Clause 3 - Power to request declaration

Seafarers’ Wages Bill [Lords] – in a Public Bill Committee am 9:45 am ar 17 Ionawr 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport) 9:45, 17 Ionawr 2023

I beg to move amendment 1, in clause 3, page 2, line 3, leave out subsections (1) to (3) and insert—

“(1) Subsection (2) applies where a harbour authority has reasonable grounds to believe that ships providing a service to which this Act applies will enter, or have entered, its harbour on at least 120 occasions during a relevant year.

(2) The harbour authority must, within such period as is determined by regulations, request that the operator of the service provide the authority with a national minimum wage equivalence declaration (in the rest of this Act, an ‘equivalence declaration’) in respect of the service for the relevant year.

(3) The duty under subsection (2) is subject to any direction given by the Secretary of State under section 11(2)(a).

(3A) A harbour authority which fails to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.”

This is the first of a number of amendments concerning national minimum wage equivalence declarations. Taken together, they impose a duty on harbour authorities to request declarations (as it stands, the Bill confers a power to do so). Declarations are to be requested in respect of years determined by regulations and must be provided within a period set out in regulations. Also, as a drafting change, “national minimum wage equivalence declaration” is abbreviated to “equivalence declaration”.

Photo of Philip Davies Philip Davies Ceidwadwyr, Shipley

With this it will be convenient to discuss the following:

Amendment 44, in clause 3, page 2, line 15, leave out “the harbour” and insert “any UK Harbour”.

Amendment 45, in clause 3, page 2, line 15, leave out “120” and insert “52”.

Government amendments 2 to 6.

Amendment 46, in clause 3, page 2, line 23, leave out “the harbour authority” and insert

“all relevant harbour authorities to which the declaration is applicable”.

Clause 3 stand part.

Government amendment 7.

Amendment 47, in clause 4, page 3, line 6, at end insert—

“(c) pension and other payments to be made that formulate a part of seafarer remuneration in relation to a service to which this Act applies.”

Amendment 62, in clause 4, page 3, line 10, at end insert—

“(c) provision prohibiting deductions from remuneration for accommodation costs, food or other entitlements.”

Amendment 49, in clause 4, page 3, line 16, at end insert—

“(5A) The national minimum wage equivalent must not be adjusted to account for accommodation, food, or other items exempted from being charged to seafarers under international convention”.

This amendment will mean that deductions cannot be made for food, accommodation or other exempted items under convention and will facilitate future changes being made with respect to changes in permissible deductions.

Clause 4 stand part.

Amendment 39, in clause 14, page 9, line 13, at end insert—

“‘equivalence declaration’ has the meaning given by section 3(2);”.

See Amendment 1.

Amendment 40, in clause 14, page 9, line 25, at end insert—

“‘relevant year’ has the meaning given by section 3(4A);”.

See Amendment 1.

Clause 13 stand part.

Government new clause 1—Offence of operating service inconsistently with declaration.

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport)

As currently drafted, clause 3 confers on harbour authorities the powers to provide that the operator of a service within scope of the Bill provides a national minimum wage equivalence declaration. The nature of the declaration is set out in clause 4, so I will address it when we turn to that clause, but it is essentially a declaration to the effect that they pay any seafarers on board who do not qualify for the national minimum wage at least the national minimum wage equivalent for the time that they worked in the UK or its territorial waters.

A harbour authority may not request an equivalence declaration in respect of any year unless it appears to the authority that ships providing the service will have used the harbour on at least 120 occasions in that year. Clause 3 also includes a power for the Secretary of State to make regulations as to the form of the national minimum wage equivalence declarations and the manner in which declarations are to be provided. Finally, it makes it an offence for an operator to operate a service inconsistently with the declaration and fail to inform the harbour authority within a certain period.

Clause 4 sets out the nature of an equivalence declaration. As it stands, subsection (1) provides that an equivalence declaration in respect of a service to which the Bill applies is a declaration to the effect that either

“there will be no non-qualifying seafarers working on ships providing the service” or non-qualifying seafarers working on ships providing the service will be paid at least the national minimum wage equivalent for their work on that service in the UK or its territorial waters.

The national minimum wage equivalent will be at an hourly rate specified further in regulations—the hon. Member for Easington asked about that earlier. Regulations may make provision for the hourly rate at which non-qualifying seafarers are remunerated in any period in respect of any work, which may include any provision referred to in subsections 2(2) to (6) of the National Minimum Wage Act 1998, or provision relating to currency conversion. Regulations may also make provision for whether, or the extent to which, a non-qualifying seafarer’s work in relation to a service is carried out in the UK or its territorial waters.

In making regulations under clause 4, the Secretary of State must

“seek to secure that a non-qualifying seafarer is…remunerated at a rate equal to the national minimum wage equivalent only if their remuneration is in all the circumstances broadly equivalent to the remuneration they would receive if they qualified for the national minimum wage.”

That essentially means that we will seek to ensure that the total pay that a seafarer receives for time worked in the UK and its territorial waters is, as a result of the regulations, no less than if they had qualified for the national minimum wage.

We will run a public consultation on the regulations, and my officials are working closely with stakeholders and officials in the Department for Business, Energy and Industrial Strategy and His Majesty’s Revenue and Customs to draft them. As the public consultation takes place, I hope that hon. Members will be able to see what happens.

Photo of Natalie Elphicke Natalie Elphicke Ceidwadwyr, Dover

The port of Dover is one of those directly affected and, given the situation in relation to P&O, which affected so many seafarers in my constituency, it is a particular concern. In relation to clauses 3 and 4, I would be grateful if my hon. Friend the Minister could confirm that he will take into account the considerable concerns of port operators about how the declarations—with the regulations underpinning them—will be managed and administered, because that is not within the usual business of port operators; it is an exception to the way in which they ordinarily operate. I know—I say this on behalf of the port of Dover in particular—that although of course they will play their part in ensuring that seafarers have the right terms and conditions, they want to ensure that they know what they have to do and how they are supposed to do it, that there is no room for dispute and that they are given the support that they need to be able to administer this.

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport) 10:00, 17 Ionawr 2023

I thank my hon. Friend for those points. They are particularly important. I do not think that we would be here today if it was not for her huge campaigning efforts on behalf of her constituents in relation to the awful actions of P&O. I absolutely agree with her that how this is implemented must be taken into account. I am sure that her port will be consulted as part of the broader consultation as regulations are brought forward, and I urge her and other interested hon. Members to take part in the consultations as we move forward.

Amendment 1, tabled in my name, turns the discretionary power to request an equivalence declaration into a mandatory duty—this is quite an important change, which hon. Members mentioned at earlier stages—where the harbour authority has reasonable grounds to believe that ships providing a service will enter, or have entered, its harbour on at least 120 occasions during a relevant year. Reasonable grounds may include a service’s schedule in previous years, or may arise from the normal communications that a harbour authority would have with operators using its ports.

The period within which a harbour authority must request an equivalence declaration will be determined by regulations, which will come forward. A harbour authority that fails to comply with its duty to request an equivalence declaration will be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale. The duty will be subject to directions made by the Secretary of State, which I will discuss in further detail when we come to clause 11, which has an important bearing on this aspect of the legislation.

This amendment is part of a larger set of amendments that will also make the formerly discretionary powers for harbour authorities to impose surcharges, and to refuse access to their harbour, into duties, which is something that Opposition Members raised extensively at earlier stages. As things currently stand, where a harbour authority does not exercise its powers in the circumstances provided for in the Bill, the Secretary of State has powers to direct harbour authorities to do that. We want to see it turned into a duty because, through continued engagement with port stakeholders, we have been informed that harbour authorities are unlikely to exercise their powers without being directed to, and the direction-making power actually was intended as a back-up power and was not intended to be used as the primary means of ensuring that the regulations are met and a minimum wage equivalent is paid. It would be a significant administrative burden on the Department if every instance had to have an imposition from the Secretary of State, and that would undermine the effective functioning of the legislation.

The change from discretionary powers to duties will strengthen the Bill by ensuring that harbour authorities must request declarations, impose surcharges and refuse access to their harbour where appropriate, without requiring the intervention of the Secretary of State at every juncture. The intention is that we will ensure that operators of services in the scope of the Bill are made subject to the requirements, and the process will be made simpler for harbour authorities.

Amendments 2 and 5, tabled in my name, are consequential on amendment 1. Amendment 2 expands the existing power in clause 3(4) by adding a new paragraph that allows regulations to make provision

“as to the period within which equivalence declarations are to be provided” by operators. Where an operator does not provide an equivalence declaration within that period, the harbour authority must impose surcharges under the new clause 2. This ensures that the point at which their duty begins to apply is clear to harbour authorities.

Amendment 5 makes provision for declarations to relate to a fixed relevant year, starting on a date to be set out in regulations. Providing a fixed relevant year will ensure that harbour authorities and operators are all working to the same period, providing consistency and certainty for harbour authorities to comply with their duties, reducing administrative burdens and making enforcement much more straightforward.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

On amendment 5, was any thought given to the possible unintended consequence of setting a specified date in regulation, namely that it might allow operators to consider means of circumventing the legislation through port hopping? As was passed on to me, it is Nautilus’s belief that, for that reason, it should be a 12-month rolling period. Has the Department considered that?

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport)

The hon. Gentleman makes a fair point. I will come to the broader concerns around port hopping that hon. Members have raised at previous stages. We do not think it will be an issue. I will come back to the hon. Gentleman at a later stage; if he continues to have an issue, perhaps he can raise it then.

Amendment 5 makes provision for declarations in a fixed year. These amendments are therefore necessary to ensure the effective functioning of the Bill, and will do just that.

Amendments 3 and 4, tabled in my name, abbreviate

“national minimum wage equivalence declaration” to “equivalence declaration”—that is all. This is a minor drafting change intended to improve the Bill by simplifying a frequently used term.

Amendments 39 and 40 to clause 14 are consequential on amendments 1 and 5, and give the phrases “equivalence declaration” and “relevant year” the same meaning as in clause 3.

Amendment 7, tabled in my name, allows for equivalence declarations to be provided before, during or after the year to which they relate, and for declarations to relate to part of a year. The amendment will prevent any gaps in coverage in declarations and requires harbour authorities to request a declaration whenever it becomes clear to them that a service is in scope of the Bill. A harbour authority must request a declaration from an existing service before the relevant year starts if it has reasonable grounds to believe that a ship will call at its harbour 120 times during the year. In the event that, part way through a year, a harbour authority has reasonable grounds to believe that ships providing the service will have entered the harbour at least 120 times, it must request a declaration part way through that year, or at the end of the year if it was not clear until that point.

Amendment 6 removes subsections (5) and (6) of clause 3, which provide for the offence of operating inconsistently with an equivalence declaration. New clause 1 provides for an offence adapted to the proposed new system for equivalence declarations. Amendment 6 and new clause 1 therefore also cater for the fact that an equivalence declaration may, as a result of amendment 7, be provided before during or after the relevant year to which it relates.

Subsections (2)(a) and (3)(a) of new clause 1 mean it will be a criminal offence to operate a service inconsistently with a declaration from the start of the relevant year or at the time a declaration is provided during a relevant year. This will ensure that the new offence covers all circumstances in which an equivalence declaration may be requested, and provides legal certainty to operators as to when they may be guilty of an offence.

Clause 13 provides definitions of “harbour” and “harbour authority” that align with the definitions in the Harbours Act 1964 in England, Wales and Scotland, and the Harbours Act (Northern Ireland) 1970 in Northern Ireland. This will ensure consistency with existing legislation and help to clearly identify the relevant authorities for the purposes of the Bill. The clause also currently provides that where there is more than one harbour authority in respect of a harbour,

“the Secretary of State may by direction specify which of them is to be treated as the harbour authority in respect of the harbour” for the purposes of the Bill. This provision is intended to avoid any uncertainty as to which is the relevant harbour authority for a particular harbour, and avoid multiple harbour authorities exercising powers in respect of a single service, which will help to ensure that the Bill’s provisions are applied consistently and effectively.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

I thank the Minister for giving way once again. Perhaps I should have intervened slightly earlier, as I have a query about amendment 7. The amendment allows for declarations to be made for part of the year. As it stands, declarations relate to 120 visits a year. If it is a partial year—say six months, for ease—will it still be 120 visits over those six months, or will it be a pro rata number of visits for that partial period?

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport)

My understanding is that it is for the whole year. The schedules for these operators are based on a whole year; it is very rare that they are not. These are big operations that do not dip in and out. They are not easy to set up; they often involve long-standing arrangements with port authorities, and are based on the whole year. However, if the hon. Gentleman would like to write to me following this sitting, I will obviously respond to any particular issues or examples he wishes to raise.

Photo of Grahame Morris Grahame Morris Llafur, Easington

I hope this intervention does not prejudice the fact that I would like to speak to amendment 67, which stands in my name and that of a number of colleagues.

Photo of Grahame Morris Grahame Morris Llafur, Easington

Could the Minister give a bit of clarification in relation to Government amendment 1? I welcome the fact that the amendment creates a duty, rather than a power; presumably, that was in response to the concerns raised on Second Reading about the conflict of interest. Let us not forget that some harbour authorities are owned by shipping companies, and may well be reluctant to apply sanctions and fines if there is a conflict of interest.

Regarding the level of fines, proposed new subsection (3A) to clause 3 refers to

“a fine not exceeding level 4 on the standard scale.”

Could the Minister indicate what level of fine that is? My information is that it is £2,500. Would it not be advantageous to set it at level 5, which is unlimited? A fine of £2,500 does not seem like much of a disincentive.

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport)

I thank the hon. Member for the first point he made, about the amendment creating a duty rather than a power. That is exactly why we have done this; hon. Members from across the House made the point, and I am glad that we have got there.

I am fully aware of the issue around level 4 and the levels of fines. I will write to the hon. Member about the specifics, and we can discuss them during the Bill’s later stages, but my understanding is that there were specific reasons behind that decision, related to different fine levels in different parts of the United Kingdom; I raised that issue myself in earlier discussions with officials. We will happily look at it again, because as the hon. Member has rightly said, I do not want it to be a lesser offence for the port operator to not comply with its duty than to comply with its duty. That is a very sensible and important point, and I will happily write to the hon. Member to explain why we have arrived at our position.

Opposition amendments 44 and 46 aim to change the applicability of the Bill from “the harbour” to “any UK harbour”, and from “the harbour authority” to

“all relevant harbour authorities to which the declaration is applicable”.

As hon. Members will be aware, the Bill refers to “the harbour” rather than “a harbour” in order to keep the focus on particular services calling between two specific ports. The scope of the Bill encompasses services calling at the harbour in question at least 120 times a year. In particular, the effective enforcement of the Bill relies on there being one harbour authority responsible for monitoring and enforcement of a service. Individual harbours may be able to anticipate that a particular service will call in that harbour 120 times in the year, especially if that service has done so in previous years or via volume of a new service. However, it would be very difficult for a harbour to anticipate whether a particular operator will have services to other harbours that would amount to 120 calls in harbours in the UK per year.

The amendments would also create confusion about which harbour authority should request an equivalence declaration, and which is therefore responsible for imposing a surcharge. For example, if an operator operated two services using the same ships interchangeably, with one calling at one port 60 times a year and another calling at another port 60 times a year, which would be responsible for requesting a declaration or imposing a surcharge?

I understand that when tabling these amendments, colleagues had in mind the risk of operators falling out of scope. We do not consider it likely that in practice operators will visit different ports periodically to prevent them from coming into scope—the port hopping that hon. Members have referred to—because it is unlikely to be commercially viable for an operator to change the service it provides for the sole purpose of avoiding paying seafarers a fair wage. For example, it would not be logical to route a high frequency Dover to Calais service periodically to Portsmouth, as this would be unlikely to attract customers wanting to use the much shorter Dover crossing, and they would instead go to a competitor.

We have done careful analysis of the likelihood of the so-called port hopping mentioned by hon. Members. I can understand where their concerns come from. We found that this sort of switching would be subject to increased fuel costs and journey times, rent and storage implications, and major capacity constraints, particularly at alternative ports away from the short straits, which this legislation is meant to cover. Operators would also have to consider infrastructure implications, with alternative ports being further away from active rail links and the strategic road network. I reassure colleagues that we have carefully considered the ways in which an operator may seek to avoid coming into scope, and for the reasons given we do not think that operators periodically calling at a different UK port at either end of the voyage is a realistic risk. I hope hon. Members feel content to withdraw those amendments.

Amendment 47 aims to bring pensions and other payments into scope of the Bill. I sympathise with the intention behind the amendment, as it is of course important that seafarers have a fair deal across all employment protections. However, this Bill is the wrong mechanism to do that. The Bill has been carefully calibrated, after thorough consultation, to focus on work undertaken close to the UK in order to ensure that its proposals do not interfere with rights and obligations under international law, particularly the United Nations convention on the law of the sea, to which hon. Members have referred.

As such, the Bill only applies to part of the time a seafarer spends working in the UK and our territorial waters. It would be so complex as to be unenforceable to provide varying entitlements in addition to the national minimum wage equivalence for different parts of the journey. This does not mean that we are ignoring the issue of pensions for seafarers. The seafarers’ charter, which is part of the nine-point plan to protect seafarers, will have operators sign up on a voluntary basis to standards relating to pensions.

Amendments 49 and 62 seek to prevent deductions to the national minimum wage equivalent rate for accommodation, food or other items exempted from being charged to seafarers under international convention. First, I assure hon. Members that the Bill is designed so as not to interfere with rights and obligations under international law, and any regulations made under the Bill will also reflect international law and our obligations thereto. Charging for food and water is prohibited by the maritime labour convention and we will ensure to reflect this in regulations under clause 4.

Deductions for accommodation are not explicitly prohibited by the maritime labour convention. Normal practice across the industry is that accommodation is provided free of charge, as it is essential to allow seafarers to do their jobs on board. We also note the Low Pay Commission’s recent recommendation that such deductions should not be allowed for seafarers who do qualify for the national minimum wage. We will be setting out the detail of how national minimum wage equivalence is to be determined in regulations, including the position on deductions. This has been the case for the national minimum wage legislation today in the UK, so the use of secondary legislation in this way is entirely consistent with existing practice and will ensure we get this complex matter right. We will be holding a public consultation on the draft regulations after the Bill has received Royal Assent.

Photo of David Linden David Linden Shadow SNP Spokesperson (Social Justice) 10:15, 17 Ionawr 2023

It is a great pleasure to serve under your chairmanship, Mr Davies. I will start by returning to some of the comments I made on Second Reading. The Bill is far too narrow in scope. Considering the egregious behaviour of P&O, we could be doing much more. I hope the Minister will look at some of the amendments.

I rise to speak to amendments 44 to 47 and 49 in my name and that of my hon. Friend the Member for Paisley and Renfrewshire North. I should point out that amendment 49 is not dissimilar to Labour’s amendment 62, which we clearly support. In speaking to these amendments, I also want to oppose Government amendment 1, which would doubtless knock out our amendment 45. I will deal first with the issue of port hopping and national minimum wage equivalence.

In clause 3, the requirement to produce a declaration of national minimum wage equivalence is applied to services that call at a harbour 120 times a year. That is the result of a change made following consultation on the draft Bill, which had proposed covering ships that called at a port or UK harbour 52 times a year—once a week. In July, in response to the consultation, the RMT—the National Union of Rail, Maritime and Transport Workers, to which I pay tribute—proposed that the definition in the Bill should be this:

“Seafarers working on ferry services that are frequently operated from UK ports (at least once a week).”

However, following consultation, the Government changed the Bill to apply it to services calling 120 times a year.

The impact assessment says that part of the reason for the change is this:

“The more regularly a seafarer calls at a UK port, the closer their ties to the UK.”

I certainly believe, as I think the Government did, that calling at a UK port once a week is a sufficiently close tie between a seafarer and the UK economy. Indeed, their lordships speaking in support of the shipping and ports industry stated that the Government’s plans contravened the international maritime conventions, specifically the UN convention on the law of the sea.

It is my understanding that the British Ports Association has legal advice that the Bill will not work and will be subject to legal challenge, including on the ground that it infringes the UN convention on the law of the sea. Indeed, the International Chamber of Shipping has also raised the matter, as the shipping industry’s de minimis crewing practices and flagging policies rest on the assertion of innocent passage in international waters between states.

Photo of Grahame Morris Grahame Morris Llafur, Easington

The hon. Gentleman is making relevant and sensible points. On the issue of the 120 days, we have concerns, which I am sure he shares, that there are so many exclusions that the Bill will be like a colander—full of holes. The original proposal was 52 times a year, or once a week. What will be the impact of the Bill on the offshore continental shelf with respect to the frequency of the use of supply vessels? Will the figure of 120 days effectively exclude them from the legislation? I suspect it will.

Photo of David Linden David Linden Shadow SNP Spokesperson (Social Justice)

I am grateful to the hon. Gentleman for making that point, which gets to both the nub of the issue and a source of real concern for me. He is right to talk about the colander effect, and not making the legislation sufficiently tight means that in many cases companies will exploit the measure, as has he eloquently outlined. Let us be honest: the legislation was introduced because a company sought—within the law—to exploit people, and it would be a dereliction of duty by the House and by the Committee if we did not seek to tighten the Bill in such a way as to ensure that industry cannot get away with using such practices.

Photo of Gavin Newlands Gavin Newlands Shadow SNP Spokesperson (Transport)

My hon. Friend has referred to the House of Lords, but on Second Reading in this place, the Secretary of State said in terms of the number of visits to harbour:

“We think the definition in the Bill at the moment will capture the vast majority of the services we wish to capture.”—[Official Report, 19 December 2022; Vol. 725, c. 66.]

The Secretary of State referred to “the vast majority”, but this relates to the national minimum wage. Why should we be happy with a majority, rather than ensuring that all employees get the minimum wage?

Photo of David Linden David Linden Shadow SNP Spokesperson (Social Justice)

Even if people were not around last night, it will not come as a huge surprise that the Government are not particularly wild about standing up for workers’ rights. We on this side of the Committee happen to be of the view that we should be doing everything we can to try to support workers—[Interruption.] The hon. Member for Crewe and Nantwich chunters. I am more than happy to give way if he wants to stand up and speak. If he wants just to make a wee bit of noise behind the Minister, he is welcome to do so.

We support returning to the stricter criterion of 52 calls per year, which is what amendment 45 seeks to do. This is a key test of the Government’s commitment to seafarer welfare, and they failed in the Lords when they narrowly defeated Lord Tunnicliffe’s amendment that aimed to restore the criterion of 52 annual harbour calls.

National minimum wage and domestic employment law are difficult to enforce and apply in the maritime sector. That is why employers such as Stena Line, which employs UK crew on international routes from UK ports in Cypriot-registered vessels, enter collective bargaining agreements with domestic maritime trade unions. The UK Chamber of Shipping estimated that up to 45 major ferry routes served the UK economy in 2020, but that is subject to change. For example, P&O closed Hull-Zeebrugge in October 2021, but DFDS opened an unaccompanied freight service between Sheerness and Calais earlier that year.

In my view, the Bill should cover crew working for operators of containers, bulk carriers, cargo ships and vessels working in the offshore energy supply chain, as well as ferries. In 2018, the RMT estimated that extending the national minimum wage to cover domestic and offshore energy routes would bring 13,000 seafarer ratings into scope. The impact assessment for the Bill estimates only the cost to employers, not the number of seafarers who would be covered by the Bill.

I am concerned that the Government have dismissed out of hand the unions’ concerns over avoidance techniques. Port hopping, as we often refer to it, remains a genuine avoidance technique that becomes far easier to use the more frequently a vessel calls at a UK harbour. At 120 calls per year, it would be far easier for operators to make minor changes to scheduled port calls in order to avoid the legislation. A threshold of 52 calls, which was in the Government’s original proposals, would be far tighter. It was changed only after consultation with industry, although the trade unions supported 52 calls. I go back to the point that if the Bill is about protecting workers—the very workers who were so cruelly shafted by P&O—then it is incumbent on the Government to listen to the voices of those workers and trade unions, not the voices of industry. That is the whole reason we are here.

Disappointingly, the Minister in the Lords, Baroness Vere, was unconvinced that that avoidance technique could be used. She said:

“I do not think operators would play switcheroo with UK ports because, frankly, their customers would not put up with it.”—[Official Report, House of Lords, 26 October 2022; Vol. 824, c. 1506.]

The translation of that is, once again, “Leave it to the markets. The markets will dictate.” If we have learned anything over the course of the last few months in this House and during the P&O debacle, it is that simply leaving it to the markets is not a great idea. I am not reassured that the logistics market will self-regulate. The recent merger between Cobelfret and Seatruck Ferries, two operators who have been paying seafarers below national minimum wage on regular international services from UK ports for years, frankly, also increases the prospect of avoidance techniques.

I hope that has outlined just some of our concerns on the issue. For those reasons, I will formally seek to divide the Committee and vote against Government amendment 1.

Photo of Natalie Elphicke Natalie Elphicke Ceidwadwyr, Dover

I will take the opportunity to speak to these clauses and amendments. They cover the short straits, and first I will comment specifically on the issue of 120 calls per year. Looking at the short straits, according to figures from the UK Chamber of Shipping, the number of port calls meets the threshold by 30 to 40 times in relation to the Dover-Calais and Dover-Dunkirk lines: around 4,000 port calls that are made would come within the legislation. Whenever we set a threshold, it is important to set it with reference to the matter that we are addressing. The evidence is very clear that 120 days is a relevant and, indeed, low threshold in relation to the particular services that we are seeking to address within the remit of this important Bill, which, as has been discussed, very much has my short straits of Dover at its heart.

I am conscious that some good points have been made in relation to seafarers more generally. I hope that we can show some global leadership on this issue. I have been pleased to have the opportunity to speak at great length about seafarers’ rights with my hon. Friend the Member for Witney when he was Ports Minister. Although I can understand the remit being extended in the way that is being sought within the remit of the Bill, we need to look at seafarers’ rights more generally, as well as those bilateral agreements.

I now turn to amendments 47, 62 and 49. The Minister made some helpful comments in introducing this section, but I ask him, if I may press him further, for an assurance of the position, particularly relating to the calculation for food and accommodation. If I were to work in McDonalds—indeed, I did so for a very long time and enjoyed it greatly—I could have a certain amount of food on my food break if I were to work for four hours. If I were to work for the entire day, I would get much more McDonalds food—very tasty. That food would be free to me as a worker and that is the principle that we want to see for those at land and within our waters.

However, I think that some of the concerns that have been raised must not be seen only through the lens of our own domestic legislation in relation to the minimum wage and its calculation. I have taken some time to look at how these issues are treated within our national minimum wage legislation on land and issues such as accommodation—staying on ship would not, in my view, fall within the current definition of “accommodation” and its applicability for national living wage purposes. But it is right that these issues have been raised and that they are looked into carefully as we go through because, in relation to the operation of seafarers, particularly on these routes, our domestic provisions are not the market provision for these matters. The market for this is global; the conditions are global and international. When we talk about common market practice, it is within a global and international setting, with different countries applying different regimes to their seafarers.

When it comes to seafarers’ rights, we tend to think that this means countries who are very international, such as the Philippines and others, but I will give the Minister a directly relevant example to this food and accommodation issue. The Danish Maritime Authority allows for seafarers’ food subsistence allowance to be deducted from the calculation of national minimum wage. It is a matter for negotiation, either collective agreement or individual contracting, but, none the less, in the application of their calculation of national minimum wage, they do—

Photo of Grahame Morris Grahame Morris Llafur, Easington

I thank the hon. Lady for giving way. I recognise the examples of Denmark and one other seafaring nation—I have forgotten which one at the moment—but they have sectoral collective bargaining. Their standards and pay rates are generally much higher. I hope she would acknowledge that. We are looking at a far lower level—just at the national minimum wage, without all of the package that I want to refer to in relation to pensions, accommodation and other things, roster patterns in particular.

Photo of Natalie Elphicke Natalie Elphicke Ceidwadwyr, Dover

I am grateful to the hon. Gentleman. Indeed, I would like later to come back in the relevant section in relation to roster patterns, which are very important.

I am giving the Danish example as a reason why we need clarity to exclude the provision from our calculation of national minimum wage. It is not appropriate or correct to exclude food and accommodation when someone is on their ferry. They work—too often—two weeks on, two weeks off. They are stuck on that ferry. They must have food and a place to put their head down. They will probably have a poor night’s sleep or a poor day’s sleep when they are off rota. It is absolutely essential that we have clarity so that, unlike in Denmark and other countries, for the purposes of our application of the minimum wage legislation in relation to seafarers operating in our own territorial waters, it would be the same if I was working at McDonald’s, or anywhere else, or working at sea. I ask the Minister to reflect on this matter and to consider whether he can give us some more assurance that that is indeed the intent behind the Bill, because it is a very important point, given the fact that there is different maritime practice even among European neighbours from a business perspective.

If I may, I will touch briefly on the desire to have improved rights for seafarers. The Minister has mentioned bilateral discussions. Again, it would be helpful for us to understand whether the bilateral discussions coming up in March with our Prime Minister and President Macron are intended to include some of the issues around seafarers that we have mentioned, because it will only be through a strong bilateral arrangement across short straits that we can ensure that we get the best possible safety and working conditions for our seafarers.

Photo of Grahame Morris Grahame Morris Llafur, Easington

I agree with much of what the hon. Member has just said. I may have misunderstood—[Interruption.] Well, it is the first time; every day is a school day.

Can the Minister clarify something that he said earlier, which may well address our concerns? It is in relation to amendment 62. Did he indicate that on the point just made by the hon. Member, namely that, as the amendment says:

“provision prohibiting deductions from remuneration for accommodation costs, food or other entitlements” will be addressed through regulation by the Secretary of State? I see that he is nodding, so that is good news indeed.

If I may, I will speak to amendment 62, which was tabled by my colleagues on the Front Bench and I, and amendment 47, which is very similar and which was tabled by the SNP. Both amendments address a broader question. I appreciate that the Bill is trying to address one specific issue by putting in place measures to prevent the actions of rogue bosses, such as the management of P&O, from being replicated by other ferry operators; I understand that.

However, what the Government must understand is that the motivation for P&O and others—I know that we will come on to nationality-based pay discrimination later—is that P&O made far more savings from changing the roster pattern and reducing the crewing than it did from reducing the wages by paying staff, who were mostly able seamen from India, less than the minimum wage. The Government must acknowledge that and if we are going to address this issue, we need some remediation.

Photo of Karl Turner Karl Turner Llafur, Kingston upon Hull East

I remind the Committee of the disaster of the Herald of Free Enterprise—193 passengers and crew lost their lives. The inquiry found that that disaster was down to one issue: crew fatigue. My concern is that that could happen again. Five or six months on, two weeks off, seven days a week, 12 hours a day—it is obvious what could occur.

Photo of Grahame Morris Grahame Morris Llafur, Easington

I thank my hon. Friend for that powerful intervention and for reminding us of the consequences of fatigue and of reducing staffing to unsafe levels. It is not just a matter of opinion and a concern expressed by the RMT and Nautilus International; a number of academic studies from Cardiff University and others, which I believe the Department has copies of, demonstrate just how important it is that we address this issue.

Photo of Natalie Elphicke Natalie Elphicke Ceidwadwyr, Dover

I had expected to speak on this issue when we reached new clause 5, but since we are talking about roster patterns, I will comment on it. The capsizing of the Herald of Free Enterprise was an absolute tragedy that we—the RMT and all of us down in Dover—come together to remember every year. It is such an important thing to remember, and I am grateful to the hon. Member for Kingston upon Hull East for mentioning it in this context.

Does the hon. Member for Easington agree that what we have seen, particularly in relation to Irish Ferries joining the short sea route, is that the Maritime and Coastguard Agency has a role at the moment in making sure that the standards of training are appropriate? We saw that the roster patterns, training patterns and crewing patterns in relation to Irish Ferries coming into Dover were changed from those that applied elsewhere in its operations. We also saw the MCA take action in relation to P&O when it tried and failed to stand up its new structures. I would like to see the MCA be stronger and firmer, and taking better action—

Photo of Philip Davies Philip Davies Ceidwadwyr, Shipley

Order. I have been very generous with interventions, but I must remind Members that interventions are supposed to be just that: interventions, not mini-speeches. If we could back to interventions being interventions, I would very much appreciate it.

Photo of Grahame Morris Grahame Morris Llafur, Easington

Thank you, Mr Davies. I will hurry along.

To reinforce the point made by the hon. Member for Dover, I say to the Minister—I am sure he is aware of this—that some academic studies into crew fatigue were published in 2012 by Cardiff University. Further research is provided by the EU’s Horizon project and the World Maritime University’s EVREST report, and all the evidence highlights the dangers of crew fatigue caused by long hours. I believe the replacement crews on the Dover-Calais ferry were working 12-hour shifts, seven days a week, for up to 17 weeks without a break, when they slept on the ship. That must be a cause for concern in terms of health and safety.

In conclusion, I say to the Minister that we really need a maximum roster pattern in the seafarers’ charter. For the ferry sector, two weeks on, two weeks off is the pattern favoured internationally and by the maritime unions, for health and safety reasons as much as anything. I urge the Minister to work with the maritime trade unions and the Labour party in respect of this issue, and on refining the seafarers’ charter to get this right and to help restore jobs, fair pay agreements and training programmes, starting with the ferry sector.

Photo of Simon Lightwood Simon Lightwood Shadow Minister (Transport)

It is a pleasure to serve under your chairmanship, Mr Davies. I rise to speak in favour of amendment 62, which stands in my name and those of my hon. Friends, on the deduction of accommodation, food costs and other entitlements, and of amendment 45, which stands in the name of the hon. Member for Paisley and Renfrewshire North, on preventing port hopping.

The intention of amendment 62 is to prevent operators from deducting accommodation, food and other costs from the national minimum wage equivalent. We do, of course, welcome the intention to ensure that operators pay a national minimum wage equivalent to those who have close working relationships with the UK, but as we have heard, significant elements of the provisions and their enforcement must be strengthened to prevent avoidance, which we know is rife in the sector.

First, the minimum wage provision has an offset allowing employers to deduct costs for providing accommodation. That is clearly ripe for abuse and must be ruled out explicitly. We know that P&O could potentially deduct £1,035 and Irish Ferries nearly £490 from a non-qualifying seafarer’s wages, if the accommodation offset is available to them under the secondary legislation provided for in the Bill.

On port hopping, operators fall within the scope of the Bill as it stands if they call at a single UK port on at least 120 days within a year. On some routes, such as that of the Pride of Hull, only slight adjustments to the timetable would allow them to escape paying the minimum wage. That period must be reduced. The initial draft Bill originally proposed covering ships that called at a UK port 52 times per year, but that was changed after consultation.

As the hon. Member for Glasgow East mentioned, the impact assessment stated:

“The more regularly a seafarer calls at a UK port, the closer their ties to the UK.”

We continue to believe, as the Government originally did, that calling at a UK port once a week is a sufficiently close tie between a seafarer and the UK economy. From experience, we know that rogue operators will do whatever they can to get round and exploit the rules. We should not let them. That is why we fully support amendment 45.

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport) 10:45, 17 Ionawr 2023

I will not go over all the points that I made earlier, but I will address some of the specific issues raised by hon. Members. My hon. Friend the Member for Dover mentioned bilateral meetings between the Prime Minister and the President of the French Republic. There have been positive discussions between officials to date; I do not know if this will be raised specifically, but the discussions have been very positive. The Transport Secretary is also hoping to visit France at some point in the not-too-distant future.

My hon. Friend the Member for Dover and the hon. Members for Easington and for Wakefield mentioned deductions. We will have a proper public consultation on the draft regulations in this space. I have already noted—as I hope hon. Members have—the Low Pay Commission’s recent recommendations that this issue should be looked at. I hope hon. Members will take part in the consultation and contribute to the regulations as they are being drafted, without feeling the need to press specific amendments to a vote today.

The hon. Member for Paisley and Renfrewshire North raised the issue of the British Ports Association. We have not seen its legal advice—if he would like to share it with us, that would be lovely—but we do not believe it has a strong legal position.

Photo of John Hayes John Hayes Ceidwadwyr, South Holland and The Deepings

My experience as a Minister was that Government lawyers never assured us that we were in a strong legal position on anything—at most, they offer a 50:50 chance. The Minister might want to think again about the comments made in Committee; the terms and conditions seem to be critical. The Government—the Minister, in particular—deserve great praise for this legislation, but it would be a grave error to get pay right but not get terms and conditions right at the same time.

Photo of Richard Holden Richard Holden Parliamentary Under-Secretary (Department for Transport)

My right hon. Friend makes an important point. We are looking into the terms and conditions, which will be there in the regulations, and we will have a wide public consultation. He is absolutely right: we want to get this right.

The legal issue raised by the hon. Member for Wakefield was about legal risk in the 52 versus 120 days element. When a ship stops at multiple points in Norway, for example, then has one trip a week to the UK, to argue that it should be covered by UK legislation rather than Norwegian legislation would put it into a very difficult international legal position. Under international maritime law, that would expose us to greater legal risk for the entirety of the legislation, rather than on specific points. I hope hon. Members understand.

The hon. Member for Glasgow East made a number of comments. On the broad issues, at least, I say to him that the Government have raised the threshold at which people pay income tax, taking millions of people out of tax. They have introduced the national living wage and reduced the age at which people qualify for it. Moreover, and in a massive and long-term benefit for huge numbers of people, they have expanded auto-enrolment in pensions to hugely benefit working people. His comments were broadly ill judged and, in a certain way, bringing forward this conversation today shows our commitment to delivering for working people. While I appreciate that everyone in the Scottish National party is an expert on ferries these days, I am not sure they are when it comes to this legislation.

Question put, That the amendment be made.

Rhif adran 1 Seafarers’ Wages Bill [Lords] — Clause 3 - Power to request declaration

Ie: 10 MPs

Na: 7 MPs

Ie: A-Z fesul cyfenw

Na: A-Z fesul cyfenw

The Committee divided: Ayes 10, Noes 7.

Question accordingly agreed to.

Amendment 1 agreed to.

Amendments made: 2, in clause 3, page 2, line 16, at end insert:

“(za) as to the period within which equivalence declarations are to be provided;”.

See Amendment 1.

Amendment 3, in clause 3, page 2, line 17, leave out “national minimum wage”.

See Amendment 1.

Amendment 4, in clause 3, page 2, line 18, leave out “national minimum wage”.

See Amendment 1.

Amendment 5, in clause 3, page 2, line 19, at end insert:

“(4A) In this Act, ‘relevant year’ means—

(a) the period of 12 months beginning with a date specified in regulations, and

(b) each successive period of 12 months.”

See Amendment 1.

Amendment 6, in clause 3, page 2, line 20, leave out subsections (5) and (6).—(Mr Holden.)

See Amendment 1 and also NC1, which provides for an offence adapted to the proposed new system for equivalence declarations.

Clause 3, as amended, ordered to stand part of the Bill.