UK Maritime Industry

John Hayes Excerpts

Thursday 12th January 2017 Westminster Hall

[Mr Carmichael]

It will not surprise the hon. Gentleman to hear that I will have a fair bit to say about national minimum wage and national living wage enforcement, because that is something that has come very much to the fore this year. It came to my attention in particular through the detention of the Malaviya Seven in Aberdeen and its sister ship, the Malaviya Twenty, in Great Yarmouth. Those ships have been detained by the International Transport Workers Federation as a result of non-payment of the crew’s wages. The ownership of the ships is being contested—the case is winding its way through the courts. I am afraid I have to say that the willingness of the shipowners in those cases to leave the seafarers they employ effectively destitute does them no credit. Sadly, it does not reflect particularly well on the wider industry, either.

Where we have seen some progress—the Seatruck case—is however perhaps the low-hanging fruit. As I see it, that is just the tip of the iceberg. As we speak here in London, there are non-domiciled seafarers, principally Filipinos, working out of Scottish ports, being paid significantly less than the national minimum wage but still having retained by their employment agents—also domiciled outside the EU and also principally Filipinos, I am told—some 32% of their wages in respect of UK tax and national insurance. In some ways, that illustrates the absurdity and inadequacy of the current enforcement arrangements. If these men are not here working as part of the UK, why are they paying UK taxes? If they are here working as part of the UK, why are they not given the protection offered to other UK employees and workers?

The more I find out, the more it seems that the situation facing many seafarers working on ships that in some cases have not left UK waters effectively for decades is just as bad as the situation that led the previous Labour Government to set up the gangmasters licensing system. It may be that at some point we will have to take a similar approach on the position of seafarers.

[The Minister of State, Department for Transport (Mr John Hayes)]

I intervene because it is so often the case that there is not sufficient time at the end to answer all the points made in the debate. The right hon. Gentleman is striking a chord with me, with which I have considerable sympathy, as he will know from our work together in the past. We will do more on this—he can be assured of that—and I hope to say a little more about that at the end.

[Mr Carmichael]

I am immensely grateful to the Minister for that intervention. I know he has a personal and political commitment in this regard and I am delighted that he was able to offer us that assurance again.

This is not just about the treatment of Filipino seafarers; there is also an effect on UK seafarers. First, because of such employment practices, UK seafarers are excluded from employment opportunities that would otherwise be available to them. That also drives down wages for those who are employed. I am told that Stena Line, the largest UK employer of seafarers, cut the hourly rate of pay for ratings employed seasonally—from June to September—from £8.31 to £7.20, which is the minimum wage rate. That is a graphic illustration of the direct impact on UK seafarers.

The situation has a context. For the Government’s purposes, that context is the maritime growth strategy that they commissioned in 2014. That was a good, comprehensive piece of work, and it was welcomed. If anything, it was somewhat overdue, coming the best part of two decades after the previous piece of work had been done. It made a number of recommendations. The most important was that leadership was required from both Government and the industry, including though a more commercial and responsive UK maritime administration within Government and an industry-led promotional body, with more proactive action to replenish and develop the skills needed to maintain our position as a world-leading maritime sector and effective marketing by the industry and Government of what the UK maritime sector has to offer both domestically and internationally to be strengthened.

I could probably do 90 minutes on the maritime growth strategy alone, but in view of the number of others who wish to take part in the debate, I will concentrate on the one aspect that, to my mind, is probably the most significant: training of seafarers. The Minister will know that since the turn of the century, we have had the SMarT—support for maritime training—scheme, which currently holds something in the region of £15 million. The British Chamber of Shipping tells me that it is looking for a doubling of that. I hope the Minister will look at that, because in terms of Government expenditure that is of course a significant ask, but it could bring significant rewards. I hope, though, that when the Minister engages with the industry in respect of that ask, he will not be shy about attaching some strings to any increase in funding.

I am told that a year’s guaranteed employment is on offer for those who are trained as officers under the scheme. That of course would tackle one of the major difficulties that I hear about consistently from constituents who work in the industry: that officers in particular are trained under SMarT scheme funding, but there is no employment for them once they qualify. There has to be a little more detail. We have to do more than simply extend the cliff edge out by one year, so that a situation in which we currently have training followed by no employment does not then become training followed by one year’s employment followed by no employment.

--- Later in debate ---

[Mr Andrew Turner]

I absolutely agree.

The port services regulation is threatening future investment in the sector as well as jobs. It has been opposed by British port owners, trade unions and Government and Opposition Members. It is unwanted, unworkable and, simply put, unacceptable for the UK. The large dark cloud in the sky relates to whether the UK will be affected by the regulation between now and when we leave the EU.

Today the Minister of State for Transport said at Transport questions:

“we are freed from the clutches of the European Union.”

Before Christmas, the European Scrutiny Committee, of which I am a member, held an evidence session with the Minister. It was then unclear whether the regulation would enter into force before the UK had formally left the EU. It was also unclear whether—heaven forbid—a transitional agreement between the UK and EU might mean that the regulation could apply to us, even though we had left. Is the Minister now saying that these uncertainties are settled, because that does not seem to be the view of the European Scrutiny Committee? Is it possible that the new regulations can commit us before we leave the European Union, and we will then have to change things back?

[Mr Hayes]

Disraeli said:

“Taking a new step, uttering a new word, is what people fear most.”

So let me utter a few new words. I have opposed the port services regulation since I first heard of it. We will vote against it. We will record our vote against it. When we do so, we will show why. It will take two years, as the hon. Gentleman knows, to come into effect. It is not for me to anticipate when we will leave the European Union, but I want nothing to do with the port services regulation, and I do not want our ports to have anything to do with it either.

[Mr Andrew Turner]

I absolutely agree. I am pleased to have that promise. Throughout the referendum I argued that there were many opportunities to be found in the uncertainties that leaving the EU could bring. However, I am not willing to accept the uncertainties that the port services regulation brings. It jeopardises our maritime industry on such a great scale that it must be avoided by all available means. I am fully aware that the Government do not intend to provide a running commentary on ongoing negotiations, but there is one thing we must fight for as we negotiate leaving the EU, which is for the UK to be wholly exempted from the EU’s port services regulation.

--- Later in debate ---

[The Minister of State, Department for Transport (Mr John Hayes)]

With great pleasure, Mr Walker. As I looked around the Chamber during this debate, I felt spoiled for choice because so many of my favourites are here. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) springs to mind, as does the hon. Member for Luton North (Kelvin Hopkins), my hon. Friend the Member for Isle of Wight (Mr Turner), the hon. Member for Great Grimsby (Melanie Onn) and, not least, yourself, Mr Walker.

Among those favourites stands proud today the right hon. Member for Orkney and Shetland (Mr Carmichael), who introduced the debate. He worked with me in Government and I know that he cares as passionately as I do about this subject—unsurprisingly, given the people he represents. When he introduced the debate he was right to emphasise the significance of the maritime sector to our economy, as well as to his constituents. The sector contributes £13 billion to the United Kingdom. It supports more than 100,000 jobs in thousands of different businesses. Just as much as that, and perhaps more, it is an area in which Britain—indeed, the United Kingdom—stands proud, because the quality of what we do in the sector is world renowned and widely admired across a range of services.

As has been said repeatedly, this is not the first time that I have done this job; it is my second visit to the Department for Transport as Shipping Minister. By the way, all ministerial jobs are visits—no more than that—as it is very important to recognise. None the less, when I was there the first time I initiated the maritime growth study to which the right hon. Gentleman and others have referred. He was very generous about it too, if I might say so. The reason for the study is that it seemed really important that we had a stocktake of our maritime circumstances and our maritime future. However, since then we have had the debate on the European Union. I will not digress by saying that the result was, for me, a dream come true, but it certainly changes our maritime future. It is therefore important that we review that growth study. I have put into place a stocktake of the study itself, which is currently taking place, so that we can consider its very helpful recommendations in the context of Brexit.

[Melanie Onn]

I thank the right hon. Gentleman—my dueting partner on occasions—for giving way.

[Mr Hayes]

I wasn’t going to mention it.

[Melanie Onn]

I just share it widely. On the point about embracing that opportunity, as he sees it, the Minister will be aware that the Humber is the UK’s busiest trading port. That is something that my hon. Friend the Member for Kingston upon Hull East (Karl Turner) will be equally as proud of as I am. It really is critical to hundreds of directly employed jobs and thousands of indirectly employed jobs as well. There is a sense that ports and maritime have been somewhat left behind in the past. Is part of this opportunity about putting ports at the heart of industrial strategy for the UK going forward?

[Mr Hayes]

Yes, that is a very well made point. The hon. Lady is right to say that we perhaps understated the significance of the maritime sector. This is a point that the chairman of the all-party parliamentary group for maritime and ports and former Shipping Minister, the hon. Member for Poplar and Limehouse, made in his contribution and has made previously. Part of the role of the Shipping Minister is to champion the sector; to speak loudly and repeatedly about its significance. The hon. Lady is right that it does not just affect the places where our ports are situated; it affects the whole of our economy. Some 95% of the goods that we purchase from abroad, and the things that we send to foreign countries, go through our ports. As the representative for Grimsby, she will know how important that is.

[Albert Owen]

Will the Minister give way?

[Mr Hayes]

I will give way in a second. By the way, I am going to visit Grimsby soon and will have a look at the port. Now I will give way to another of my favourites.

[Albert Owen]

I was a bit disappointed that I was not listed among the Minister’s friends earlier on. There is a serious point that I want him to answer. Now that we have talk of an industrial strategy, will the Minister, who is in the Department for Transport, liaise with the Department for Business, Energy and Industrial Strategy to ensure that both Departments know about this so that we have joined-up thinking when we talk about ports being the catalyst?

[Mr Hayes]

We are already doing that, but these debates must have a purpose, so I reassure the hon. Gentleman that I will personally meet Ministers on exactly the issue he has raised, and in the fashion that he has described. It is important that the industrial strategy takes full account of the significance of the maritime sector, as has been said. As he spoke earlier I thought to myself for a moment, given our great history, that he has forgotten more about energy than I have ever known, but then I thought, as a former Energy Minister, that was a tad too self-deprecating.

Let me highlight the key issues that have been raised, which fall into the following categories. First, there is the maritime growth study, which I have mentioned. That was a very important piece of work and I am immensely grateful to Lord Mountevans for leading it and to others who took part. It provided a series of recommendations that will inform future policy, but as he and others acknowledged, it must be a living document. The great risk with such exercises is that the document is published, the work is done, there is a great furore around its publication and then a year later people think, “What on earth was that study?” In order to give the document continuing relevance, it needs to be regularly updated, which is precisely what I am doing through the work I just described.

The points made about the flag—as highlighted by the shadow Minister, the hon. Member for North West Durham (Pat Glass)—and tonnage tax should be pertinent to that review of the study. We can do more with tonnage tax, particularly on recruitment and training, and we need to do more, as has been acknowledged by the Government and those with whom we work, to make the flag more attractive. There has to be an offer in respect of the register that goes beyond simply raising the flag and includes a range of services that we can provide to make it more attractive. We are committed to that.

Secondly, the issue of ports was raised. We may have emphasised ports insufficiently. At the risk of adding contumely to our affairs, I disagreed to some degree with the Opposition spokesman on this issue; the ports are perhaps the best example of how private organisations investing heavily, being responsive to changing circumstances and being very efficient and competitive, compared with their European counterparts, can make a significant difference to the sector. The fact that we have private organisations—not wholly, but for the most part—running our ports is testament to what can be done when private and public interests coincide.

However, we should not be complacent. The shadow Minister is right that we need to look at the new challenges that our ports face, because they work in an extremely dynamic sector and more can be done to support them. We certainly should not have the port services regulation. As I made perfectly clear to my hon. Friend the Member for Isle of Wight, we will not have it as we do not want it and will fight it at every opportunity.

The third issue that was raised was skills and recruitment. I share almost all the views that permeated—indeed coloured—this debate, begun by the right hon. Member for Orkney and Shetland. I think that we are doing too little on recruitment and that we need to do more on skills. As Members will know, I was the apprenticeships Minister when the coalition Government first came into office. I am proud of our work on revitalising apprenticeships, but I take the point that was made. More can be done, and in my discussions on the industrial strategy I will raise the continuing importance of training in this sector. We need to recruit and train more British seafarers. It is as simple as that. Throughout this short debate Members have made the point that there has to be a career path for those seafarers. It is not enough simply to recruit people at different levels; there has to be a career path so that people can build their life in seafaring. That is a good thing and something of which we should be proud.

[Albert Owen]

The Minister made two interventions on earlier speakers, and I am really pleased that he has now taken two interventions from me. Sea cadet units across the United Kingdom were a fertile breeding ground for people for both the merchant navy and the Royal Navy. Will he do more to train youngsters up in those facilities? He will also be aware of early-day motion 516, which has been suggested by the unions. Will he work with the unions and others to ensure that we have a proper campaign for skills and safety at sea?

[Mr Hayes]

Indeed I will. I recently held a roundtable meeting, which the unions attended, on precisely those matters. I have discussed recruitment with the trade unions, and I welcome the excellent briefing produced by my trade union friends. When I first became a Minister, I said to my officials, “I want to meet the unions regularly,” and they looked slightly nervous about it. During the course of those meetings, a union representative—I will not say who—said, “We never got this much out of Labour.” I can assure the hon. Gentleman—and particularly the hon. Member for Luton North (Kelvin Hopkins), who called for this specifically in his contribution—that I will continue to work with the trade unions in exactly the way in which he has described. It is vital not only that we recruit people, but that we train them appropriately and allow them the kind of career opportunities that he called for.

[Karl Turner]

Will the Minister commit to meeting a group of cross-party MPs, along with the RMT representatives, very soon to see what progress he has made following this debate?

[Mr Hayes]

Yes, I am happy to do that, perhaps under the auspices of the all-party group, which I have already met, but I am happy to meet again. That would be a useful vehicle for precisely that kind of discussion.

The fourth area that the debate touched on—this was referred to by a number of hon. Members—was what might be called the welfare and conditions that prevail in the maritime sector. I am absolutely committed to ensuring that the conditions are appropriate. Some alarming claims have been made today, which I take very seriously indeed, particularly if people are not being paid the appropriate wage and if the circumstances and conditions in which they are working are not adequate. I take the point made by the hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) about the need to attract more women and getting the conditions right to allow us to do so. I hear what has been said about the importance of safety, and that is a fundamental concern for all of us who care about the sector. We will take this further. As a direct result of the debate—perhaps it will happen in the discussions that were just described—I am very happy to consider what more the Government must do. The work I am doing on the maritime growth study should fill some gaps and allow us to consider what more can be done on recruitment, as well as how we can approach skills in a fresh way and how the terms and conditions that apply across the industry can be improved.

The debate has served a useful purpose in allowing me not only to be the champion of the maritime sector, but, I hope, to be able to emulate the best of my predecessors, such as the hon. Member for Poplar and Limehouse, and leave some kind of legacy. I want to do that on behalf of our ports and the towns in which they are situated, our ship owners and our shipbuilders—we build ships and boats in this country, and shipbuilding is something of which we should be proud too—and fundamentally and most of all, what is dearest to my heart, on behalf of our seafarers.