Select Committee on Environment, Transport and Regional Affairs Appendices to the Minutes of Evidence

Memorandum by RMT (FUS 17)


  1. The National Union of Rail, Maritime and Transport Workers (RMT) represents approximately 60,000 transport workers in the United Kingdom and Ireland. The RMT is the sole union for seafaring ratings in the UK shipping industry, representing over 6,000 deck, engine and catering personnel. Alongside the Transport and General Workers Union the RMT also negotiates for workers in the growing offshore oil and gas sector.

  2. The RMT was formed as a result of a merger between the National Union of Seamen (NUS) and the National Union of Railwaymen in 1990. The RMT, and previously the NUS, took the lead in campaigning for Government support for the Industry. The culmination of this campaign, in which the officer's Union NUMAST and the Chamber of Shipping have also played an important role, has been the formation of the Government Task Force Working Group to examine measures to revitalise the industry.

  3. The RMT has been present in all Government Working Group meetings and these have now lasted over one year. The union welcomes the opportunity to submit evidence on the future of the UK Shipping Industry. For the Committee's ease of reference the RMT submission will address in order the terms of reference as detailed in the Press Notice of 22 October 1998. The submission by the RMT will primarily focus on the Union's area of expertise, that being ratings.


  4. There has been a dramatic decline in seafaring employment for UK nationals. This will not be reversed unless action is taken to at least reduce the cost differential between employing UK ratings and those from lower labour cost countries in other parts of the world, principally Eastern Europe and the Far East. Almost every other Western European nation has taken action to address this matter and it is now time for the British Government to finally grasp the nettle. The urgency of this cannot be overstated.

  5. The Working Group has examined a number of measures which could benefit British shipping companies. RMT recommends that the following be implemented:

    —  Waive employer's National Insurance contributions for UK seafarers.

    —  Expand the current Crew Relief Costs scheme.

    —  The introduction of a tonnage based tax regime lined to the training and employment of UK seafarers.

    —  Amending the current Immigration Rules to allow the increased employment of UK nationals.

    —  Examine any initiatives that may be taken within Europe which will strengthen UK seafarers employment in the Coastal Trades.

    —  The amendment of the 1976 Race Relations Act so that Seafarers are no longer exempted from it's provisions.

    —  The introduction of a comprehensive training support package for both officers and ratings.

    —  A recognition of the valuable role that shipping has to play in the Government's Integrated Transport Policy and a Government strategy for assistance in the ferry, costal, offshore and deep-sea sectors of the industry.

  6. The RMT has long campaigned for the alleviation of the employer's National Insurance contributions. The National Insurance contributions paid by employers represent between 8 per cent and 10 per cent of paybill costs for the typical UK seafarer. Unfortunately the failure of the previous Government to implement this measure resulted in shipowners transferring the contracts of seafarers offshore. During 1997 the RMT was faced with a fait accompli as 6,000 British seafarers had their contracts transferred offshore by employers intent on achieving these savings. By transferring the Contracts of Employment to an offshore company the employer is no longer liable for the National Insurance payments but the Government loses the contribution revenue from these UK seafarers and it is therefore a false economy. In addition UK seafarers have had their employment rights and certain social security benefits placed in jeopardy. For example entitlement to the Job Seekers Allowance can be lost if a seafarer spends most of his working time outside UK territorial waters on a non-UK Flag ship. It is vital that these seafarers are restored to contracts on-shore through Government legislation to waive the employers National Insurance contributions in order that all shipping companies can achieve these vital savings.

  7. Obviously training will be vital in providing the net generation of UK seafarers. Later in this submission the RMT examines the present number of UK seafarers and how their employment and training may be developed. It is believed that discussions should continue on ratings training but the RMT will propose a series of measures that we believe should be implemented as soon as possible.


  8. RMT believe that it is the benefits of UK Ship registration and employment of UK nationals that, taken together, give benefits for the wider UK economy. It is surely self evident that if maritime knowledge is to be preserved in the UK economy, and a maritime infrastructure retained, the skills that deliver this cannot be allowed to wither away.

  9. In recent years there has been a link between the Flag of a ship and the likely employment of UK nationals. In the 1970s it was virtually assumed that UK companies registered in the United Kingdom but the proportion of the UK owned trading fleet actually registered in the United Kingdom is now only 20 per cent following many shipping companies decisions to flag out in the 1980s. The number of UK seafarers employed on these ships has also sharply declined. Since 1981 the number of UK officers employed on the UK owned fleet has declined by 70 per cent while the number of ratings has fallen by 60 per cent. Seafaring officers often serve on non-UK flag ships but for ratings this is not normally a possibility and therefore the position of seafaring ratings is even more precarious.

  10. The decline of the UK registered Fleet has been staggering. As recently as 1980 there were 1,200 ships of 500+ gross tonnage on the UK Register. By the start of this year this figure had fallen to less than 240 and numbers are still declining. Shipowners who flag their ships here will have a greater propensity to benefit the wider UK economy through training and employment opportunities for UK citizens. They will also be more likely to purchase UK goods and services.

  11. Where UK nationals are employed this provides valuable career opportunities for British youngsters and in addition there are substantial numbers of back up for shore based positions in the United Kingdom. The total commercial maritime presence in the United Kingdom is currently estimated to comprise 1,200 companies with over 112,000 employees. The largest sectors in employment are shipping, shipbuilding and repair, marine equipment manufacture, the ports and financial and other services.

  12. However on a word of caution it should be noted that whilst those ships flying the Red Ensign are of course more likely to employ UK seafarers this is by no means a guarantee. Indeed RMT have recently found that certain shipowners have retained the Red Ensign whilst no longer employing UK seafaring ratings. P&O Nedlloyd have stated that they propose to eventually replace all UK ratings and they could therefore retain the UK Flag despite the fact that only a small minority of their crew maybe UK nationals.

  13. The Committee has asked about the specific position of the Isle of Man Registry. Unlike the UK Register the Isle of Man Register has in fact increased its tonnage in recent years but sadly this has not been replicated in increased employment for British ratings. Ninehundred and four UK national seafaring ratings are employed on Isle of Man registered ships. This equates to 30.08 per cent of the total number of ratings. The equivalent figure in 1990 was 65.19 per cent. Until seafaring ratings are employed in greater numbers the RMT will have continuing difficultly in giving creditability to the Isle of Man register.


  14. Waterborne transport is the most environmentally friendly form of transport for carrying freight and this is one of the most compelling arguments for supporting the Shipping Industry. It is estimated that there is considerable capacity for tra

nsferring freight to the more environmentally friendly forms of waterborne and rail transport. It is for this reason that we believe Government should closely examine the potential of the Coastal Shipping Industry to carry significantly more amounts of freight. New developments in ship technology combined with the increased speed of fast ferries mean that shipping can, in many cases, offer a cheaper alternative to road transport.

  15. A quick look at statistics provided in the Department of Transport, the Environment and the Regions yearly bulletin shows that shipping is far more energy efficient than road transport and in respect of some emissions, for example carbon monoxide, the most environmentally friendly form of transport available. In total terms coastal bulk and container ships consume about 50 per cent less fuel than HGVs per unit of cargo moved. The 1993 Royal Commission report on the Environment recommended that waterborne traffic's share of domestic freight should be increased from 25 per cent to 30 per cent.

  16. It has been estimated that initially 3.5 per cent of the United Kingdom's freight traffic could comfortably be transferred to water with the potential for more when research and appropriate action has been identified to assist the transfer of freight between different modes. Ships can be re-routed to ports nearer to the origin and destination of their loads, and also through the potential for bulk and unit loads to shift to coastal traffic. In the early 1990s the carriage of domestic freight by waterborne transport declined to its lowest levels for a decade. This followed a dramatic 30 per cent increase in road freight between 1979 and 1991.

  17. In totality waterborne traffic accounts for just six per cent of goods lifted in the United Kingdom, whilst 81 per cent is accounted for by road transport. In other countries with extensive coastlines or inland waterways, such as the United States, France, Japan and the Netherlands, waterborne traffic will account for between 20 to 25 per cent of freight volume.

  18. The framework of the Integrated Transport Policy, in so far as it relates to shipping, has now been published. The above potential has been acknowledged by the paper and RMT is pleased to note that Government intends to bring forward legislation to extend the application of the freight grant regime to include coastal and short sea shipping. Government have also stated that they wish to make more use of inland waterways.

  19. However RMT are concerned that the Governments' plans for the Integrated Transport Policy have not been included in the November 1998 Queens speech and legislation will therefore not be forthcoming in the next year. The RMT sincerely hopes that implementation of the proposed package of measures for the shipping industry, if dependent on legislation, will not suffer the same fate. The consequences of this will be extremely serious for the preservation of the dwindling amount of maritime expertise in the United Kingdom.


  20. The shipping industry is of far reaching economic and strategic importance to the United Kingdom, and considering its size it plays a disproportionately large role in both national and international affairs. The seafaring labour force has always been of modest size but a substantial investment has gone into creating the skills of these seafarers and they continue to provide the United Kingdom with substantial dividends. The total net output from UK commercial activity is over £7.5 billion or 1.1 per cent of Gross Domestic Product. Total turnover from these activities is around £20 billion, with approximately £5 billion coming directly from Merchant Shipping activities and a further £4 billion from suppliers to the UK shipping industry.

  21. There are a number of key reasons why the United Kingdom would be foolish to rely on other countries to provide our shipping and seafarers. The retention of a significant UK flagged fleet with sufficient numbers of seafarers is vital to the national interest. First and by no means least shipping is vital for providing our trade in the world markets. Ninety-five per cent of our external trade by weight and 25 per cent of our domestic trade is carried by water. It is surely foolish to rely solely on other nations for the carriage of our trade. Other nations are all commercial competitors and certainly outside the European Community they could at certain times be politically ill-disposed.

  22. Business in the United Kingdom will benefit from having different options for transporting goods between the UK and overseas destinations as this will enable them to transport goods at reasonable prices and remain competitive. A healthy UK based shipping industry will obviously help facilitate this otherwise additional costs and delays are likely through the necessity of using indirect feeder services for the carriage of goods.

  23. The shipping industry brings considerable Balance of Payments earnings into the UK. Net payments exceed £1 billion every year. However these earnings are declining steadily, and a recent study commissioned by the Chamber indicated that in real terms Balance of Payments earnings had declined by 37 per cent in the decade up to 1996. At the present time London is still the world leader in maritime related services but this supremacy will gradually erode should the availability of crucial seafaring skills continue to dwindle. Seafarers play a crucial role in filling skilled land based jobs. Later in this submission we will refer to the jobs filled by ex-seafarers elsewhere in the economy.

  24. One of the most compelling reasons for maintaining significant numbers of seafarers is for the purpose of national defence. The main function of the Merchant Fleet is to support and supplement the Ministry of Defence in house assets and to participate in reinforcement and re-supply operations. There will be instances where ships can be chartered on the international market but for many operational tasks it will be necessary to have British ships and British crews. Certainly it would be counter productive to have foreign nationals actively defending the realm in a war situation.

  25. If Britain was faced with another conflict the size of the Falklands we would not be able to provide the manpower and resources to meet this challenge. During the Gulf Crisis the lack of suitable British registered tonnage forced the Government to charter foreign vessels and this proved to be quite a significant additional cost to the taxpayer. At the time of the Gulf crisis it was reported in the Sunday Telegraph that the Government were forced to charter in 127 foreign flag vessels at at cost of £180 million. The same fleet in peacetime would have cost £85 million.

  26. There are also some important safety considerations which the Committee should consider. If ships are on the UK register they come under full UK regulatory control. It is obviously easier to ensure safety standards on UK flagged ships. With foreign tonnage the control of safety is limited to Port State Control. The Sea Empress oil spillage gave us all a reminder of the danger to our coastline of sub-standard foreign tonnage with mixed nationality crews not trained to the same standards as would be expected in the UK. Efforts to improve the safety of shipping internationally through the International Maritime Organisation will of course continue, and whilst steady improvements maybe made this will inevitably be a slow process and ultimately the United Kingdom's goal of completely safe shipping throughout the world will never be fully realised.

  27. Having a significant fleet does however enable the UK to continue to have a strong voice internationally when discussions take place in international forums such as the IMO on matters affecting safety and pollution prevention. Earlier in this document we referred to the transfers offshore of many UK seafarers contracts of employment. This has given the RMT a considerable problem as the transfer to offshore status have placed in doubt the jurisdiction of Industrial Tribunals over seafarers contacts of employment and can place in jeopardy certain social security benefits. These difficulties are compounded if the ship is non-UK Flag and the vessel spends most of its time outside UK territorial waters. Even before the latest moves by shipping companies to transfer contracts offshore seafarers employed on this basis are denied many Employment Rights taken for granted by shore based employees.


  28. Seafaring deck, engine and catering ratings, are all highly skilled and qualified and they are a resource to not only their immediate industry but also the nation as a whole. Unfortunately if present trends continue our maritime base will be almost entirely extinct in 20 years time. Total employment for both seafaring ratings and officers taken together is now just 24,500 in the UK Trading Fleet. This figure does not include officers who can, unlike ratings, often be employed on foreign flag vessels. The estimated number of officers and cadets is in total just over 18,000 and so the overall total for UK nationals employed in the Shipping industry is just over 29,000. This is the estimate given by the recent study of Professor McConville and includes 10,860 ratings. In 1980 ratings figures alone were 30,000 whilst total seafaring employment was 64,600.

  29. RMT believes that Professor McConville's figure of 10,860 ratings is an over estimate of real numbers. In the study produced by Professor McConville it is acknowledged that figures of ratings are very much an estimate. This is because the Chamber of Shipping have not produced a Fleet Manpower Inquiry since 1996 when ratings numbers for the year ending 31 December 1995 were produced. RMT is seriously concerned that no proper study of seafaring ratings has been done for three years and it is only now with the culmination of the Government Working Group on shipping that a further study has been commissioned. These figures will give the position for the year ending 31 December 1998 to be produced in 1999 and RMT is convinced that the study will show further falls in seafaring ratings employment.

  30. In the last Fleet Manpower Inquiry 8,700 ratings were shown to be in the employment of Chamber of Shipping companies. Even if more than 2,000 ratings were employed in non-Chamber of Shipping companies there has undoubtedly, in the last three years, been a fall in UK ratings employment with Chamber companies, also some of those UK ratings seafarers identified by Professor McConville may be employed only on a temporary basis. Certainly RMT has in the last few years witnessed redundancies in the ferry sector with both P&O and Stena Line. It was hoped that following such a dramatic decline in numbers the bottom line had been reached. Unfortunately clearly this is not the case and the future continues to look even bleaker with further job losses now imminent at P&O Nedlloyd, and in the event of abolition of Duty Free there will inevitably be a further erosion of UK ratings employment in the ferry sector.

  31. The possible departure of significant numbers of P&O Nedlloyd workers would mean the end of any significant presence for UK seafaring ratings in the commercial deep sea sector. RMT has produced a separate document on training for UK ratings which we would be happy for the Committee to have. In the RMT paper the union has closely examined the last Fleet Manpower Inquiry and the age profile for deck and engine ratings. This makes even more depressing reading as the age profile of the more skilled deck and engine ratings is very high. RMT found that 21 per cent of deck ratings are aged 51 or over. Out of the 852 engine room ratings 224, or 26 per cent, are in this age range. Companies employing UK ratings have already expressed concern that skilled workers in these grades are becoming increasingly hard to recruit and if there is not a shortage of deck and engine ratings already there will clearly be one in the very near future.

  32. The number of UK ratings trained continues to decline. Until very recently the National Sea Training College was the entry point for all ratings. In 1987-88, 230 ratings were trained at the college. Numbers were at this level for the next few years and in 1990-91 322 ratings were trained. Next year numbers dropped to 103 and since this time numbers have been under 100 every year. Sixty-two were trained in 1995-96 but only 20 in 1996-97 and 24 in 1997-98. Whilst up to 100 ratings may be trained in other maritime colleges this will not replenish even the existing number of UK ratings.


  33. Unfortunately the Government's new training scheme SMART has not, and will not, solve this problem. It is welcome that unemployed ratings will now have the opportunity to obtain training assistance through the scheme but SMART is not expected to produce significant improvements to the numbers trained. The scheme is essentially an amalgamation of the previous GAFT and DOCS schemes for which Government appears unwilling to produce additional funding. Previously ratings trained under the GAFT scheme amounted to between 30 and 50 per annum.

  34. During the discussions on ratings training in the Government Task Force Working Group all parties recognised that the expected shortage of ratings needed to be addressed. A special ratings Task Force has been set up to consider what specific initiatives can be taken to address the expected future shortfall of UK ratings in the light of a further Fleet Manpower Inquiry. The Working Group has considered ways of adding value to UK ratings and also specific funding for their training. RMT believe the following initiatives should be implemented alongside other Government support measures for the industry:

    —  Extending current training provisions so that ratings have a structured training programme all the way through to the most senior grade in their department. For example junior deck ratings would receive training and certification as an AB or engine room equivalent, or as Senior Steward. This could take individuals up to five years.

    —  Creating alternative career structures to cadetships by encouraging more young ratings to take officer conversion training. For example Glasgow College of Nautical Studies have developed a scheme for training engine room ratings to Engineer Officers.

    —  Targeting special training assistance to enable suitable ratings to train for more skilled positions on board, e.g., training for engine room ratings to operate computerised pump rooms or to provide fitter skills in engine rooms.

    —  Providing grants to shipping companies to offset the cost of NVQ implementation with one off payments for the cost of setting up training providers and further grants to be made for each trainee.

  35. It is worth noting that these initiatives were specifically agreed by both maritime Trade Union's together with the Chamber of Shipping in a paper submitted on a tripartite basis to Government. RMT has been happy to work with other industry participants in drawing up proposals to assist the industry and the co-operation between employers has come about due to the crisis facing the industry.

  36. A number of other initiatives have also been discussed in the Working Group. Among these have been the establishment of various industry wide forums to assist in developing and funding training. These have included the establishment of a Maritime Training Trust and the setting up of a Training Levy. However these industry wide initiatives, whilst certainly not unwelcome, will not generate significant numbers of new UK ratings.

  37. The creation of additional training berths for young trainees is the most pressing task for the industry. Even with a comprehensive training policy giving substantial assistance of shipping companies will remain largely ineffective if shipping companies are still unwilling to create the additional slots on board for trainees due to the cost differential between employing UK and foreign nationals from low cost labour countries. This is why training assistance must be provided alongside other Government support measures.

  38. The Committee should also note that when UK ratings are employed the shipping company will often only be operating to minimum Maritime Coastguard Agency crewing levels and that is why it is important that training assistance covers a substantial amount of the actual cost of the training. This is why RMT believes that assistance should be given for ratings training all the way through to the most senior position on board, providing of course that the rating performs to sufficient requirements.


  39. Almost every other Western European nation has a package of support measures for their shipping industries. The United Kingdom is therefore faced with not only low cost competition employing cheap labour but also European Fleets who benefit from more enlightened policies.

  40. The measures adopted by other European countries will, of course, not subsidise their Fleets so that the cost differential entirely disappears but fiscal and taxation measures can create significant incentives for registration with the host nation. Many European countries refund income tax where shipping companies employ seafarers from the home state or they may be in addition, or as an alternative, waive the employer's National Insurance contributions. Currently income tax is refunded to seafarers spending more than 183 days outside UK territorial waters but this of course does not apply to seafarers working around the UK Coast.

  41. In respect of taxation measures the consensus in the shipping industry now seems to be for the introduction of a tonnage tax. This has largely come about due to the success of this tax in the Netherlands. The tonnage tax is a shipping-specific method of corporation tax whereby a notional profit is assumed per tonne of shipping and corporation tax is then applied on this basis. It gives shipowners far greater certainty on the amount of tax they are to pay. The success of the Netherlands scheme has led to the introduction of a similar tax in Norway and Greece. In the Netherlands the tonnage tax has led to a significant increase in the size of the Fleet. Between January and October 1996 50 new vessels were attracted to the Dutch Flag.

  42. However RMT believe that the tonnage tax should be linked to the training and employment of UK ratings and officers. During the discussions on UK nationals jobs with P&O Nedlloyd the company stated that the introduction of a tonnage tax based on the Dutch model would not enhance the employability of UK seafarers as their competitors could simply switch to the UK Register and gain the tax without employing UK ratings and officers. Whilst the tonnage tax may attract additional ships on to the UK Register it is unlikely to lead to increased employment for UK nationals without a clear linkage whereby employers are obliged to employ UK seafaring officers and ratings.

  43. It should be noted that when the Netherlands Government introduced the tonnage tax Government already provided tax refunds for Dutch nationals. In addition to the tonnage tax the Norwegian Government has increased the number of their own nationals employed on their ships through a 12 per cent refund paid for the employment of Norwegians. Both Norway and Holland have taken these steps following a long decline in the size of their own registered Merchant Fleets and the number of their own seafarers employed.

  44. RMT also recommend that the UK Government seeks to discuss further initiatives in the European Community to strengthen the employment prospects of UK seafarers. The inclusion of seafarers within the scope of the Posted Workers Directive would be the most welcome. Also the European Community are presently discussing the protection of European seafarers pay and conditions on ferry trades between two European countries in so far as any other workers employed on these routes would have to be on the established pay and conditions negotiated by the host trade union.


  45. The role and importance of on-shore shipping services is significant in the United Kingdom. However, as previously stated, these can only be protected through sustaining the maritime skills which give rise to this knowledge. The most thorough study of the requirements of the on-shore maritime sector and its requirement for ex-seafarers was the 1996 report of Cardiff University commissioned by the Chamber of Shipping, the Department of Transport and the Marine Society. The report identified 17,000 shore based jobs which employers would prefer to fill with ex-seafarers. For 70 per cent of these seafaring experience was considered to be essential.

  46. Insurance and Ship Broking, to which the terms of reference refer, are just two of the many shore based activities dependent on seafaring knowledge. In the Marine Insurance sector former seafarers are often employed in marine claims departments in order that their technical knowledge can evaluate claims. In Broking seafarers are most likely to be employed in sale and purchase matters, particularly when the handover from one owner to another takes place. There are however numerous other shore based activities where ex-seafarers are not just likely to be employed but are actually essential. For example the Port Industry will employ significant numbers of ex-seafarers as harbour masters and pilots.


  47. In this submission the RMT has sought to highlight the dramatic decline in the number of seafarers employed in the United Kingdom. The story of the decline of the UK Merchant Fleet has been told before and the only difference is that with each passing report the need for action becomes more acute. If yet another opportunity is missed the danger is that the maritime knowledge will have declined so far that the UK shipping companies and other maritime interests will be forced to leave the UK. Even if UK Shipping Companies who currently employ UK seafarers wish to continue do so they will not have sufficient numbers of skilled ratings still available.

  48. The trend in recent years has been for the wholesale replacement of UK ratings whilst officers have been preserved, particularly on UK Flag ships. However there is no economic reason why UK shipowners can employ only officers and not ratings. It is undoubtedly true that both lower labour cost seafaring ratings and officers can be obtained internationally by shipowners. For years the shipboard environment very much replicated the class structure of wider society and the Union is sure that ratings have been seen as politically expendable in recent years. With maritime skills fast disappearing it is time for more enlightened attitudes for the sake of the wider industry.

  49. Currently the maritime skills are still there, albeit in drastically reduced numbers, but they are old and need replacing. The Transport Committee should be aware that this applies to deck and engine room ratings as well as seafaring officers and their need for training is therefore an absolute priority. The 1995 Fleet Manpower Inquiry demonstrated this and the union is reluctant to see further discussions drag on over the next few months when the need for action is obvious.

  50. The RMT has proposed a series of action points which we believe will address the crisis in the Industry. It is important that a piecemeal approach is not adopted to the UK Shipping Industry's problems. Measures to boost training will only be effective if they are implemented alongside other Government measures based along the lines of our European competitors. Other developed nations recognise the importance of their maritime sectors and for this reason alone the support measures will remain even if the UK continues to stand alone in its laissez faire approach. The maritime knowledge of the UK has significance way beyond the number employed in the immediate industry.

  51. The RMT, and before that the National Union of Seamen, has come a long way in it's campaign for the Industry. An industry wide consensus has been developed in recent years and the Government Task Force Working Group is at this moment about to publish its report. This is not before time as the Working Group began its discussions towards the end of 1997. RMT sincerely hope that action will be forthcoming in the very near future.

December 1998

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