Seafarers’ Wages Bill [Lords]

Debate between John McDonnell and David Linden

Tuesday 7th February 2023 Commons Chamber

[David Linden]

I rise to speak to new clause 4 in my name and that of my hon. Friend the Member for Paisley and Renfrewshire North (Gavin Newlands). I will come on to the substance of the new clause later, but for now I want to offer my support to the Opposition amendments before the House.

My fundamental position on the Bill has not changed. Yes, I think it is a welcome step in the right direction, but it is incredibly unambitious in tackling the scale of the problems unmasked by the exploitative behaviour of P&O Ferries. It remains a source of extreme frustration to me that, when the P&O debacle unfolded, politicians in this place talked a really tough game, yet the legislation put before the House has not met the scale of the challenge. Even worse, the British Government have reneged on their previous commitments and, I would argue, have watered down the Bill. For example, in clause 3, as it stands, the House effectively gives a green light to port-hopping, which is symptomatic of how this whole problem came about, ergo letting the free market exploit existing weaknesses in legislation and regulation. To be blunt, when it passes, this Bill will be a bit of a missed opportunity, and all that remains for us during its remaining stages is to try to ameliorate it.

For the purposes of brevity, I will refer to new clause 4 as the Hebblethwaite amendment. Throughout Second Reading and in Committee, we spoke about the importance of giving this Bill teeth and of tightening things up. If Members speak to seafarers, as I have done to those in my constituency, they will know that one big source of anger is the fact that senior management at P&O Ferries got away scot-free with their utterly disgraceful behaviour. If we are to go as far as passing this Bill, please let us at least make sure that it has the legislative teeth to deal with the some of these complete reprobates, who have patently exploited workers and should not be deemed fit and proper persons to hold directorship roles.

Let us start with Peter Hebblethwaite, the CEO of P&O Ferries, who was paid £325,000 a year before bonuses. This is a man, as others have said, who proudly admitted to a joint Select Committee of this House that he knew the actions he was undertaking as company director were illegal, but he proceeded anyway, and he even had the gall to say that he would do it all over again if he got the chance. I absolutely agree with the RMT general secretary, Mick Lynch, who said:

“Gangster capitalists should not be rewarded for their appalling employment practices; they should be punished with the full force of law.”

However, herein lies the problem, because passing this Bill without my new clause 4 would mean that Mr Hebblethwaite has carte blanche to again behave as he did in March last year. In summary, there must be individual consequences for directors who seek to exploit workers, and the Bill currently lacks a personal liability clause. That is exactly what my new clause would do by enshrining in statute the ability to deal with these gangster capitalists who seek to ride roughshod over seafarers and other workers.

At its most basic level, Hebblethwaite was responsible for the unlawful sacking of almost 800 seafarers, using a pathetic, cowardly, pre-recorded video message. Despite all that, he is already out there promoting himself again; indeed he was rewarded with a promotion at DP World. What kind of a broken, sick system sees almost 800 seafarers summarily sacked—and sacked unlawfully—yet the boss is given a plum promotion for showing ruthlessness and the sheer brass neck to shove two fingers up to Government?

So, the kind of person this legislation would penalise if they fell foul of the Act is one who admitted breaking the law, and one who used handcuff-trained, balaclava-wearing security guards to remove dedicated, unionised seafarers and replace them with non-unionised workers, many of whom are paid a fraction of the UK minimum wage. Even worse, after experienced crew were fired by Hebblethwaite, the UK coastguard repeatedly detained P&O ships for a lack of crew training, including fire safety and lifeboat drills. But still—yes, still—Hebblethwaite is allowed to retain his position as a company director, which makes a mockery of our legislative framework.

Only by adding new clause 4 to the Bill can we finally deal with these gangster capitalists who Government Ministers had tough words for last year. But what will they do this afternoon when the Division bell rings? Will they vote to bring the likes of Hebblethwaite to heal, or, now that the media circus has moved on, will their protestations be exposed as little more than hollow words?

This Bill is underwhelming and many of us are seeking to give it greater teeth to ensure that never again can a company director like Hebblethwaite take such a calculated risk with people’s jobs and livelihoods, knowing fine well that the consequences of doing so result in nothing more than a few uncomfortable column inches. We need to enshrine in statute a strict deterrent which makes personal liability a reality for the Peter Hebblethwaites of this world, because if this whole sorry episode has taught us anything, it is that bad bosses will continue to be bad bosses unless we hit them where it hurts. It is on that basis that I have tabled new clause 4.

[John McDonnell]

I have been working for 20 years for this legislation and I cannot tell the House how crushingly disappointed I am. I just did a Hansard search of my statements over the years. Way back in May 2003 I had a Westminster Hall debate on the application of the Race Relations Act 1976 to seafarers, and I said then that

“the disparity is that non-UK seafarers will be paid less than half the wage of the others. On some ships, they are paid less than the minimum wage. We have also seen the behaviour of some companies, such as P&O Ferries, where UK seafarers have been dismissed and replaced by Filipinos to reduce wage rates.”—[Official Report, 14 May 2003; Vol. 405, c. 132WH.]

I said, too, that the “moral case” for legislation was “overwhelming” and that we needed to act now because we had the opportunity to act, but we failed. I raised it again in 2004, when I cited the practice with regard to Irish crews who were replaced by seafarers from eastern Europe on exploitative pay and conditions. I raised it in 2005, 2006, 2007 and 2008; I raised it later in 2010 and 2012, urging the Government to implement regulations to outlaw pay discrimination against all seafarers working in UK territorial waters. It just went on: I can quote this on an annual basis.

As has been said, the proposed legislation has been prompted by what happened, so predictably, at P&O last year. It has been said that the litmus test of this legislation is whether it prevents another P&O. It will not. We may be able to do something on the margins of wages with regard to this, but, just as P&O has done, companies will exploit people on rosters, or the number of hours they work, or how much time they have to spend on ship; they will undermine their pensions, introduce accommodation charges, as other employers have done as well, and reduce crew numbers, which, as has been said, puts lives at risk. That is the behaviour of the worst employers in the shipping sector, and we need to legislate to tackle the worst. The only thing that will prevent another P&O is firm legislation against fire and rehire. A consultation is currently taking place, but we should bring forward measures as rapidly as possible.

Carer’s Allowance

Debate between John McDonnell and David Linden

Wednesday 30th March 2022 Westminster Hall

[John McDonnell]

I fully agree. There is a sense of urgency about this issue now, because what came out of the discussions that I have had with the carers group that I brought together is the stress that carers are under, and the mental health implications not only for themselves as individuals but for their whole family. We know that there are examples in the past of how such stress has caused a mental health problem that has led to suicide.

There is a need for urgent action now. We have gone beyond intellectual debates about this issue; we just need some action rapidly, given the fact that carers face these massive increases in prices, particularly around energy. And then effectively they face a cut—a 3.1% increase, as against inflation now, which ranges between 7% and 10%. That level of inflation comes in like a whirlwind for these particular families and we need urgent action now. Perhaps that action has not been considered effectively in the past, but it certainly needs to be considered now.

[David Linden (Glasgow East) (SNP)]

I am grateful to the right hon. Member for giving way. Does he also believe that it is incumbent on the state to view this matter through the prism of preventive spending? If we pile so much pressure on these carers, who are caring for some of the most vulnerable people, and then the carers themselves end up in mental health predicaments or poor health, the costs of that will be borne by the state anyway. So it is a false economy not to support them.

[John McDonnell]

That is exactly the final point that I was going to make, because most of the people who I have talked to are at a tipping point, where they and their whole family can no longer survive on the level of income they have, given the pressure they are under.

What comes across time and again is that carers have to struggle: first of all for recognition; then for assessment of the person they are caring for; then for support services; and then for just a respite every now and again. For some of them, that struggle is becoming insurmountable. Then what happens? The person they are caring for is taken into care and the costs escalate beyond anything that we have seen so far. So there is a desperate need to resolve this matter.

I will just throw in one other point as well. The benefit that carers get is not an access benefit to other benefits. With regard to energy costs in particular, a small step would be access to winter fuel allowance and—to be frank—a doubling of that winter fuel allowance.

Gurkha Pensions

Debate between John McDonnell and David Linden

Monday 22nd November 2021 Westminster Hall

[David Linden]

I will not hold that against you, Dr Huq.

[John McDonnell (Hayes and Harlington) (Lab)]

I am sorry to rudely interrupt the hon. Gentleman again. I apologise to you as well, Dr Huq. This is a fleeting visit; I am trying to be here and in the main Chamber at the same time, but I have not quite mastered that yet.

Before I left, the hon. Gentleman raised the key issue for me and my constituents: the poverty Gurkhas have been thrust into as a result of, to be frank, an act of gross discrimination over years. Does he agree that, because of the length of service and the commitment Gurkhas have shown, including through the human sacrifices made, we should never allow this group of people to live in the level of poverty that he described earlier, and that we need redress as rapidly as possible?

Finance (No. 2) Bill

Debate between John McDonnell and David Linden

2nd reading
Tuesday 16th November 2021 Commons Chamber

[Christine Jardine (Edinburgh West) (LD)]

Almost as good as they get!

[David Linden]

That’s about as much as Geoffrey Cox gets!

[John McDonnell]

Don’t tempt me.

Those are the only figures that we have, but I thought that we should be generous and say that there were, on average, 25 jobs a year at least. We do not know, as all we have is the figure of 75. In the case that there were 25 jobs a year, we are still talking about, at best, £4 million to £5 million a job in subsidies for the British shipping companies. I do not know what other Members think, but there is an issue of productivity here, is there not? That is the sort of problem that we have when we get into relying on tax reliefs to stimulate the economy and jobs growth.

Let me make a final point on tax reliefs. As the hon. Member for Glasgow Central and my hon. Friend the Member for Ealing North have said, the failure to link these tax reliefs to the achievement of net zero means that we are undermining the ability of the Government to intervene effectively in the economy in order to ensure that we are all signed up to tackling climate change.

I also thought that the Government were going to come forward with amendments in legislation to prevent companies with any record of tax avoidance from being able to qualify for tax reliefs at all, but that is not in this legislation. We are therefore in a situation where we are giving tax reliefs to companies that we know have in the past engaged in tax avoidance. Of course we all welcome the tax avoidance measures that the Government have introduced, but this legislation is an incredibly slow, incremental development. We need to go so much further, with full transparency and enforcement.

When we are trying to enforce against tax avoidance, the one thing that we must not do is open up opportunities for new forms of tax avoidance, but the Office for Budget Responsibility, the UK Trade Policy Observatory and the TUC have said that the introduction of freeports is the new opportunity for tax avoidance schemes, for the displacement of jobs from one area to another with no overall benefit, and—this is exactly what the TUC is saying—for the undermining of trade union rights; and we know what that will do for workers.

I have welcomed the Government’s investment in HMRC. I was sitting here years ago when the first major cuts to HMRC were introduced, and we saw the results. It was an undermining of the work to address tax avoidance and evasion. However, as other hon. Members have said, unfortunately the new jobs have gone into chasing compliance issues as a result of covid, and not into increasing the operation to address tax avoidance.

Those are the issues that I just wanted to comment on. I actually came here to make one specific point and put forward one proposal with regard to local government, but as there are not people rampaging to speak in the debate, I thought that I could at least comment on some wider points.

The point I wanted to make is about what is happening with regard to local authority finance. I thought that as part of the Budget, the comprehensive spending review and then this Bill, the Government would bring forward what has been promised for some time now—a fairly radical reappraisal of local government finance with the potential for reform that would provide local authorities with the resources, as well as a relatively independent source of income, that would then embody their ability to engage in genuine levelling up across our society, as raised by my hon. Friend the Member for Oldham East and Saddleworth (Debbie Abrahams). But the figures show that local government funding from central Government grant is about £16 billion a year lower today than it was in 2010. Cumulatively, that is a reduction over that 11-year period of £100 billion in central Government support for local government.

That means that before we can even talk about levelling up, we need levelling back. We need to give councils the power to invest in local services in their communities again. The hon. Member for Broadland (Jerome Mayhew), who is not in his place, raised the importance of the Budget for local communities, and I agree. This Bill should be doing that, but apart from the occasional grant to individual communities—on, unfortunately, a sort of pork barrel basis—there does not seem to be an overall strategy to enable it to happen. As I said during the Budget debate, we have seen the impact, with the cutting of funding for nearly 900 children’s centres, 940 youth centres, 738 libraries, and 1,200 bus routes. Local government was mentioned only once by the Chancellor in the Budget speech. There was no acknowledgement of what councils have endured over the past 10 years—that includes Tory, Labour, Lib Dem and SNP councils—or the debt crisis that is now engulfing many town halls in our country.

I was hoping that we would at least get the opportunity of some resolution of the debt problem of local councils within the Finance Bill, or would have the opportunity to prepare amendments to enable that to happen. Creatively, we will see whether we can bring amendments forward in that way, but that is made more difficult by the amendment to the law motion not being brought forward by the Government. Many councils across the country are in debt. In recent years, three section 114 notices have been issued, in the case of Tory as well as Labour councils, and dozens more have applied for and received emergency Government loans.

Some time ago, as part of their pushing local authorities to try to seek alternative local funding sources, but also as part of their commercialisation agenda, the Government forced councils into a position where many of them sought to compensate for the lack of Government funding by borrowing from the Public Works Loan Board to buy investments with revenue-producing potential. Some of those investments have proved to be risky misjudgments. Admittedly, this has happened across the board, with all political parties in control in different council areas, but the Government have to take some responsibility for the mess, because they have forced those local authorities into that sort of speculative behaviour, which is also beyond their levels of experience and expertise.

In addition, there has been a complete lack of oversight from both the Department for local government, under its various names over recent years, and the Public Works Loan Board, which has lent the money to those councils. The accounts of the Public Works Loan Board reveal that over £2.8 billion was lent last year and over £3 billion was generated in interest income. That is extraordinary: it is robbing Peter to pay Paul.

Councils are under huge financial pressures, and they now owe £71 billion in debt to the Public Works Loan Board. I want to see whether we can amend this legislation to reduce the interest rates to councils. The Bank of England base rate is still 0.1%, so every pound spent on interest by councils—it is the same for central Government—is £1 less spent on social care, children’s services, street cleaning, bin collections or whatever. The average interest rate charged by the Public Works Loan Board is 3.57%. That is 36 times higher than the Bank of England base rate. What we need in the longer term is stronger oversight of loan applications and for the Public Works Loan Board to charge interest at the Bank of England base rate.

In the meantime—this is why I was hoping that the Government would move somewhat in this legislation—to deal with the high interest rates and the high levels of debt, we need some form of debt jubilee for local councils. That could be a zero rating on all existing loans before we move to the Bank of England base rate on all new loans. More expansively, it could recognise the failure in recent years from central Government to oversee and the impact of Government austerity cuts, which have led to the debt crisis in local government. The Treasury arguably should fund a partial debt write-off for councils. With more than £70 billion in principal debts, plus interest rates, even a 20% write-off could free up nearly £15 billion for local councils to spend in the coming years.

That is the proposal I wanted to argue for in this debate. It would be welcomed cross-party in local government and would relieve many local councillors from the appalling decisions they will have to make in the coming months between increasing local council taxes and, more importantly for many of them, another round of cuts in public services, because of the high interest rates they are having to pay and the interest charges that are falling upon them.

The final point I will make in this Budget debate is to return to the points that a number of Members have made. This Finance Bill does not seem to relate to the Government’s strategy overall, and it certainly does not relate to the needs of our communities. I worry that after the experience of covid, people are looking increasingly to the Government to provide leadership. This Budget, the comprehensive spending review and certainly this legislation do not provide that. The Bill will increase the levels of concern and insecurity that unfortunately are impacting on our communities. I find it a disappointing piece of legislation, and I hope that by way of amendment we might be able to improve it. In that way, we might at least meet some of the challenges our communities face, tackle some of the poverty and deprivations, end austerity and maybe give a bit more hope to the communities we represent.