Seafarers’ Wages Bill [HL] - Commons Amendments

House of Lords, 21 March 2023.

Motion on Amendments 1 to 64

Baroness Vere of Norbiton (Conservative)

My Lords, I begin by expressing my gratitude to all noble Lords for their thoughtful consideration of this important legislation. As the Bill progressed through your Lordships’ House and the other place, the Government listened carefully to concerns raised by parliamentarians, and we engaged further with stakeholders. The amendments before your Lordships’ House today address many of the concerns raised and ensure that the Bill is effective and enforceable, simple to apply and delivers its intended benefits to seafarers.

The amendments to be considered today may appear numerous, but many are minor and technical. The amendments can be considered according to four themes: switching powers to duties; clarifying matters around equivalence declarations; switching the duty for setting a surcharge from the harbour authority to the Secretary of State; and, finally, changes to regulations, guidance and directions, most of which come from the previous three themes.

I turn to the first set of amendments, which change the previously discretionary powers of harbour authorities to request declarations, impose surcharges and refuse access to harbours to mandatory duties. Through continued engagement with port stakeholders, we were informed that harbour authorities would be unlikely to exercise their discretionary powers without being directed to do so. Therefore, this change from discretionary powers to duties will strengthen the Bill.

Harbour authorities will now be required to request an equivalence declaration from an operator, if they have reasonable grounds to believe that ships providing the service will call at the harbour at least 120 times in the 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. Furthermore, they must impose the surcharge in the circumstances specified in the Bill: where a declaration has not been provided in time; where a declaration relates to only part of a year; or where the harbour authority has reasonable grounds to believe that a service is being operated inconsistently with a declaration or that a declaration has been provided that is false or misleading. Where a surcharge has been imposed but not paid, harbour authorities must refuse access to their harbour.

We have also made several consequential changes to the Bill to reflect these new duties, including the power for the Secretary of State to require information from harbour authorities and to conduct inspections for the purpose of establishing whether, or to what extent, the authority is complying with its duties. There are new criminal offences where harbour authorities do not comply with their duties to request equivalence declarations, impose surcharges or refuse harbour access. It will also be an offence for a harbour authority to fail to provide information required by the Secretary of State in the manner and within the period specified, to provide false or misleading information, or to not inform the Secretary of State within four weeks if the information becomes false or misleading. A harbour authority that is guilty of an offence under the Bill will be liable on summary conviction to an unlimited fine in England and Wales, or a fine not exceeding level 5 on the standard scale in Scotland and Northern Ireland.

The second type of amendment relates to changes to the national minimum wage equivalence declarations, which I shall refer to for ease as “equivalence declarations”. We have made provision for equivalence declarations to relate to a fixed “relevant year” to be set out in regulations. The relevant year will be the same for all harbour authorities; this will provide the greater certainty that harbour authorities will require to comply with their new duties, reduce the administrative burden and make enforcement more straightforward. We have also clarified that a declaration can be provided before, during or after the year to which it relates and that declarations can relate to part of a year. This provides harbour authorities with more flexibility to request declarations in all possible circumstances when it becomes clear that a service is in scope.

Related to this matter is a new clause, introduced in place of the offence in what was Clause 3(5) and (6). The offences in this clause cater for the fact that a declaration may be provided before, during or after the year to which it relates. This includes introducing a new criminal offence where an operator provides a declaration which is false or misleading in so far as it concerns the operation of a service for a period in the past.

The third theme of these amendments is the change to the surcharge mechanism, on top of making their imposition a duty on harbour authorities. First, we have clarified the circumstances in which harbour authorities must impose surcharges to reflect the fact that equivalence declarations may be provided before, during or after the year to which they relate, as I have noted. Thus a harbour authority must impose surcharges where a declaration has not been provided in time; where a declaration relates to only part of a year; or where the harbour authority has reasonable grounds to believe that a service is being operated inconsistently with a declaration.

We have changed the duty for setting the rate of the surcharge from harbour authorities to the Secretary of State. I thank the noble Baroness, Lady Scott of Needham Market, for raising the issue earlier on in the passage of the Bill. This does not fundamentally change the compliance process, as ports will still have a role in imposing the surcharge, but they will not now set the rate. We will consult on the regulations that provide for the surcharge tariff to ensure that it is set at an appropriate rate.

We have also made changes to specify a time limit for objections to surcharges in regulations. We have removed the provision that harbour authorities can use funds from a surcharge for the discharge of their functions, meaning that from now on it must be used only for shore-based welfare facilities for seafarers. I am sure that noble Lords will agree that this is exactly right.

The noble Baroness, Lady Scott of Needham Market, also raised the issue of a possible conflict of interest where a harbour authority and an operator are owned by a connected company, causing a potential weakening of the financial disincentive that the surcharge is intended to be. We agreed that the Bill would be strengthened by making an amendment to address this potential conflict of interest.

Finally, I turn to amendments relating to regulation-making powers and powers to give statutory guidance and directions to harbour authorities. These are all consequential on the three previous themes of the amendments. For example, the power to give statutory guidance to harbour authorities has been removed from the Bill. Instead, the Government still intend to provide guidance to harbour authorities. That of course will be consulted on, but I make it clear that it will not be statutory guidance because the harbour authorities will have duties.

The amendments to the direction-making power have redefined the circumstances in which directions may be given to harbour authorities. Of course, now we do not need the power to direct harbour authorities to do something, because they now have a duty to do it. However, we need the power to direct them not to do something in the circumstances where we really do not want them to do that thing—that is just flipped over.

We have also included a power to make regulations by the affirmative procedure that will specify the factors that are or are not to be considered in determining whether ships on the same route are providing the same service. This is really to ensure that we do have the power if it becomes clear that operators are avoiding falling into the definition of a service by acting in a certain way. We do not believe that this power will be needed. However, it is there out of an abundance of caution should it become apparent, once the Act is in force, that operators are trying to get round it in certain ways. To ensure that it has the full scrutiny of your Lordships’ House, it will be subject to the affirmative procedure and, as I said, we do not see any circumstances in which that power will be used. But noble Lords did raise concerns during the passage of the Bill that operators might act in such a way, so we felt it prudent to include it on a just-in-case basis.

Those are all the amendments that we propose. I note that there are 64 of them. However, as I have said, most of them are minor and consequential within the major themes, and I hope I have reassured noble Lords that they will strengthen the Bill’s effectiveness. We listened to noble Lords and ensured that we engaged with stakeholders, and I believe that the Bill will now ensure that operators pay a fair wage to seafarers. I beg to move.

Baroness Scott of Needham Market (Liberal Democrat)

My Lords, I thank the Minister for bringing these amendments. I confess that when the Bill finished its passage through this House, I felt rather depressed that I had not been able to convince the Government that there were some fundamental flaws, but the changes today show that the Government were convinced. The problem, I think, was not quite understanding the nature of the relationship between harbour authorities and the vessel operators that use the harbour. Putting them in the position of trying very hard to get the business of operators and then leaving it up to them as to whether they take action against them just did not feel right, particularly in cases where the vessel operators and the harbour authority are under the same ownership—there is a direct conflict of interests. All these amendments that change powers into duties are a really welcome clarification, particularly the duty on the Secretary of State and not the harbour authority to set surcharges.

I have two questions for the Minister. On Amendment 36, spending funds on seafarers’ welfare facilities is a really smart idea, but has anything been considered to ensure that any money spent this way will be additional and will not simply replace money that the vessel operators or harbour authorities would have spent anyway? Finally, and in many ways most importantly, on Amendment 44 and the refusal of access to a port under certain circumstances, I know that the industry was concerned that this would not be lawful under international maritime regulations and would amount to impeding the right of passage. , Has the noble Baroness had any further discussions with the industry and has she been able to convince its members that they are on safe legal ground?

Baroness Taylor of Stevenage (Labour)

My Lords, I am very pleased to support the Motion before the House today in the name of the Minister. The action taken by P&O Ferries was a national scandal which should have marked a line in the sand, and any attempt to prevent a repeat of such events will always be welcome. On that basis, we have supported the limited measures in the Bill, but given the limited scope of this legislation, my noble friend Lord Tunnicliffe and others also called for broader measures beyond wages.

The wider issues, including roster patterns, wages and pensions, have yet to be addressed, and I hope the House will soon see further legislation to deliver these. It would also be helpful to know how those responsible for such exploitative practices can be brought to justice, and there are still serious health and safety concerns regarding the working conditions of seafarers. We also have to consider the much wider problem of fire and rehire—another favourite of exploitative employers—but I am sure that is for another Bill on another day.

However, as much as I am disappointed that many of these problems remain, I am pleased that the Government have now introduced amendments, as set out in detail by the Minister, on issues which required clarification. These new amendments, including in relation to tariffs, fines, surcharges, the information that a harbour authority can request from an operator and the introduction of relevant offences, each have our support. It is important as well that it is not the harbour authority that sets the charge, as this raised a number of issues. We agree that spending money on seafarers is appropriate and right, and I am interested in the Minister’s answer to the question from the noble Baroness, Lady Scott.

I will finish by expressing how grateful I am that the noble Baroness, Lady Vere of Norbiton, has engaged with the House throughout the passage of the Bill. I thank her for her time in a meeting to explain progress on the Bill on my second day as transport spokesperson, and for her patience in answering all my questions. I thank the noble Baroness, Lady Scott, for her involvement and contribution to the Bill. I thank the trade unions for continuing to champion the cause of seafarers and my noble friends on the Front Bench, particularly my noble friend Lord Tunnicliffe for his personal support and for bringing his encyclopaedic knowledge to bear during the passage of the Bill. I hope the House will share our support for the Bill.

Baroness Vere of Norbiton (Conservative)

My Lords, I am very grateful for the short contributions from both noble Baronesses today. I am relieved and grateful for the support of both Benches and I recognise the enormous amount of work that has gone on behind the scenes to bring the Bill to where it is today. The noble Baroness, Lady Scott, showed exemplary diligence as we took the Bill through, and I reassure her that I did this all the way through: sometimes, it just takes a little time to get the amendments drafted and through the system. Hence, they did not come back to your Lordships’ House; they went to the Commons, but I think we can take full credit for them.

On the noble Baroness’s detailed question about Amendment 36, on whether the amounts are additional, we absolutely expect that they would be. If needed, we would provide guidance in that area. We hope that there will not be significant additional amounts of money flowing into this area, because if there are, we will have failed in our endeavours; but I will certainly ensure that we provide appropriate guidance and that that money is additional to the money that is already spent on seafarers’ welfare at ports.

On refusal of access to ports, we are satisfied that the sector is aware of where refusal of access is appropriate when relating to whether or not an equivalence declaration is in place. The vessel operator will often know before it will have left the port because, often, many of these vessels are on short journeys. Of course, there will be circumstances, as there always are, when, for humanitarian or environmental reasons, one would provide access to port to any vessel, whether that would be one covered by this Bill or not.

On the broader measures raised by the noble Baroness, Lady Taylor—and I welcome her to transport; this was, I am sure, a baptism of fire going straight into this Bill—we are working at pace on all of the elements in the nine-point plan. We are looking at research on roster patterns. The seafarers’ charter is quite well developed, and I hope to have more on that soon. We have had discussions with our French counterparts: I have met the Minister twice, and we are due to have another meeting shortly to make progress with our neighbours in France to see what we can do to match up with the legislation that they have already placed in their Parliament. Of course, the noble Baroness will have seen that my colleagues in the Department for Business and Trade have launched their consultation on a code of practice on “fire and rehire”. Having said all that, I beg to move.

Motion agreed.