National Minimum Wage (Offshore Employment) (Amendment) Order 2020

Lord German Excerpts

Thursday 25th June 2020 Lords Chamber

[Lord German (LD) [V]]

Like many other noble Lords, I welcome this order, but I believe that it could go further. In particular, I wish to make the case for the inclusion of workers on short sea crossings from the coastline of the United Kingdom.

The rationale given for leaving these services out of the scope of the order is given in paragraph 7.5 of the Explanatory Memorandum. It is because short sea crossings are designated as exercising the “right of innocent passage”. It is correct that if you applied this criterion universally, these short sea crossings would be ruled out of the requirements of the national living wage legislation. However, Members of your Lordships’ House will be familiar with the not infrequent use of carve-outs, where exceptions are created. Why have the Government not created one for UK-resident workers on short sea routes? These workers are being treated differently from other UK-resident workers doing exactly the same job. Is this legislation needed for them?

It is difficult to find exact levels of pay for those working on short sea crossings, but some job placement agencies are posting jobs with salary levels below the £8.20 national minimum living wage. That national minimum living wage, based on a full-time 38-hour week, gives a yearly equivalent of about £17,200. At that level, all will pay national insurance contributions, as they are earning above the £9,516 earnings threshold, and they could possibly also pay income tax, depending on their individual circumstances.

Short sea-crossing ferries are a strong component of local economies around the ports they serve. Therefore, it is difficult to understand why the Government have stopped short of ensuring the national minimum wage for those who work on these ferries, both passenger and freight. Let us take the examples of Heysham and Liverpool. Ferries go from these ports to Belfast, so are captured by this legislation. Other examples are the Isle of Man and Dublin, both of which fall outside this legislation. There is an additional level of unfairness for those working out of Holyhead, Fishguard and Pembroke Dock, compared with those in Stranraer or Penryn.

Treating UK taxpayers and residents differently depending on which short sea crossing they are working on is clearly unfair. Typically, those working short sea crossings will have a home at one end or the other of the crossing. The Government can easily identify those resident in the UK because they pay national insurance contributions. Therefore, in reality, this group of workers is being discriminated against by virtue of the fact that their place of work moves. Add to that the failure to apply the very sensible obligation in this order to short sea crossings to France and other nearby neighbours, and we have let down a number of low-paid workers across our country. I ask the Minister to explain why the Government have failed to include them in this order and to say whether the Government will bring forward further statutory instruments to correct this matter.