Seafarers’ Wages Bill [Lords]

Mark Harper Excerpts

Monday 19th December 2022 Commons Chamber

5.59 pm

[The Secretary of State for Transport (Mr Mark Harper)]

I beg to move, That the Bill be now read a Second time.

Britain’s maritime industry is respected around the world for its professionalism and high standards. From shipping safety and financial services to seafarer training and welfare, our flag is acknowledged globally as a symbol of excellence, but maintaining that position in a competitive market requires constant progress. In particular, we must continue to invest in people, the men and women who are our maritime industry’s greatest resource, and on whom we rely to uphold Britain’s proud maritime tradition. When that hard-earned reputation for quality and expertise was threatened by unscrupulous employers, as it was earlier this year when P&O Ferries shamefully sacked almost 800 seafarers and staff to replace them with cheaper agency labour, we did not hesitate to take action. That is why, following the sackings in spring, the then Transport Secretary, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), set out a nine-point plan to prevent other companies from benefiting further from such underhand and unacceptable moves.

[Chris Stephens (Glasgow South West) (SNP)]

There is nothing in the Bill currently on changing sections 193 and 194 of the Trade Union and Labour Relations (Consolidation) Act 1992 to prevent anyone doing what P&O did earlier this year. Is that something the Government are considering?

[Mr Harper]

The solution we have decided to set out is to ensure that, for operations taking place with a close connection to the United Kingdom, operators have to pay an equivalent to the national minimum wage, so that what they cannot do is replace their staff for cheaper agency labour. That is our judgment on how we think the situation can best be prevented in the future. I accept that other people will propose different solutions, but this is the one we have settled on, and we think it will deal with the issue highlighted earlier this year.

[Dr Matthew Offord (Hendon) (Con)]

It is undeniable that P&O has acted appallingly, but I do not understand why there is a need for this proposed legislation. The maritime labour convention came into force on 7 August 2014. That international convention, which we signed up to, applies to vessels engaging in trade, or where a vessel is operating under the flag of a country that has ratified the MLC, or is operating in the waters of a country that is ratifying the MLC. Surely that legislation from the International Labour Organisation takes precedence for all vessels across the world?

[Mr Harper]

Clearly, given what happened earlier this year, we do not think the existing position is satisfactory. That is why we are bringing forward the Bill. If my hon. Friend wants to set out his argument in more detail during the debate, we will obviously listen with great care, but we think legislation is necessary. The Bill is a major step forward and it will deliver on point one of the nine-point plan, changing the law so that seafarers with close ties to the UK working on frequent services to UK ports are paid at least an equivalent to the UK national minimum wage while they are in our waters.

[Jim Shannon (Strangford) (DUP)]

The concern I have, and I believe other Members in the Chamber have, is that I understand the chief executive officer of P&O said that the average hourly wage for his new crewing model would be £5.50 per hour, yet the minimum wage is much more than that even for under-18s. Can the Secretary of State provide clarification? I want the Bill to be firm, hard and strong—I think we all do—so will he address that issue?

[Mr Harper]

The legislation will ensure that seafarers with close ties to the UK who are working on frequent services to UK ports have to be paid at least an equivalent to the UK national minimum wage while they are in our waters. As the hon. Gentleman points out, for those aged 23 and over, the current rate is £9.50 an hour. From April 2023, it will be £10.42 an hour. That is clearly significantly higher than the amount the hon. Gentleman just set out. That is the point of the Bill: to discourage the sort of behaviour we saw from P&O earlier this year.

[Grahame Morris (Easington) (Lab)]

Just to amplify the point from the hon. Member for Strangford (Jim Shannon), the chief exec of P&O gave evidence to the Transport Committee indicating that it was common practice to pay below minimum wage level. On the Dover-Calais route, P&O staff used to work—this is the UK-based ratings—one week off, one week on rotas. It is not just about wages. Currently, agency staff, including Indian able seafarers, are working at least 12 hours a day, seven days a week, for up to 17 weeks with no shore leave. That must be a risk to health and safety. Does the Secretary of State remember the Herald of Free Enterprise and the impact of stress and tiredness? Surely, it is about more than just wages?

[Mr Harper]

It is about more than just wages. That was one of the things covered in the nine-point plan, but we are working on other things, including various seafarers’ protections and measures with our international partners. This specific Bill is to deal with the specific issue of what seafarers are paid. The hon. Gentleman is quite right that the issue is wider than that, but the Bill deals with what they are paid. It is focused on that, and I hope it gets the support of the House.

[Richard Burgon (Leeds East) (Lab)]

Can the Secretary of State explain to the House clearly why, in the Bill’s original draft, frequent visits to UK ports was defined as 52 times a year and now it is 120 times a year? That surely makes it far easier for unscrupulous companies to drive through loopholes here and evade paying people the national minimum wage?

[Mr Harper]

We think the definition in the Bill at the moment will capture the vast majority of the services we wish to capture. We think that defining that in the way that we have makes it more difficult for people to avoid than it would be if we were very specific about types of vessels, for example. I am conscious that a number of people wish to speak in this debate, so I will make a bit of progress before taking any further interventions.

We said from the start that where new laws were needed, we would create them, that where legal loopholes—which the hon. Gentleman referred to—were cynically exploited, we would close them, and that we would strengthen employment rights. That is why the Bill is important. Operators of regular services to the UK will be required to pay their crew a decent wage if they want to access our ports, and it will remove the incentive for other, unprincipled firms to drag down pay for seafarers with close ties to the UK.

Under the existing national minimum wage legislation, not all seafarers who regularly call at UK ports are currently entitled to the UK national minimum wage. It cannot be right that seafarers who frequently work in the UK and in our territorial waters are not entitled to the same as other workers simply because they work on an international, rather than a domestic, service. The Bill will fix that particular issue. I recognise that there are other issues that people wish to deal with, but the Bill deals with that. It does not amend the National Minimum Wage Act 1998, but it makes provision for seafarers on services in scope of the Bill to be paid at least a rate equivalent to the national minimum wage.

Since March, we have consulted extensively with the industry to make sure the measures we are discussing are workable. Those discussions have been productive and are continuing. As was just alluded to, the legislation will apply to international passenger or freight services that call at UK ports on at least 120 occasions in a year, which equates to 72 hours on average. Harbour authorities will be empowered to request declarations from operators of services to confirm that they pay their seafarers no less a rate than that equivalent to the national minimum wage. If they do not provide that declaration when requested, harbour authorities will have the power to impose a surcharge, or may be directed by the Secretary of State to do so. It will not be a profit-making exercise for harbour authorities. They may only use the money raised from the surcharge for the discharge of their functions or for provision of shore-based seafarer welfare facilities.

We hope the surcharge is never required. The point of it is to be a disincentive to operators paying low wages. It will be set at such a rate that it does not make financial sense for operators to underpay staff. If they do not pay the surcharge when it is levied, harbour authorities will be empowered to deny access to the port. That will not be an onerous responsibility for harbour authorities; beyond accepting the declarations, they will not be responsible for checking the details of seafarers’ pay. The enforcement role will be carried out by the Maritime and Coastguard Agency, which will undertake inspections and investigations and, if necessary, prosecute offending operators.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

I am curious about denying access to ports. What consideration has the Secretary of State given to granting powers to detain a ship in port? Denying an operator access to a port may simply mean that it moves to a different port of the United Kingdom; detaining a ship would mean much greater risk for the operator, which will surely mean greater compliance.

[Mr Harper]

We judge that the risk of operators moving to or operating out of a different port is relatively small. The routes on which they operate are the profitable ones, so ceasing to operate on them would not make business sense. We think that denying access to a port is a proportionate response to the problem, so we have settled on that measure as the appropriate solution.

We will draw up regulations and guidance setting out further details of how the legislation will work. They will be subject to consultation to ensure that our measures are practical and effective and that people cannot avoid them. Feedback from the industry has been crucial throughout the process. Ferry operators told us that inclusions or exclusions based on type of service would create market distortion and ambiguity, so the only specific exclusion in the Bill is for

“a service that is for the purpose of leisure or recreation, or…a service provided by a fishing vessel.”

[Jim Shannon]

I thank the Secretary of State for his graciousness in giving way. Will resources be made available for the extra work that harbour authorities and marine services will have to carry out? If they are already rushed and under pressure, surely it makes sense to employ more people and make more resources available.

[Mr Harper]

We do not think that the responsibility on harbour authorities will be particularly onerous. Their job will be to receive declarations, not to investigate or do compliance work; those responsibilities will fall to the Maritime and Coastguard Agency. As with all our agencies, it will be a question of setting priorities. As the hon. Gentleman can see from the fact that we are introducing primary legislation on the matter, improving services for seafarers is indeed one of our priorities.

[Grahame Morris]

rose—

[Mr Harper]

I will take another intervention from the hon. Gentleman, as he is a member of the Select Committee on Transport, and then move on.

[Grahame Morris]

The Secretary of State is being generous in giving way. On the point about harbour authorities being charged with collecting the surcharge, is there a conceivable conflict of interest where a shipping company owns a port or has an interest in a harbour authority?

[Mr Harper]

The hon. Gentleman makes a very good point that illustrates why I will have legal powers to enforce whether a port levies the surcharge: to deal with any issues where there is a conflict. He makes a perfectly fair point, and we have thought about how to deal with it.

Our analysis shows that the arrangement that we have set out will capture the vast majority of ferries to the UK, but without including services such as deep-sea container services or cruises. Those services will remain out of the Bill’s scope, because they do not call at UK ports frequently enough that the seafarers working on board could be said to have sufficiently close ties to the UK.

We will continue to engage with industry throughout the passage of the Bill. We intend to consult on regulations and supporting guidance, which will include setting the framework within which harbour authorities will set their tariffs for surcharges and the method of calculating the national minimum wage equivalent rate.

It is important to remember that the Bill is just one part of a wider plan to protect seafarers’ welfare. It will not solve all the issues brought to light by P&O Ferries’ actions, but it is an important step. That is why we continue to discuss seafarer protections and welfare with a range of close European partners, including discussions about the creation of minimum wage equivalent corridors to encourage the payment of fair wages on entire routes. To continue to improve the protection of working conditions for seafarers, we are developing the voluntary seafarers’ charter.

[Luke Pollard]

There has been a race to the bottom, with P&O Ferries creating a toxic culture, but not all ferry companies are doing the same. Brittany Ferries operates out of Plymouth; it provides a significant lifeline route between Plymouth, Roscoff and Santander that is vital for our exports of agriculture and fisheries products. Does the Secretary of State agree that it is not about P&O Ferries alone? There are examples of good practice among UK ferry operators; it could well be improved, but it is good practice. The race to the bottom that P&O Ferries started is not one in which all UK and French ferry operators want to participate.

[Mr Harper]

The hon. Gentleman raises a very good point. The point of the Bill and the nine-point plan is to ensure that ferry operators that want to operate in a responsible way are not forced out of business or forced to drop their standards by unscrupulous operators. He also makes the point that services to Plymouth are incredibly important; speaking as a south-west Member of Parliament myself, I want to make sure that they can continue.

[Mrs Natalie Elphicke (Dover) (Con)]

May I draw attention to the much better behaviour that we have seen from DFDS, which operates out of the port of Dover? On port-to-port agreements, will my right hon. Friend confirm that some of the issues that have been raised—including rosters, the Maritime and Coastguard Agency’s overview of the intensity of the Dover-Calais route, and matters outside the simple question of wages—can be better addressed within that framework between our two nations?

[Mr Harper]

My hon. Friend has put an enormous amount of work into the matter, following P&O’s behaviour. She is focused at all times on solving the issues on behalf of her constituents; I know that her conversations with my predecessors focused on fixing the problem in the long term and on supporting operators that want to raise standards in the sector. I thank her for all her work.

The charter that we are developing, in conjunction with the maritime industry and various social partners, will enhance the core employment protections available to seafarers. As part of that plan, the Department for Business, Energy and Industrial Strategy will introduce a new statutory code of practice to address fire and rehire, which it will publish for consultation in due course. My Department is also taking steps to encourage more ships to operate under our flag and to improve the long-term working conditions of seafarers beyond pay protection, as my hon. Friend has just set out.

The measures in the Bill will help to ensure that employees working on vessels that make regular visits to UK ports can no longer be exploited by unscrupulous operators. Following the mass sacking earlier this year of P&O Ferries staff, some of whom had worked for the company for four decades, we promised to act. The Bill demonstrates that we are doing so. We are sending a message to every operator: if you want to serve UK ports on a regular basis, and if you want to carry passengers to and from our country, you must meet our high standards. I commend the Bill to the House.