Seafarers' Wages Bill [ Lords ] (Second sitting)

Mike Kane Excerpts

Committee stage
Tuesday 17th January 2023 Public Bill Committees

[The Chair]

I remind the Committee that with this we are discussing the following:

Amendment 64, in clause 7, page 5, line 32, leave out subsections (5) and (6) and insert—

“(5) The Secretary of State must by regulations provide for a national tariff of surcharges by which the amount of the surcharge is to be determined.”

Government amendment 14.

Amendment 50, in clause 7, page 5, line 33, after “regulations” insert

“, where the minimum surcharge to be imposed on an operator where Subsection (2) applies shall be no less than 300 per cent of the difference between the amount calculated as the national minimum wage equivalence for the operator and the amount in total paid by that operator”.

Government amendment 15.

Amendment 51, in clause 7, page 5, line 36, leave out

“specified by a harbour authority”.

Amendment 52, in clause 7, page 5, line 37, leave out “the authority” and insert “each authority”.

Government amendments 16 and 17.

Amendment 65, in clause 7, page 5, line 43, leave out paragraph (e).

Government amendments 18 and19.

Amendment 53, in clause 7, page 6, line 1, leave out subsection (8) and insert—

“(8) Monies collected by a harbour authority under this section must be transferred to the Secretary of State at a frequency of not less than twice per calendar year for disbursement towards the costs of shore-based welfare facilities for seafarers.”

This amendment would ensure that revenue from surcharges is passed to the Secretary of State for Transport rather than being held by harbour authorities and would direct UK Government spending to welfare facilities.

Amendment 54, in clause 7, page 6, line 3, leave out paragraph (a).

Government amendment 20.

Clause 7 stand part.

Government amendment 21.

Amendment 55, in clause 8, page 6, line 10, leave out

“specified by a harbour authority”.

This amendment is consequential on earlier amendments relating to the surcharge.

Amendment 57, in clause 8, page 6, line 14, at end insert—

“(2A) Any objection must be made to the Secretary of State within a length of time which may be specified by regulations. Any objection made after this time period will be considered void.”

This amendment allows the Secretary of State to set a time limit for any objections to be lodged.

Government amendments 22 and 23.

Amendment 56, in clause 8, page 7, line 1, leave out

“to direct the harbour authority”.

Clause 8 stand part.

Government new clause 2—Imposition of surcharges: failure to provide declaration in time.

Government new clause 3—Imposition of surcharges: in-year declaration that is prospective only.

Government new clause 4—Imposition of surcharges: operating inconsistently with declaration.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

It is an absolute pleasure to serve under your chairmanship, Ms Harris.

At the close of the morning sitting, Mr Davies happily interrupted me in full flow about the Laffer curve. I often hear hon. Members talk about the Laffer curve, and earlier the Minister referred to all the tax giveaways implemented by this Government, but I remind Government Members that we are the most taxed society in modern history. Government Members enjoy talking about the nanny state and postcode lotteries, but I worry about how the clause will be implemented by different harbours. The Secretary of State will have enormous powers—a Labour Secretary of State could be implementing the regulations—and will have to play judge and jury between the various ports, harbour companies, the Maritime and Coastguard Agency and others. That is my big worry about the clause.

I rise to speak in favour of amendment 64 in my name and the names of Opposition members of the Committee. The Bill as drafted poses a risk that the surcharge regime will be different between harbours, and too small to have any effect on operator employment practices. Operators could choose to pay the surcharge to continue to use the ports, avoiding any penalty charge set out in clause 9. Will the Minister tell us what happens to penalties if they are charged? Where do they go? Will he seek to fund onshore mariner and seafarer welfare services from the charges? I am keen to hear more about that.

Many operators do not just run ferry services but operate ports as well—P&O itself operates a port. So the Government are potentially asking operators to fine themselves, which is perverse. Ministers must think again.

I note that the Secretary of State said he would use retained powers to decide which port could enforce fines, but he must set a national tariff for surcharges and designate a Government agency to collect them. Agreements and publication of the tariff of surcharges are subject to secondary regulations set out in clause 7. That could undermine the unlimited fines that can be imposed on operators for offences created elsewhere in the Bill, because the tariff will be based only on the differential between the amount paid the seafarers and the national minimum wage equivalence for UK work. Our amendment would give the Secretary of State the powers to set a national tariff of surcharges, which the harbour authorities would then enforce under direction. That would prevent ports from being prosecuted by competitors, and prevent harbour authorities from competing on the level of surcharge company operators would have to pay. That surcharge should not be given to the harbour authorities to use as they see fit, but should clearly be given to support seafarer welfare facilities. It would be wrong for operators to spend on their own businesses the fines levied for exploitation of seafarers. That is why we support amendments 53 and 54 in the names of SNP colleagues.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to serve with you in the Chair, Ms Harris. I will address amendments 51, 52, 55, 56 and 58, which stand in my name and that of my hon. Friend the Member for Glasgow East. We will also be supporting amendment 64—we have signed the amendment —in the name of the hon. Member for Wythenshawe and Sale East.

Ultimately, we want this legislation, in whatever form it takes at Royal Assent, to stick. That is what we are seeking to ensure today. The surcharges and penalties envisaged have to be realistic to have any effect. The hon. Member for Wythenshawe and Sale East raised the possibility of operators who own ports surcharging other operators who use those ports. If we end up in a position where operators allege sharp practice on the part of other operators and take legal action, it is workers who will be caught in the middle. P&O Ferries can afford the lawyers; poorly paid staff cannot. Setting a national tariff will remove the element of discretion from harbour authorities and ensure that all harbours and all operators across the board pay the same surcharge, regardless of which harbour has jurisdiction.

With all due respect to the harbour authorities, shifting the onus to the Secretary of State would also be a clear sign of how seriously the Government will take infringements. It is one thing for an operator to take on a port, but quite another to decide to take on the Department for Transport, if they know they are in the wrong. The likes of P&O might have deep pockets, but ultimatel, there will be no escape from a law that is properly enforced by the state.

As things stand, the level of surcharge that will be levied on operators in breach of the legislation is set entirely by the harbour authority, with reference to the regulations that will be laid at some point by the Secretary of State. My concern is that if the level of surcharge is set too low—we spoke this morning about the level of fines that could be levied—there would be no or very little disincentive for operators to pay below the national minimum wage equivalent. We saw with P&O that even flagrant lawbreaking was no disincentive whatever.

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[Gavin Newlands]

I rise to speak to amendment 58. I am minded to support amendment 70 and new clause 6 in the name of the hon. Member for Easington. Perhaps counterintuitively, I am looking to add another exception to the list that could allow a rogue operator’s ship access to harbour, because I do not want seafarers or workers caught in the middle. As things stand, where an operator has been refused access for not paying the surcharge even when a crew welfare issue has been identified, such as a long overdue change of crew, the Bill would allow harbour authorities to continue blocking access to the operator. That could put the crew in the middle of a tug of war between the harbour authority and the operator.

We do not want a situation where the harbour authority is legally able to prevent access to a port when a ship has genuine need to seek access to ensure the safety and health of its crew. I know that most harbours take their responsibility for crew welfare seriously, but we do not want a situation where rogue operators are able to say, “We would love to take crew welfare seriously, but we couldn’t access the nearest harbour because we didn’t take it seriously in the first place, by paying below the national minimum wage.” There should be no excuses when it comes to employee safety.

Adding crew welfare to the list of exceptions to the harbour authority’s right to refuse access would provide some extra piece of mind for seafarers, and ensure that they have the protections, not the operator. It is the seafarers we are looking to protect. The amendment would clearly not prevent harbours from refusing access where the five conditions do not apply and, on that level, does not seek to water down the options available to hit those who refuse to pay a surcharge.

The Neptune declaration was established during the covid pandemic as it became clear that public health restrictions on access to ports were severely impacting on the capacity for ships to change over. Part of that declaration is a commitment that operators should make all reasonable efforts to accommodate crew changes, including when the vessel has to make a reasonable deviation. That should apply even as we have moved beyond the worst of the pandemic, and our legislation should reflect that declaration, which is why we have tabled the amendment.

[Mike Kane]

I rise to signal our support for amendment 70 and new clause 6 in the name of my hon. Friend the Member for Easington, who spoke well about seafarer welfare.

To give a personal example, over the past 30 years, my wife and I have enjoyed the hospitality, archaeology and beauty of the Orkney Islands. Over those 30 years, we have seen the number of cruise ships docking at Kirkwall go through the roof. There are days when the visitor numbers can double the population of the islands. When I visit the beautiful St Magnus Cathedral in the heart of Kirkwall, I now see—around the back or further up the high street—the welfare lines of mariners waiting for handouts or warm clothes, or going to the post office to send telegrams or money back home to their loved ones. Those lines get longer and longer every year.

I echo the concerns that the power for harbour authorities to suspend access to operators that are not paying crew at least the national minimum wage in UK territorial waters is probably dangerous and ineffective. I would welcome the Minister’s consideration of that. By denying ships access to those harbours, we are denying those crews, who are some of the poorest people in society—they are flown in from all over the world to give us the leisure experience we want on cruises—access to give welfare to those back home. That is less a political and more a humanitarian issue that our ports and harbours increasingly have to deal with.

[Mr Holden]

I thank hon. Members and welcome the spirit of amendment 58, which aims to provide urgent welfare facilities when they are needed. The Government believe, however, that those would be covered by clause 9(3), under which crew would be provided with access to urgent medical or welfare facilities or to undertake other emergency measures. We support the intention behind the amendment; in urgent cases concerning safety, a ship should be able to access the harbour under the framework that we have set out. Where an incident was not safety-related or related to the welfare of the crew and was therefore not covered by the force majeure exception, the ship would not be permitted access to the harbour.

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[Gavin Newlands]

I was on tenterhooks there: I was not sure whether I would have to leave expeditiously for the Standing Order No. 24 debate application in the Chamber, but thankfully that has been resolved.

As trailed when I spoke previously, amendment 61 seeks to amend the legislation in a similar fashion to Labour’s amendment 66. I am not precious about which amendment the Minister accepts. Clause 12 concerns the power to make regulations by statutory instrument and currently sets out that regulations made under the legislation are subject to the negative resolution procedure, as is always the case these days—other than for those in respect of clause 15, I should add in fairness. Given the potential nature and impact of the provisions that may be made by regulations under clauses 3, 4, 7 and 9, it would be appropriate for such regulations to be subject to the affirmative resolution procedure, to enhance the scrutiny of the regulations of this Parliament. At one point, the Government were keen for this Parliament to “take back control”. I hope the Minister can exert that with these amendments.

[Mike Kane]

I rise to speak in favour of amendment 61, in the name of the SNP Members, and amendment 66. The proposal is self-explanatory but important. The regulations under the Bill hand very broad powers to Ministers. It would be important for the House to consider and approve the regulations that will be made.

[Grahame Morris]

The ground has been very well covered. I am just wondering, particularly in relation to amendment 61, tabled by my colleagues from the SNP, about the impact of the earlier Government amendments. The Secretary of State has quite extensive powers in relation to the declaration, the imposition of surcharges, and directions to harbour authorities. I am sure that that must have been taken into account, but it does seem, given the extensive powers being conferred on the Secretary of State, that it would be reasonable to have reference to the affirmative procedure in the Bill and to specify which sections require delegated power for the Secretary of State. Therefore I support amendments 61 and 66.

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[Mike Kane]

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

[The Chair]

With this it will be convenient to discuss

New clause 7—Report: remuneration of seafarers—

“Within one year of the date of Royal Assent to this Act, the Secretary of State must lay before Parliament a report setting out an assessment of—

(a) the impact of this Act on the remuneration of seafarers, and

(b) whether there is any evidence that, as a result of this Act, seafarers have been dismissed and re-engaged on lower wages at or closer to the National Minimum Wage.”

[Mike Kane]

I rise to speak in support of new clauses 5 and 7. Earlier this year, the House stood completely united against the action taken by P&O Ferries. We had oral questions that day in the House, and the former Minister, the hon. Member for Witney, was at the Dispatch Box when the news filtered through that this company had sacked some 800 British workers with no notice. Eight hundred livelihoods were lost because a rogue company made a calculation that it was cheaper to break the law than to abide by it.

A married couple who had been employees of P&O for 14 years spoke to a colleague of mine about the reward for their years of loyal service—summary dismissal by a pre-recorded video message, and then being marched off the ships that they lived and worked on by private security guards, treated like criminals. That was the human face of P&O’s criminal act. It is 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.

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 that: the Government would work with

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

He was right, because 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, such workers could be expected to work up to 91 hours a week, on board, full time, for 17 weeks at a time. My hon. Friend the Member for Kingston upon Hull East reminded us of the Herald of Free Enterprise and what happened there. Outside UK waters, those workers would not be entitled to any pension, the minimum wage or any sick pay. 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 dangers, but the Bill does nothing to address 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. That is precisely what our new clause 5 is about.

Turning to new clause 9, 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 such names as the Spirit of Britain or the Pride of Kent. Six months on, however, that chief executive—

[The Chair]

Order. I remind the hon. Member that we are debating new clauses 5 and 7.

[Mike Kane]

Thank you, Ms Harris. That chief executive stays in place. The point is that if P&O Ferries or any of its low-cost rivals wanted to do that again, nothing in the Bill will stop it from doing so. That is why new clause 9 is important, because it clearly establishes fines and personal liability for a failure to abide by the legislation.

[The Chair]

Order. I again remind you, Mr Kane, that we are debating new clauses 7 and 5.

[Mike Kane]

We are indeed.

[The Chair]

New clause 9 will be later in our proceedings.

[Mike Kane]

Indeed. Given the track record of shameful companies such as P&O, we have to change.

My final concluding remarks, Ms Harris, are to thank you for your excellent chairing for the first time in such a Committee. I also thank Mr Davies for his excellent deliberations as Chair this morning, and the Minister, because the Bill was brought to the House in the right spirit, for trying to do something. Members across the Committee recognise that, and I thank all those who participated and contributed. With that, I also thank staff at the Department for Transport and the Clerks of the House.

[Mrs Elphicke]

It is to be noted that new clauses 5 and 7 concern reports about whether more needs to be done. I think we agree across the Committee and more widely that what happened in the P&O case was a spark to firm action going forward.

We touched on the issue of roster patterns earlier on, but I want to address it specifically. We know it is something the Maritime and Coastguard Agency has looked at on the short straits. For me, the new clauses do not address the fundamental question of who will be responsible for ensuring appropriate and safe working conditions on that route. That responsibility sits with the MCA, but concerns have rightly been raised about individual operations, and new clause 5 will not go any way to addressing those particular concerns. I think the bilateral agreements being discussed may form a route to looking at some of the issues, particularly those that apply to the route between Dover and France.

Turning to pensions and wages more broadly, this is the first piece of legislation of its type. There are a number of mechanisms in this place, including the Transport Committee, which has shown to be diligent in its support of not just the P&O workforce but transport matters more generally. There are additional forums in this place that provide the correct routes and opportunities to assess whether this legislation is reaching its objectives and intent.

On new clause 7, it is important that the remuneration of affected seafarers is assessed and considered. I have been encouraged during discussions I have had on remuneration with DFDS, which operates on the Dover-Calais route, to hear that it embraces the opportunity to have these conversations about improving conditions for seafarers. But as regards the Bill, part of the nine-point plan is a comprehensive approach to tackling this issue following the appalling actions of P&O. Overburdening the Bill with additional requirements for statutory reports and assessments may actually delay the important work we all have to do—be it bilateral or voluntary agreements or other options.

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[Mr Holden]

My hon. Friend makes a very sensible point. The Bill is a big step in the right direction in delivering for seafarers and countering some of the issues we have seen.

It will already be a criminal offence for operators to operate a service inconsistent with a declaration, and we do not think it is necessary for directors to be held personally liable for that offence. It would not be appropriate for directors to be guilty of an offence of failing to provide a declaration, as there is no obligation for them to do so. While the intention is that surcharges will be a sufficient disincentive against operators failing to pay at least the national minimum wage equivalent, it is open to operators not to provide an equivalence declaration, in which case surcharges will be imposed.

The existing compliance mechanism of surcharges for failure to provide a declaration and the criminal offences for operating inconsistently with a declaration will have considerable financial and reputational implications for operators. I do not think anybody here today can say that P&O Ferries has not experienced a reputational impact—not only that, but a legislative impact—from its behaviour over the last few years. Personal liability for directors is therefore not necessary.

I want to leave one thought in the minds of hon. Members on both sides of the Committee. The Insolvency Service is currently undertaking a civil investigation, which, among other things, will assess various individuals’ fitness to be directors.

[Mike Kane]

When will the Insolvency Service report? We keep asking, but we do not get an answer.

[Mr Holden]

As the hon. Member knows all too well, he and I are very much on the same page and would like the Insolvency Service to report as soon as possible, but it is an independent organisation and we cannot comment on ongoing investigations. The entire basis of the new clause tabled by the hon. Member for Glasgow East, which Opposition Back Benchers have spoken about too—that they want something that could disqualify someone—is there in what is being looked at. It is maintained via the Insolvency Service. While I cannot comment on the individual case, I think it is clear that what everybody wants to achieve is already there. I understand why Members are trying to invent another offence, but it is not necessary, as what the hon. Member for Glasgow East seeks to achieve can already be done through current legislation.