P&O Ferries

– in the House of Commons at 2:08 pm on 30th March 2022.

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Photo of Grant Shapps Grant Shapps The Secretary of State for Transport 2:08 pm, 30th March 2022

Madam Deputy Speaker, I wish to make a statement on P&O Ferries.

Last week, I stood at this Dispatch Box to address the House on the shameful sacking of 800 seafarers by P&O Ferries. No British worker should be treated in this way, devoid of dignity and respect. Our maritime workers, who supported this country during the pandemic with great dedication and sacrifice, deserved far better than to be dismissed via a pre-recorded Zoom in favour of cheaper overseas labour.

In response, we urged P&O Ferries to reconsider. Those calls have fallen on deaf ears. Instead, chief executive Peter Hebblethwaite—in front of Parliament, no less—set out how he deliberately broke the law and, in an act of breathtaking indifference, suggested he would do the same thing again.

The failure of P&O Ferries to see reason, to recognise the public anger and to do the right thing by its staff has left the Government with no choice. Today, I am announcing a package of nine measures that will force it to fundamentally rethink its decision and send a clear message to the maritime industry that we will not allow this to happen again: that where new laws are needed, we will create them, that where legal loopholes are cynically exploited, we will close them, and that where employment rights are too weak, we will strengthen them.

I start with the enforcement action we are taking. Far too many irregularities exist between those who work at sea and those who work on land. Even where workers have rights, they are not always enforced. The first measure I can announce is that Her Majesty’s Revenue and Customs will be dedicating significant resource to checking that all UK ferry operators are compliant with the national minimum wage—no ifs, no buts.

Secondly, I have asked the Maritime and Coastguard Agency to review its enforcement policies, checking they are fit for purpose, both now and into the future. The House will recall that the MCA is already, at my request, carrying out inspections of P&O’s ferries. So far two ships, the European Causeway and the Pride of Kent, have been detained after failing safety inspections. I will not compromise the safety of any vessel, and P&O will not be able to rush new crews through training and expect those ships to sail. That work is ongoing.

Thirdly, we will take action to prevent employers who have not made reasonable efforts to reach agreement through consultation, from using fire and rehire tactics. A new statutory code will allow a court or employment tribunal to take the manner of dismissal into account and, if an employer fails to comply with the code, to impose a 25% uplift to a worker’s compensation.

Fourthly, I have made no secret of my view that P&O Ferries’ boss Peter Hebblethwaite should resign. He set out to break the law and boasted about it to Parliament. I have written to the chief executive officer of the Insolvency Service, conveying my firm belief that Peter Hebblethwaite is unfit to lead a British company, and have asked it to consider his disqualification. The Insolvency Service has the legal powers to pursue complaints where a company has engaged in “sharp practice”. Surely the whole House agrees that nothing could be sharper than dismissing 800 staff and deliberately breaking the law while doing so. It is, of course, for the Insolvency Service to decide what happens next, but in taking this step I want to ensure that such outrageous behaviour is challenged.

It is a hard truth that those working at sea do not enjoy the same benefits as those working on land, which brings me to the fifth element of the package today: a renewed focus on the training and welfare elements of our flagship maritime strategy. We are already investing £30 million through the maritime training fund to grow our seafarer population, but I will go further, pursuing worldwide agreements at the International Labour Organisation. We will push for a common set of principles to support maritime workers, including an international minimum wage, a global framework for maritime training, and skills and tools to support seafarer mental health.

Sixthly, we know that P&O Ferries exploited a loophole, flagging its vessels in Cyprus to escape UK laws. We will take action on that too. From next week, our reforms to tonnage tax will come into effect, meaning that maritime businesses set up in the UK will have unnecessary red tape removed, as well as any provisions from the EU that are no longer required. By doing so, we will increasing the attractiveness of UK flagging and bring more ships under our control, thereby protecting the welfare of seafarers.

Much of the maritime sector is governed by international laws, obligations and treaties. That means that we cannot hope to solve all these problems alone. The seventh plank of our package today is therefore to engage with our international partners. This week, I have contacted my counterparts in France, Denmark, the Netherlands, Ireland and Germany to discuss the idea that maritime workers on direct routes between our countries should receive a minimum wage. I am delighted to say that the response, particularly from the French Minister for Transport, has already been positive. I will now work quickly with my counterparts to explore the creation of minimum wage corridors between our nations, and we will also ask unions and operators to agree common levels of seafarer protection on those routes.

I have set out how we will step up enforcement, how we will support the workforce in the long term, how we will get more vessels under the British flag, and how we are working with international partners to create minimum wage corridors, but I know the House is expecting legislative changes, too. Although we had originally intended to come to the Chamber today to announce changes to the National Minimum Wage Act 1998, after seeking expert maritime legal advice it has become clear that that will not be possible. The issue is that maritime law is governed by international conventions that would too easily override changes to domestic laws. However, I will not let that stop us. Seafarers deserve the same wage certainty as onshore workers. They deserve to be safe in the knowledge that they will not be undercut at a moment’s notice by cheaper overseas labour. Today, we are providing that certainty.

I can announce to the House our eighth measure: our intention to give British ports new statutory powers to refuse access to regular ferry services that do not pay their crew the national minimum wage. We will achieve that through primary legislation to amend the Harbours Act 1964. It will mean that if companies such as P&O Ferries want to dock in ports such as Dover, Hull or Liverpool, they will have no choice but to comply. Crucially, that also means that P&O Ferries can derive no benefit from the action it has disgracefully taken. It has fired its workers to replace them with those who are paid below minimum wage but, as a result of this measure, that cynical attempt will fail. My message to P&O Ferries is this: “The game is up. Rehire those who want to return, and pay your workers—all your workers—a decent wage.”

The Government want to bring that legislation forward as quickly as possible, but it is important to get it right. We are legally bound to consult the sector on any changes and, unlike P&O, we take that consultation seriously. Legislative changes will not be possible overnight. To that end, I can announce the ninth and final measure we will be taking. Today I will write to all ports in the UK, explaining our intention to bring forward legislation as quickly as possible, but in the meantime instructing them not to wait. I want to see British ports refusing access to ferry companies that do not pay a fair wage as soon as is practical. They will have the full backing of the Government. I have also instructed the Maritime and Coastguard Agency to get behind that action, and it has indicated that it will do so.

This issue has united the whole House, and indeed the whole country, in anger at those responsible and in sympathy for those affected. We are a proudly pro-business Government, but we will never support those who treat workers with such callousness and disrespect as we have seen here. British workers are not expendable; they are the backbone of this country.

The robust package of measures announced today will give our maritime workers the rights they deserve, while destroying the supposed gains P&O Ferries hoped to obtain. It will send a clear message that those using British waters and British ports to ply their trade must accept British laws. I commend this statement to the House.

Photo of Louise Haigh Louise Haigh Shadow Secretary of State for Transport 2:19 pm, 30th March 2022

I thank the Secretary of State for advance sight of his statement, and for the briefing he gave me on these measures last week.

I know the whole House agrees that the action taken by P&O Ferries was beneath contempt. A sense of fair play and decency runs deep in this country—it is part of who we are—so the sight of a rogue employer who has made a mockery of the rule of law, trashed the reputation of a great British brand and upended the lives of 800 families saying that he would do it all again offends people deeply. The test, therefore, for this Government in the eyes of the country is simple: do not let them get away with it—because for too long, they have. The warning sirens have been sounding for years. P&O Ferries has been exploiting workers in plain sight. In this House, the Government were told repeatedly of seafarers on destitution wages, some earning just £1.74 an hour. My hon. Friend Karl Turner warned:

“If the Government fail to act, how long will it be before we see the same thing happen…on other critical shipping lanes?”

The gate was left wide open, and P&O Ferries has sailed straight through it.

The steps announced by the Government, insisting on the bare minimum, cannot come a moment too soon. This is a move we warmly welcome, and which has our wholehearted support. However, can the Secretary of State confirm that under the harbour legislation he mentioned, the national minimum wage will apply on the entirety of all UK international routes, and not just in British waters, as P&O seemed to suggest yesterday? I very much welcome his action to instruct the Insolvency Service to consider the CEO’s disqualification. When will the Insolvency Service respond, so that the Business Secretary can seek an order for his disqualification in the courts?

Yesterday’s letter from P&O showed in black and white that regardless of the proposed legislation, it still intends to carry out its outrageous plan to sack 800 workers, to trample over the laws of this country, and to take an axe to the pay and conditions of these workers’ replacements and force through a 60% pay cut. This is, as the joint Select Committee was told last week, fire and rehire on steroids—and P&O Ferries must not get away with it. That is why the Government’s reluctance to use every tool at their disposal to force it to change course is bewildering. No prosecution has been brought, despite the Prime Minister's announcement last week, and the deadline to act to protect these workers is tomorrow. The Chancellor confirmed yesterday to my hon. Friend Emma Hardy that the review of the relationship with DP World has already concluded—and it will keep every single taxpayer-funded contract.

Even with these very welcome steps announced today, the Government still risk giving the green light to P&O and other exploitative employers. Will the Secretary of State now guarantee that he will prosecute, disqualify the directors, and suspend their lucrative contracts? If P&O continues to proceed with this unlawful action, and to risk safety, is it not time to suspend its licence to operate? Will he introduce powers to allow the Government to step in and stop any such illegal behaviour in future and force employers back to the negotiating table? Will he amend the Trade Union Act 2016 so that employees can seek unlimited punitive damages against such unlawful action in future?

P&O Ferries has written the blueprint for bad business the world over. It must know that there will be consequences, because this scandal extends well beyond P&O. It is the consequence of a decade in which an axe has been taken to workers’ rights. The balance has tipped far away from working people. Fire and rehire has become commonplace, and millions of people are thinking, “Will I be next?”

The measures announced yesterday by the Under-Secretary of State for Business, Energy and Industrial Strategy, Paul Scully, show, I am afraid, that the Government still do not get it. The measures may mean extra compensation, but only after people have gone through a tribunal process that is beset with delays and backlogs—and this is a price that bad bosses have already shown they are prepared to pay. If Ministers mean what they say—if this is going to be a line in the sand—they will bring forward an emergency employment Bill straight after recess. No more half measures, no more excuses—they must ban fire and rehire for good. They will also guarantee that not a penny of public money will be handed out to companies that disregard workers’ rights, and will work with the RMT and Nautilus International to pursue a binding agreement on pay and conditions to end the race to the bottom that P&O is determined to lead.

We will work constructively with the Government on the measures announced today, but 13 days on from this scandalous act, key shipping routes are still suspended, 800 workers are still without their jobs, those responsible have no regrets, and time is almost out. The stakes could not be higher. To reverse this scandalous act, the actions of Ministers must now match their words.

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I thank the hon. Lady because throughout this crisis she has been very proactive in getting in contact and providing additional ideas and thoughts, many of which have entered into this package. She has been, broadly speaking, pretty constructive, along with a number of other Members from across the House.

The hon. Lady asked about the extent of the intention behind these measures. They are for routes that ply their trade between Britain and our continental neighbours, which is why I mentioned the individuals that I have contacted in foreign Governments.

The hon. Lady asked about the speed of the Insolvency Service. It is of course independent, so we do not have direct control over that, but I very much hope that it will act appropriately quickly. She asked why the Government have not taken any court action. It is because the Government are not in a position to take court action; that is for the unions and for workers to do. We understand the limitations of that, which is why I described some of the items in the package that would address that.

The hon. Lady asked about P&O contracts. We have looked, and we have not identified any so far. In the spirit of co-operation with all Members of the House, and with her in particular, I should say that if anyone is aware of any contracts that we have yet to uncover, they should let us know. The only two found were historical, from during coronavirus.

The hon. Lady mentioned that the situation might be indicative of a wider issue with this Government’s approach towards employees. I gently mention that it was this Government who, in 2020, introduced the extension of the national minimum wage to seafarers on domestic routes. We did that, not any other Government. I seem to recall that in 2005, when Irish Ferries introduced the low-cost approach that, according to P&O, has forced its hand, a chap called Tony Blair used to stand at this Dispatch Box.

Photo of Huw Merriman Huw Merriman Chair, Transport Committee, Chair, Transport Committee

I not only welcome this package of measures but thank—I hope on behalf of the whole House—the Secretary of State for the leadership that he has shown. We now have real urgency on this. That is what we asked for, and that is what we have got. With regard to consultation rights, when P&O Ferries came before our Committee last Thursday, it said that it was basically buying out those rights from the workers because it could. Will he consider, in the longer term, a power of injunctive relief for the Insolvency Service, so that it can stop the actions of P&O Ferries, which has effectively audited our legislative book and found it wanting?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

Yes, that is certainly something we are considering. I thank my hon. Friend for his work, and that of his Select Committee and the Business, Innovation and Skills Committee, which brought the P&O boss here. I think it astonished the House but also the whole country to hear that testimony, which has directly led to the package that we have today, item No. 6 of which goes some way towards addressing my hon. Friend’s specific point.

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

I, too, thank the Secretary of State for advance sight of his statement. I genuinely welcome the action that he has outlined today, although the strength of his words must be followed by the strength and urgency of his actions. There are areas where I hope he can be persuaded to go further. However, I am pleased that those who perpetrated these shameful actions against P&O workers are being held to account and shown the consequences of their law-breaking.

As I have said to a few people in this House, I feared that there would be a delay to the national minimum wage measures due to international maritime labour laws. I commend the Secretary of State for trying to find a work-around, but perhaps he can give us more detail on that. In the meantime, will he indemnify ports for any action they may take against ferry operators?

The movement on fire and rehire is welcome, particularly given the work that I and many Members across the House have done in recent years. However—this is where I depart from the praise for the Secretary of State—as I have said to the Under-Secretary of State for Transport, Robert Courts, many British Airways workers have contacted me in the past few days asking this progressive, nay socialist, Transport Secretary whether British Airways workers were being threatened with fire and rehire. The Secretary of State’s statement says that the Government “will take action to prevent employers who have not made reasonable efforts to reach agreement through consultation from using fire and rehire tactics.” No threat of fire and rehire, whether followed by consultation or not, is reasonable. It must end, and now.

Where I am disappointed is with the tools available to tribunals and courts to enforce the new code. A 25% uplift in compensation is, as P&O has demonstrated, merely a cost to be factored in for unscrupulous employers with deep pockets, and it does not hit employers that simply do not pay their tribunal-mandated compensation. Can we instead see some real teeth to allow tribunals to deploy the full range of outcomes towards employers, including recommending reinstatement where possible? That would be a major deterrent to others considering fire and rehire.

The Chair of the Transport Committee, Huw Merriman, and the Chair of the Business, Energy and Industrial Strategy Committee, Darren Jones wrote jointly to the Secretary of State earlier this week. Among other things, they called for the prosecution of P&O, the removal of its licence to operate in the UK and a review of DP World’s involvement in the freeports project. We have heard, sadly, that the DP World review is complete, but what consideration is he giving to the remaining conclusions of the two Chairs?

I welcome the beefed-up role for the Maritime and Coastguard Agency in enforcing some of these new measures. However, the last financial year saw the MCA receive a real-terms cut in central Government funding. Will the Secretary of State make extra funds available to the MCA so that what he has announced today will actually happen on the ground, rather than it being great in principle but undeliverable in practice?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

Briefly, I thank the hon. Gentleman. I mentioned that I will be working with the International Labour Organisation, but I will also be working with the International Maritime Organisation, which is headquartered globally in London, on making this a global move. Some of what he said will not apply, because once we have changed the Harbours Act 1964, it will outlaw the need to end up going to a tribunal on the 25% uplift and the rest of it. I will leave it there for brevity.

Photo of Natalie Elphicke Natalie Elphicke Conservative, Dover

I warmly welcome the strong package of measures announced today. Does my right hon. Friend agree that the behaviour of the directors of P&O is disgraceful, and they must be held to account? The Dover-Calais route must be operated to the highest safety standards, with decent pay and conditions and on a level playing field. Will he continue to work with me, as he has done since this disgraceful act occurred, to do everything possible to support the Dover-Calais sea corridor and the Dover community?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I thank my hon. Friend for her incredible input into this. In Dover, she is right at the frontline of any impacts when ferries are not running. Her contribution, assistance and guidance have been absolutely invaluable. I will absolutely step up to her asks on this. I stress, probably on behalf of the whole House, that in this House we find it unacceptable that someone would deliberately, knowingly and wantonly go out of their way to break the law in sacking staff. We will not take that lying down. The law will be changed and I am afraid that P&O Ferries, although as of last night it did not realise it, will have to U-turn.

Photo of Ben Bradshaw Ben Bradshaw Labour, Exeter

Don’t worry, Madam Deputy Speaker, it is a common and embarrassing mistake—for the other one!

Will the Secretary of State explain in a bit more detail why he thinks he does not have the powers to seek an injunction to prevent this company from behaving deliberately, disgracefully and, as he just described, illegally?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I have taken a lot of legal advice in the last 10 days to two weeks, and we simply have not found the power to exist in the form that the right hon. Gentleman describes. Maritime law is complex and international in nature. We have looked through every possible solution, and the Harbours Act 1964 is the way to deliver this. In the meantime, we will have the Maritime and Coastguard Agency making sure that we can bring these benefits much sooner than through laws passed through this place.

Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

It is clear that Peter Hebblethwaite has no intention of acting with honour, but I hope that this package of measures will at least give him pause for thought. I hear the calls for further action against the parent company, DP World. I gently point out to those saying so that it is not without consequence—my constituency is home to London Gateway, and hundreds of people are employed there as well—and I want them to act cautiously. However, I call on DP World, the parent company, to look closely at the actions of Peter Hebblethwaite, because he is damaging its reputation, its relationship with the Government and its relationship with me. Get him to do the right thing.

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

My hon. Friend is absolutely right about the reputation of P&O Ferries being ripped to shreds in 14 days in a way that I cannot think of with any company in corporate history. It is important that its owners understand that they are welcome to invest in this country and create employment, but that we take employment law seriously. They need to understand that and deal with this P&O situation, otherwise that will not be smooth.

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Northern Ireland), Liberal Democrat Spokesperson (Cabinet Office)

I very much welcome the Secretary of State’s statement today. It is one of the most substantial and significant statements I have heard in almost 21 years as a Member who has taken a close interest in matters of the merchant marine. I hope that this is the start of a very different practice from what we have seen in recent decades. One of the problems we have had over the years is that when successive Governments were introducing the tonnage tax and refining it, there was a link to training, but not enough of a link to post-training employment. That is the sort of thing that has to change. Protection has to be given not just to officers, but to ratings. When the Secretary of State is constructing the next round of the tonnage tax, will he listen first to the unions representing the ratings and the officers, and not just the shipping companies?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

Needless to say, I am very grateful for the right hon. Gentleman’s comments on this statement. It is a serious attempt to sort out something that internationally has not been satisfactory for a very long time, because of the global nature of shipping. He is absolutely right to zero in on the tonnage tax. As he knows, there will be an opening for the tonnage tax—from 4 April, I think—for the first time in many years. If we can get this right, we can use the tonnage tax not only to improve the industry, but to drive the right kind of behaviour. With more ships flagged under the British flag, we can lead—as we do as a maritime nation—with the IMO here, and use the tonnage tax to pull those ships along.

Photo of Damian Green Damian Green Conservative, Ashford

I congratulate my right hon. Friend on the package of measures he has announced, and I very much hope they are effective. One of the immediate effects of P&O’s disgraceful action has been massively to reduce the capacity of freight to go across the channel, and that has had the predictable knock-on effect of emergency measures being needed on the Kent motorway network, causing disturbance and some misery to my constituents and others across Kent. As well as these measures, does the Department have any proposals to mitigate the problems with cross-channel freight and therefore to mitigate the effects on the M20 and other roads in Kent?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I apologise to my right hon. Friend and other Kent MPs, because I appreciate that the situation with P&O has caused considerable disruption. We have put the moveable barrier in place. I spoke to the lead of the Kent Resilience Forum yesterday, and they have been reporting to me on its level of usage, because I do not want it to be there for no reason. It is being regularly used. A benefit from having put in that moveable barrier is that it no longer takes weeks to deploy and take away, but I am cognisant of the disturbance it creates for Members in the Kent area. I will ensure that we meet regularly with my right hon. Friend and other Members to provide updates on what we expect to happen next.

Photo of Jeremy Corbyn Jeremy Corbyn Independent, Islington North

I welcome the statement made by the Secretary of State today, and in particular his reference to international seafarers. I recognise that he spoke about minimum wage conditions on ferries, but he then went on to talk about international seafarers, who often face disgraceful, almost slave-like conditions of work on international transport. Will he commit to working with the International Transport Workers Federation of transport trade unions, as well as the ILO, to try to get rid of this scandal on a global scale? Obviously Britain can only play one part in that, but we can have a very big influence on changing the whole mood internationally.

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

The right hon. Gentleman is right to point out that this is an international issue. It is worth saying that during the pandemic, we got a UN resolution through to recognise seafarers as key workers. We repatriated 22,000 seafarers. I sent the MCA in to raid a ship that was in Tilbury docks, where I suspected international seafarers were being held at work, essentially against their will. That was successful and there were prosecutions. We have gone further today with the measures I have outlined, which I hope he will approve of, considering that they include working with the International Labour Organisation.

Photo of Damian Collins Damian Collins Chair, Draft Online Safety Bill (Joint Committee), Chair, Draft Online Safety Bill (Joint Committee)

I welcome the Secretary of State’s robust statement in response to P&O’s appalling behaviour. I also welcome the work that he and his Department are doing with the Kent Resilience Forum to ensure that we keep motorway traffic moving through the county. Does he agree that it is important that the Maritime and Coastguard Agency continues to be robust and does not allow ships that are poorly crewed with unqualified crew members on board to cross the world’s busiest shipping lane?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

My hon. Friend is absolutely right. The second item that I announced backs up what has already been happening with the MCA looking at those ships carefully, and that will continue. We will not compromise safety in the sea lanes. We have seen what happens when compromises are made, and we do not want to see that repeated.

Photo of Sammy Wilson Sammy Wilson Shadow DUP Spokesperson (Treasury), Shadow DUP Spokesperson (Work and Pensions), Shadow DUP Spokesperson (Brexit)

I, too, welcome the Secretary of State’s work on this important issue and the urgency with which he has acted. I very much doubt, however, that when he writes to P&O, it will abide by his instruction not to allow ships to dock in Larne or Cairnryan where it owns the port and the boats and where it is acting illegally by giving workers less than the minimum wage.

The monopoly issue is important for Northern Ireland, however, because one of the ships is impounded and there is an absence of service. The port represents a strategic asset for Northern Ireland because nearly 50% of our trade comes through it, so businesses that operate in that port are not getting any revenue, workers are not getting any work and Northern Ireland’s supply issues are being affected. What action can the Secretary of State take with the company to try to restore the situation?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

The right hon. Gentleman raises many important points. As he rightly points out, one of the ships has already been detained in Northern Ireland. Stena Line has been doing a great job to fill in some of the gap and I will ask other companies to assist where possible. If he does not mind, I ask him to meet again—I know he has already—with my hon. Friend the maritime Minister, because the specific issues relating to Northern Ireland will need a lot of care and attention over the coming days.

Photo of Virginia Crosbie Virginia Crosbie Conservative, Ynys Môn

Although I welcome the new measures that my right hon. Friend has brought to the House, what reassurance can he give that they will support companies such as Stena Line to grow jobs, particularly local jobs and local labour, so that the news is good for UK seafarers and for the UK flag?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

The simple fact is that this package will finally ensure that the whole seafaring community is on a level playing field—or a level sea—when it comes to channel crossings and that there will be no advantage to Irish Ferries running a cut-price route or P&O Ferries trying to do the same. For Stena Line, DFDS and others, it will ensure that they can all operate and compete on a fair platform.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business and Industrial Strategy)

The Secretary of State says that P&O should reinstate every worker on their original terms and conditions, with which I completely agree, but he needs to take every action available to him to support the group of workers who have just been sacked, as what he announced today is largely about the future. Will he suspend or cancel P&O and DP World contracts, including the lucrative freeport contracts? That is how he will show them that the Government are really serious and how he will have the greatest chance of putting the pressure on them that will lead to the reinstatement of those workers.

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I should point out that the workers involved, many of whom I have been speaking to, frankly do not want to go back and work for P&O Ferries and/or have already accepted jobs elsewhere. I think they will be looking for a change in that company before they rush back.

On the P&O contracts, we have not found any that exist. On the DP World issue that the hon. Gentleman refers to, I have seen figures quoted for the amount of money in a contract, but that is actually money that, by and large, goes to the local authority—I think that is the point that my hon. Friend Stephen Metcalfe was making. It is for the local authority to then set out how the freeport operates. The hon. Gentleman should be in no doubt, however, that we will be keeping a close eye on that and increasing the pressure to ensure that the right thing happens with P&O.

Photo of Alec Shelbrooke Alec Shelbrooke Conservative, Elmet and Rothwell

I warmly welcome my right hon. Friend’s statement, which has clarified many technical points. It will be important to analyse how the cruise ship industry accesses British waters and to ensure that the critical infrastructure of freight transport is not allowed to be held hostage again, which is what P&O tried to do on its own terms.

On the point of ensuring that seafarers are being paid at least the minimum wage in our waters, how will that technically be done if they are not registered through HMRC in this country?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I should point out again that P&O Cruises is not in any way, shape or form related to what has happened here. It is the people at P&O Ferries who are very much in the dock. With the ferries, we will ensure that that policing takes place through HMRC and the work of the ports themselves.

Photo of Ellie Reeves Ellie Reeves Shadow Minister (Justice)

Awards for compensation in employment tribunals are notoriously low, with average awards for unfair dismissal at just £10,800. The Secretary of State has announced an uplift of 25%, but an extra £2,700 will not deter unscrupulous employers such as P&O. My hon. Friend Louise Haigh, the shadow Transport Secretary, has called for unlimited punitive damages in circumstances such as these. Will he back those calls?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

The simple answer, in this case, is that we want to stop it ever getting that far and we will do that by forcing such employers to pay the minimum wage in the first place. I should clarify that we are not against the idea that sometimes, unfortunately, redundancies occur. We know that and we saw it in the pandemic. We are pleased that, after the pandemic, unemployment is as low or lower than before. We understand that business has to change, but it is unacceptable to deliberately set out to break the law when it comes to consultations, and that is what we are focusing on. These nine measures will ensure that we do not get there in the first place and that more punitive measures are in place.

Photo of Laura Farris Laura Farris Conservative, Newbury

I congratulate the Secretary of State on his excellent work and, particularly, the creative and robust approach that he has taken to closing the national minimum wage loophole, which makes this whole thing a complete waste of money for P&O. Can I press him further on what he said about future injunctive relief? Will he consider enlarging the powers of the High Court to order a mandatory 90-day consultation where there has been no consultation? It was apparent from Hebblethwaite’s appearance before the Select Committee that he saw that as a tick-box exercise rather than a meaningful engagement with the unions to try to minimise redundancies and mitigate the consequences that can—and often does—work.

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

My hon. Friend makes an excellent point. I place on record that she, as a former employment lawyer, has been incredibly helpful throughout this process, as have many other hon. Members. I see Karl Turner in his place, who has also been extraordinarily helpful. The answer to her question is yes. I will work with my colleagues in BEIS to look at how we can make further improvements to those injunctive procedures. I thank her for her work.

Photo of Andrew Gwynne Andrew Gwynne Shadow Minister (Health and Social Care)

I, too, thank the Transport Secretary for his statement and for the seriousness that he has given the issue, because it has been appalling for those P&O Ferries workers. He talks about amending the Harbours Act 1964, which I wholeheartedly welcome, and he has urged ports to do that now, irrespective of the legislation not yet being changed. As futile as legal action may be from P&O Ferries, what assurances is he giving to British ports to do the right thing, notwithstanding that not yet being the law?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

It may be helpful to the hon. Gentleman and the whole House if I place in the Library the letters that will go out immediately with this statement to the Maritime and Coastguard Agency, in which I request that it carries out this action and a response, which I believe is already forthcoming.

Photo of Saqib Bhatti Saqib Bhatti Conservative, Meriden

As with many Conservative Members, I have often advocated for business being a force for good, which means celebrating businesses that are positive contributors to society and calling out bad actors such as P&O, which has treated its workers callously. Does my right hon. Friend agree that today’s plan sends a clear signal to any business thinking of going down that route that the Government will penalise any company that treats workers as disposable, as P&O did?

Photo of Dan Carden Dan Carden Labour, Liverpool, Walton

I welcome the Secretary of State’s statement and his action plan, but if the only legislative changes are to give new statutory powers to ports, the issue of fire and rehire will not go away. What conversations has he had with the Business Secretary about legislation so that the outrage that there rightly is in the Chamber is not brought back again next month and the month after?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I think what really set this case apart was the way in which the boss of P&O brazenly wanted to break the law, admits to breaking the law and says he will do it again, so the changes, in this case to the Harbours Act 1964, will deal with that. In addition, the hon. Member asked what conversations I have been having with the Secretary of State for BEIS, and the answer is very full ones. We have been looking across the piece at how employment law operates and we will continue to do so, notwithstanding the fact that we want there to be flexibilities in employment law, which is one of the things that leads to this country having consistently lower unemployment than the rest of the EU, for example.

Photo of Barry Gardiner Barry Gardiner Labour, Brent North

I welcome the fact that the Secretary of State is considering injunctive procedures where consultation has been ignored and not respected by the employer. It is just a shame that his party failed to vote for it in October. Will the Secretary of State say if the statutory code he is introducing will create any new criminal offence? If so, what is it, who can enforce it and what is the penalty? Alternatively, does it, like previous codes of conduct, simply issue a set of recommendations that bad companies can ignore?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

I should say to the hon. Gentleman that the detail on that was set out by the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend Paul Scully, yesterday in this House. I will make sure that the hon. Gentleman gets a full note detailing the answers to his questions.

Photo of Rachael Maskell Rachael Maskell Shadow Minister (Digital, Culture, Media and Sport)

I welcome the statement from the Secretary of State, but the reality is that P&O could adjust its measures and continue to operate—and, of course, operate with different staff, with 800 staff losing their jobs. What consideration has the Secretary of State given to a 10th option of an operator of last resort, such as operates in the rail industry, so that he could immediately take such routes back into public ownership?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

The hon. Lady will be interested to hear that I have considered an operator of last resort model. What happens at sea is somewhat different from what happens on the railways by the very nature of the fact that there is an open sea but there are specific rail lines. In this case, of course, we have the beauty of competition. We have Stena, DFDS and some others in that market, and they are plugging the gaps so that, from a capacity point of view, we are okay at this time.

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

Thank you very much, Madam Deputy Speaker, for accommodating me. I want to thank the Secretary of State. This campaign has gone on not just for the 12 years I have been in this House; this campaign has existed since the 1966 seamen’s strike. I congratulate the right hon. Gentleman and the Under-Secretary of State for Transport, Robert Courts, on getting over all the hurdles that must have been appearing in front of them, and I want to work with my hon. Friend the shadow Secretary of State to ensure that what the Secretary of State proposes will work and ensure that the minimum wage applies.

My concern is that these companies employ terribly bad practice, and I fear that they will find other ways to exploit seafarers. Safety is my big concern, so if conditions change or if rotas change—if seafarers are required to work five months on and a month off, for example—we will not be very far from disasters such as the Herald of Free Enterprise, in which passengers lost their lives due to crew fatigue. Can the Secretary of State assure the House that he is looking at ensuring that cannot happen in this case?

Photo of Grant Shapps Grant Shapps The Secretary of State for Transport

As I prefaced, I am hugely grateful to the hon. Gentleman. He has provided contacts, knowledge, expertise and experience through the last week and a half, as we have been discussing this issue, and I am incredibly grateful for his historical knowledge of the industry as well.

I can assure the hon. Gentleman that that is precisely what we are doing. In my comments, I said that we will be

“pursuing worldwide agreements at the International Labour Organisation.”

We will also

“push for a common set of principles to support maritime workers, including an international minimum wage, a global framework for maritime training and skills and tools to support seafarer mental health.”

I know these are issues for which he has been fighting for a very long time, and his time has come.