Clause 5 - Requirement to Provide Information

Seafarers’ Wages Bill [Lords] – in a Public Bill Committee am 10:45 am ar 17 Ionawr 2023.

Danfonwch hysbysiad imi am ddadleuon fel hyn

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

I beg to move amendment 8, in clause 5, page 3, line 22, after “is” insert “or at any time was”.

This is consequential on Amendment 7.

Photo of Philip Davies Philip Davies Ceidwadwyr, Shipley

With this it will be convenient to discuss the following:

Government amendment 9.

Clause stand part.

Government amendments 10 to 12.

Amendment 63, in clause 6, page 4, line 37, at end insert—

‘(6A) An inspector may request information from—

(a) an officer of Revenue and Customs, or

(b) Maritime and Coastguard Agency, if they consider it necessary for either of the purposes specified in subsection (2), and the authority to which the request was made must respond within 14 days.”

Clause 6 stand part.

New clause 8—Report: evidence of nationality-based pay discrimination—

‘(1) The Secretary of State must produce and publish a report setting out any evidence of nationality-based pay discrimination against non-qualifying seafarers.

(2) The evidence referred to in subsection (1) must include, but need not be limited to, aggregated data drawn from—

(a) minimum wage equivalence declarations requested by harbour authorities;

(b) information provided in response to notices under section 5;

(c) evidence from inspections under section 6; and

(d) any other sources of information as the Secretary of State considers appropriate.”

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

As previously, I will address the clauses and speak to the amendments, including those from the Opposition. Clause 5 allows the Secretary of State—in practice, operating through the Maritime and Coastguard Agency—by notice to require operators to provide information for the purpose of establishing whether a service is being operated consistently with an equivalence declaration provided by the operator. It is an offence for an operator to fail to provide information required by the Secretary of State under this clause or to provide information that is false or misleading.

An offence under this clause is punishable on summary conviction by a fine in England and Wales, or by a fine not exceeding level 5 on the standard scale in Scotland and Northern Ireland. The sort of information that the Maritime and Coastguard Agency may request under this clause may include, but is not limited to, payslips, seafarer employment agreements and payroll information.

Clause 6 empowers an inspector appointed by the Secretary of State to board a ship in a harbour in the United Kingdom or enter any premises for the purposes of establishing whether a service is being operated consistently with an equivalence declaration, or of verifying information provided under clause 5. In practice, this will be an inspector from the Maritime and Coastguard Agency, which is responsible for enforcement in many areas in this sector and is the most appropriate agency for the job.

It is an offence for any person to intentionally obstruct an inspector in the exercise of their powers; to fail without reasonable excuse to comply with a requirement imposed by this clause, or to prevent another person from completing such a requirement; or to make a statement that the person knows is false or misleading, or recklessly make a statement which is false or misleading, in purported compliance with a requirement imposed under this clause. Such an offence is punishable on summary conviction by a fine in England and Wales, or a fine not exceeding level 5 on the standard scale in Scotland and Northern Ireland.

This clause, together with requests for information under clause 5, will allow the Maritime and Coastguard Agency to play an enforcement role in checking whether a service is being operated consistently with a declaration. In practice, this will be done through intelligence-based checks in the event of credible evidence suggesting a service may be being operated inconsistently with a declaration and random spot checks. It is important to distinguish the enforcement role from the harbour authority’s role in the compliance process, which is mostly administrative. Harbour authorities are not required to make inquiries as to whether a service is being operated consistently with a declaration.

Amendment 8, tabled in my name, is consequential on amendment 7 to clause 4, which 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. Amendment 9 is a minor drafting change to abbreviate “national minimum wage equivalent declaration” to “equivalence declaration”, as discussed with respect to amendments 1, 3 and 4.

Amendment 10 to clause 6, tabled in my name, is consequential on amendment 7 to clause 4, which 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. Amendments 11 and 12 to clause 6 are consequential on the abbreviation of “national minimum wage equivalence declaration” to “equivalence declaration”. In particular, amendment 12 changes the word “declaration” in clause 6(4)(c) to “statement”, so that this is not confused with the term “equivalence declaration”.

Opposition amendment 63 to clause 6 seeks to ensure that inspectors are able to access the appropriate information from Government agencies in order to exercise their enforcement powers. This is unnecessary, as the Maritime and Coastguard Agency will be the relevant enforcement agency and so will already have access to its own information. We have discussed data access with His Majesty’s Customs and Revenue, and it is considered unlikely that it would hold relevant information on seafarers in the scope of the Bill, as they are not already entitled to national minimum wage. As such, we do not consider it necessary to include information-sharing provisions in the Bill, as the MCA is the relevant authority.

Opposition new clause 8 would require the Government to produce and publish a report setting out any evidence of nationality-based pay discrimination against non-qualifying seafarers. Under the Equality Act 2010 (Work on Ships and Hovercraft) Regulations 2011, limited nationality-based discrimination is permitted. Under the Bill, we will not have the relevant evidence to which the new clause refers. Nationality is not relevant to whether someone is a non-qualifying seafarer, so we do not intend for declarations to require operators to provide information relating to nationality. Such information would also not be requested by a notice under clause 5, as it is not relevant to whether the national minimum wage equivalent is being paid. The Government are conducting a post-implementation review of the Equality Act 2010, which will consider nationality-based pay discrimination. I request that the Opposition do not press the new clause.

Photo of Mike Kane Mike Kane Shadow Minister (Transport) 11:00, 17 Ionawr 2023

I rise to speak in favour of amendment 63 and new clause 8. My hon. Friend the Member for Wakefield gave specific examples of deductions made by Irish Ferries and P&O; as he said, this is all about compliance. In his nine-point plan, Grant Shapps, now the Business Secretary, pledged to involve His Majesty’s Revenue and Customs in ensuring compliance with minimum wage legislation, but the Bill does not include a direct role for HMRC, which is the only expert in minimum wage compliance. That is like delegating something to a port and harbours board, to the Maritime and Coastguard Agency or to anybody, but it is not the Government taking responsibility for the matter. That clearly must be addressed, and I ask the Minister to address it. Port operators are not experts in minimum wage compliance or in establishing whether the minimum wage is being properly enforced.

Maritime and Coastguard Agency officials will need to be trained in labour market enforcement issues, and HMRC national minimum wage enforcement officials will need to be trained in seafarer and maritime employment practices and law. What provision is there in the Bill for that? I do not see much at all. However, the Department for Transport told the trade unions that His Majesty’s Revenue and Customs has stated that there is no disproportionate risk of seafarers not being paid the national minimum wage. If this is not enforced properly, it is wide open, and I think most Members with any common sense will think it is wide open. On 24 March, Peter Hebblethwaite, the former chief executive officer of P&O Ferries, openly admitted to a joint sitting of the Transport Committee and the Business, Energy and Industrial Strategy Committee that P&O Ferries was paying an average well below the national minimum wage. How does clause 5 tackle what Peter Hebblethwaite said to this House?

Amendment 63 would ensure that an inspector may request from His Majesty’s Revenue and Customs or the Maritime and Coastguard Agency such information as is necessary to ensure that the operator is compliant with the national minimum wage. Further, complaints of non-payment of the national minimum wage have been consistently submitted to His Majesty’s Revenue and Customs. [Interruption.] I am slightly interrupted by the right hon. Member for South Holland and The Deepings—that will be His Majesty’s Revenue and Customs on the phone right now, agreeing with my comments to the Committee. Complaints have been submitted by the RMT on behalf of foreign seafarers, but the third-party process does not require His Majesty’s Revenue and Customs to report back on the outcome or progress in investigating those complaints. How will we, as elected Members, and the industry see how the measures in the Bill progress once they have been implemented by Parliament? There is no provision for that. Amendment 63 would ensure a timescale for response of 14 days, so that the outcome of the measures in the Bill will be crystal clear and transparent.

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

I rise to support amendment 63. Given the stroppy point at the end of the Minister’s last contribution, I reassure him—[Interruption.] Oh, it was a humorous point; well, that is for each individual to judge. I point out to the Minister that Chris Grayling has been retained as the Scottish Government’s ferries tsar from now on, so we will not have to worry about that. For the purposes of Hansard, that was sarcasm, lest I have to correct the record at a later date.

The point that has just been made is essentially this: as the Bill currently stands, the Government are hiding behind harbour authorities by expecting them—and with the amendments before us, now compelling them, under fear of prosecution—to carry out the enforcement work. Given the complex nature of the issues we are dealing with, I understand what the Government are doing, but maritime employment rules and minimum wage rules are complicated.

The Maritime and Coastguard Agency will need to be trained in labour market employment issues. HMRC employment enforcement officials responsible for enforcing the minimum wage will need training in seafarer and maritime practices and maritime law. Additional resourcing and time will potentially be needed to make this work. The MCA is responsible for the enforcement of the Bill’s powers, but is not named or listed in clause 6 or anywhere else. A dual role for the MCA and HMRC national minimum wage inspections must be clearly established, otherwise the Bill could have unintended consequences for qualifying seafarers’ existing national minimum wage rights.

The nine-point plan included a specific action to ask HMRC to dedicate UK national minimum wage resource to the maritime sector. The Department for Transport has told trade unions that HMRC has since stated that there is no disproportionate risk of seafarers not being paid the national minimum wage. I have no clue how it has come to that conclusion, given everything that has gone on, and that statement is despite Peter Hebblethwaite’s open admission to the joint Select Committee on 24 March that P&O ferries are now paying an average well below the national minimum wage, not to mention the evidence amassed by the RMT and detailed in annex 2 to its briefing.

The Government should consider using redundant Brexit customs processing facilities built at great expense in ports that host operators and vessels in scope of this Bill to provide bases for the inspectors from the MCA, HMRC and the International Transport Workers’ Federation, which will assist in the enforcement of the legislation. The MCA and the ITF perform essential port state control functions to protect and uphold minimum international seafarer welfare standards in the maritime labour convention. It is for that reason that we support new clause 8 in the name of the hon. Member for Easington.

I suspect the Government may not accept the new clause, but it would be pretty obscene if we were to see evidence of nationality-based pay discrimination. We very much support the new clause. I hope the Minister is generous, for a change.

Photo of Grahame Morris Grahame Morris Llafur, Easington

I support the arguments put forward by my colleagues on the Front Bench. Will the Minister give some clarification? I noted what I thought was an assurance in his comments. Our amendment 63 is an attempt to make the enforcement process clearer, in terms of ensuring that the inspectors have the requisite not just powers but information, from HMRC in particular, in order to carry out the task that the Bill assigns to them. I wonder whether the Minister could clarify—maybe I am missing something; I heard him say that it would be the Maritime and Coastguard Agency that would be the inspectors. Could that function be delegated to the harbour authority or to staff of the harbour authority acting on behalf of the MCA? I would appreciate if he could clarify that point in his summing up.

Nationality-based pay discrimination is the elephant in the room. We must get to grips with it. I realise that the issue is incredibly complicated because of international treaties, but we need to get to the kernel of the issue because this is what is happening. Unscrupulous ferry operators in the sector are displacing UK-based seafarers on a “fire and rehire” basis, which Labour finds anathema.

There were Conservative MPs who were incandescent at the tactics employed by P&O Ferries on 17 MarchSt Patrick’s day—in that terrible action it took. We must see if we can address that, and the hon. Member for Paisley and Renfrewshire North made a good suggestion about using the expertise from the International Transport Workers’ Federation as part of the collective effort, particularly where the issues relate to seafarers from overseas. I wonder if the Minister might consider not only that, but the suggestion to use the facilities that were built—at some cost to the public purse—for the Brexit customs processing facilities and consider whether those not being used adequately could also be used for that purpose.

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

I would like to provide some clarification on the points made initially by the hon. Member for Easington. The Maritime and Coastguard Agency is the relevant enforcement agency, not the harbour authority. Furthermore, it would be unlawful to delegate powers in this space to harbour authorities, so I wanted to make that clear. In response to a point made by the hon. Member for Paisley and Renfrewshire North, the Maritime and Coastguard Agency does not need to be named in the Bill because it enforces on behalf of the Secretary of State. This is normal drafting for Government agencies that are subsidiaries of Departments.

The Department has obviously engaged extensively with HMRC on this issue. The truth is, as this is not enforcing national minimum wage legislation but trying to get the national minimum wage equivalent, the amount of information that HMRC holds in respect to many of these people is either nil or incredibly limited, as many of them will not be UK taxpayers. HMRC has been clear that it is happy to share anything it can to make enforcement easier, but it is not in the exact same space. HMRC already enforces national minimum wage for seafarers who qualify for it, but within this legislation we reflect that much of that falls out of the normal scope of UK legislation.

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

On that point, if I can refer back to the point I made in my speech, does the Minister agree with HMRC—despite all the evidence to the contrary: not just P&O, but many other operators—that there is no disproportionate risk of seafarers not being paid the national minimum wage? Does he think that that is credible?

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

Sorry, could I ask the hon. Member what the disproportionate risk was in reference to?

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

Of seafarers particularly not being paid the national minimum wage compared to other sectors.

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

Part of the issue here is that we are trying to address the national minimum wage equivalence. This is beyond normal UK territorial extent, which is the issue at stake here, which is why we are doing legislation that goes beyond our normal boundaries and does butt up against some of those international maritime obligations that we have, whether that is the case for inland ferries or anything else within the UK. I am not an expert on what HMRC has said, but I assume that what it has said is correct. I imagine there are other elements in the broader economy, where perhaps there are greater language barriers and piecework, where HMRC targets the normal national minimum wage legislation and where it sees the greatest abuses. That is why I am sure HMRC is quite clear in its thinking.

I urge Members, based on what I have said in response to the amendments, to withdraw them, and, if not, to support the Government and vote down the Opposition’s amendments.

Amendment 8 agreed to.

Amendment made: 9, in clause 5, page 3, line 22, leave out “a national minimum wage” and insert “an”.—(Mr Holden.)

See Amendment 1.

Clause 5, as amended, ordered to stand part of the Bill.