Twentieth Report Contents

Instruments drawn to the special attention of the House

Merchant Shipping (Prevention of Pollution from Noxious Liquid Substances in Bulk) Regulations 2018 (SI 2018/68)

Date laid: 15 February 2018

Parliamentary procedure: negative

Merchant Shipping (International Load Line Convention) (Amendment) Regulations 2018 (SI 2018/155)

Date laid: 15 February 2018

Parliamentary procedure: negative

Summary: These two instruments implement part of a backlog of 40 items of international maritime legislation and enable the use of an ambulatory reference mechanism to implement future legislation in their reflective subject areas. While accepting that commercial incentive is a strong motivation for ship operators to comply with the law, the House may wish to ask the Minister about the Department for Transport’s (DfT) failure, for more than ten years, to ensure that the UK authorities have up-to-date powers to prosecute when a breach of safety law is identified.

Material from the DfT, set out in this Report, indicates that the gaps in relation to those instruments are comparatively minor. However, the DfT’s own Impact Assessment points out that, as a signatory to international maritime conventions, if the UK is found to have failed to comply with its obligations it might lose its “low risk status”, which would increase the frequency of inspections for UK flagged vessels in foreign ports and hence increase costs to UK industry. While these Regulations are the start of the DfT’s attempt to prevent that outcome by reducing the backlog, we are concerned that deficiencies recognised in time to insert provision for an ambulatory referencing mechanism in the Deregulation Act 2015 are only now starting to be addressed, almost three years after that Act was passed. We intend to write to the Minister to enquire how significant the overall backlog of maritime legislation is, and how long DfT expects to take to put its legislation in order.

These Regulations are drawn to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.

1.These Regulations have been laid by the Department for Transport (DfT) under the Merchant Shipping Act 1995, and each is accompanied by a Explanatory Memorandum (EM) and an Impact Assessment (IA). In each case, the legislation seeks to implement a backlog of international maritime law and to ensure that future legislative amendments made by the International Maritime Organisation (IMO) will operate directly in UK law by use of an “ambulatory reference” (see paragraphs 14 and 15 below).

2.A submission has been received from a member of the public, Mr Richard Greenhill, expressing concerns about the long delays in implementing this legislation. It is published in full on our website alongside DfT’s responses to various questions posed (“the supplementary material”).1

Policy content

3.SI 2018/68 (“the NLS Regulations”) update Annex II of “MARPOL”, the main international convention for the prevention of pollution of the marine environment by ships from operational or accidental causes. Annex II of MARPOL entered into force on 6 April 1987 and lays down specific requirements for the construction and operation of ships carrying Noxious Liquid Substances (“NLS”) in bulk. These Regulations consolidate previous amendments and, among other things, introduce a new pollution categorisation system with criteria for assigning products to it. They also revise rules around the cleaning of tanks and discharge of NLS into the sea. DfT state that UK shipping already operates to these standards and the change will have little or no commercial impact on them.

4.SI 2018/155 (“the Load Line Regulations”) implement the International Convention on Load Lines (“ICLL”) 1966, as modified by the Protocol of 1988 relating to the Convention (“IPLL”) and all subsequent amendments, into domestic law. Load lines are based on the historic “Plimsoll Line”, and indicate the maximum safe loading of a ship in specific conditions. The Regulations aim to reduce the risk of sinking due to overloading, instability and breach of watertight integrity, and include provision for the survey, certification and inspection of ships for the purpose of ascertaining compliance with the Regulations. With certain limited exceptions, for example warships, the Regulations apply to all UK ships of 24 metres or more and to all foreign ships of 24 metres or more while in UK waters.

A major backlog

5.These instruments implement elements of a large backlog of international maritime legislation. The NLS Regulations implement changes that came into effect on 1 January 2007. The Load Line Regulations make all necessary changes since 1998. In the supplementary material DfT acknowledges the backlog but states that:

“[DfT] can give assurance that it does not allow this to make a material difference to UK ship standards, which are among the highest in the world. ...The maritime sector is highly regulated and over the last 20 years the Secretary of State for Transport has made 250 pieces of UK maritime secondary legislation. This number comprises the implementation of international obligations and EU legislation as well as the development of domestic legislation. The legislative programme has been prioritised according to safety, commercial and legislative need.”

Deficiencies in the NLS regime

6.Gaps have been left by this selective approach, although, according to DfT’s supplementary material, they have not made a difference in the number of prosecutions. However, shipowners’ compliance appears to have been based on commercial interest so that their ships can sail freely between ports, rather than free enforcement.

7.DfT states that:

“when comparing MARPOL Annex II, pre-2007 with the amendments post 2007, the key change has been to the re-categorisation and classification of chemicals carried by chemical ships internationally. The only other change has been to the tightening of the quantity of noxious liquid substances remaining in the tank after discharge, from 100 litres to 75 litres. All other requirements from the previous MARPOL Annex II remain in place, with some updating...the Department has not identified any cases where there was no prosecution because the 1996 Regulations were not up to date. ... The Department has identified that out of date references in the [current] 1996 Regulations could pose a risk to a successful prosecution in a narrow range of cases where the terminology for product categorisation or classification has changed internationally. In practice this issue has not arisen and the matter has not therefore been tested in law. The 2018 Regulations will close this potential gap.”

Deficiencies in the Load Line regime

8.The position in relation to the Load Line Regulations is more concerning. Paragraph 2.5 of the IA to the Load Line Regulations states: “While the ILLC/ILLP is not transposed into UK law the UK does not have the legal authority to certify its own ships to the relevant standards. Failure to do so makes it much more likely that a UK ship will be detained in a non-UK port for non-compliance, leading to expensive delays and inconvenience for UK flagged ships trading internationally.”

9.Paragraph 2.6 of that IA says: “While the ILLC/ILLP is not transposed into UK law the UK is unable to take enforcement action against non-compliant ships because it does not have legal authority to require compliance. As most UK owners and operators comply as a matter of course with ILLC/ILLP requirement in order to continue their global operations, the UK must be able to enforce the same standards against non-UK ships in UK ports, to ensure that compliant UK ships are not disadvantaged.”

10.DfT’s initial response to a question about this was:

“The UK’s power to certificate its ships to international convention standards is based on UK domestic law (ie which reflects the conventions as last transposed). For load lines, the Secretary of State has approved Assigning Authorities to assign the load lines and issue certification. The Assigning Authorities are commercial Classification Societies, and in practice they apply the latest international standards. Shipowners are keen to comply with the latest standards, as failure to do so will result in non-compliance in port State Control inspections when they visit foreign ports.”

11.When pressed on whether the UK authorities could or could not certify and enforce the load line for ships, DfT responded:

“The legal basis for the certification of UK ships is contained in the Merchant Shipping (Load Line) Regulations 1998 which implement the comprehensive survey and certification regime provided for by the Load Line Convention... Certification can currently only be carried out under the 1998 Regulations to the standards implemented by those Regulations. The same certification regime is contained in the 2018 Regulations and will be used to certify ships to the amended international standards when the Regulations come into force but until the Regulations come into force the UK does not have legal authority to certify ships to the amended international standards.” [emphasis added]

12.This statement is not as bad as it looks because, as the supplementary material made clear, this inability to enforce is limited to certain higher standard elements on newer ships:

“The UK currently has powers under the Merchant Shipping (Load Line) Regulations 1998 to prosecute UK ships wherever they are and non-UK ships in UK territorial waters for breaches of the standards ... as last transposed into UK law. Therefore, if the load line is submerged, demonstrating a ship is overloaded, UK authorities can bring a prosecution. The 2018 Regulations contain the same powers to bring prosecutions for breaches of the Regulations. The reference in the Load Line Impact Assessment to enforcement action should be understood in the context of bringing prosecutions under a new set of Regulations which contain marginally higher standards for newer ships.

These incremental improvements to safety are made on a continuous basis, and generally apply to ships built after a certain date. This does not mean the older ships are unsafe - it just means that improvements are reflected in new vessels. For instance, the most significant amendments to the Load Line Convention require that newer ships are built with additional strengthening to hatch covers and portable beams compared with older ships.”

13.The House may wish to consider whether the DfT’s selective approach to implementing international legislation “prioritised according to safety, commercial and legislative need” is acceptable, if the implication is that certain international obligations are not transposed within a reasonable time.

Ambulatory References

14.We acknowledge that DfT have been aware of their own deficiencies for some time and have sought a mechanism to prevent future difficulties by using an “ambulatory reference”. This mechanism enables any amendment to the specified law or convention to come automatically into force in UK law at the same time as it takes effect internationally. Once agreed no further regulations on these matters will be laid before the UK Parliament for discussion and approval. In the EM however the DfT undertakes to publicise any such changes in advance of their coming into force date by means of a Parliamentary Statement to both Houses of Parliament and a Merchant Shipping Notice.

15.This mechanism was enabled specifically for international instruments in the maritime sector by section 106 of the Deregulation Act 2015 and came into effect on 26 May 2015. These two sets of Regulations are the first to use the capability, but have not been made until almost three years after it was acquired. We note that paragraph 2.7 of the IA to the Load Line Regulations mentions a backlog of over 40 items of international maritime legislation that have not been transposed. The House mays wish to press the Minister on why addressing the backlog has taken so long.

Who makes the decisions?

16.Mr Greenhill suggests that the use of this ambulatory reference mechanism will in effect delegate the UK’s law-making powers to a supranational body (namely a two-thirds majority of the Maritime Safety Committee of the IMO which is empowered to amend maritime conventions).

17.In its supplementary material DfT responded:

“UK law-making powers on maritime safety have not been delegated to the IMO or any other international body, but are fully retained in Westminster, where they reside as a reserved matter. Any convention amendment proposed in the IMO is the subject of considerable debate and close scrutiny. The UK also has strong influence in the IMO. The UK position is always determined in consultation with industry and union representatives.

Further, for amendments which have been adopted by the IMO, the amendment procedure in a convention will allow for objections and that is the case even with the tacit acceptance procedure (which generally requires two-thirds of members not to object in order for an amendment to come into force).

The UK may also make a declaration that it does not accept a proposed amendment or lodge a reservation at the IMO in respect of the amendment to ensure that the amendment does not come into force in relation to the UK (pre-EU exit, this continues to be subject to EU-alignment in matters of EU competence). This also means that an amendment cannot come into force in the UK by way of an ambulatory reference provision. However, in practice, this is expected to happen rarely, if ever, because the UK is generally supportive of safety enhancements.”

18.Although DfT states that the UK position is always determined in consultation with industry and union representatives, we note this does not necessarily mean with their agreement. The consultation process described in paragraph 8.3 of EM on the Load Line Regulations says:

“two of the three responses, including the UK Chamber of Shipping, the main representative body for shipowners in the United Kingdom, were supportive of the use of ambulatory referencing and welcomed the reduction in bureaucracy and increased speed of implementation. The National Union of Rail, Maritime and Transport Workers (RMT) was not supportive due to concerns about the uncertainty about what future amendments would be agreed.”

Conclusion

19.Although DfT states that UK-flagged ships are operating to the enhanced standards, their compliance appears to be because those ships would not otherwise be accepted at foreign ports which do fully enforce IMO legislation. The reciprocal position for enforcement for foreign ships in UK waters appears to be adequate but not complete.

20.While accepting that commercial incentive is a strong motivation for ship operators to comply with the law, the House may wish to ask the Minister about DfT’s failure, for more than ten years, to ensure that the UK authorities have up-to-date powers to prosecute when a breach of safety law is identified.

21.The DfT’s Impact Assessment on the Load Line Regulations (paragraph 2.7) points out the potential wider consequences of this failure:

“The UK, as a signatory to the IILC/IILP, has an obligation to implement any changes. Given the backlog of over 40 items of international maritime legislation that have not yet been transposed there is a danger that the UK’s failure to comply with its obligations will be identified through the mandatory IMO Member Statue Audit Scheme which entered into force at the start of 2016. A poor audit performance increases the possibility of the UK losing its “low risk status”, this would increase the frequency of inspections for UK flagged vessels in foreign ports and hence increase the cost to UK industry.”

22.Paragraph 2.8 of that IA goes on to state “overall there is a pressing need for Government intervention to provide for an alternative, simplified approach to help speed up implementation and/or reduce the resources required”. That mechanism was given to the DfT under the Deregulation Act 2015 and yet these Regulations, the first proposing to use an ambulatory reference, come almost three years after that Act was passed. We intend to write to the Minister to enquire how significant the overall backlog of maritime legislation is, and how long DfT expect to take to put their legislation in order.

Free School Lunches and Milk, and School and Early Years Finance (Amendments Relating to Universal Credit) (England) Regulations 2018 (SI 2018/148)

Date laid: 7 February 2018

Parliamentary procedure: negative

Summary: These Regulations amend the eligibility criteria for free school lunches and milk and the early years pupil premium (“FSM” and “EYPP”). Hitherto, during the rollout of Universal Credit, the list of entitling benefits for FSM and EYPP included Universal Credit, in order to ensure that children of families moving on to Universal Credit in the early pilot areas would continue to be entitled to FSM and EYPP. The Department for Education is now introducing a net earned income threshold of £7,400 per annum under Universal Credit: to be eligible for FSM and EYPP, a household must have an annual net earned income equivalent to £7,400 at the point of claim.

The Department has said that the new criteria are intended to ensure that free school lunches and milk and the early years pupil premium continue to be targeted at the families that need them most. It has confirmed that it intends to continue publication of its annual analysis of “Schools, pupils and their characteristics”. We look to the Department to make best use of this analysis, in order to monitor the impact of the changes and to demonstrate that its targeting does not miss children who would otherwise face avoidable disadvantage.

We draw these Regulations to the special attention of the House on the ground that they give rise to issues of public policy likely to be of interest to the House.

23.The Department for Education (DfE) has laid these Regulations with an Explanatory Memorandum (EM). In the EM, DfE says that the Regulations amend the eligibility criteria for free school lunches and milk (FSM) and the early years pupil premium (EYPP).2 3

24.During the early stages of the rollout of Universal Credit (UC), UC was added to the list of entitling benefits for FSM and the EYPP, in order to ensure that children of families moving on to UC in the early pilot areas would continue to be entitled to FSM and the EYPP. DfE is now introducing a net earned income threshold of £7,400 per annum under UC: to be eligible for FSM and EYPP, a household must have an annual net earned income equivalent to £7,400 at the point of claim. The Department says that a typical family earning around this threshold, depending on their exact circumstances, would have a total annual household income of between £18,000 and £24,000 once benefits were taken into account.

25.DfE states that the new eligibility criteria are intended to ensure that FSM and the EYPP continue to be targeted at the families that need them most, and that they are consistent with the way in which the Department for Work and Pensions (DWP) and other Government Departments have established new criteria for other “passported” benefits.

Consultation

26.DfE consulted on changing the entitling criteria for FSM and the EYPP over eight weeks to 11 January 2018. In the EM, the Department says that 576 responses were received “alongside 8,421 emails in response to a campaign run by the Children’s Society primarily asking the Government to extend eligibility for FSM to all children in families on UC”. DfE comments that this was “a different proposition to that which was consulted on”. 56% of the 560 respondents to the specific question agreed with the proposed net earnings threshold of £7,400 per annum. DfE adds that “of those who disagreed, a significant proportion cited the Children’s Society’s ambition to extend entitlement to FSM to all children in households on UC”. DfE has published a summary of consultation responses.4

Impact of changes

27.We put a number of questions to DfE about the Regulations. We asked how many children benefited from FSM under the previous benefits system; whether DfE still estimated that by 2022 around 50,000 more children would benefit from FSM; and, in each year to 2022, whether more children would benefit from FSM than under the previous benefits system.

28.DfE has told us that, last year, around 1.1 million of the most disadvantaged children were eligible for and claimed a free meal. The Department still estimates that by 2022 around 50,000 more children will benefit from a free school meal compared to the previous benefits system, and has provided a note to explain the methodology used in its analysis (which we are publishing as Appendix 1). That note refers to DfE’s annual publication “Schools, pupils and their characteristics”, which includes statistics on free school meals. DfE estimates that, in each year to 2022, more children will benefit from free school meals compared to the previous benefits system. As the explanation of DfE’s methodology shows, the Department does not predict actual pupil population numbers, but estimates the change in the eligible cohort numbers between the previous benefits system and the proposed system.

29.We noted that the February 2018 summary of consultation responses contained a section on the impact of the new income threshold on work incentives, which acknowledged that “some respondents believed that our threshold might discourage some households from increasing their income through work”. The Department’s response stated that “in the longer term, introducing a threshold remains the most practical approach. We must have a clear system that is realistic for school and local authorities to deliver.” We asked DfE whether it accepted that there was a risk that the threshold would be a disincentive to increasing income from work, but considered that this risk was outweighed by practical considerations.

30.DfE has told us that it would not accept this, and that the Social Security Advisory Committee (SSAC) has found that there is no rigorous research evidence to show that the provision of passported benefits acts as a work disincentive.5 The SSAC also found that a substantial proportion of people do not make decisions about whether to take work or remain on benefits on purely economic grounds; other social and attitudinal factors are important. DfE told us that these factors, combined with the well-established links between employment and improved health and wellbeing, meant that there would still be considerable incentives for households to increase their working hours.

31.DfE has also said that its new criteria are consistent with the approach that other Government Departments have applied to determining eligibility for other passported benefits that flow from Universal Credit eligibility. DfE’s net earnings threshold is comparable to the approach taken for free school meals in Scotland, where a net earnings threshold of £610 per month (equating to £7,320 per annum) was introduced in August 2017.6

Conclusion

32.In introducing these Regulations to amend the eligibility criteria for free school lunches and milk and the early years pupil premium, the Department for Education has said that the changes are consistent with new criteria for other “passported” benefits that have been set by other Government Departments as Universal Credit has been rolled out. DfE’s consultation on changing the eligibility criteria showed that 56% of the 560 respondents to the specific question agreed with the proposed net earnings threshold of £7,400 per annum, although the Department acknowledges that it also received 8,421 emails, which it ascribes to a campaign run by the Children’s Society, calling for the extension of eligibility for free school lunches and milk to all children in families on Universal Credit. The support given to the Children’s Society campaign shows the strength of feeling on this issue.

33.The Department has said that the new criteria are intended to ensure that free school lunches and milk and the early years pupil premium continue to be targeted at the families that need them most. It has confirmed that it intends to continue publication of its annual analysis of “Schools, pupils and their characteristics”. We look to the Department to make best use of this analysis, in order to monitor the impact of the changes and to demonstrate that its targeting does not miss children who would otherwise face avoidable disadvantage.


2 EYPP funding is allocated to local authorities which are required to distribute the funding to early years providers (such as school or day nurseries or childminders) in respect of eligible children.

3 A Written Statement announcing these changes was made on 7 February 2018 (HCWS459).

4 See Department for Education, Eligibility for free school meals, the early years pupil premium and the free early education entitlement for two-year-olds under Universal Credit: Government consultation response, February 2018: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/681210/Government_response_FSM_and_EY_entitlements_under_Universal_Credit.pdf [accessed 27 February 2018]

5 Universal Credit: the impact on passported benefits: SSAC report (2012). See: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/214611/ssac-rev-of-pass-bens.pdf [accessed 27 February 2018]

6 Welfare Reform (Consequential Amendments) (Scotland) Regulations 2017 (SI 2017/182)




© Parliamentary copyright 2018