Examination of Witnesses (Questions 40-59)
23 JUNE 2004
MR MICHAEL
PARKER, MR
MARK BROWNRIGG,
MR EDMUND
BROOKES, MR
MICHAEL HASSING
AND MR
MAURICE STOREY
CB
Q40 Miss McIntosh: So the Chamber sees
no reason to have an employment link between those people trained
as cadets under the tonnage tax and those who will be UK—
Mr Parker: The short answer is,
no. Our view is still the same as when tonnage tax came in. We
think it will just simply frighten people away. We believe that
there is sufficient intent in most of the employers to offer jobs
to cadets. We know of some employers who would actually like to
employ more. There will undoubtedly be some who cannot or will
not but what we have established in principle now with NUMAST
is that we do a joint study on the employment prospects of the
cadets coming through so we actually have some facts to see what
is happening, because one would expect mobility. Some will move
of their own volition from one employer to another. One employer
may not be able to offer all the jobs that he has got cadets for,
but others have a deficit. We need to measure whether this flow
of cadets, which is now starting to come through the training
system because of tonnage tax, to see if it is actually working
out as we think it is. That is why we have agreed in principle
with NUMAST to have this study. So we would like some facts before
we start planning whether there should be any further changes
or modifications.
Q41 Miss McIntosh: In your submission
to the Select Committee you have mentioned that there are two
exclusions you would like to see rectified. One is the exclusion
of aggregate carriers and the contribution they have made to coastal
shipping and the other is offshore specialist vessels. Could you
just tell us how confident you are that these exclusions will
be included and what benefit it will bring the Chamber if they
are included?
Mr Brownrigg: I have already referred
to aggregate carriers. The Government, as far as we know, is onside
with that. We have been told that that is just a matter of time
now that the EU has approved the extension of tonnage tax to that.
The other area is the specialist vessels in the North Sea and
last time around these were left out. I think there potentially
was a conflict between transport and energy policy, but it meant
that while platform supply vessels (normal supply vessels in the
North Sea) and anchor handlers were included, specialist vessels
such as dive support vessels and research, seismic and so on,
particularly what are called stand-by ships or emergency response
and rescue vessels, were left out. In both cases this is particularly
unfortunate since they have been traditional employers of officers
and ratings and in some cases quite substantial. Certainly in
the North Sea you are talking about something like between 1,500
and 2,000 ratings and about 1,500 officers. I may be slightly
out there, but it is in that order. So you are talking about two
modest but important areas of the fleet to which it would be beneficial
to extend tonnage tax.
Q42 Clive Efford: Mr Parker, you said
earlier on that we should be pleased with the amount of tonnage
that is being shifted under the UK flag. Apart from the tonnage
tax, what other factors do you think have played a part in increasing
that amount of tonnage?
Mr Parker: Oh, undoubtedly the
improvements to the MCA. Without those, it would not have happened.
How you weight them I do not know because tonnage tax and the
improvements to the MCA came through in parallel, but the two
were absolutely crucial.
Q43 Clive Efford: Do you think there
are other changes, perhaps to the tonnage tax or other factors
that could be altered in the future to improve the situation?
Mr Parker: Unless my colleagues
have any thoughts, I do not, particularly. I think what we need
to maintain the confidence of those who are investing here in
shipping through tonnage tax, particularly the overseas investors,
is to maintain the system and to give them comfort that the 10
year promise they had to make is going to be honoured, i.e. it
is not a system that is going to be messed around with every year
or two and therefore their long term planning is going to be undermined.
Certainly some of the press comments recently around some of the
subjects here have prompted some of them to ask what is going
on in the UK, and certainly we as the Chamber and I as the President
are saying to them, "Remain calm. I believe the British Government
will maintain the tonnage tax as it is and your ten year planning
is real and realistic." I hope I am right.
Q44 Clive Efford: Moving on slightly,
has the increase in the number of ships on the UK register resulted
in a lower standard of employment rights?
Mr Parker: No, not at all. In
fact, one of the nice things about this expansion of the fleet
is that what we are getting, as you can see from the statistics,
is a much greater increase of tonnage, the numbers of ships, and
this is because the new ships are much bigger ships. They are
the modern, efficient ships, so they offer very good accommodation
on board and we have the nice position that whereas before tonnage
tax we had a national fleet that was older than the international
average, we now have a fleet which is younger, and I think that
is something we should be proud of.
Q45 Clive Efford: Do you have any comments
on the remarks of the outgoing IMO Secretary General, who specifically
referred to concerns about the lowering of standards under the
UK flag?
Mr Parker: Well, I am concerned
with anything the Secretary General of the IMO says, but we are
not worrying about that at the moment. It is something we would
watch. We are very keen as the Chamber that we have a high-class
quality fleet in the UK.
Q46 Clive Efford: If you are concerned
about what he has got to say, surely you would react to a comment
like that from an outgoing official who says he is concerned about
lowering standards of employment conditions under the UK flag?
Surely you would have a concern about that, would you not?
Mr Parker: We do not believe there
is a lowering of standards.
Q47 Clive Efford: And the fact that RMT
and NUMAST are expressing similar concerns, do you have any comments
on that?
Mr Parker: Well, that is something
we are always happy to discuss with them, and we do. There may
be exceptional things which need to be addressed, but in the generality
we do not believe standards are.
Q48 Clive Efford: I am not involved in
the industry, as you might guess, but I think you are displaying
an astonishing degree of complacency if people in those positions
have gone so far as to express their concerns to that degree and
you do not seem to have any comment or any response other than
to say, "We're prepared to talk about it and of course their
comments would cause us concern."
Mr Parker: I certainly do not
want to appear to be negative. Perhaps Maurice Storey would have
another angle on this because he is very close to this situation.
Mr Storey: I think the comment
from the Secretary General, Bill O'Neil, was that he said that
the UK was taking Taiwanese ships on their register and that brought
the standards down. Was that not the case? Was that not the exact
quotation?
Q49 Clive Efford: The quotation that
I am referring to is just that there is a lowering of standards
which the Secretary General has referred to. I would expect you
to be aware of his comments.
Mr Storey: He did refer to the
Taiwanese situation and the point that I made to him at a meeting
after he expressed that opinion was that the people who come on
the ships of the UK flag, whatever nationality they are they all
have to meet the standards of Trading Certification and Watch-Keeping,
which is the IMO international standard. There is a worldwide
standard now and no officer can carry a certificate without holding
that standard. We believe, this group, that the British officers
are the best. They are the leaders in the world, always have been
and they are always looked up to, as the red ensign is always
looked up to as far as quality is concerned and I think we want
to see that maintained. But I do not think, from the job I have
got at the present time and from my previous role, we have seen
bad quality people operating British flag ships. You have only
got to look at the port state control records for the British
flag to prove that we are flying much higher than most other flags.
Q50 Chairman: So you would not agree,
for example, that ships are not on our UK register there is no
control requirement over the qualification or the nationality
of the officers on the vessel, which in turn leads to problems
in their appointment as training officers for cadets?
Mr Storey: I think, Madam Chairman,
if you have an officer who is correctly qualified he should be
able to train. It is better, of course, if you have a British
officer training a British worker.
Q51 Chairman: That was not actually the
question, Mr Storey. If you are serving on a vessel where all
senior officers are of different nationality and culture and have
been trained under quite different regimes to that established
in the UK, how do you control the level of training that is being
handed out to the cadets?
Mr Storey: By ensuring that the
officers—I have that exact situation in one of the companies
I represent, where we have foreign officers training British cadets,
but the foreign officers have full British certificates of competency
and they are trained and able to train the cadets and the records
from the cadets who have been on the ships that I am talking about
are very high records. I have shared this information with NUMAST
to prove the situation.
Q52 Chairman: Is it the case that tonnage
tax companies are not willing to employ junior officers once they
are trained?
Mr Storey: No, that is not the
case. Certainly my company has said it will employ the officers,
give the officers employment that we have trained, and I know
Mr Hassing is in a similar situation.
Q53 Chairman: So who is right when NUMAST
says that between October 2001 and March 2004 there were 719 confirmed
officer job losses? You do not notice that? You do not feel that
that is the case?
Mr Parker: Could I perhaps come
in on this one, Madam Chairman? Yes, there have been some redundancies
of officers.
Q54 Chairman: A fairly hefty one in a
not very large workforce, 719, is it not?
Mr Parker: I agree, and any redundancy
is regrettable, but I do not think those are actually cadets.
They are officers where—
Q55 Chairman: Yes, confirmed officer
losses. But if you lose just over 700 officer posts you are not
going to replace those with cadets, are you?
Mr Parker: No, and what I was
going to say was that many of those officers, although they have
lost their jobs with a particular employer, they have found jobs
elsewhere in the industry. So they are not job losses, they are
job transfers, if you like, in many cases. I do not think there
are 700 idle officers from that unfortunate redundancy.
Q56 Chairman: Are you doing anything
to encourage your members to take on more cadets?
Mr Parker: Yes.
Mr Hassing: I would just like
to add that we do offer all our cadets a position as a junior
officer and most of them stay.
Q57 Chairman: All of them?
Mr Hassing: All of them.
Q58 Chairman: How many did you train
last year?
Mr Hassing: That will be about
the same number. We have around 140 on the programme.
Q59 Chairman: And you would expect to
absorb the number of people that you train each year?
Mr Hassing: We would expect to
have absorbed all of them. That is how we plan it, but it is long
term planning. We have done it in the past and we are hoping that
we will also do it in the future, but I will have to add that
they have to be competitive internationally. The training and
the employment costs of the junior officers and the senior officers—
| 
