P&O Ferries and Employment Rights

Grant Shapps Excerpts

Monday 21st March 2022 Commons Chamber

[The Secretary of State for Transport (Grant Shapps)]

I thank the hon. Member for Sheffield, Heeley (Louise Haigh) for bringing this debate forward. It is important that this should be fully discussed, although we have already had an urgent statement on the subject. The way in which those 800 loyal and experienced workers were treated by P&O Ferries last week was shameful and utterly unacceptable, after two years during which maritime staff faced significant demands and worked tirelessly to keep the country open and supplied us with vital goods, without which this country would not have been able to function. In my view—I am sure it is the view of the whole House—this is about having respect for employees, about employers having the common decency to engage with their workforce, particularly when times are tough, and about having standards that we would expect every single company in this country and every single employer to uphold.

Of course we understand the financial pressures that many businesses are facing right now. Regrettably, redundancies are sometimes inescapable, but there is no excuse for what we saw last Thursday. There was no consultation with the workforce and no consultation with the unions. To answer the hon. Lady’s question, the first I heard about it was at 8.30 in the evening, not through the memo, which I did not see, but instead through communication with my private office to indicate that P&O would be making redundancies the next day. The House may or may not be aware that, in 2020 during coronavirus and again in 2021, redundancies took place at P&O. In 2020, the numbers were larger than those we saw last Thursday. However, the company consulted properly about those redundancies, and they were made voluntary. So it was on that understanding that I had a conversation with the hon. Member for Kingston upon Hull East (Karl Turner) the next morning, in which he provided some on-the-ground information. Then, as colleagues will recall, I was standing at this Dispatch Box when I was passed a note about redundancies taking place. It was with considerable concern that I saw that the company was deploying those redundancies via a pre-recorded Zoom call, as the hon. Lady has said.

[Clive Efford]

The Secretary of State said that he did not know of P&O’s plans until 8.30 in the evening, but the shadow Secretary of State has indicated that the Government were aware of P&O’s plans before their public announcement. Can he confirm that that is the case, when that was, who had access to that information and what action they took on it?

--- Later in debate ---

[Grant Shapps]

My understanding is that a very small number of officials were contacted by P&O management during the late afternoon. They then wrote up a read-out of that, which is, I think, the note that has been widely circulated. As I have mentioned, my concern was not really sparked until I was at the Dispatch Box, when I started to hear about the way that it was being carried out, because in 2020 and 2021 voluntary redundancies had taken place in the way that we would expect. It was deeply concerning to see the footage of staff being forcibly removed from ferries, underlining the cynical approach and confrontational nature of the operation, which was not at all what we had seen in those previous two rounds. It is astounding that a company with a long and proud maritime past, whose vessels bear names such as the Pride of Kent and the Spirit of Britain, will in future have almost no British crew on board, but it is no more astounding than the manner in which the crew were left marooned last week.

[Emma Hardy]

Am I correct in understanding that the Secretary of State was made aware of the P&O workers being sacked and made the assumption that it would be done in the correct manner, without checking whether it would be done in accordance with trade union and employment legislation? We have heard the famous saying that if we assume something, it tends to make an “ass” out of “u” and “me”. It seems that in this case we have made an ass out of all those P&O workers who are now stuck without their jobs because the Secretary of State assumed that everything would be fine without doing his job and checking it.

[Grant Shapps]

I really want to avoid the temptation to try to turn this into a political knockabout—[Interruption.] It is not. It is about 800 people’s jobs. When the previous two rounds of redundancy took place—I think I am right in saying that neither the hon. Lady nor any other Member of this House, perhaps bar one, approached me about them—the company quite properly consulted the workers and the unions and carried them out in a voluntary fashion. The expectation, therefore, was, quite properly, that that was what would happen again on this occasion. We are also talking about a commercially sensitive decision, which limits what a Minister can immediately say and do. But there is no excuse—and this is the point—for the way in which it was carried out. For some employees, for a four-decade seafaring career to be brought to an abrupt video end is just plain insulting.

Since the news emerged, I have spoken to one of the sacked employees, who has given years of service to P&O. He told me about the chaotic way in which the situation unfurled for him on Thursday morning. He said that after a decade of service, workers were brutally informed via a pre-recorded Zoom message, and that, despite the fact that some staff have now been offered redundancy packages, nothing can change the way in which these workers were let down. They found out, as the rest of the world was finding out, via a Zoom message, which was linked to some of those individuals’ homes.

[Craig Mackinlay (South Thanet) (Con)]

I am very pleased that my right hon. Friend has had the opportunity to speak to some of the employees. Has he managed to glean the level of the financial compensation for redundancy? Will the package be the standard minimum or will it be different?

--- Later in debate ---

[Grant Shapps]

My understanding—again, the House will have a strong view on this—is that they are being offered two and a half weeks’ pay, rather than one week’s pay for every year’s service, as well as three months’ redundancy pay and then another three months’ redundancy pay for the fact that it is happening very early. In other words, it is six months’ redundancy pay and two and a half weeks’ pay. However—and this is the catch—it is on the condition that they sign a non-disclosure agreement. Again, this goes to the heart of the problem, which is the company working in a way that tries to keep employees quiet and then pay them off in return.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

You have been on your feet for eight minutes. Tell us what you are doing.

[Grant Shapps]

I hope the right hon. Lady recognises that I have taken a great number of interventions. I would be able to tell her what we are doing but only if she did not want me to take her colleagues’ interventions, which I want to hear.

[Andrew Gwynne]

The Secretary of State seems to be saying that it is absolutely unacceptable—indeed, outrageous—that the Spirit of Britain will be staffed by a non-British workforce because employees have not been sacked in an appropriate manner, but that, were the Spirit of Britain to be staffed by a non-British workforce because employees had been sacked through the appropriate channels, that would be okay. That is not taking back control. It is weak.

[Grant Shapps]

I agree with the hon. Gentleman. That is the point I was making. To have a ship called Spirit of Britain, Pride of Kent or any other name that attaches it to this country when it does not have British workers would be completely wrong, and I will be calling on P&O to change the name of the ships. It would be completely inappropriate. I think that was his point. [Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. It is getting very difficult to hear. I know that feelings are running very high, but it is important that we hear what the Secretary of State is saying.

[Grant Shapps]

I directly answered the hon. Gentleman’s question, but that seems to have brought derision, so I think I will make some progress to let the House, the country and those seafarers know what we are doing about this.

On Friday, I communicated my anger to the chief executive of P&O Ferries. I also urged him to engage with the seafarers and trade unions, and offered my support in organising those discussions. It is not too late for those discussions to take place to salvage the situation, so I implore him to do so. The maritime Minister, the Under-Secretary of State for Transport, my hon. Friend the Member for Witney (Robert Courts), also spoke to the chief executive on Thursday and expressed in no uncertain terms our deep disappointment before coming to this House and explaining the Government’s position.

[Andy McDonald (Middlesbrough) (Lab)]

Will the Secretary of State give way?

--- Later in debate ---

[Grant Shapps]

I want to make a little progress. We made it abundantly clear that the reputation of P&O Ferries has been badly hit by this episode, not just within government, but, more importantly, with the public. Many believe that they have seen this company’s true colours. Clearly, it has been handled disastrously by the company, which is why we have asked the Insolvency Service to look at the notification requirements and consider whether further action is appropriate, especially if, as we are concerned, the relevant notice periods were not given and the relevant consultation did not take place. I can inform the House that that would be a matter for criminal prosecution and unlimited fines.

We are reviewing, as a matter of urgency, all Government contracts with P&O Ferries and with DP World. Where possible, we are looking to use other providers if there are any contracts where the UK Government are involved—I believe, at this point, that such contracts have been historical in nature, rather than current. We are considering further steps that we can take to remove P&O Ferries’ influence from the British maritime sector, including positions on key advisory boards, because, again, I do not want to see that company, given the way the management have behaved, advising on the way the British maritime sector is shaped and rolls out.

[Several hon. Members rose—]

[Grant Shapps]

Again, I wish to make a little progress, so let me turn to the critical issue of fire and rehire. It is only a rehire to a very limited degree here, from what I can see—it is more like just fire. I have already asked ACAS, or, rather, my right hon. Friend the Business Secretary has, to produce additional information and guidance to employees, and—[Interruption.] And wait for it: if we need to go further, this is something we will consider doing. I have spoken to the Secretary of State for Work and Pensions to ensure that those who have lost their jobs are supported with relevant help and a rapid response taskforce. Since Thursday, I have received many messages from blue-chip employers anxious to snap up the newly redundant workforce, and I have arranged to put them in touch. I pay tribute to those who have come forward, and with unemployment at 3.9% I very much hope that those excellent individuals will be snapped up very quickly indeed.

[Mr Carmichael]

I hope that we are going to hear soon about the safety implications of this issue. P&O Ferries has obligations under the international safety management code, which requires each vessel to have a safety management system. That is then audited by the Maritime and Coastguard Agency, which produces a document of compliance. It is difficult to see how, with 100% crew changes in the way we have heard, P&O can possibly now be in compliance with those obligations. Will the Secretary of State look at the possibility of suspending the documents of compliance until he is satisfied that P&O is in compliance with them?

[Grant Shapps]

I will, but I will come back to the right hon. Gentleman’s precise points in a moment in my speech. Seafarers’ rights and wellbeing are a matter I take extremely seriously. Indeed, the House may recall that during the pandemic I ordered the MCA to board vessels forcibly to ensure that conditions were appropriate where I believed that there may have been maritime workers who were being exploited, as indeed they were being. So I take this matter incredibly seriously. Maritime employees have not in this country, and indeed throughout much of the world, received some of the same benefits and protections that exist otherwise for workers. That simply is not good enough and it is a practice we have been seeking to end.

[Jo Stevens (Cardiff Central) (Lab)]

In 12 years—

[Grant Shapps]

In 12 years we have done an awful lot, and I am just about to tell the hon. Lady about it. As I was saying, that is why in our maritime 2050 strategy, which she may not have read, this Government committed to a social framework for UK seafarers that will promote working, pay and social conditions, levelling the playing field with—[Interruption.] Let me explain to hon. Members who have not read the strategy that it is called the 2050 strategy but it takes place now. I do not want them to be confused by the name of the strategy. [Interruption.]

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. We really cannot have Members making it impossible to hear what is being said.

[Emily Thornberry]

But it is so annoying!

[Grant Shapps]

The right hon. Lady says I am “so annoying” but—[Hon. Members: “Division!”] [Laughter.] I see that the Opposition have the advantage right now. I am trying to explain that the maritime 2050 document is not about something happening in 2050; it is happening right now, and its purpose is to level up conditions between those working onshore and those working on ships. Seafarers, regardless of nationality, who normally work in our territorial waters are now, thanks to this Government, fully protected by our national minimum wage.

Colleagues should be aware that the UK operates under international laws as treaty members, meaning that UK law does not apply in all circumstances—an issue which may in part be in play in this case. A further consideration is that we understand that some seafarers were employed under Jersey law, which has further complicated the legal picture. Such complications allow employers to take advantage in the way that we have seen with P&O Ferries, which is why we will do all we can to ensure that domestic law is applied in full everywhere around the country.

[Sammy Wilson]

The boats on the route from Larne to Cairnryan never deviate, travelling daily from one British port to another British port. Do minimum wage laws apply on that route?

[Grant Shapps]

The laws apply in UK territorial waters, so I believe that they do. I will contact the right hon. Gentleman with the detail.

Despite the current disruption to P&O services, I can confirm that at present no major issues are reported on ferry routes to and from this country. I discussed supply-chain issues with my French counterpart this weekend, and both Government and industry have been working flat out to put alternative arrangements in place to ensure that the supply chain continues.

I place on the record my thanks to Stena for stepping up over the weekend at our request, laying on extra services from Scotland to Northern Ireland. We are monitoring the situation at other ports served by P&O, such as Dover, Liverpool and Cairnryan. I can tell the right hon. Gentleman that Stena will be putting on additional services from Scotland to Northern Ireland from tomorrow, which will be of particular interest to retailers including ASDA and M&S.

[Karl Turner (Kingston upon Hull East) (Lab)]

I am grateful to the Secretary of State for giving way; I can perhaps help him and the House. National minimum wage legislation does now apply on UK-to-UK routes, but only since June 2020 when Opposition Members continually lobbied Ministers to ensure that it did.

[Grant Shapps]

I absolutely respect the hon. Gentleman’s knowledge and expertise, and I thank him publicly for ensuring that I was receiving information as he saw it break on the ground through his constituency contacts. As he says, it is the case that we introduced that legislation, and I am delighted that it was backed by all sides.

We will ensure that resilience plans are deployed on the supply-chain issue—

[Grahame Morris (Easington) (Lab)]

Will the Secretary of State give way?

[Grant Shapps]

I want to make a little progress. Those plans will mean that passengers and freight traffic will be as little affected as possible.

While I welcome P&O’s plan to resume ferry operations this week, to the point of the right hon. Member for Orkney and Shetland (Mr Carmichael), the safety of shipping remains a top priority. Staff must be experienced and trained to uphold the highest possible standards, as his intervention suggested. I have now instructed the Maritime and Coastguard Agency to inspect all P&O Ferries vessels prior to their re-entering service, including the operational drills to ensure that the proposed new crews are safe and properly trained. If they are not, these ships will not sail. I expect many customers—passengers and freight—will quite frankly vote with their feet and, where possible, choose another operator. On that subject, for the purpose of fairness, I point out that P&O Cruises, although it shares the P&O name, is nothing to do with P&O Ferries and should not be tarnished with the same brush.

[Dame Angela Eagle]

Why does the Secretary of State seem pleased that P&O is to recommence its routes when, as we have heard, some of the crew will be on as little as £1.80 an hour?

[Grant Shapps]

I do not have details of how the ships will be recrewed. The hon. Lady will be aware that we are still putting maximum pressure on the company to sit down around the table with the workers and unions to make sure that this is not where this sad story ends. Ultimately, to provide the supply chain, which Northern Ireland Members have been raising, it is important that we have the resilience needed to ensure that goods flow, but that cannot be done using crews who are not properly trained to do the job to the highest standards.

I implore P&O Ferries to reconsider its decision. It is not too late to acknowledge its mistakes. I hope that the reaction to that now infamous video—in the House, the media and across the country—tells the company that this approach is quite simply unacceptable.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

Will the Secretary of State give way?

[Grant Shapps]

I just want to complete my speech. Others wish to speak, not least Members on the hon. Lady’s side of the House.

I say to P&O, “Please, repair some of the damage done last week by fully engaging in a true dialogue with seafarers and trade unions.” Otherwise, we are committed to re-evaluating our relationship with P&O Ferries and will review our contracts with it and with DP World as a matter of urgency. We will do everything we can to help the workers, where possible by finding them new jobs, and we will make sure we send a powerful message to every other employer in this country that such disgraceful treatment of workers will never be tolerated.

[Stella Creasy]

The Secretary of State said earlier that he was going to ensure that P&O Ferries would no longer advise on transport issues in his Department. Right now, DP World has press promoting its role advising the Government on trade matters. Has he picked up the phone to his colleagues in the Department for International Trade to make sure that DP World is summarily sacked from that role? I am sure he could make a video to let the rest of the world know if that was the case.

[Grant Shapps]

I can confirm that that applies to all Government activity involving DP World and its ownership structure. I can also confirm that I am writing today to DP World—the ultimate owners—to express the outrage felt across the entire House.

[Several hon. Members rose—]