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P&O Ferries

Volume 820: debated on Tuesday 22 March 2022


The following Statement was made in the House of Commons on Thursday 17 March.

“Earlier today, P&O announced its decision to make around 800 seafarers redundant on several routes across the UK. Let me say right off the bat: the way that these workers were informed was completely unacceptable. I will say more on that in a moment or two. While this is fundamentally a commercial decision for the company, I wanted to come to the House today to inform Members about our latest understanding of the situation and what is now being done.

In taking this decision to make seafarers redundant, P&O has also today informed us that it will be suspending services, for approximately a week to 10 days, while it locates new crew. The affected routes are Dover to Calais, Larne to Cairnryan, Dublin to Liverpool and Hull to Rotterdam. I know right across the House will share my concern over the loss of these routes, but I should stress that P&O says they are only temporary and that alternative provision will be provided by other operators, to whom I am extremely grateful.

Passengers will still be able to travel to and from the UK, including across the channel, with freight coming in and out of the country. I understand that DFDS is stepping in to provide alternative services for passengers with valid tickets, and I would like to thank DFDS for its swift action.

However, I must warn travellers that they should expect some disruption over the coming days. I have asked my officials to liaise with the Kent Resilience Forum and the Cabinet Office to closely manage traffic in Kent over the coming days while P&O works to restore services. Today, the Dover TAP—the Dover traffic assessment project—has been activated, although as Members will know that is not all that uncommon, and there is some queuing on Jubilee Way, although the Port of Dover expects this to reduce over the afternoon. I have also asked officials to remain in close contact with other resilience forums around the country, as well as the devolved Administrations, in managing this issue.

We of course have long planned contingencies for such situations and disruption, particularly around the channel, and I do not expect the supply of critical goods and services to be impacted as a result of this decision by P&O, although queues on the way to Dover are more likely to occur at times. Modelling suggests we have sufficient capacity to handle the temporary loss of these P&O ferries.

Let me turn now to the issue of the seafarers. These are hard-working, dedicated staff who have given years in service to P&O. The way they have been treated today is wholly unacceptable and my thoughts are first and foremost with them. Reports of workers being given zero notice and escorted off their ships with immediate effect, while being told cheaper alternatives would take up their roles, shows the insensitive way in which P&O has approached this issue—a point I made crystal clear to P&O’s management when I spoke to them earlier this afternoon.

As I told Peter Hebblethwaite, I am extremely concerned, and frankly angry, at the way workers have been treated today by P&O. As a matter of urgency I have asked my department to liaise closely with counterparts in the Department for Work and Pensions to ensure that workers are being signposted to the most relevant support, and I am intending to call the trade unions immediately after this Statement to discuss the situation with them.

There can be no doubt that the pandemic has had a devasting impact on the finances of many travel companies, including P&O. But while their finances are matters for them, and them alone, I would have expected far better for the workers involved. We will continue to engage closely over the coming days, and I commend this Statement to the House.”

The Statement is remarkably laid back. The decision

“is fundamentally a commercial decision for the company”.

So that is all right, then.

“I have asked my Department to liaise closely with counterparts in the Department for Work and Pensions to ensure that workers are being signposted to the most relevant support”.

The Government have accepted that 800 people have abruptly and probably unlawfully lost their jobs—and everything is hunky dory.

“I am intending to call the trade unions immediately after this statement to discuss the situation with them”.

Perhaps we could now be told what the outcome of that discussion was, how long it lasted, which trade unions were involved and how many subsequent discussions there have been between Government Ministers and the trade unions?

Finally, on P&O, the Statement meekly says:

“Their finances are matters for them, and them alone”.

Forget the furlough money it claimed from taxpayers; forget the wealth of its owners, DP World; and forget the approximately £140 million it splashed on sports sponsorship, despite the pension fund being saddled with a deficit of a similar amount.

In a nutshell, the Government’s Statement says that this a commercial decision by the company, its finances are nobody else’s business, and they will tell the 800 sacked seafarers which website or body to go to in order to inquire about job prospects. But yes, the Commons Minister also said:

“I would have expected far better for the workers involved”.—[Official Report, Commons, 17/3/22; cols. 1140-41.]

That Statement really will have shaken the company to the core, as will the demand from the Secretary of State that P&O rename its vessels to remove any suggestion of a link with Britain.

Beyond the ritual wringing of hands there is a deafening silence from the Government about what they intend to do now—yes, now—to pull this company up short, get this instant sacking decision reversed and send a loud and clear message to other companies to not even think of going down a similar road themselves. Doing that, though, is just not what this Government do when faced with a company treating its employees almost like criminals. A certain amount of wringing of hands, yes, but action, no.

Let us look what the Government’s priorities have been recently on industrial relations. The other week they forced through secondary legislation on compelling trade unions to fork out for the cost of certification officers, who have precious few complaints to deal with. Before that they had been opposing a Private Member’s Bill from a Labour MP to bring an end of the insidious practice of fire and rehire on inferior terms. There was no priority, one notes, for levelling up the playing field between employer and employee, as exposed by this episode, where in most situations the need of the employee for a job is greater than the need of the employer to employ that employee.

What the Statement reveals is the lack of any meaningful legal redress for the sacked 800. If there was clear and effective legal protection against the kind of action we have just seen, it would have been taken. But there is not, and the company knows that, which is why it carefully planned this far from spontaneous action over a period of time in the secure knowledge that what it was doing—even if in breach of the law—would be far more financially advantageous than abiding by recognised and established procedures.

A decisive majority of employers behave decently towards their employees, but there are still too many who do not, and one of those is clearly P&O Ferries and its owners DP World. The company refers to its losses as being unsustainable, but presumably this situation will now improve as the adverse impact of Covid on business and travel diminishes—or was the House of Commons Public Accounts Committee spot on in its recent report showing how our trade with the EU has declined following Brexit? Does P&O Ferries know that its traffic lost by Brexit will not return, with this abrupt mass sacking and employment of cheaper labour being an early example of the Brexit “dividend” we have heard so much about from the Prime Minister?

The abruptly sacked employees appear to have been offered an enhanced redundancy payment with a deadline of 31 March to accept, otherwise it will be withdrawn. It would appear that P&O is hoping that it will be difficult to advise the sacked employees that they have reasonable prospects of recovering more in an employment tribunal from an unfair dismissal claim.

The Government have been aware of this issue of sacking and then employing cheaper labour for some time. In a debate in this House on the National Minimum Wage (Offshore Employment) (Amendment) Order 2020 on 25 June 2020, the Minister responding said:

“We are aware that … ferry routes are largely not covered by the amendments and that some ferry services may be using low-cost employment models … We are committed to improving standards here and will consider other options in regard to these operations … The noble Baroness moved on to discussing differential pay. Maritime is the only sector in the UK that continues to permit this … The industry will still state that differential pay is the necessary requirement and that seafarers are paid a competitive rate when considered against the average salaries they could receive in their own countries. I acknowledge that this remains a difficult argument to accept when it would not be accepted in any other sector. The Government will consider whether further changes are required when the Equality Act regulations are reviewed towards the end of this year.”—[Official Report, 25/6/20; cols. 430-31.]

So, two commitments were made in June 2020: first, to

“consider other options in regard to these operations”—

that is, low-cost employment models—and, secondly, to

“consider whether further changes are required when the Equality Act regulations are reviewed towards the end of this year”.

Can the Government now say what the outcome was of those two commitments? Can they also say whether P&O Ferries had ever told them prior to last week that moving to what is euphemistically called a low-cost employment model was an option it was considering?

We now know that the Government were told by P&O Ferries and DP World of their actual intention the day before the 800 staff were abruptly told they were no longer required and that the Government took no action to try to stop it happening. What we want to hear tonight from the Government is what action they will take, first, to see that the 800 staff abruptly sacked are reinstated and, secondly, to ensure that a similar episode of abrupt mass sacking cannot happen again because the law will be tightened up as a matter of urgency and penalties for breaching it reviewed so that, financially, it would be a non-starter for any company to behave in the way that P&O Ferries and DP World have behaved towards their employees. The Secretary of State’s apparent priority of renaming ships as a remedy just will not suffice.

My Lords, I want to talk about business culture, the culture of an organisation that takes action like this, the culture that led the management of P&O to turn these people out of their jobs with no notice because they could, or thought they could—Zoomed out of work after years, decades, of service to that company. There was no empathy or self-awareness in this action, and there was no understanding that it was wrong. The fact that the management was unwilling or unable to see this speaks volumes about the culture of P&O and that of its owner, DP World.

But how about closer to home? It is clear that government officials were warned about this act of corporate brutality, so can the Minister confirm to your Lordships’ House who knew in advance? Can she tell your Lordships why this knowledge rang no alarm bells? That it was apparently waved through also reveals the culture of this Government: they had time. If the Government allow this sort of behaviour to go unchecked, what sort of precedent does it set or reinforce? Will others, yet more in the shipping industry, argue that they are compelled to follow suit in order to remain competitive?

Speaking on the BBC’s “Today” programme on Friday 18 March, the spokesperson for the UK Chamber of Shipping, Peter Aylott, said at the end of an interview that he was content and very confident that P&O had acted properly. Does the Minister agree with the trade body?

Despite their knowing in advance, since the announcement, the Secretary of State and other Ministers have wrung their hands, as the noble Lord, Lord Rosser, pointed out. These displays of remorse are mere crocodile tears unless the Government actually do something. Ideally, the Government should cause P&O to think again. They should use their leverage on the parent company to make it make its company change its mind.

Assuming that that is not possible, here are a few ideas for the Minister and the Government. First, can the Minister say here and now that the Government will make sure that not one penny of the settlement to which these employees are entitled is withheld by P&O using legalistic threats and wrangles? Secondly, has the Minister spoken to the Pensions Regulator and can she assure your Lordships’ House that the pension fund it safe and will not need to be topped up by the Government or under the pension guarantee support scheme? Can she confirm that the huge amount of money P&O owes to the rating pension scheme is still on the hook and it will still pay it?

Thirdly, can the Minister undertake to ensure that every one of the new employees, if this has to go ahead, is reviewed for their qualifications? I fear that unqualified people will take these jobs, and that is a safety issue. P&O Ferries has obligations under the International Safety Management Code, which requires each vessel to have a safety management system. That system is then audited by the Maritime and Coastguard Agency, which produces a document of compliance. Can the Minister explain how on earth P&O can still comply with that vital safety certification if it has made a 100% change of crew?

Then there is the role of the corporate owner of P&O in the UK economy. Please will the Minister undertake to give a list of all the public contracts that are held by DP World, and can she explain how, on the one hand, her Secretary of State can say what he did about P&O and, on the other, those contracts can possibly be retained by its parent company?

Finally, there are freeports. DP World is at the forefront here. The Chancellor of the Exchequer, Rishi Sunak, personally opened the DP World-backed Thames Freeport. Speaking at the commercial launch, at the Saudi Arabian owned Savoy Hotel in London, the Chancellor said he was “thrilled” by DP World’s involvement. His level of thrill will no doubt have been doubled by the fact that DP World Southampton has also been awarded freeport status for the Solent Freeport. There is an inherent danger with freeports. They hold huge potential to be hotbeds of tax evasion and money laundering. For that reason, it is vital that organisations leading such ventures have an impeccable moral compass. After the events of last week, we now know that DP World presides over a culture that fails to understand the moral implications of its actions. It has a wonky moral compass. Is that really the sort of company that we want running our freeports?

My Lords, I thank the noble Lords, Lord Rosser and Lord, Lord Fox—the latter standing in for the noble Baroness, Lady Randerson, so well today—for their comments on this very regrettable and mishandled situation. The Government do not support the behaviour of P&O Ferries—clearly at the behest of its owner, DP World. It was an appalling situation for those workers to be in, and it will have had a devastating impact on the corporate reputation of P&O Ferries and DP World. I should like to point out that this is P&O Ferries, not P&O Cruises, which is owned under a different structure and has nothing to do with the ferries. I would not want this regrettable incident to bear too heavily—indeed, at all—on the cruises.

I will turn to the points raised by the noble Lords, Lord Rosser and Lord Fox, in due course, but I will first clearly set out that the Government are exploring all options to hold P&O Ferries and DP World to account. The circumstances are still unfolding. At this point, we need to get a clear understanding of what they are, what rights the seafarers have and what they are being offered by their very recent employer. It is also worth remembering that P&O Ferries still employs well over a thousand people—possibly up to nearly 2,000. We need to make sure that we understand what may happen to them and what P&O Ferries intends for them.

The world of employment law on international routes is hugely complicated. In many circumstances, the jurisdiction of the flag state applies on board vessels on international routes. Occasionally, that can also be a coastal state or the state under which the contract of employment was signed. We believe that was Jersey for some of these workers, but there is an awful lot of information to be found out about the circumstances surrounding the contracts and employment of these individuals. We are working very closely with officials in the department to press P&O Ferries and its owner, DP World, for the information we need to fully get to grips with some of the issues we want to proceed with. As mentioned by the noble Lord, Lord Fox, we are looking very carefully at our contracts with P&O Ferries and DP World. We will immediately review them all.

The noble Lord, Lord Rosser, mentioned furlough. It was, and remains right, that those employers received furlough. It is paid to the employee. It would be absolutely wrong to assume that P&O Ferries would have benefited from furlough, and those workers certainly had their jobs protected for longer because they got it. I still believe that providing furlough was the right thing to do in those circumstances. However, we will very closely consider the relationship of the UK Government with both organisations and put P&O Ferries and DP World on notice that their relationship with Her Majesty’s Government has now changed.

We have instructed all parts of government to do whatever they can to support the workers who have been impacted. Obviously, we are in touch with DWP, which will work with local employers. I am incredibly heartened by some of the messages we have had from local employers across the country looking for these highly skilled individuals and wanting to get them on board.

We have instructed the Maritime and Coastguard Agency to inspect all P&O vessels, including operational drills, to ensure that all new crews rushed through are safe to go to sea. They will not go to sea unless they have passed all those inspections. We have asked the Insolvency Service to look at the notification requirements and the specifics of the case, to consider whether action is appropriate. P&O has assured the maritime Minister that what it did was correct and legal. We are checking that that is the case and will seek further confirmation. There is a requirement to notify the BEIS Secretary of State if a redundancy notice is intended for more than 100 people. Again, we need to check which legislative framework that applies under.

We are calling on P&O Ferries to reconsider its actions, pause changes and start a meaningful dialogue with seafarers. The Transport Secretary has written to the company with an offer to facilitate discussions. There is quite a long way to go, but I share the anger expressed by both Front-Benchers about the manner in which this was carried out. We—the global we, as in my department and officials—were made aware on the afternoon of 16 March, the day before, which might have been a Wednesday, that this was happening. A very factual note was prepared—I often get factual notes telling me what is happening.

I think the noble Lord, Lord Fox, said it was waved through. Nothing was waved through. There was never a decision to be taken and Ministers were not aware of the note until matters became more urgent on the Thursday morning. It is the case that we are working very closely to understand exactly what has gone on here.

I want to point out at this stage because there has been much outrage—and I am outraged and think noble Lords should all be outraged—that the redundancies announced last week were actually much smaller than the redundancies announced in 2020 and in 2021. I missed the noble Lord’s outrage at that time. I am sure he probably felt it, but it did not appear. Why now and not the previous time? It is because it was done so badly and in such a poor fashion that it is outrageous that any company worth its salt would feel that it is okay to treat human beings in this way.

The noble Lord, Lord Rosser, referred to possible breaches in the law, and that is exactly what we are focusing on: which law might there have been breaches of and how are we going to address it? I have mentioned that the law is substantially different on international routes. We work on an international basis within the International Labour Organization’s Maritime Labour Convention, which sets out the minimum standards on some key employment and working conditions policy, but I absolutely accept that there is more to be done. This is an international workforce. It works globally. It works onboard. It is something that the UK Government can only influence internationally.

I will take the noble Lord’s point about the nationality-based pay differential. He noted that the regulations are due for review. I concede that the review has not been completed. The delay will have been due to Covid and other pressing needs on the legislative programme, but I will write to him with further details of what that review will be.

The noble Lord, Lord Fox, asked whether I felt that P&O acted properly. Clearly, I feel that it did not. There is an awful lot of work to be done. I do not know whether it will ever be able to rebuild its reputation because I fear that many people will vote with their feet. He also mentioned something important about the pensions. There is a deficit in the pension scheme and P&O will still be accountable for that deficit.

He asked whether the MCA will be reviewing the qualifications and the systems. As I have said, there will be a—how can I put this?—very thorough review by the Maritime and Coastguard Agency to make sure that these vessels are fit to go to sea. He mentioned a 100% change of crews. Again, I am not sure that there is a 100% change of crews. It could well be that certain crew members have been changed because, of course, P&O Ferries still employs well over 1,000—possibly up to 2,000—people.

I will check Hansard and go through any other points but, for the time being, I will move on to other questions.

My Lords, will my noble friend accept that there is outrage across the House at these developments? The shock wave is such that no one quite understands what the implications are for other companies if they seek to do the same. Can my noble friend explain what the position is under the retained EU law that we have spent hours, days and weeks on since we left the European Union? I understand that means if a company wishes to act in this way, there has to be a statutory period of consultation. Why does that not apply in this case? Is it deemed to be an international route now because we are a third country? The difference in 2020 was that we were part of the European Union. Is that a clear understanding of the situation?

The only other point I would like to raise is: what is the ability of Her Majesty’s Government now to requisition such ships as owned by P&O if we encounter a time of hostility? Are we still able to requisition its services as we were in the past when it was owned under a British flag?

I will have to write to the noble Baroness about requisitioning. I believe that these vessels all fly under the flag of Cyprus and have done for some time. I am afraid that I am not an expert in requisitioning, but the law surrounding the employment of these seafarers is very complicated. There may be various jurisdictions under which they fall, but in previous times when redundancies have happened—and I mentioned earlier redundancies in 2020 and 2021—there was consultation and notification. So it is not right that this time P&O felt that it could get away scot free by not at least having the conversation. We recognise that sometimes negotiations do not work out and employers may have to make difficult decisions about making people redundant, but it must be worth at least having that conversation.

My Lords, it seems that there is a lack of clarity about what is going to happen. I need to declare an interest, as Dover falls within the diocese that I serve, and economic effects in Dover affect the finances of the diocese of Canterbury. There seems to be a lack of clarity in what the Government are saying. First, we need to be assured not just that letters will be written to the noble Lord, Lord Rosser, useful as they will be, but that there will be a further Statement to your Lordships’ House setting out the results of the inquiries that the Government are making legally. Can the Minister assure us that that will be done, and at what point?

Secondly, there certainly seems to be a possibility of very sharp cuts in wages paid to the crews of these ships. Can we be assured that they will fall no further than the national minimum wage in this country? If the law does not permit that, can the law be changed?

Thirdly, in the United States, questions of security and national interest ensure that United States ships on crucial routes are flagged in the United States and crewed by United States citizens. Will be the Government undertake to look at the security implications of crucial short crossings across the channel being crewed by those from all over the world rather than those who are committed to the interests of this country?

I thank the most reverend Primate for his concern and intervention in this really important topic. We will return to the House and make further Statements. I know that colleagues from BEIS will look at the employment law elements of this issue, and I believe that there is a Question in your Lordships’ House tomorrow, should he wish to press this further.

On the wages of the crew, there are various media reports flying around—again, we do not have confirmation as to what will happen about the wages there. If they are operating on domestic routes within territorial waters, such as from Larne to Cairnryan, they will receive at least the national minimum wage. It is the case—if there is possibly a silver lining for some of those people who may well be losing their jobs—that they will receive six months’ pay plus 2.5 weeks for each year of service. So I am very much hoping that for those people we will be able to fire up the DWP services and work with local employers, and they will also have what is well above a statutory settlement as a result of their redundancy.

The most reverend Primate asked about the security of really important routes, and I recognise that and will take it back to the Maritime Minister and ask him to consider it.

My Lords, the great port city of Larne has suffered a devastating blow by the outrageous actions of P&O, with around 50 Northern Ireland workers losing their jobs, many of whom were long-serving seafarers with families to feed. Meanwhile, the Road Haulage Association has said that Northern Ireland hauliers are now operating at around 50% capacity, with food supplies particularly badly affected. With services on this route not expected to resume for at least a week, will the Minister outline what direct action the Government are taking to safeguard the needs and well-being of the people of Northern Ireland who are already dealing with a never-ending supply problem related to the disastrous post-Brexit protocol?

Of course, the Government are watching the services and their capacity levels very closely at the moment. Our assessment is that there is sufficient capacity with other operators. For example, at the short straits, Eurotunnel combined with the other operators will provide sufficient capacity. Obviously, we are monitoring this on an hourly basis and working very closely with operators to see how they can put on extra ships to ensure that freight and passengers are able to move appropriately.

My Lords, as a former trade union negotiator, albeit in my past life and in the airline industry, there were times when we had to negotiate under the most difficult circumstances, particularly concerning downsizing or cost savings. Schemes such as early retirement, voluntary severance and, often, flexible contracts were ways to resolve this issue. Fortunately, we never had to dismiss an employee. Notwithstanding the appalling behaviour of P&O, as has been clearly echoed by Members across this Chamber, could the Minister tell me how long the negotiations took between the trade unions and P&O regarding these redundancies? Were the paid-up members of the trade unions aware of the consequences of an agreement not being reached between the trade unions and P&O? If the Minister does not have this information to hand at present, could she look into this matter with some urgency? In my opinion, while the trade unions are clearly not responsible for these job losses, they were a huge influence in the negotiations which took place.

I can say to my noble friend that we do not believe that there was consultation with the unions, which is one of the big problems here. We have asked for urgent information as to how many conversations there have been. It is our impression, at this current time, that there have not been any conversations. If there were none, that may well be unlawful. That would be up to the employees to challenge via a tribunal. It will also depend on where the jurisdiction for the contract of employment actually lands. My noble friend is quite right that we need to dig into this in an urgent way to ensure that unions are not locked out of these circumstances in the future.

My Lords, the Minister, in responding to Front Bench questions, rightly said that this action will have a devastating impact on the reputations of P&O Ferries and DP World. The Minister further said that any company worth their salt “would not behave in this way”. The Minister said that the relationship between the Government and DP World has now changed. With that in mind, building on the questions of the noble Lord, Lord Fox, given the fact that freeports are by definition places of, if not lawlessness, certainly reduced legal protection for workers in terms of taxation and so on, how can the Government leave freeports with that kind of structure in the hands of a company which, in the Minister’s own words, has a devastated reputation?

I am not entirely sure I agree with the noble Baroness that freeports are areas of lawlessness. The point that I am trying to get across is that we are not sure that laws have been broken. Do I feel that, ethically, things have been done that should not have been done? Absolutely. But we do not know that laws have been broken. When it comes to the situation concerning freeports, which the Government wholly support, we are working urgently to establish the facts of what happened. There is a lot of speculation and comment in the media; we need to establish the facts and whether laws have been broken. We will then consider how this might affect any involvement of DP World in British freeports.

My Lords, I agree with the Minister when she says that it is not okay to treat human beings like this, and that we will be holding DP World to account. DP World is not a public listed company but a fully owned company of the Dubai Government. Has any Minister picked up the phone to Sheikh Mohammed or any of the Dubai authorities to say that it is unacceptable to treat workers like this in our country? How will we be holding the Dubai Government to account, since they own DP World?

My Lords, on the issue of whether any laws were broken, it is very clear that there needs to be some kind of law to prevent this kind of despicable mass firing and rehiring of hundreds of workers in the way that P&O has acted. Since employment law is a devolved matter, certainly in the case of Northern Ireland, will she undertake on behalf of the Government to liaise with the devolved Governments about any changes that are being thought about? Further to the question asked by the noble Lord, Lord Rogan, can she assure me that the Government have looked at the specific issue of supplies coming from Great Britain to Northern Ireland? We depend an awful lot on our air and sea connectivity. Given the problems of the protocol, can she tell us that the specific channel between Larne and Cairnryan has been examined by the Government?

I can reiterate that all of the routes previously operated by P&O Ferries and currently temporarily suspended are being reviewed by the Government; we are assessing and ensuring that capacity is available. The noble Lord talks about an incredibly difficult and complicated area; of course we will have conversations with the Northern Ireland Executive and, indeed, all devolved Administrations about how we can ensure decent standards for those seafarers who work on the international routes.

My Lords, this template must be deeply worrying for the Government. Post Brexit, we were going to be a high-wage, high-skilled economy; now we discover that there may well be a massive loophole in this ambition, through which companies like DP World and P&O Ferries that are motivated to do so can drive a coach and horses. If they can complicate their contracts in ways that are not covered by our law, they can dismiss people by not giving them appropriate notice, or any notice in this case, and not consulting with unions as they would otherwise be required to do, and then replace them with low-paid, apparently unskilled or lower-skilled workers on very temporary contracts where they have no continuity of work. The Government must be very worried if they have discovered this, so what are they going to do to make sure that nobody else can drive a coach and horses of this size through the protection of workers, particularly high-skilled and high-paid workers?

I do not feel that this is a systemic problem for the British economy. These are unique circumstances; they apply to the maritime sector where, of course, there is a very global workforce, particularly on the international routes. When you operate in non-territorial waters, the different jurisdictions that can apply are many and varied, as I said earlier, depending on the flag of the vessel and various other factors. So I do not see the issue that the noble Lord is painting as a widespread systemic factor across the economy, but it is something that we will need to be well aware of for maritime purposes. It is the ambition of this Government to build our skills in maritime as a world-leading maritime nation; indeed, our document Maritime 2050 set out how we were going to augment British skills to get them onto British-flagged vessels.

My Lords, I apologise for missing the beginning of the Statement; I hope that the Minister will still allow me to ask my question. I want to push her on freeports. DP World has the second and third-largest ports in the country; two of them are already designated as freeports. Can the Minister assure us that those who are employed in a freeport will have to be paid at least the minimum wage, in England as well as in Scotland?

I do not have any information on the employment status of workers in freeports but, if I can find out any information, I will certainly write to the noble Baroness.

My Lords, I want to pursue the issue of pensions, which was raised by the noble Lord, Lord Fox, and highlight the question to the Minister: to what extent are the pension arrangements that apply to these workers under threat? Is the company doing this because it is encountering commercial difficulties? Is the covenant to which most company pension schemes rely therefore under any sort of threat? The fact that the pension arrangements are continuing is not sufficient comfort.

It is also important to understand that two pension arrangements are involved here: the P&O scheme and whatever other arrangements that provide pensions for the unfortunate workers who have lost their jobs, and the Merchant Navy Ratings Pension Fund, which is a separate arrangement in which I assume many of those who have been fired have deferred benefits. Because of the way that scheme has operated in the past, P&O potentially owes it a lot of money. There was an implication that pensions are not a problem but the issue bears further investigation and reassurance, both to the House and to the workers involved.

I would be pleased to take that issue away and ensure that we have looked into it in great detail. My understanding is that the employees’ pensions are protected. We are aware of the pension deficit in the Merchant Navy Ratings Pension Fund; P&O Ferries will need to pay what it owes.

My Lords, presumably it is the gift of the Government to award these licences for P&O to operate to various destinations. Will the Government look carefully at the possibility of rescinding those licences, or, when they come up for renewal, at all possibilities of other carriers being used to replace P&O, so that, in other words, its future in this country, and that of DP World, is finished?

In these circumstances, we have to think carefully about taking steps such as those outlined by the noble Viscount. I am not aware that we would impose licence conditions as stringent as the ones he potentially proposes. As I said, I am conscious of the fact that well over 1,000 people still work for P&O Ferries. I would very much like them to have a successful career, hopefully with an organisation that takes a step back and learns its lessons, and then reapproaches the market with the sort of costumer-facing and employee-facing attitude that this Government want to see.

My Lords, the 20 minutes allotted for Back-Bench questions have now finished. We will allow a minute or so for the House to adjust itself for the next business, before we continue on Report.