the Department for Transport, if they know they are in the wrong. The likes of P&O might have deep pockets, but ultimatel, there will be no escape from a law that is properly enforced by the state.

As things stand, the level of surcharge that will be levied on operators in breach of the legislation is set entirely by the harbour authority, with reference to the regulations that will be laid at some point by the Secretary of State. My concern is that if the level of surcharge is set too low—we spoke this morning about the level of fines that could be levied—there would be no or very little disincentive for operators to pay below the national minimum wage equivalent. We saw with P&O that even flagrant lawbreaking was no disincentive whatever.

[Grahame Morris (Easington) (Lab)]

I completely agree with the line the hon. Member is pursuing here—that the fines should present a disincentive to breach the provisions of the legislation—but would he clarify a point on the minimum surcharge? The amendment says it would be

“no less than 300 per cent of the difference between the amount calculated as the national minimum wage equivalence for the operator and the amount in total paid by that operator”.

We learned in the debates on the previous clause that more than 50% of the savings that P&O were making were not from wages but from the changes in roster patterns. Should that be taken into account as well?

[Gavin Newlands]

I thank my colleague on the Transport Committee for making that point. It is very important, and he is absolutely right. I spoke about the impact of rostering on Second Reading. I am sure we will come on to the seafarers’ charter and the issues around that later on. My amendment seeks to amend the Bill in front of us, but I would love for us to be taking the whole situation into account, rather than just the wage. We will discuss that point in more detail a bit later on.

The Insolvency Service refused to undertake criminal proceedings against P&O Ferries or its corporate leadership, despite Mr Hebblethwaite’s appearance in front of the Select Committees’ joint hearing, when he freely admitted that he and his colleagues conspired over a lengthy period of time to systematically break the law and treat their workforce dreadfully. P&O clearly took the view that the chances of facing any real penalty for their actions were slim and, ultimately, they were proved to be right.

The Bill sets no minimum level of surcharge that would be levied on operators found to be in violation of the law. If the surcharge is set at a rate lower than the difference between compliance and non-compliance, there is nothing to prevent rogue operators from paying below the national minimum wage equivalent, making a declaration to that effect, paying the surcharge and still sailing away with full pockets, exactly as P&O Ferries did. [Interruption.]

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

I thank everybody for coming back. I am sorry that my speed of speaking was so swift earlier; I shall try to keep these comments at a more temperate pace. I will pick up on a couple of points from hon. Members, then enter into a little more of the briefing.

Tariffs or surcharges will be set by each harbour authority, but they will be in accordance with the regulations made under clause 7. As the hon. Member for Paisley and Renfrewshire North said, we also hope that the surcharges will never be required, but we need to have them to ensure proper practice. Opposition amendment 50 seeks to set out in the Bill how the surcharge is to be calculated. Currently, the Bill provides that harbour authorities will set the tariff of surcharges in accordance with the regulations. It is important that the surcharges disincentivise operators from not providing equivalence declarations, and we agree that surcharges should be high enough to act as a disincentive. We will consult on the levels of the tariffs to be set in the regulations. We do not want to commit to setting the level in the Bill, but please be assured that we are going to take everything into consideration in the drafting of the regulations.

Amendments 51, 52 and 56 seem to be designed to take responsibility for setting the surcharge away from the harbour authorities. Harbour authorities have been given this duty given their proximity to operators as their customers. The tariff must be set in accordance with regulations, but harbour authorities are well placed to determine within those regulations what the surcharge should be in each case. However, we will consider this position further before Report.

Amendment 53 would remove the option for harbour authorities to keep the surcharge for any of their functions, and would mean that moneys would be transferred to the Secretary of State for disbursement . The Bill already allows moneys to be spent by the harbour authority for the purpose of shore-based welfare facilities. I can see that to make the Secretary of State an intermediary places great faith in the speedy actions of the Government in all cases, but there is a possibility that this transaction would put a significant administrative burden on the Department were it to be dealt with on a case-by-case basis and would delay seafarers seeing the benefit of this money.

Amendments 54 and 68 would remove the harbour authority’s ability to spend moneys collected from the surcharge on the discharge of their functions. This is not intended to be a profit-making mechanism, but I am happy to review this function as intended before Report, because we need to ensure the surcharge is high enough to act as a disincentive.

Amendment 65 would remove the power to make regulations providing for the notification of a surcharge to the Secretary of State. The power to make regulations providing for the notification of the surcharge to the Secretary of State is an important mechanism to deter non-compliance. The mechanism of the Bill relies heavily on the monitoring of enforcement, and, as the imposition of the surcharge is a duty under the Bill, it is important that the Secretary of State is notified in this process.

I understand the importance of making it clear that it is the imposition of the surcharge that must be notified to the Secretary of State. I have thus tabled Government amendment 18, which provides for notification to the Secretary of State of the imposition of a surcharge. I hope colleagues are reassured by that.

[Grahame Morris]

I am grateful for the explanation. The Minister said amendment 65; did he mean amendment 64 in relation to the powers of the Secretary of State to set regulations? Can the Minister have a quick look at that? It is a point that in the earlier clauses he had indicated he was going to look at again before Report, so that we have a consistent level set by the Secretary of State in regulation. Could the Minister clarify that?

[Mr Holden]

The hon. Member is quite right. I should have been referring to amendment 64. What I was referring to in that section was Government amendment 18, which relates to Opposition amendment 65. I am about to come on to amendment 64; I did try to reference the hon. Member’s comments earlier, but I will come on to them now.

Amendment 64 would require the Secretary of State to make regulations setting out a national tariff of surcharges, as I indicated earlier, removing any role for harbour authorities in setting surcharge tariffs. The surcharge is an important mechanism to deter non-compliance, and the Government consider it reasonable and proportionate for harbour authorities to play some role, alongside the national tariff setting under clause 7. It is envisaged that a schedule of rates for the surcharge will be set by the harbour authority with reference to the estimated difference between the amount that seafarers are paid and the amount they would have been paid if they had qualified for national minimum wage. This is expected not to be an exact calculation, but to be based on estimates of the number of seafarers involved. The detail of how that will be worked out will be set out in regulations, and we will work closely with industry to ensure we get it right. It is important that surcharges are relevant to the circumstances of the service in scope, and harbour authorities are well placed to make that call given their proximity to services. We have, however, heard the concerns raised by the ports industry and others, so we will consider the matter further ahead of Report.

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[Mr Holden]

It is a pleasure to serve under your chairmanship, Ms Harris.

As currently drafted, clause 9 allows harbour authorities to refuse access to a harbour if an operator has not paid a surcharge as required in accordance with the Bill. The provision is intended to incentivise payment of surcharges and to make payment a condition of access to UK harbours. There are exceptions where a harbour authority may not refuse access: in cases of force majeure; where there are overriding safety concerns; where there is a need to reduce or minimise the risk of pollution; or where there is a need to rectify deficiencies on the ship.

[Grahame Morris]

The Minister is being very helpful. Will he list the categories that fall under, or explain how he would describe, “force majeure”? He mentioned a couple of categories. Is that an exhaustive list?

[Mr Holden]

I will happily provide the Committee with a full list ahead of Report stage. We are talking about serious incidents where life is at risk, but I am happy to write to the hon. Gentleman with further detail.

The method of communicating refusal of access will be set out in regulations. The clause provides that nothing in section 33 of the Harbours, Docks and Piers Clauses Act 1847 prevents refusal of access to a harbour under this section. Access can be refused, irrespective of whether an objection has been made under clause 8. This revision is a key tool in ensuring compliance with the policy intention of the Bill.

The amendment imposes a mandatory duty on harbour authorities to refuse access to a harbour, instead of a discretionary power to do so, as I mentioned earlier with regard to implementing the surcharges. As with those amendments to clauses 3 and 7, the reason for the amendment is to ensure the effective functioning of the Bill so that harbour authorities do not simply wait to be directed by the Secretary of State.

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Amendment 29 is consequential on amendment 32, which I will discuss when I come to clause 11. Amendment 29 makes it clear that a harbour authority’s duty to refuse access is subject to any direction given by the Secretary of State under clause 11(2)(a).

[Grahame Morris]

It is a pleasure to serve under your chairmanship, Ms Harris. In this group, I will speak to amendment 70 in my name and to new clause 6.

The Minister explained the reasoning behind his proposal to refuse access to a harbour. Amendment 70 proposes that the ship should be detained within a port. That is far more in line with international maritime law. The denial of harbour access is a matter of some concern. For harbour authorities or, indeed, the Secretary of State to suspend access is dangerous and likely to be ineffective. I therefore support the detention of non-compliant vessels within a UK harbour. The trade unions, the RMT—National Union of Rail, Maritime and Transport Workers—and I believe Nautilus International, also support that view, in order to provide a punishment for non-compliance that is more in line with international maritime regulatory standards governing operators’ behaviours.

I respectfully point out that the Maritime and Coastguard Agency’s port state control powers, which already exist under the maritime labour convention, are the only mechanism for inspecting crew employment and welfare standards. Every month, foreign flag vessels detained following those inspections are posted by the Maritime and Coastguard Agency on the Government’s website. The power that I propose would be a welcome addition to the port state control responsibilities that the MCA discharges for foreign flag vessels working from UK ports.

Only denying access to ports is not a realistic or sustainable punishment, especially as it relies to some extent on vessels not sailing to the UK if they are found to be non-compliant. Amendment 70 and new clause 6, in relation to vessels that fail to pay the surcharge, would be much more effective. There is also the possibility that capacity in another port would be blocked, if a ship were detained outside the port, perhaps in another harbour or even in a different jurisdiction. It is not clear whether the bilateral agreements the Government are negotiating—the Minister referred to them earlier, in particular that with France, but there are also those with Ireland, the Netherlands, Belgium, Spain, Denmark and Norway—would take account of that. I would be interested in the Government’s response to that point.

There is a welfare issue. It is outside the scope of this Bill, but there have been occasions where, certainly during the course of the pandemic, a number of vessels were laid up. I do not know if comes under the category of force majeure. Many tens of thousands—even hundreds of thousands—of seafarers were unable to access proper conditions. I know there were issues about the spreading of infection and so on, but putting that to one side, surely in terms of welfare it would make far more sense to detain the vessels within the port, rather than outside.

[Gavin Newlands]

I rise to speak to amendment 58. I am minded to support amendment 70 and new clause 6 in the name of the hon. Member for Easington. Perhaps counterintuitively, I am looking to add another exception to the list that could allow a rogue operator’s ship access to harbour, because I do not want seafarers or workers caught in the middle. As things stand, where an operator has been refused access for not paying the surcharge even when a crew welfare issue has been identified, such as a long overdue change of crew, the Bill would allow harbour authorities to continue blocking access to the operator. That could put the crew in the middle of a tug of war between the harbour authority and the operator.

We do not want a situation where the harbour authority is legally able to prevent access to a port when a ship has genuine need to seek access to ensure the safety and health of its crew. I know that most harbours take their responsibility for crew welfare seriously, but we do not want a situation where rogue operators are able to say, “We would love to take crew welfare seriously, but we couldn’t access the nearest harbour because we didn’t take it seriously in the first place, by paying below the national minimum wage.” There should be no excuses when it comes to employee safety.

Adding crew welfare to the list of exceptions to the harbour authority’s right to refuse access would provide some extra piece of mind for seafarers, and ensure that they have the protections, not the operator. It is the seafarers we are looking to protect. The amendment would clearly not prevent harbours from refusing access where the five conditions do not apply and, on that level, does not seek to water down the options available to hit those who refuse to pay a surcharge.

The Neptune declaration was established during the covid pandemic as it became clear that public health restrictions on access to ports were severely impacting on the capacity for ships to change over. Part of that declaration is a commitment that operators should make all reasonable efforts to accommodate crew changes, including when the vessel has to make a reasonable deviation. That should apply even as we have moved beyond the worst of the pandemic, and our legislation should reflect that declaration, which is why we have tabled the amendment.

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[Mr Holden]

Clause 10 specifies that in England, Wales and Northern Ireland, proceedings relating to offences under the Bill will be prosecuted by the Secretary of State. In practice, the Secretary of State will do so through the Maritime and Coastguard Agency. In Scotland, all criminal prosecutions are brought by the Lord Advocate.

This provision ensures that there is a clear and consistent process for the prosecution of offences under the Bill, and that such proceedings are handled by the appropriate Government agency. The clause is a critical component of the Bill’s enforcement mechanism and it will help to ensure compliance with its provisions.

Clause 11 as drafted will give the Secretary of State the power to give guidance to harbour authorities on how to exercise their powers under the Bill. The clause also allows the Secretary of State to issue directions to harbour authorities, requiring them to exercise or not exercise their powers under the Bill or to exercise them in a particular way.

[Grahame Morris]

The Minister is being patient and I appreciate that. Will he clarify the difference between “guidance” and “direction”? I ask because, on an earlier clause, we agreed that harbour authorities will now have a duty rather than a power. I wonder whether the Secretary of State’s “guidance” is a weaker term than a “direction”. Will he explain the difference?

[Mr Holden]

As drafted, the Bill is weaker, and that is why we are replacing the provisions with a duty in all these areas, in order to strengthen the requirement. Whether, in some such areas, it was “guidance” or other wording, there will now be a “duty”. That makes the Bill harder, ensuring that the harbour authorities have to do things.

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[Mike Kane]

I rise to speak in favour of amendment 61, in the name of the SNP Members, and amendment 66. The proposal is self-explanatory but important. The regulations under the Bill hand very broad powers to Ministers. It would be important for the House to consider and approve the regulations that will be made.

[Grahame Morris]

The ground has been very well covered. I am just wondering, particularly in relation to amendment 61, tabled by my colleagues from the SNP, about the impact of the earlier Government amendments. The Secretary of State has quite extensive powers in relation to the declaration, the imposition of surcharges, and directions to harbour authorities. I am sure that that must have been taken into account, but it does seem, given the extensive powers being conferred on the Secretary of State, that it would be reasonable to have reference to the affirmative procedure in the Bill and to specify which sections require delegated power for the Secretary of State. Therefore I support amendments 61 and 66.

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[Sir John Hayes]

I rise briefly to address new clause 5, which has much to recommend it. The hon. Gentleman was right to talk about a seafarers’ charter, which has been long called for. He was right to recognise the need for engagement with the trade unions. When I was the Minister, I had a positive dialogue with the RMT maritime section, as my former shadow Minister, the hon. Member for Kingston upon Hull East, will know. It is also right, as I said earlier, that we understand that pay should be seen in a broader context, as the new clause recommends. I called earlier for a strategy that looked at the whole maritime sector, pertinent to the matters we have been discussing today, which would identify common concerns across ports, business services, manufacturing, engineering, science and all the other ancillary industries linked to maritime.

It seems critical to recognise that seafarers are particularly vulnerable to exploitation because of the peripatetic nature of their employment. Where people take advantage of that vulnerability, we need to act. We have moved on from the dark days when economic liberalism prevailed and we thought the free market would solve everything—at least I hope we have. This country has a proud maritime past. One thinks of great seafarers such as Drake, Captain Cook and Lord Nelson, who are heroes, whatever the liberal bourgeoisie, with their doubt-filled, guilt-ridden preoccupations, may think. We can have a maritime future that is just as great, but that must be built on the right terms and conditions, pay and circumstances for our seafarers.

My only reservation about the new clause, which is why despite teasingly suggesting that I might support it, I will not, is that it does not actually go far enough. I would want to do still more. The Government are to be commended for introducing the legislation, and my hon. Friend the Member for Dover in particular is to be commended for championing the interests of seafarers on the back of the awful events that have been reflected on today, when P&O behaved so disgracefully. I say to the Minister let this be the beginning of new thinking about how we can revitalise the maritime sector by doing right by the people who work in it.

[Grahame Morris]

I am grateful for the opportunity to speak on the new clauses.

New clause 7 is in my name and that of my hon. Friends the Members for Glasgow East and for Paisley and Renfrewshire North. We are using the F-word, aren’t we: fire and rehire. In the context of this new clause and new clause 5, I remind Members of the awful circumstances of the sacking of the seafarers on the P&O Ferries. The Minister has brushed aside all attempts by the Opposition to amend the Bill and address concerns about the number of days in port. That means that the Bill’s scope is incredibly narrow. I am afraid that many seafarers who might have anticipated being afforded a degree of protection will be terribly disappointed. Given the powers we have conferred on the Secretary of State, I think it is completely reasonable to suggest that the Government should produce a report within a year of Royal Assent to assess whether they have been effective. Indeed, the Minister and his predecessors have suggested that if those powers are not effective, further measures would be introduced to ensure that seafarers are protected from unscrupulous rogue employers.

New clause 5 relates to important issues that the Government need to address, not least the fact that the 2018 regulations were breached by P&O Ferries. When Peter Hebblethwaite, the chief executive of P&O Ferries, addressed a joint session of the Transport Committee and the Business, Energy and Industrial Strategy Committee—the hon. Member for Paisley and Renfrewshire North and I are members of the Transport Committee—he was quite open about the three areas of law that he had breached. In fact, he was quite boastful, which was shaming in my opinion. I believe that the 2018 regulations, which P&O Ferries breached, are up for revocation under the Retained EU Law (Revocation and Reform) Bill. I understand, however, that an agreement was reached to retain a number of labour protections in UK law, so I am looking to the Minister for some reassurance on that. If that is the case, I hope that appropriate action will be taken to keep those protections in place for those who Members on both sides of Committee acknowledge to be an extremely vulnerable employment group because of the nature of their work.

Before we lose sight of it, the whole purpose of the Bill is to protect pay, working hours, pensions and other remunerated conditions of seafarer employment on ferries. We rehearsed many of the arguments on Second Reading, and it is the belief of many on the Opposition Benches that the Bill’s scope needs to be widened to more effectively cover employment issues, as well as minimum pay, for seafarers working on those ferry routes.

I am rather disappointed about the seafarers’ charter. I know that it has had a number of iterations; we have at least two former Shipping Ministers on the Committee: the right hon. Member for South Holland and The Deepings and the hon. Member for Witney. I think it started off as the—this is a bit of a tongue-twister—fair ferries framework agreement. It was then the fair ferries charter and then the seafarers’ charter. But it still has not been published, as far as I am aware, and it is only voluntary. If it were in the Bill and we could have some confidence that employers would have to implement it, we would have major reassurance.