Seafarers’ Wages Bill [Lords]

Louise Haigh Excerpts

Monday 19th December 2022 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

May I wish you, the whole House and the staff of the House a very happy Christmas, Mr Deputy Speaker?

Earlier this year, this House stood completely united against the action taken by P&O Ferries. There was total consensus that that criminal act was a national scandal. Some 800 British workers were sacked with no notice—nearly 800 livelihoods were lost because a rogue company made a calculation that it was cheaper to break the law than abide by it. At the time, I stood side by side with many of the sacked crew in Dover. A married couple who had been employees of P&O Ferries for 14 years spoke to me about the reward for their years of loyal service: summary dismissal via a pre-recorded video message, being marched by private security guards off the ships they lived and worked on, and being treated like criminals. That was the human face of P&O’s criminal act. It was the reality of a business model that has been allowed to prevail for far too long on our seas—a business model predicated and dependent on exploitation.

As the Secretary of State knows, Labour supports the provisions in the Bill, but, as we have already heard, it is wholly insufficient. Its test must be whether it will end those exploitative practices that have become commonplace in our maritime sector. Will those responsible for the P&O scandal be brought to justice? Will the Bill stop another P&O scandal? I ask because six months on, this Dubai-owned company, which received millions in taxpayers’ money during the pandemic and which tore up the rights of British workers and bragged about it to Parliament, has continued business as usual. It should be a badge of shame for this country that P&O Ferries and DP World did what they did precisely because they thought they could get away with it. They knew they could exploit our weak employment laws. They made the calculation that it would be cheaper and easier to pay off those workers because this Government would not hold them accountable.

Despite all the Government’s promises, despite all their outrage, P&O’s central calculation was correct, was it not? Earlier this year the then Prime Minister himself said that P&O Ferries would face criminal sanctions. The then Transport Secretary said that it would be placed under criminal investigation. He demanded that the boss, Peter Hebblethwaite, stand down. He even demanded that P&O rename its ships, stating that it was completely wrong for them to sail under names such as Spirit of Britain and Pride of Kent. Six months on, however, that chief executive and those who deliberately broke the law in plain sight have faced no consequences whatsoever, and, as far as I am aware, their ships are still happily sailing under those names.

Workers across the country may well be looking to this Government and asking what exactly is the point of them if they can let P&O get away with all this—because Peter Hebblethwaite has been rewarded with a promotion to another directorship within the company. There has been no criminal prosecution as was promised: the Insolvency Service refused to take forward a prosecution, and chose not to consider the public interest test in doing so. There has been no action against any of the directors responsible. Every day that Peter Hebblethwaite remains in charge of P&O Ferries, other employers who wish to undermine the rights of British workers will find comfort. He is unfit to lead a British company, and he should be disqualified as a director.

I will be grateful if the Minister who winds up the debate tells us whether he agrees with that, and why it is that six months on, the Insolvency Service is still considering his case when the evidence could not be clearer. He bragged about it to a parliamentary Select Committee! Will the Minister bring that case to a conclusion, and use his own powers under the Company Directors Disqualification Act 1986 to finally bring this individual to justice?

The fundamental point, however, is this. If P&O Ferries or any of its low-cost rivals wanted to do all this again, nothing in the Bill or anything else that the Government have put forward would stop them. P&O Ferries decided not to notify either the Secretary of State or the competent authorities of the flag states of Cyprus, Bahamas or Bermuda of its dismissal plans—a legal requirement under sections 193 and 193A of the Trade Union and Labour Relations (Consolidation) Act 1992—and refused to consult the workforce ahead of their dismissal.

The Secretary of State’s predecessor said:

“where new laws are needed, we will create them…where legal loopholes are cynically exploited, we will close them, and…where employment rights are too weak, we will strengthen them.”—[Official Report, 30 March 2022; Vol. 711, c. 840.]

So why does the Bill contain nothing about notification of flagged vessels, or increased sanctions for those who fail to consult ahead of redundancy? The only way to prevent this from happening again is to hike up the damages that can be paid at tribunals, and/or to slap criminal liability on those who break the law in the same way as Peter Hebblethwaite, who bragged about it. Why have the Government shied away from taking the action that is so clearly needed—and why, six months on, have they still not published even a draft of their promised strengthened code on fire and rehire? It was due for consultation in the summer, but it has still not been published. Even the very little that the Government promised in the wake of this scandal has fallen by the wayside.

Let me now turn to the provisions of this limited Bill. We do, of course, welcome the intention to ensure that operators pay a national minimum wage equivalent to those who have a close working relationship with the UK, but, as we have heard, significant elements of these provisions and their enforcement must be strengthened to prevent avoidance, which we know is rife in this sector. First, the minimum wage provision has an offset allowing employers to deduct costs of providing accommodation. That is clearly ripe for abuse, and must be explicitly ruled out. Then there is the issue of “port hopping”. As the Bill stands, operators fall within the scope of the Bill if they call at a single UK port on at least 120 days within a year. In the case of some routes, such as that of the Pride of Hull, only slight adjustments to their timetable would allow them to escape paying the minimum wage. That period must be reduced. The initial drafting specified 52 visits a year.

There is also the issue of enforcement. In his nine-point plan, the now Business Secretary pledged to involve His Majesty’s Revenue and Customs in ensuring compliance with minimum wage legislation, but the Bill does not include a direct role for HMRC, the only expert in minimum wage compliance; and there is no clearly defined minimum fine for breaching the Bill’s provisions.

That brings me to the role of the port operators themselves, which was mentioned in earlier interventions. This is, perhaps, the most troubling aspect of the Bill. Many operators do not just run the ferry services, but operate ports as well. P&O itself operates a port. The Government are potentially asking operators such as P&O to fine themselves. That is utterly perverse, and the Government must think again. I note that the Secretary of State said he would retain powers to decide which ports would enforce fines, but he must set a national tariff for surcharges and designate a Government agency for collecting them.

The P&O scandal was supposed to represent a line in the sand for seafarers’ rights. The Secretary of State’s predecessor was clear about this, saying that the Government would work with

“unions and operators to agree common levels of seafarer protection on…routes.” —[Official Report, 30 March 2022; Vol. 711, c. 841.]

Seafarers’ exploitation is every bit as much about conditions as it is about pay. Baroness Vere of Norbiton, the Minister in the other place, said that the Government would act on that wider exploitation only

“where it is proven that it is appropriate to do so.”

Let me briefly give the House an illustrative example of why that is so important.

An agency worker can be contracted on the Dover-Calais service at the shamefully low rate of £4.75 an hour. As is common in the industry, they could be expected to work up to 91 hours a week, on board, full time, for 17 weeks at a time—not entitled to any pension; not entitled to the minimum wage or any sick pay when outside UK waters. I ask Members to imagine a season of winter storms in the Irish sea or the North Sea, where sleep is almost impossible, and to imagine spending up to 17 weeks on board, responsible for the safety of passengers and that vessel. The industry has already learnt from painful experience about the danger of this kind of exploitation, and of seafarer fatigue. The Herald of Free Enterprise disaster 35 years ago claimed the lives of 193 crew and passengers, but the Bill does nothing to address these dangerous and exploitative crewing and rostering practices. That is why we must see a legally binding seafarers’ charter on the face of the Bill—one that ends the race to the bottom from which P&O Ferries has benefited; one that smashes the business model dependent on the manipulation of vulnerable workers from around the world.

We are a proud seafaring nation. That tradition has been the envy of the world, but the ongoing exploitation of seafarers is a stain on it. With this Bill, we have the chance to drive out these exploitative practices for good, and ensure that another P&O can never happen. That is why Labour supports it today, but will seek to work with the Government to strengthen it in Committee, and ensure that never again can we allow such exploitation to go unchecked on our seas.