Examination of Witnesses (Questions 120-140)
23 JUNE 2004
MR BRIAN
ORRELL, MR
MARK DICKINSON,
MR ANDREW
LININGTON, MR
BOB CROW
AND MR
STEVE TODD
Q120 Mr Donohoe: In terms of your membership
in that sector, how many members do you have today against that
that you had when the tonnage tax was introduced?
Mr Crow: Less than 7,000.
Q121 Mr Donohoe: You now have less than
7,000?
Mr Crow: Yes, but we had 30,000
in 1980.
Q122 Mr Donohoe: So you have dropped
quite significantly?
Mr Crow: Yes.
Q123 Mr Donohoe: Since the introduction
of the tonnage tax, how many members have you lost?
Mr Crow: An average of 700 a year.
Q124 Mr Donohoe: 700 a year. Mr Orrell,
what is the situation in NUMAST?
Mr Orrell: Well, I would like
to separate out job loss and membership, because membership is
not necessarily related to a decline of a fleet. We have just
over 19,000 members. About 15,500 of those are sea-going and that
is marginally more than what we had ten years ago, but that is
because in those companies that we have collective bargaining
agreements with we have increased our membership density from
what may have been 70, 75% to 90%.
Q125 Chairman: Do you think your members
in shore jobs, if they move in shore jobs, do you keep them as
they get older?
Mr Orrell: In some areas, Chairman,
deep sea pilots, surveyors, harbour masters.
Q126 Chairman: So as much as anything
it could have contributed to a stabilisation of your membership
rather than a loss?
Mr Orrell: Yes, but also because
our members have transferability of skills ashore they also have
transferable skills into the international market. Near 50% of
our sea-going membership is actually on foreign contracts with
foreign employers in the international fleets.
Q127 Mr Donohoe: Coming back to that
point and an earlier point that you made, Mr Orrell, where you
indicated that the cadets while training are employed but after
the training has expired they are no longer employed. Are you
suggesting that they are a cheap form of employment?
Mr Orrell: No, the comment that
I was referring to is that there is a myth in the industry. The
first myth is that we are training too many cadets now that we
have got 620 and there are not enough jobs for them. I am not
convinced by the truth of that, but it does have a moral side
to it that one wants to address. Why is the concern being spread
in the industry that we are training too many at 620 when we were
originally striding out to get 1,250 jointly with the shipowners.
That is an interesting question. Why are we only on 620 now four
years on from the tonnage tax coming in with the training link?
Some of the reasons for that are that some companies that never
trained before are still not training. I do not think any are
paying a levy.
Q128 Chairman: They are not paying the
levy?
Mr Orrell: I do not want to get
confused with the pilot under the tonnage tax.
Q129 Chairman: No, but you are really
suggesting that they are not complying with their side of the
bargain?
Mr Orrell: No, no, a levy is where
companies that do not train—this is not tonnage tax.
Q130 Chairman: No, I know, this is the
training level.
Mr Orrell: In the tonnage tax
there is a requirement to pay a pilot. There is a planned pilot
of 1%. The unplanned pilot is currently running at 16%. That 16%
is money that is being paid because they are not replacing wastage.
Why the cadets have not increased to near 1,000 or near 1,250,
in our view, is because some companies have reduced their training
levels because they are being trained elsewhere now by more companies
who are not going to employ them and they will be able to do it
and at the same time reduce their training budgets.
Q131 Chairman: Yes. That is very difficult
to evaluate though, is it not?
Mr Orrell: Yes.
Q132 Chairman: Forgive me, but that is
a whole lot of subjective judgments, is it not?
Mr Orrell: From not just myself
but the Chamber of Shipping as well, but yes.
Q133 Chairman: If we are looking for
facts and figures, what you are saying to me is, "I think
this is happening, but it's difficult for us to use that as the
basis for an argument"?
Mr Orrell: No, that is true. If
the question is, though, why have you only got 620 cadets now
with 745 ships and a training equivalent of one in fifteen officers
per year, and that is only 60 more than 560 when you started in
1998, then what other answer is there?
Q134 Mr Donohoe: Could I take you back
though to a point. I took a note where you did indicate that you
would not think that industry would employ cadets once they have
trained them. Have I got that wrong?
Mr Orrell: There is no evidence
for that. There is no evidence that there is a significant non-employment
of cadets.
Q135 Mr Donohoe: So all the cadets that
are taken on by the companies are employed eventually in the companies?
Mr Orrell: No, some cadets that
are trained by some companies are taken on by non-sponsoring companies.
Some companies have to search around to get someone to take them
on. I am not saying that every cadet gets a job, in fact I know
they do not because last week I got a letter from a cadet who
got excellent records all the way through and has finished and
he is trying to get a job now. What I am saying is there is no
hard evidence and facts on that and that is why, together with
the Chamber of Shipping, we are saying let us not throw anecdotal
evidence around, let us start a research project to find out what
is the position.
Q136 Ian Lucas: I was going to ask you
specifically about British junior officers. Are you saying that
there is capacity for every British junior cadet who comes through
and becomes an officer to secure employment?
Mr Orrell: Now, that is a different
question. Will that capacity continue? I say there will be capacity
if there is an employment link.
Q137 Ian Lucas: How do you answer the
argument that if you impose compulsory obligations upon shipping
companies to continue to employ both officers and ratings—I
put this to both of you—those companies will simply go away
again and you will have the situation you described earlier where
the fleet is declining, inevitably?
Mr Orrell: I am trying to be as
factual as I can, but we work in an odd industry. If the training
commitment is a small price to pay for the benefits that are derived
from a tonnage tax regime, to the extent that more ships come
on to the register but more jobs do not come to UK seafarers and
we are training to the extent where there may not be the capacity
to be absorbed in other companies then they can go. That is our
position. They can go and at a stroke you will overcome the problem
that people have this myth that we are training too many at 620.
I believe that there is an obligation upon companies that train
people through a tonnage tax when they took the decision, and
I will just mention Canadian Pacific here because we put it in
our submission. We decided to go to some of these companies where
we knew they were in the tonnage tax, and please remember we do
not have access to who is in the tonnage tax and who is not, but
we knew CP was. All of their officer population is Indian and
we asked them what is their position about a training link for
officers and quite clearly they said to us, "When we entered
the ten year commitment with the tonnage tax we planned on employing
every UK cadet that we trained and over the ten years before we
come out we will end up with our trained cadets being masters
and chief engineers." So they are displacing foreign officers
to meet their commitment. Now, we were amazed at that. In the
industry generally, with the likes of MAERSK, P&O and Nedlloyd,
we are negotiating agreements to allow a percentage of foreign
officers into the officer establishment so as to secure a proper
career progression for young UK officers being trained, being
able to go into the Junior officer jobs and up the senior ranks,
waiting for the Government to give us an employment link, of course.
Mr Crow: But some of these ships
will go anyway, whether the tonnage tax is there or not. What
we are saying is that if these shipowners are getting a subsidy,
eg a tonnage tax, then part of what they are getting we want put
back in to British ratings.
Q138 Ian Lucas: I understand what you
are saying, but what the shipping companies were telling us earlier
was that if these obligations were imposed then the progress that
has been made since the introduction of the tonnage tax will end
and that the fleet will disappear.
Mr Crow: It is a very brutal world
out there in the shipping industry and all they are doing is instead
of employing a British rating on X rate of pay, they are employing
foreign labour on £1.50, £2 an hour, with conditions
that will go back to Captain Bligh's days.
Q139 Ian Lucas: So what you are saying
is that it is happening already. They are not employing British
ratings in any event?
Mr Crow: No, ratings have not
increased at all. All they have done is cop the money and got
foreign labour and made bigger profits out of it.
Q140 Chairman: Is it true the RMT did
not take up training arrangements for British crew members under
the tonnage tax?
Mr Crow: It is not true at all
and I think Steve has been involved in shipping—
Mr Todd: No, I do not know and
my predecessor, whom I succeeded last year, knows of no offer
of any training or any employment opportunities that come on the
back of the tonnage tax.
Chairman: Well, that has been very helpful,
gentlemen. Thank you very much. That is very clear. We are very
grateful to you.
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