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Westminster Hall

Wednesday 26 April 2006

[Mr. Roger Gale in the Chair]

Maritime Industry

Motion made, and Question proposed, That the sitting be now adjourned.—[Claire Ward.]

9.30 am

Ms Katy Clark (North Ayrshire and Arran) (Lab): I am grateful for the opportunity to raise the fundamental issues relating to the Government's support for the maritime industry, the rights and responsibilities of employers in the industry and the employment rights of those who work in it.

The Government have a proud record in many areas. We have a strong record on employment. Indeed, we have created 2.4 million new jobs since we came to power in 1997. We also have a proud record on equality issues, particularly on race relations, and one of our flagship policies was the creation of the national minimum wage legislation. However, much of my speech will focus on a forgotten group of workers who have not benefited from many of those positive Government initiatives—some of our seafarers.

When the Labour party came into office in 1997, we recognised the crisis facing the UK maritime industry and UK seafarers. We also knew of the shipping industry's importance to Britain's economy, our dependence as an    island nation on sea transport, the sustainable environmental benefits of sea transport and, not least, the industry's importance to national security. Shortly after the Labour party came to power, my right hon. Friend the Deputy Prime Minister set out the Government's plan to boost the shipping industry. A shipping working group was set up and tasked with considering the key issues of enabling maximum economic benefit to be obtained from the shipping industry, reversing the decline of the UK merchant shipping fleet, increasing the employment and training of seafarers, and encouraging shipowners and the wider maritime industry to devote more resources to the maritime fleet.

The group made 33 recommendations—I shall not go through them all—and the major headings give a flavour of the debate at that time. They included funding training, facilitating training, improving the employment environment, regulating to improve British seafarers' prospects, safeguarding the employment rights of British seafarers, improving the fiscal environment, opening up new opportunities for UK shipping and the operation of the UK register for shipping.

David Taylor (North-West Leicestershire) (Lab/Co-op): My hon. Friend is right to list the many improvements that have been made in the pay and conditions of millions of British workers. The tonnage tax regime was indeed a brave attempt to improve employment and training in the maritime industry, but does she agree that the next and final step towards
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making it work would be to ensure that there were legal obligations and that employment and training were not just optional extras for UK-registered fleet owners?

Ms Clark : I am grateful to my hon. Friend for making that point, and I hope to make the same point during my speech.

Many of the shipping working group's recommendations were taken up, and many of the policies that the Government adopted have been successful for the shipping industry. The group made a wide range of recommendations and, as is usual, the Government accepted some, but not others. The group's work led the Government to lay out their strategy in December 1998 in a policy document called "British shipping: Charting a new course". The document outlined a range of policy initiatives to address the decline in the numbers of UK ships and seafarers. The centrepiece was the policy to which my hon. Friend the Member for North-West Leicestershire (David Taylor) referred—the introduction of a tonnage tax, which all parts of the industry agreed should be the way forward. The tonnage tax provides significant support to the shipping industry and is worth about £40 million a year.

I shall focus on three main aspects of Government policy towards the maritime industry: the tonnage tax and the industry's failure to deliver voluntarily on training and employment; the section 9 exemption in the Race Relations Act 1976, which makes it legal to employ foreign national seafarers on inferior wages and conditions; and the failure to apply the national minimum wage regulations to foreign seafarers in UK territorial waters.

The first issue is the tonnage tax and the industry's failure to deliver on training and employment—and of course we must put it in context. As I said, the Government are to be congratulated on responding to the fall in the number of UK seafarers by outlining the measures contained in their policy document "British shipping: Charting a new course". One of the key objectives that the Government set themselves was to increase the training and employment of UK seafarers, and they said that the tonnage tax was the most important of the measures to deliver on that objective.

The tonnage tax represents a significant concession to the shipping industry. Rather than paying the normal form of tax on their profits, companies that enter the tonnage tax regime pay a notional tax levy according to the size of the company fleet. However, applying the criteria that the Government set themselves for judging the success of the tonnage tax regime—the increased training and employment of UK seafarers—makes it clear that there has been little benefit in terms of the training and employment of ratings, although there has been limited success in relation to cadets. I believe that the policy's failure, particularly in relation to ratings, has resulted from the scheme's voluntary basis.

The UK is an island nation and is heavily dependent on ships for its trade, but the number of our seafarers has declined dramatically in the past few years. UK seafaring ratings numbers have fallen from 30,000 in 1980 to just over 9,000 today. Since its introduction in 2000, the tonnage tax has not stopped the decline in training or employment, particularly for UK seafaring ratings. In fact, employment opportunities continue to
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decline, and the levels of training for new entrant UK ratings positions is falling. Although it is difficult to get figures, my understanding is that only 50 British ratings trainees came into the industry in 2004–05, and it is predicted that there will be fewer this year.

Despite all the good intentions, the tonnage tax exemption cannot be a seen as a success for ratings. Although shipping companies must train cadets, there is no legal requirement to employ officers or ratings; indeed, there is no obligation even to train UK ratings—companies must simply consider UK ratings' training and employment options. Unfortunately, therefore, the majority of vessels that enter the UK register employ no UK seafaring ratings.

The tonnage tax concession to the industry was worth more than £61 million between its introduction in 2000 and the end of the financial year 2003–04. The latest figures from the Inland Revenue show that the cost to the taxpayer in each of the past two financial years was about £40 million. The concession has clearly been successful in bringing more ships on to the UK register, although there is no obligation to register in the UK to qualify for the concession. However, the concession has not delivered increased employment for UK seafarers. It is therefore important that the Government follow through on their commitment to increase the employment of UK seafarers. We now have even fewer UK ratings than in 2000, when the concession was first introduced. I note that the Chamber of Shipping gave a commitment to increase the training of seafarers, both officers and ratings, by 25 per cent. year on year prior to the introduction of the tonnage tax in 1999. That would have doubled the number of ratings in training, but the number has declined from about 2,000 in 1999, when the tonnage tax was introduced, to about 50 more recently. The concern is that those figures will continue to fall.

The Minister will be aware that late in 2004 the Department for Transport and the Inland Revenue published the results of their review of the tonnage tax. At the time the Government decided to delay the implementation of the link between the tonnage concession and the employment of UK seafarers. Instead, the previous Minister with responsibility for shipping referred the employment issues of the tonnage tax to a working party—the Department for Transport's shipping task force.

The Transport Committee also considered the matter. It welcomed the Government's decision to include the consideration of proposals for a training commitment for ratings in the expanded terms of reference of the shipping task force working party. The Committee also said that there was a pressing need for information about what companies in the tonnage tax regime were doing to honour their commitment to ratings. Without that, the Committee stated, it would be difficult to disagree with the National Union of Rail, Maritime and Transport Workers, the ratings' trade union, which contended that the present voluntary commitments amounted to nothing by way of an industry commitment.

Not surprisingly, the shipping task force working group was not able to reach an agreement about an employment link for UK seafarers, as the Chamber of Shipping refused to agree to any commitments on
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training or employment of UK ratings. Instead, the working party made a series of recommendations, including an increase of funding for training, a crew relief costs scheme and an extension to the seafarers' earnings deductions tax concessions.

As yet, no details have been made available by the Chamber of Shipping or the Department for Transport on how shipping companies are honouring their commitment to consider the training and employment of ratings. I am aware that the Department for Transport has produced a short summary that gives some indication of the number of companies employing UK seafarers, but it gives no specific company training or employment figures.

Before agreeing to the tonnage tax, an independent inquiry into the tax was commissioned by the Chancellor of the Exchequer. The report, by Lord Alexander of Weedon, recommended the adoption of the tonnage tax regime. He said of the regime:

Given that the commitment to ratings was less than the trade union was seeking, he asked the industry to consider exploring with the Department for Transport ways to ensure the prospect of further commitments and advancement on those matters.

The reality is that that work has never been done; given the obvious failings of the current position, which is voluntary, I sincerely hope that one outcome of today's debate will be that the issues are reconsidered and a formal link is adopted. I know that the Government are aware of the problem, and that the Minister promised a decision on training and employment being linked to the tonnage tax soon. I urge him to put compulsory measures in place to ensure that the original trade-off, about which the Government were very clear, and the original commitments, which were very much what the country and the shipping industry need, which were very clear—they are what the country and the shipping industry need—are made a reality.

The second issue that I wish to raise is discrimination against seafarers under the Race Relations Act 1976. The Minister will be aware that historically exemptions relating to seafarers have always been found in race relations legislation. Indeed, when in opposition, my right hon. Friend who is now the Deputy Prime Minister said that those exemptions were a national disgrace.

Although the Government have amended that legislation, it is still perfectly lawful to discriminate against seafarers on the ground of their nationality. The effect is that companies are able to bring in foreign national workers at lower rates of pay and with worse conditions, so undercutting the existing work force and leading to job losses and reductions in the number of new British recruits.

The Government took action by amending the 1976 Act. The sections amended related to the treatment of seafarers recruited abroad to work on UK ships, and the amendments made it lawful to discriminate on grounds of nationality rather than race, colour or ethnic origin, which had been the position until then. For the exemptions to apply, seafarers have to reside and be recruited abroad. The crux of the matter is that race
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relations legislation specifically allows seafarers recruited abroad to be treated differently from UK seafarers even though they may be employed and living on board UK workplaces for lengthy periods.

Seafarers of many nationalities work in the United Kingdom and on UK-flagged ships. In some situations, UK seafarers work beside foreign nationals—on the same ships and in the same departments—but because of UK employment law, the British workers earn more and have better terms and conditions than their foreign counterparts. The Minister will be aware that representations have been made to the Government over a considerable time. Despite that, however, the discrimination continues and the employment of existing UK seafarers remains increasingly precarious.

In 2004, the European Commission stated that European Union seafarers should be paid according to the home rate of the flag of the ship that they sail on regardless of their place of residence. That means that Spanish, Polish or any other EU nationals should not be discriminated against compared to resident UK seafarers employed on UK-flagged ships. However, I understand that EU nationals are still being paid a lower rate.

Shortly after the European Commission made its position clear, the Department for Transport said that, on receipt of legal advice, it would conduct a review of sections 8 and 9 of the Race Relations Act 1976. However, no more proposals have been made. The Minister may be aware that RMT, the union that represents maritime workers, has submitted complaints to the European Commission arguing that section 9 of the 1976 Act is in breach of the European treaty provision on non-discrimination and the free movement of goods. Complaints have also been lodged with a range of other organisations, including the International Labour Organisation and the international committee on economic, social and cultural rights, and complaints have been launched with regard to the European social charter.

I understand that the trade union is also considering taking formal action in the High Court to stop discrimination against foreign national seafarers, whether or not they are from the European Union. I urge the Minister to consider the matter again and to bring forward legislation to outlaw discrimination against UK seafarers once and for all.

At the moment, shipowners continue to enjoy an exemption from the provisions of the 1976 Act. That allows them to pay exploitative rates of pay to foreign national seafarers recruited abroad. In many situations, the national minimum wage does not apply to UK seafarers on board UK ships while they are in UK waters, as the legislation applies only when ships are in port or in UK internal waters. That lack of regulation and social protection for seafarers has meant their continual replacement by low-cost foreign national seafarers.

Perhaps the most high-profile recent example of problems of this nature was the Irish Ferries dispute last year, which was not, of course, a British dispute. It led to high-profile industrial action and got media attention, but such issues often do not end up in the national press. On that occasion, Irish Ferries offered its work force the option of voluntary redundancies or a cut in pay and conditions of up to 50 per cent., and there
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was an industrial dispute, which, hon. Members may recall, was settled only after the work force had a sit-in on the ferries. In most situations that have affected British workers, things have been far quieter. When British workers are forced to compete with low-paid foreign nationals, they often realise that the writing is on the wall and accept job losses and redundancies because of the legal position in which they are put.

It is not acceptable for existing work forces to be continually replaced with cheap labour brought in from outside because British employment law does not ensure that there is a level playing field. I have a constituency interest in this matter because my constituency includes island communities, to which a number of ferries operate. Ferries are very much affected by the legislation. In recent years, there has been a creeping situation in which foreign workers are brought in on lower rates of pay and worse conditions. As a result, the existing British work force has been losing out, and new British workers are not being recruited. New foreign recruits tend to be employed on lower terms and conditions because they do not have that employment law protection.

In my constituency, the situation is particularly relevant because Caledonian MacBrayne, which operates many of the services to the island communities and thus provides a lifeline, and which is effectively a publicly-owned company, is being put into a tendering position. While that process is clearly very much a devolved matter within the remit of the Scottish Executive, I am very aware, as a Scottish Member of Parliament, that the Executive can operate only within the legal restrictions put in place by this place. Current employment law puts many of the workers who provide these services at risk. The tendering process may lead to Caledonian MacBrayne continuing to provide the service, and the process itself might not lead to the   displacement of the existing work force and the employment of low-cost foreign national seafarers, but the law does not prevent the use of cheap labour to undercut the terms and conditions of the work force.

That significant development in Scotland is yet another reason why we need to reconsider this area of law and ensure that we introduce employment law to protect the rights of existing work forces on ferries and future recruits.

Mr. Alan Reid (Argyll and Bute) (LD): I congratulate the hon. Lady on securing the debate and on the way in which she is presenting her case. As I, too, have islands in my constituency, I share her concern about CalMac. The Government could help by accepting the recommendation of the shipping working group that employers' national insurance contributions for the shipping industry should be alleviated. The Government's rejection of that recommendation has forced CalMac to transfer all its employees to a company based outwith the UK. Does the hon. Lady agree that that could lead to a worsening of conditions, and that the Government should accept the recommendation?

Ms Clark : I shall not comment specifically on the issue of national insurance contributions. I am aware of that development, and I think it unfortunate that the legal framework within which Caledonian MacBrayne is forced to operate is leading to it having to use devices
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of that nature simply to try to secure its continued existence. That company has provided lifeline services to island communities for generations. Those of us who live in areas that are served by such ferries, or who have been there on holiday, are aware of the affection in which that company is held in Scotland and its island communities. If something is not broken, we should not try to fix it, so it is unfortunate that those services are at risk because of the nature of European Union regulations and employment legislation. Therefore, I agree with the sentiments of the hon. Gentleman.

The third issue that I shall raise today is the national minimum wage and how it applies to seafarers. In addition to the exemption under the Race Relations Act, shipowners have managed to gain a favourable interpretation of national minimum wage legislation—a flagship Labour policy that was implemented by this Labour Government. The Department of Trade and Industry has interpreted the legislation in such a way that foreign national seafarers' entitlement to the national minimum wage applies only on UK registered ships when they are in port or in internal UK waters, as opposed to UK territorial waters. If that interpretation is correct, there is an urgent need to amend the legislation so that coverage is properly extended to all who work within UK territorial waters.

There are also concerns about the inadequate provisions for enforcing the legislation on board British ships. The Maritime and Coastguard Agency is the only body that can logically carry out that commitment. Unfortunately, it is not required to do so, and the task is carried out by the DTI, which does not necessarily have the requisite specialist knowledge to deal with the complexities of the industry.

The UK has jurisdiction over UK territorial waters which extend for 12 miles. I am aware that the Minister has said that the legislation is not as he would like it to be. I would be grateful if he would use this opportunity to issue a guidance note or introduce a statutory order to ensure that the UK minimum wage applies to UK ships in UK territorial waters, because under the current legislative framework British workers are being put in a vulnerable position.

These loopholes in the law need to be filled. The Government are very much one who promote equality for all; action has to be taken to ensure that all workers employed in the UK have the full protection of the Race Relations Act and national minimum wage legislation. The minimum wage legislation is one of the most important policies introduced by Labour since it came to power, as millions of people have benefited from it. In opposition, we heard time and again what damage it would cause the British industry, but many of those comments were scaremongering. Similarly, many of the arguments now being advanced as to why we cannot apply the national minimum wage to seafarers and foreign national seafarers do not hold water and will not stand the test of time.

Our manifesto last year made it clear that tax credits and minimum wage legislation were a way of ensuring that work paid for everybody. We also made it clear that    we would implement Low Pay Commission recommendations for everybody. We have a proud record on such issues.
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I think that this is a time to recognise that we have done a huge amount of good work for the maritime industry. Many of the Government's policies on shipping have been a great success. However, we have perhaps not been successful in ensuring that British people continue to work the ships that operate out of our country. Today, I would ask the Minister to assure us that he will continue to review the Race Relations Act and will work with all parties involved in the process to ensure that the appalling discrimination against foreign national seafarers is stopped once and for all.

We rightly sing the praises of the national minimum wage, which will be a lasting tribute to the Government. However, I do not believe that minimum wage legislation was ever intended to exclude some of the most vulnerable in our society: migrant seafarers. Will the Minister reconsider that issue?

Finally, Labour has a good record of using tax incentives to work with business and boost employment. I have already spoken about the huge strides that Labour has made in that area since we came to power. In my constituency, we have seen an increase of more than 25 per cent. in levels of employment. That story is repeated throughout the country. However, when the policy was put in place, the trade-off was that concessions would be provided to the shipping industry in exchange for the employment and training. We are often told by business that it is not possible to get something for nothing, yet the tonnage tax regime seems to be a situation where, when it comes to jobs, there has been no return for UK seafaring ratings. I ask the Minister to reconsider those issues.

Mr. Roger Gale (in the Chair): It is apparent that a number of hon. Members wish to participate in the debate. I have the names of four before me already. I intend to call the Front Benchers at 10.30 and would therefore urge brevity on hon. Members if all are to be allowed to speak.

10.2 am

Mr. Mark Hoban (Fareham) (Con): First, I congratulate the hon. Member for North Ayrshire and Arran (Ms Clark) on the thorough way in which she introduced the debate. When preparing for the debate, I wondered who the Minister would be, and which Department would be represented. The last time that I participated in a debate on the maritime industry, the Minister was from the Department of Trade and Industry. Having heard the hon. Lady's speech, I understand why the Minister is from the Department for Transport.

I declare a non-pecuniary interest as an honorary vice-president of the Society of Maritime Industries. My constituency, Fareham, has a strong interest in the maritime sector, particularly the leisure sector. The River Hamble forms the boundary of my constituency and is well known for being an area for the leisure industry. For example, Moody's Boatyard, which was once a yacht builder, is now principally into yacht sales. We have a marina builder, Walcon Marine. The Westminster Dredging Company not only keeps our sea lanes free, but uses the results of its dredging to supply the aggregates industry. Warsash maritime college trains many of the people who we see on our merchant
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ships—not only UK-flagged ships, but ships flagged across the world. There is a strong international element to the student base. In south-east Hampshire, the maritime sector is dominated by VT Group. I will return to VT Group, formerly Vosper Thornycroft, later.

I want to reflect for a moment on the comment that I made at the beginning of my speech about who might speak for the Government on this occasion. A number of Departments have a strong interest in the maritime industry. It is sometimes difficult for those working in that successful sector to identify the lead voice.

The DTI has a marine unit, which has been effective in trying to improve dialogue, particularly on issues such as the defence industrial strategy. Of course, the DTI is going through a process of increased regionalisation, which might lead to a dilution of its support for the maritime industry.

The Ministry of Defence is the principal customer for UK shipbuilding. Its defence industrial strategy has a strong strand of the marine industrial strategy running alongside it. The DFT takes the lead in many issues that affect the maritime industry, but when we consider the research and development framework that has been discussed by the EU, should the DFT or the DTI speak on such issues?

It is important that the Government consider how they support the maritime industry and whether that should be through a single Minister or improved co-ordination. Either approach has advantages. The maritime industry is looking for a stronger, clearer lead on these issues.

David Taylor : I am not sure whether the hon. Gentleman was at the end of his list, but I would like him to incorporate the Department for Environment, Food and Rural Affairs, which has a distinct and significant interest in the recycling and breaking of ships at the end of their lives. The improved environmental legislation that gets rid of single-hull ships will inevitably lead to more breaking. It must not happen on south Asian beaches where environmental standards are low.

Mr. Hoban : The hon. Gentleman is absolutely right. In the alphabet soup of ministerial responsibilities, DEFRA plays an important role. It has launched consultation on the draft Marine Bill, which is perhaps not as broad as its title would suggest. A range of people are interested.

The breaking-up of ships has environmental consequences. There was a debate in the previous Parliament when one such ship was going to be broken up in Hartlepool, when Peter Mandelson was the Member of Parliament. There was some debate about whether that should happen here or overseas.

I want to go back to the maritime industrial strategy, the importance of shipbuilding and the MOD as the industry's principal customer. VT Group is based in Portsmouth, with a modern dockyard facility that has recently opened in a transfer of facilities from Woolston. Alongside that is the maintenance system co-owned by VT Group and BAE Systems.

As a constituency MP considering issues about the future of VT Group and the repair and maintenance facility in the dockyard, I have always been conscious of the uneven nature of the work load, which can lead to
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feast or famine. For example, there might be an order for a number of warships and VT Group will have to gear up for that, as it will have to for the carrier vessel future, or CVF. There will also be times when VT Group will have to lay off employees because of a dip in the work load from the MOD. At the moment, VT Group is fortunate as not only does it have work on the Type 45 destroyer, but it has secured a successful export contract for ships. That should maintain the work load until the CVF comes on stream, when the group will need to recruit more staff to cope with that bulge in the work load.

The question arises of what will happen after CVF. What plans do the MOD have to ensure that work goes into UK dockyards, and how does that match our defence needs? If we are to have a viable warship building industry in the UK, we need some certainty about future work loads to ensure that the principal warship builders have some knowledge of what capacity will be required. That requires a closer working relationship between the industry and the MOD, which raises the question of value for money for taxpayers. How will we ensure that we have some competition for warship and shipbuilding while ensuring that the industry has some certainty? The MOD is going down the route of through-life maintenance contracts, so it is interested when procuring warships not only in the initial build costs but in how much it will cost to maintain those warships. That requires some transfer risk to the shipbuilding businesses.

When considering such partnering arrangements, which VT Group is committed to, we should manage to balance the respective interests of the taxpayer and the warship building industry to produce a satisfactory outcome that ensures stability of employment and maintenance of capacity along with a good deal for the taxpayer. Those are some of the important issues that affect my constituency. I appreciate that this is outside the scope of the Minister's responsibilities, but I hope that his opposite numbers in the MOD will read these remarks and think about how best to accommodate the conflicting pressures on the warship industry in the UK.

10.10 am

Linda Gilroy (Plymouth, Sutton) (Lab/Co-op): I congratulate my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) on obtaining the debate. She made a very good case. She spoke of the proud record of the Government, but she also made a powerful case for the need further to improve the prospects of seafarers. I come from Plymouth, another proud naval constituency, and I well remember marching up and down Fore street in Saltash with the district National Union of Rail, Maritime and Transport Workers officer, Baz Gregory, when I stood—I was unsuccessful at the time—as a candidate in South-East Cornwall in the 1990s. At that time, people were fearful as to whether there was a future for UK seafarers at all. It is a mark of where we have got to today that we are standing up and fighting for the right conditions for those seafarers.

In addition to declaring my interest in that I come from a seafaring constituency, I declare a non-pecuniary interest as a vice-president of the Society of Maritime Industries. The United Kingdom, and in particular London, is a world centre for maritime activities, and to
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maintain that position we need to find ways to value seafarers. That is important in its own right but also because we need to recognise the strong links between offshore work and the experience that people gain as seafarers, and the significant gaps in the important onshore work and the need to recruit people there. If we do not start valuing people when they are young and go to sea and gain that experience, it becomes much more difficult to look forward.

Following on from the hon. Member for Fareham (Mr. Hoban), I declare not exactly an interest but an experience with the Defence Committee. I reiterate what he said about the need to try to get these things right for the future of British shipbuilding. A huge programme of shipbuilding, the biggest for two generations, was laid out as part of the defence industrial strategy last December. That will be followed through with the marine industrial strategy. I do not know whether my hon. Friend the Minister can comment on what part he and his Department might play in seeing that through. Important skills issues relating not only to the onshore infrastructure, which supports the maritime industry, but to the shipbuilding industry need to be addressed. As I understand it, the marine industrial strategy is setting out to address how best we can sustain critical industrial skills and technologies that we need for the future, while delivering improved performance quality and competitiveness.

I said that I came from a well known naval constituency. The region has a terrifically long coastline—one third of the coastline of England. It is no surprise that the marine and maritime sectors have been identified as priorities in respect of economic development by our regional development agency. We have growth in that sector, mainly deriving from leisure, marine and defence-related activities and important centres at Falmouth, Plymouth and Poole. I want to consider the need to get the wider maritime industry on board in valuing not only seafarers, but the work that many seafarers go on to do after their seafaring career, which my hon. Friend the Member for North Ayrshire and Arran mentioned.

I draw to the Minister's attention the work of Marine South West, which has emerged from the work of the regional development agency, and the network of skills centres that it is developing as a potential model and way forward. The skills centres are based on the three communities that I mentioned. They are also supported by IT networks. A great deal of work has been done with the marine and maritime industry to identify the top 10 skills list for onshore jobs. The skills include those relating to business management, IT, electronic engineering, mechanical engineering, welding and fabrication, painting and finishing, composites, carpentry and so on.

That work is aimed at ensuring that there is a bridge to enable people in the general marine and maritime industries to find careers and a way forward. That is important to the case that my hon. Friend the Member for North Ayrshire and Arran laid out, because if those skills gaps exist, it is exceedingly important that we find ways to assist seafarers. Often when they are younger, their skills are developed and they are valued and rewarded for the work that they do.
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I am sure that the Minister appreciates that the marine and maritime industries are high technology-based and that their continued success is based on the application of enterprise and innovation. In January, I was able to secure the Upper Waiting Room for an exhibition on just how high-tech those industries have become. I found the figures quite staggering: for Plymouth alone, we are talking about £1 billion for the marine, maritime and broader marine science sector.

We need to develop programmes across the piece to inspire young people to pursue careers in that rewarding and vital sector. We need to develop employer-led training and skills centres such as those exemplified by Marine South West. I look forward to the Minister's response to the important points that my hon. Friend the Member for North Ayrshire and Arran raised. I hope that the Minister will also acknowledge the points that I have made about the way in which the south-west is leading the way on some of these matters.

10.17 am

John McDonnell (Hayes and Harlington) (Lab): The normal crew assembles for debates on this subject over the years. However, I must apologise because one of our crew is missing: my hon. Friend the Member for Dover (Gwyn Prosser) is on parliamentary business abroad. I declare an interest as the chair of the RMT parliamentary group and I refer to my entry in the Register of Members' Interests.

I congratulate my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) on securing the debate and on her superb and definitive description of the industry as it stands and the issues facing us. I shall be brief because other hon. Members want to speak. I shall focus on the Race Relations Act 1976 and the minimum wage.

There is an element of déjà-vu because we were in Westminster Hall three years ago having the same debate and things do not seem to have moved on. In 2003, the Home Office made it clear that it did not believe that the shipping industry should be excluded from race relations legislation. It then started the consultation about how to bring the shipping industry within that legislation. We went through that debate and the Government decided that they would introduce amendments to the legislation.

I was cheered and enthused that at long last the Government were addressing this sector of British life, which had been excluded from the basic laws of civilised society as we know it. Then, the Government created the bizarre situation in which discrimination on the basis of ethnicity was outlawed, but discrimination could continue on the ground of nationality. Employers could pay one worker less than another simply because of the country from which they came. That is outrageous in any civilised society.

We went on with the debate, however, and I think that it was in this room that the statutory instrument was considered. I attended the Committee considering it. I was not a member of the Committee, but I exercised my right to speak. One thing that convinced hon. Members to support the amendment allowing discrimination on the ground of nationality to continue was the Minister's statement, both in that Committee and in the Adjournment debate, that hon. Members need have no
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fear because the minimum wage would apply to anyone serving on a British ship in UK waters. I did not go away happy, but I thought that at least we had secured some commitment from the Government. Within months, we discovered that "territorial waters" was not the definition, but "internal waters". I sail on the Norfolk broads; I have an old, battered wooden boat and I am not a very good sailor. When I sail, people get off the water if they see me coming. If I employed someone on that boat in Norfolk waters, they would get the minimum wage. If I sailed outside Great Yarmouth harbour, I doubt that they would because we would have gone outside internal waters. No one knew what internal waters meant. I had never heard the definition before, and we had to scurry for lawyers to get that definition and to find out where the idea had come from.

People are still being discriminated against in the industry because they are not achieving the minimum wage, and it is happening on ferry service after ferry service: Larne to Troon and Cairnryan, Mostyn to Dublin, Rosslare to Cherbourg, Fleetwood to Dublin and Belfast and Liverpool to Dublin. British seafarers are being replaced by Spanish, Filipinos and others who are paid less and work in poorer conditions. That is exploitation by any standard. No one is arguing for those people to lose their jobs, but if they have jobs they should be paid the same rate as anyone else. Why should one person be paid less than and work in different conditions from others when they are doing the same job within our own territorial waters? That is a scandal.

The situation is the same on the Hull to Zeebrugge route run by P&O North Sea Ferries, which uses British, Portuguese and Filipino workers, with the Filipinos being exploited the most. Companies are allowed to pay disgraceful wages. Ramsay Shipping, which trades between the UK and Ireland and the UK and Scandinavia, is paying Filipino seafarers £456 a month. Union Transport—there is an ironic name if ever there was one—is paying east European seafarers £856 a month. It trades between the Isle of Man and Britain, and the Isle of Man and Ireland.

We have raised this matter time and time again. The National Union of Rail, Maritime and Transport Workers issued a press release 18 months ago regarding a company called Lapthorn, which is paying people below the minimum wage. Our information at the moment is that that continues to be the practice. Workers are being exploited within sight of the British coast as a result of our failure to plug the gap in race relations legislation. I believe that this is a disgrace, for a Labour Government in particular, and for a civilised society.

As my hon. Friend the Member for North Ayrshire and Arran said, the European Union has introduced directives that ensure that the Government must comply so that EU workers, at least, receive the same treatment as UK seafarers. My hon. Friend the Minister gave us a commitment in February 2005 that amendments to the legislation would be brought forward, but by the end of 2005 we had not seen any. I urge my hon. Friend the Minister to ensure that we get Government action speedily. Three years on from the previous Adjournment debate on the issue and two years on from the statutory instrument Committee we are still in a situation where workers are being exploited, and where
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employers are exploiting a loophole in the law. It is a moral responsibility on this Government to act, and act now.

10.23 am

Mrs. Linda Riordan (Halifax) (Lab): I, too, add my congratulations to my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) on securing this important debate. I welcome the opportunity to talk about recent disputes with Irish Ferries at the end of 2005, which my hon. Friend mentioned.

The dispute is now over, but it raises important questions regarding UK shipping and the future of UK and Irish ferries. The Irish Ferries dispute was one of the most serious industrial disputes in Ireland's history and it was sparked by the proposed replacement of 543 Irish seafarers by eastern European seafarers on rates of pay well below those of the minimum wage.

Irish Ferries runs ships between Britain and Ireland and the company sought to dismiss its existing Irish sailors and replace them with workers from Latvia and Estonia on lower rates of pay and longer hours. Irish Ferries adopted crude tactics by smuggling private security guards on board the ships to make sure that the handover to the new cheaper crew went smoothly. That further inflamed the dispute with a stand-off developing on the Isle of Irishmore ship in Pembroke and the Ulysses in Holyhead.

On both those ships seafarers occupied the vessels in protest and refused to leave the berth with a new crew unfamiliar with the operation of the ship. The port authorities also refused to grant the International Transport Workers Federation inspectors access to the ships' crews to check on their welfare, which was in breach of International Labour Organisation convention 147. In December last year, the Irish Congress of Trade Unions co-ordinated a day of action with workers across Ireland stopping work in support of the existing Irish Ferries seafarers. The dispute resulted in the cancellation of Ireland's social partnership negotiations, although regrettably the European shipowners organisation could not bring itself to condemn the actions of Irish Ferries despite concerns being raised in the European Parliament.

In the 21st century the people of Ireland could not comprehend how it was possible for shipowners forcibly to dismiss Irish seafarers and replace them with seafarers from eastern Europe on rates of pay equivalent to half the Irish minimum wage, when at the time the minimum wage was only £5.20 per hour. Unfortunately, in the shipping industry it seems that a different set of rules apply. The Irish Government condemned the actions of Irish Ferries, but stated that the transfer of the flag from Ireland to Cyprus meant that they were powerless to act. The Cyprus flag is one of the countries that have been deemed by the International Transport Workers Federation to be a flag of convenience. Flags of convenience are often utilised by shipping companies as safety and working conditions are not enforced effectively.

In the end, the settlement brokered through the Irish courts resulted in the replacement of significant numbers of Irish seafarers with cheaper labour from Eastern Europe. Thanks to the heroic actions of a group of seafarers the rates of pay were not below the minimum wage but the company has none the less succeeded in lowering standards in the Irish sea sector.
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Standards around the UK coast have declined in the past few years, but there are still shipping companies that employ UK seafarers, both as ratings and officers. For example one of Irish Ferries' principal competitors, the Swedish company Stena Line, operates ferry services around the UK, including in the Irish sea, and employs seafaring officers and crew on UK rates of pay. In addition, UK seafarers are employed by P&O Irish Sea Ferries although the company also employs other nationalities. Norse Irish also employs UK and other foreign national sailors.

Irish Ferries threatened to start a race to the very bottom and its actions endangered the future of British and Irish seafarers in the ferry sector. The ferry sector is now one of the few remaining areas of employment for UK seafaring ratings. During the dispute, the RMT wrote to the Minister responsible for shipping, asking him to convene early discussions with Irish Government counterparts to implement measures to tackle awful practices in the shipping industry.

Acceptable social standards have to be enforced on all ships trading between UK and Irish ports, irrespective of the flag of the vessel. The UK Government have previously gone on record as supporting the EU directive. This directive sought to ensure that the pay and conditions of seafarers on regular passenger and ferry services trading between the UK and other parts of the European Union were in line with seafarers of the member state with the closest connection to the ferry or passenger service. It was not possible to get the support of all member states to pass this legislation, but given the increasing frequency of the displacement of UK and Irish seafarers, similar legislation will undoubtedly be debated again. I hope, therefore, that my hon. Friend the Minister can advise me that the Government still support the principles and measures as outlined in this directive.

We must take action to safeguard the standards of the UK flag and we must also work with other EU member states to ensure that acceptable social standards are enforced on all ships trading around the UK. I hope that the Minister will agree to engage constructively with members of the RMT parliamentary group, so that we can work towards an acceptable solution.

10.30 am

Mr. Alistair Carmichael (Orkney and Shetland) (LD): I add my congratulations to the hon. Member for North Ayrshire and Arran (Ms Clark) on securing the debate, because it is an important subject. I welcome her to the select band of people who take an interest in shipping matters from a constituency point of view. I have taken an interest in them from an early stage of my parliamentary career, and I welcome her to the club.

The hon. Lady presented her arguments in a measured but forceful manner. The only part of her analysis with which I could take issue was her fondness for Caledonian MacBrayne. At some other time and place, we can discuss the impact of Caledonian MacBrayne, and David MacBrayne before it, on the development of highlands and islands communities. I fear that if we were to do so today, Mr. Gale, you would rightly rule us out of order.
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It is tempting to speak of the shipping industry, but in truth there are a number of different industries. One remarkable feature of the shipping industry is its global nature. The simple commercial reality is that if we do not operate a commercial regime that allows or encourages people to flag, operate and trade here, plenty of other countries will. It means that when the Government construct something such as the tonnage tax, which I have supported not uncritically, they must perform a delicate balancing act. I do not think that they have got the balance right, but I recognise the need for it.

It is a different situation from that outlined by the hon. Lady, regarding the operation of section 9 of the   Race Relations Act 1976, and in particular the exemption of inshore waters from the application of the minimum wage. I can see no excuse for that. It is bizarre and perverse that somebody who drives a bus or a train on dry land is treated differently from somebody who works on a ferry or any other inshore shipping vessel. I cannot understand the logic of that.

The hon. Member for Hayes and Harlington (John McDonnell) was right about the distinction between discrimination on the basis of nationality as opposed to ethnicity. That distinction would not be tolerated in any other sphere of industry or commerce, and I do not understand why it is tolerated in shipping. My experience is that many things are tolerated in shipping simply because they do not take place on land. In relation to shipping safety standards and practice, if many ships on the high seas were lorries on the road, traffic commissioners would take them off immediately, and next day the story would be on the front page of every tabloid.

I want to pay tribute to some of the organisations that work in shipping. In particular, the National Union of Marine, Aviation and Shipping Transport Officers and the Chamber of Shipping are very good at keeping Members of Parliament informed, and at providing thorough and frequent briefings. As one would expect, they often approach a subject from different angles, but I find the input from both organisations immensely helpful. I shall raise a few points that they have mentioned in their briefings. The first is on the tonnage tax.

The Chamber of Shipping rightly points out that in just over five years, the commercial shipping fleet that is owned and managed in the UK has more than doubled in carrying capacity. The UK flag fleet has more than quadrupled. The chamber makes the point, which I had not heard, that shipping earns £1.2 million an hour for the UK economy. We must understand that whatever romantic notions there may be, we are dealing with a big business.

The chamber also makes one interesting claim that I shall pursue with it and NUMAST in the fullness of time. Its research carried out jointly with NUMAST shows that the total number of junior officers recruited will increase by 19 per cent. over the next three years and continue to increase over the next decade. I hope that they are right, but I am not sure that even an increase of that sort would meet the targets that have been outlined. Further, nothing is said about the position of ratings.

The two organisations also say something more telling: there has been a 9 per cent. decrease in the number of UK deck and engine officers since 1997, and
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the total number of UK officers is expected to continue to decline in the short term. They say that some of the reasons for that relate to demographics.

What is the appropriate way to administer the tonnage tax? It has been around for several years, and it has proved its worth by bringing shipping under the British flag. However, being under the British flag proves to be of limited value unless it brings with it the application of certain basic standards of labour and safety. The Government must do more. The case has been made, and it is clear that the industry will not apply those standards voluntarily. The Minister must say that the need for a link has been accepted. If he or his Treasury colleagues were prepared to do that, it would move the debate on to the nature of the link, which is where the substantial negotiations remain to take to place.

It is difficult to divorce shipping interests from those of ports. The Government are shortly to commence a consultation on their port strategy. Declaring a constituency interest, I issue to the Government a plea that when they consult they have particular regard to the changing nature of containerised shipping throughout the world. The market model shows that there is an increasing number of big container ships, which to my mind and to the minds of many in the shipping industry means that we are moving towards large container ports—hubs from which smaller ships take the containers on to smaller ports. That is inevitable, and we need at least one such hub in Britain.

I have a constituency interest in that, and so does the hon. Lady, because Hunterston in her constituency has the infrastructure to accommodate such a hub, and it is building up that area of the business. In my case, the natural deep-water port of Scapa Flow is available for development, and there is a great deal of support in Orkney for taking that forward.

Ms Katy Clark : Does the hon. Gentleman agree that there is a strong environmental case for placing ports not only in the south of England, but in other parts of the country? There is a particular need in the north of England and in Scotland for freight not to enter the country through Rotterdam or the south of England, and for it to do so in a way that minimises the road transport of freight.

Mr. Carmichael : The hon. Lady is right. The environmental arguments for putting more freight on to the sea are compelling. With the south of England's substantial amount of freight transport, it is probably the worst place for freight to enter. If UK plc does not get its act together soon, other places will cheerfully take that business, as they have done with other aspects of shipping. I suspect that it will be lost to ports such as Rotterdam, which will mean that the points of entry will be the south coast ports, which will bring no environmental benefit. The opportunities for commercial employment and environmental improvement that would result from placing hubs in constituencies such as mine and the hon. Lady's would be lost.

10.40 am

Mr. Julian Brazier (Canterbury) (Con): I, too, congratulate the hon. Member for North Ayrshire and Arran (Ms Clark) on securing the debate and on a well informed and impassioned speech.
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The red ensign now flies over 3 per cent. of the world's merchant shipping, a far cry from the days when we had 40 per cent. of the ships prowling the globe, and when the merchant navy's sister service, the Royal Navy, could maintain a two-power standard. Nevertheless, the merchant fleet is as important as ever to our economy. It has again overtaken aviation to become our third largest export earner, with a turnover of more than £10 billion. More than 95 per cent. of our trade comes from the sea, 67 million people travelled to and from our shores by boat, and Britain has Europe's largest ports industry and the world's most significant maritime hub, with an annual turnover of £37 billion. We must also remember all the ancillary operations, from insurance to marine law, in which Britain is a world leader.

We have had a well informed debate. My hon. Friend the Member for Fareham (Mr. Hoban) discussed naval shipbuilding. I shall not follow him down that route and go beyond my brief, but, sadly, it appears that many of the problems that existed 20 years ago when I was a management consultant to several shipbuilders continue to exist.

We no longer face a serious military threat of being cut off by sea from major supplies of crude oil and materials, but in times of crisis there is still an important defence need, as my hon. Friend reminded us, to transport troops and arms to war zones. During the Falklands war, dozens of vessels were requisitioned for service in the south Atlantic. Merchant sailors faced death and injury on behalf of their nation and were rightly rewarded for their gallantry. Looking across a range of such issues, we can see why the decline in the merchant navy in the past 30 years is so serious for British trade.

Mr. Carmichael : Did the hon. Gentleman read the article in the NUMAST Telegraph last year or the year before which made the valid point that we would not be able to raise the Falklands taskforce again in an emergency?

Mr. Brazier : The hon. Gentleman anticipates my next point. Today, we would be incapable of fighting an operation such as the Falklands war, at least with the support of British merchant ships. In 1982, 985 ships of more than 500 gross tonnes were owned and registered in the UK. Today, the figure is 260. Worse still, the number of British merchant sailors has fallen by three quarters over that period.

The two Gulf wars have shown that, in such situations, the Government can hire merchant ships from other shipping registers and foreign owners. However, while we might be able to afford to hire ships, the availability of trained and loyal sailors might prove more difficult. Admiral Sir Nicholas Hunt stated at an all-party House of Commons Defence Committee sitting:

As the Defence Committee said many years ago, there are some things that money cannot buy, and that is certainly true in the case of pride, bravery and courage.

I have some sympathy with the points made by the hon. Member for Hayes and Harlington (John McDonnell) about seafarers, specifically in UK
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territorial waters. As it is a complicated matter and one on which my party is conducting a large policy process, I cannot give an Opposition view on it, apart from saying that I heard his points and have some sympathy with them.

I salute the Government's efforts, through the introduction of the tonnage tax, to rebuild our merchant marine sector after many generations of decline, and their efforts to ensure a stable and competitive environment for the industry. The hon. Member for North Ayrshire and Arran referred several times to "Charting a New Course". Some, but not all, of its recommendations have been adopted, and it would be interesting to hear from the Minister what the timetable is for delivery on the remaining recommendations.

UK-owned has shipping increased its tonnage by 137 per cent. since 2000, and the tonnage of the fleet flying the red ensign has increased by 325 per cent. during the same period. There are nearly 600 new officer cadets each year, one third more than before the tonnage tax was introduced. I am indebted to the General Council of British Shipping and NUMAST for that briefing. However, while that improvement is welcome, it does not go nearly far enough. Even with the increase in cadets being trained, and even with 90 per cent. of those cadets finding jobs in the UK fleet, as the joint study by the Chamber of Shipping and NUMAST showed, the sad fact is that the number of new officers each year is barely half the number needed merely to stand still, largely because the age profile of existing officers is so far to the right. At current trends, the number of UK officers will fall by almost half in the next 15 years.

As the hon. Lady said, the position with ratings is much worse. Unless the trend is reversed speedily, there is a severe danger of the sector going back into decline. International Financial Services, London has warned that the vast contributions made by British shipping and associated maritime services to the Exchequer could be in jeopardy.

I paid tribute to the Government's efforts on the tonnage tax, but their record on the ports sector has been most disappointing. Severe delays in decisions about port development are a threat not just to the shipping industry but, arguably, to the wider economy. The Dibden bay farrago—seven years of arguing, £45 million into the pockets of lawyers, and at the end of it only a firm "No"—seriously undermined confidence in the whole system. That confidence can be restored only by Government action to ensure that timely decisions are made about the development of ports, which brings me to an obvious question: when will the strategy that we have heard so much about be published? We need to take a wider look at how the transport strategy—road, rail and so on—will serve the infrastructure of existing and planned port developments. To take one example at random, Crossrail, which is going through the House with the support of all parties, and rightly so, as currently planned would mess up the freight links to Felixstowe.

On a more detailed point, may I tease the Minister once again about the Harbours Bill? The industry and my party want that small and sensible measure, and the Government have said that they want it. Will he have a word with his right hon. Friend the Leader of the House
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and get us a Second Reading debate of an hour or two, which is a reasonable requirement for any Bill? There have been plenty of slots when it could have been fitted in.

The maritime sector in this country has been unwell for decades and is in a fragile state. There is a modest recovery at present, but we must be careful not to make the industry reconsider its position in this country. The Chamber of Shipping stated:

We must consider either a clearer employment link to the tonnage tax, or other employment-related measures. The unions and the Transport Committee have called for the former, and the General Council of British Shipping has some ideas on the latter. As so much of our maritime future lies in being able to resuscitate the skills sector of the industry, it is important that we consider every possibility and take whatever decision needs to be taken soon.

In summary, I hope that the Minister will give the    timetable for delivery of the remaining recommendations in "Charting a New Course". I hope that we will hear something about publication of the shipping taskforce's report, to which the hon. Lady referred, on possible links between employment and the tonnage tax, and I should like to know when the ports policy will be published. Finally, can we have a commitment on that small measure that has been around for a long time, the Harbours Bill?

I am pleased to have had an opportunity to speak in the debate on this great industry.

10.49 am

The Minister of State, Department for Transport (Dr. Stephen Ladyman) : I, too, congratulate my hon. Friend the Member for North Ayrshire and Arran (Ms Clark) on securing this debate and on joining the small, select band of MPs who take maritime issues seriously. I wish that that band was much larger, and that we had these debates more often. Since I have been in my post, I can recollect offhand only one occasion on which I was asked a question on maritime matters at first order questions. That really is not good enough; the House should take more interest in such an important industry.

Several hon. Members have described the importance of the industry, which has earnings of more than £10 billion a year, and export earnings of £7 billion a year. As the hon. Member for Canterbury (Mr. Brazier) said, it has overtaken aviation to become the third largest export earner for our country's economy. It is a very important industry, and it has strategic importance, too: 95 per cent. of goods that come into and out of the country are still carried by sea. It is a vital industry. Nor is it restricted to the sea; the industry extends into land—into the financial and insurance sectors, and into the ports. Ports can be a tool for regeneration for our communities and are themselves a key part of the economy.

A small part of the east Kent mafia is here today. Its members include the hon. Member for Canterbury and I, as well as you, Mr. Gale. We know that the biggest employer in Kent is not Pfizer, the pharmaceutical
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company, as everybody usually says, but the port of Dover, if one takes on board both direct and indirect employment. In addition, there are ports at Sheppey; there are the Medway ports; and there are smaller ports at Ramsgate, Broadstairs, and Margate, which is in your constituency, Mr. Gale. There is also the leisure boating industry and the under-12m fishing fleet around Kent. In fact, in counties such as Kent, maritime issues are the most important part of the economy. Essentially, the questions that my hon. Friend the Member for North Ayrshire and Arran put to me were how we maintain that, and build on it to encourage further employment.

My hon. Friend has painted a slightly pessimistic picture of employment in the industry. It is not as I would like it to be, and there are not enough UK seafarers working yet, but the situation is improving. There were 896 UK officers employed on tonnage tax boats when the tonnage tax started in 2000–01, and there are now 2,888. The number of ratings has increased from 449 to 1,460. One could argue that that is because far more boats have come under the tonnage tax over that period. However, although between 1997 and 2001 the number of UK active seafarers fell from 30,000 to 25,000, that fall has been reversed; by 2004 there were 29,000 UK active seafarers, and 26,500 of those are at sea, so the situation is not quite as bleak as my hon. Friend describes it.

As was put fairly by the hon. Member for Orkney and Shetland (Mr. Carmichael), the dilemma that I face is that of striking a balance. My hon. Friend the Member for Halifax (Mrs. Riordan) described what is, in a sense, an Irish problem. She talked about the situation as regards Irish Ferries and about what happened when Irish Ferries flagged out. Under those circumstances, a new crew could be brought on board who would work for much less than Irish citizens would. The National Union of Rail, Maritime and Transport Workers wrote to me, asking me to intervene, and the Irish Shipping Minister had many conversations with me during that crisis; he was a frequent telephone caller to my office, asking for advice and support. That crisis highlighted what happens when regulations that shipowners do not like are put in place. Shipping is an international business and, at the stroke of a pen, people can move their ships under another flag and take on a new set of lesser restrictions, so there is a balancing act to perform.

I have heard and understand the arguments advanced by the National Union of Rail, Maritime and Transport Officers and the National Union of Marine, Aviation and Shipping Transport Officers. We have not yet made our decisions on the output of the shipping taskforce; those announcements will have to wait until after purdah, but it will not be long before we announce what we will go for. I ask colleagues on both sides of the Chamber for a little sympathy for the fact that I have a narrow line to walk between wanting to do something that will stimulate employment and bring UK seafarers on to boats, and wanting to bring ships under the red ensign. Let us not forget that people do not have to be under the red ensign to benefit from tonnage tax; likewise, people under the red ensign do not have to be within the tonnage tax regime. I want ships to be under the red ensign, and I want UK seafarers on them. I have to try to find a way to maximise that potential, but
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without driving shipowners to take their ships away from the red ensign and the tonnage tax, and to put them instead under other flags, and flags of convenience.

I remind the House that there are many flags of convenience, and that there are also numerous variants on the tonnage tax now. We may have invented it, but other countries came along afterwards and thought, "That was a jolly good wheeze that the Brits came up with; we'll do the same thing." Shipowners have choices, and we have to find a way of navigating through those choices.

At the end of the day, one thing that will help us to bring UK seafarers back to the sea is the training regime that we offer. That point was made by my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy). Our seafarers will never be as cheap as other countries' seafarers, so they have to be better—better trained, better qualified, and providing better value for money. We have to find a way of doing that. Could the training regime that we put in place and the money that we provide for training be tools that we use to encourage shipowners to stay under the red ensign, to stay with tonnage tax, and to use UK seafarers, to offset any extra costs of employing UK seafarers that they might incur? Hon. Members will have to wait until our announcements to find out, but that certainly is one thing that we will have to consider.

My hon. Friend the Member for Hayes and Harlington (John McDonnell), who made a powerful case about the Race Relations Act 1976, will also have to wait. I do not recollect making a commitment to sort the matter out by the end of 2005; I made a commitment to him to bring the Act within EU law.

John McDonnell : The commitment was about the implementation of the EU directive within that time.

Dr. Ladyman : I remain committed to bringing the 1976 Act within EU law; it is the date by which my hon. Friend thinks that I promised to do it that I am slightly in doubt about. That is an issue that we need to continue to work on.

I shall deal with one or two other points raised. We cannot start the ports policy review until the last of the outstanding planning decisions that we have a mind to approve—that on London Gateway—is taken. That is because until we know whether we are granting that planning permission or not, we do not know what our existing port capacity is. How can we come up with a strategy for the country unless we know what our existing port capacity is, and is projected to be? Also, legal constraints would come into play if we started the ports policy review while there was a high-profile, outstanding planning issue to be decided. I hope that that matter will be dealt with very shortly; then we can move on and start the ports policy review, which, as the hon. Member for Orkney and Shetland said, is vital, and which it is important that we get on with. Unfortunately, the Scottish Parliament has made a universal declaration of independence on the ports policy review and will conduct its own parallel review of its ports strategy, so to what extent the strategy for England and Wales—

Mr. Roger Gale (in the Chair): Order. We now move to the next debate.
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