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DEBATE PACK

Number CDP-2017/0009, 10 January 2017

Future of the UK Maritime industry

By Lorna Booth Doug Pyper Matthew Ward Jennifer Brown

Summary This pack has been prepared ahead of the debate on the maritime industry to take place in Westminster Hall on 12 January 2017 at 3pm. The subject for the debate has been chosen by Alistair Carmichael.

The maritime industries (shipping, ports and business services) were estimated to contribute at least £8.5 billion a year to the UK economy in 2012 and the associated marine industries (shipbuilding and repair, construction of ports and marinas and marine leisure) are estimated to contribute £2.5 billion. The sector employed at least 113,000 people in 2012.

There has for some time been a good deal of concern about the application of the NMW to seafarers and enforcement. The law in this area is somewhat complex given the territorial aspects. The RMT union have estimated that 8,300 seafarers are working in the UK shipping industry for rates below the current national minimum wage.

Following the UK referendum vote to leave the EU the concerns for the maritime industry are likely to be surrounding general policy areas such as employment law, immigration, border controls and contract law, as well as transport specific areas such as freedom to trade, safety and the environment, tonnage tax and security.

Contents 1. Background 2 1.1 What are the maritime

industries? 2 1.2 Where does government

responsibility lie? 2 1.3 Maritime Growth Study

and government response 2

1.4 Naval procurement 4 1.5 Economic contribution

of the maritime industry 4

2. National Minimum Wage concerns 5

3. Brexit and Maritime issues 7

3.1 Shipping 7 3.2 Ports 8

4. Press Articles 9

5. Parliamentary Material 10

5.1 Parliamentary Questions 10

5.2 Debates 14 5.3 Written Statements 15 5.4 Early Day Motions 17

6. Reports 19

The House of Commons Library prepares a briefing in hard copy and/or online for most non-legislative debates in the Chamber and Westminster Hall other than half-hour debates. Debate Packs are produced quickly after the announcement of parliamentary business. They are intended to provide a summary or overview of the issue being debated and identify relevant briefings and useful documents, including press and parliamentary material. More detailed briefing can be prepared for Members on request to the Library.

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1. Background

1.1 What are the maritime industries? Broadly speaking, the sector covers:

• Shipping

• Ports

• Maritime business services, such as insurance, legal services and shipbroking

• The allied marine industries, which manufacture equipment and provide support to the whole maritime sector, including the leisure market, commercial shipping, offshore energy and naval.1

1.2 Where does government responsibility lie?

Responsibility for the maritime industries is split across many parts of government, including:

• Department for Transport

• Maritime and Coastguard Agency

• Department for Business, Energy and Industrial Strategy (includes marine technology and manufacturing, offshore energy and – with Department for Education – skills)

• Department for Environment, Food and Rural Affairs (Defra) (fisheries and marine conservation policy)

• The Marine Management Organisation (non-devolved marine planning and licensing)

• Health and Safety Executive (HSE)

• Ministry of Defence.

1.3 Maritime Growth Study and government response

In 2015, a Government commissioned report, Maritime Growth Study: keeping the UK competitive in a global market, presented a vision for the maritime industry in the future:

the UK is the world’s foremost maritime centre and a maritime nation that:

1. exploits the full range and depth of its maritime cluster to promote the UK’s position as the world’s leading maritime centre.

2. attracts inward investment in ports and other maritime business, contributing to both the national and regional economies.

1 Department for Transport, Maritime Growth Study: keeping the UK competitive in a global market, September 2015

Future of the UK Maritime industry 3

3. sells its marine engineering and manufacturing expertise and innovation to shipowners and other maritime businesses around the world.

4. ensures that the world’s shipping industry chooses UK-based maritime business services, including maritime training, to support their global trading fleets.

5. draws the world’s shipowners to the UK, with more shipping operations being managed from here, creating UK jobs and with owners paying UK Tonnage Tax.

6. provides shipowners with a high quality, commercially-oriented UK Ship Register that promotes the UK brand, reinforces our maritime centre status and generates income for the UK taxpayer – the Flag of choice for quality owners.

7. replenishes and builds its vital maritime skills base, including through shore-based apprenticeships and by attracting more shipowners into UK Tonnage Tax with the associated commitment to train seafarers through government funded maritime training schemes.

To achieve this vision, the report recommended that the sector needed:

8. leadership by both government and industry, including a more commercial and responsive UK maritime administration within government and an industry-led promotional body

9. more proactive action to replenish and develop the skills needed to maintain our position as a world-leading maritime centre

10. effective marketing by industry and government of what the UK maritime sector has to offer both domestically and internationally

See Section 9 of the study for the full set of recommendations.

The Government committed to accepting those recommendations that were for it, in full. It has since:

• held Ministerial Working Groups on maritime growth to discuss key topics with industry leaders, and established an official-level Maritime Strategy Committee to identify further actions

• said it is taking actions to ensure that the Maritime and Coastguard Agency (MCA) works “more effectively, efficiently and commercially”, including examining further commercialisation of the Ship Register

• included the maritime sector in the GREAT Britain marketing campaign

• begun studies on future seafarers and Support for Maritime Training.

• Industry have also set up various groups, and various trade associations and partners have come together under the umbrella of Maritime UK.2

2 Government response to Maritime Growth Study, Written statement - HCWS402, 16

December 2015 Letter dated 09/2016 from Baroness Evans of Bowes Park to Lord West of Spithead

regarding implementation of recommendations of the Maritime Growth Study as raised in the debate regarding the G20 summit, trade and leaving the European Union

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1.4 Naval procurement The Government has committed to publishing a National Shipbuilding Strategy in 2017 and published an independent report by Sir John Parker to “inform” the strategy at the end of November. Sir John Parker’s report focuses on naval procurement, specifically the Navy’s new frigate programme, though he also does talk positively about the non-naval shipbuilding sector. He also discusses concerns about shortage of skilled labour and apprenticeships. 3 Further information can be found in the Library briefing: The Royal Navy’s new frigates and the National Shipbuilding Strategy: December 2016 update (CBP-7737).

1.5 Economic contribution of the maritime industry

The maritime industries (shipping, ports and business services) were estimated to contribute at least £8.5 billion a year to the UK economy in 2012 and the associated marine industries (shipbuilding and repair, construction of ports and marinas and marine leisure) are estimated to contribute £2.5 billion. The sector employed at least 113,000 people in 2012.4 In 2015, there were 23,380 UK seafarers active at sea.5

3 Sir John Parker, An Independent Report to inform the UK National Shipbuilding

Strategy, 29 November 2016 4 Maritime Growth Study: keeping the UK competitive in a global market (2015) – see

Annex A for definitions 5 Department for Transport, Seafarer statistics: 2015 (2016)

Future of the UK Maritime industry 5

2. National Minimum Wage concerns

There has for some time been a good deal of concern about the application of the NMW to seafarers and enforcement of the same. The law in this area is somewhat complex given the territorial aspects. Section 40 of the National Minimum Wage Act 1998 and the National Minimum Wage (Offshore Employment) Order 1999 (SI1999/1128), together with case law on the jurisdictional limitations of UK employment law, provide the legal basis for applying the NMW to seafarers. The legal position was summarised by the Low Pay Commission in its Spring 2016 report:

the application of NMW regulations to seafarers is one of the more complex areas of minimum wage law. From the introduction of the NMW in 1999 our understanding had been that seafarers were covered by the minimum wage when they were employed to work on a ship while it is in the UK or its internal waters, regardless of where the ship is registered. In addition, our understanding was that a seafarer working on a ship registered in the UK must be paid the minimum wage wherever in the world that ship may be unless: all the work takes place outside the UK (and its internal waters); or they are not normally resident in the UK and the ship is outside the UK (and its internal waters). However, following a ruling by the Court of Appeal in 2011 the legal situation changed: it was possible that the NMW may be applied to workers on non-UK flagged ships where it could be shown they have a jurisdictional link with the UK.6

The report went on to highlight evidence from the Rail, Maritime and Transport Workers’ Union (RMT) that “it conservatively estimated that 8,300 seafarers’ … are working in the UK shipping industry for rates below the current NMW of £6.70 per hour”.7 The Commission noted RMT evidence that a new working group would be established to investigate the issue:

In terms of movement on this issue, the RMT said that, building on the work of the Equality Act Working Group (convened under the last Government to look at the operation and effectiveness of the Act), a sub-group on pay would be formed in the coming months and this would include discussion, between maritime unions, employers and Government departments, of the enforcement approach for seafarers and the NMW.8

On 17 November 2016 Alistair Carmichael asked John Hayes, Minister of State at the Department for Transport, about progress on enforcing the NMW for seafarers in the North Sea:

National Minimum Wage: Seafarers

Mr Alistair Carmichael (Orkney and Shetland) (LD)

6 p289 7 Ibid. 8 Ibid.

6 Number CDP-2017/0009, 10 January 2017

What discussions he has had with officials of Her Majesty’s Revenue and Customs on enforcement of the national minimum wage for seafarers employed in the North sea.

The Minister of State, Department for Transport (Mr John Hayes)

The right hon. Gentleman will know I am a proud trade unionist. This is an area of great concern to me. I have met my friends in the National Union of Rail, Maritime and Transport Workers, and Nautilus International—I have Nautilus’ charter with me. My officials have been working closely with officials in the Department for Business, Energy and Industrial Strategy and HMRC, as well as stakeholders, on the application of the national minimum wage to seafarers in UK waters more generally.

Mr Carmichael

I am grateful to hear that the Minister is taking this matter seriously. It surely cannot be right for HMRC to deem that a ferry service that starts in Aberdeen and finishes in Lerwick is operating wholly outside UK territorial waters. It is nonsense for the body that is supposed to enforce the minimum wage to be undermining it in this way. Will the Government do something to stop this?

Mr Hayes

I worked with the right hon. Gentleman in government and he knows of me what I know of him, which is that he does his homework. I have the statutory instrument and the original legislation in my hand as I speak. Let me tell him this: I am committed to reviewing the legislation to ensure that it applies to the offshore sector.9

9 HC Deb 17 November 2016 c376

Future of the UK Maritime industry 7

3. Brexit and Maritime issues

3.1 Shipping Access to the European single market has greatly benefitted the UK shipping industry. Much of the UK’s international trade is conducted with other EU Member States and many goods traded within the EU are moved by sea. UK shipping companies are also active in a global marketplace and have long been seeking consistency in the application of rules to ships from all Flag States to allow companies to compete on a level playing field. This consistency has been achieved over decades through the participation of Flag and Port States in international forums such as the IMO, the ILO, the OECD and UNCITRAL. In this environment the EU’s sometimes unilateral approaches to maritime policy making have been a challenge.

UK shipping post-Brexit is likely to be concerned about general policy areas such as employment law, immigration, border controls and contract law. More specifically on transport issues, it is likely to be concerned about the following:

• Freedom to trade: OECD rules could preclude any change insofar as ships being able to call at an EU or a UK port and load and unload cargo or passengers regardless of its flag and regardless of the nationality of its owner. UK-flag ships could, however, lose their right to operate in the domestic trades of those EU Member States who maintain flag-based cabotage restrictions.

• Safety and the environment: Vessels and companies operating in EU waters would mostly still have to comply with EU (and IMO) regulations since the EU would continue to apply their rules to vessels irrespective of their flag or ownership.

• Tonnage Tax: Corporate tax is a national responsibility, outside the scope of EU law. So the UK tonnage tax regime and those aspects of corporation tax that are specific to ships (chiefly, roll-over relief and capital allowances) are unaffected. All the EU does is set a broad framework in which those taxes must fit (i.e. State Aid guidelines).

• Security: The EU’s counter-piracy Operation Atalanta EU NAVFOR is UK-based and -led with an existing mandate until December 2016, albeit with an intention to renew it for a further two years. The renewal under a UK lead will now be more difficult to achieve.

The British International Freight Association (BIFA) has said that container lines are likely to continue to call directly at UK ports as UK volumes are “more than large enough to justify” direct calls with mainline vessels, mainly in the South of England ports. However, their main concern is of potentially losing the benefits of free trade and customs harmonisation with the EU single market. It states that a return to tariffs for UK merchandise exports and imports, if this is the outcome would be ‘‘detrimental to UK trade with the EU, and may result in a small reduction in UK-EU maritime volume’’.10

10 BIFA, What Brexit means for UK shipping, July 2016

8 Number CDP-2017/0009, 10 January 2017

3.2 Ports At present, over 90% of UK trade is handled by ports and the EU is the UK’s largest trading partner. However, the UK ports sector, being largely privately owned and competitively run, is very different to those of many other EU Member States. Consequently, it has long had concerns about public subsidy in other EU countries distorting competition, particularly between the larger international ports.11

The greatest concern for UK ports over the past decade or so has been the repeated attempt by the EU to legislate on port services, which they have argued would impose disproportionate and potentially harmful regulation in an area where the UK is already competitive.12

The proposed ‘Port Services Regulation’ was cited several times during the referendum campaign as a reason to leave the EU.13

More generally, Oxera has said that changes to the costs of trade with the EU are ‘‘likely to affect the volumes and patterns of freight activity at ports, while the need for new customs checks on imports and exports is likely to cause considerable congestion at UK and mainland European ports’’. It suggests that any negative impact could be mitigated through EEA membership or free trade agreements, although delays in negotiations could mean a significant period trading under WTO agreements.14

There may be some positive consequence for UK ports on the east coast if difficulties emerge around Dover and Folkestone due to changes to border controls at Calais.15

This could see an uptick in passenger and freight traffic though London, Grimsby, Tyneside or the Forth, though at present it is far too early to say. In November 2016 the Centre for Policy Studies published a new paper arguing that EU law ‘‘has long held back the potential of British ports’’ and that so-called ‘free ports’ (i.e. areas that, although inside the geographic boundary of a country, are considered outside the country for customs purposes) could create more 86,000 jobs for the British economy if they were as successful as those in the United States.67

11 Report of the exchange of views between ports CEOs and Transport

Commissioner Bulc 19 January 2015 Brussels, p7 12 More details can be found in HC Library briefing paper CBP7457 13 ‘‘It's not just the plot to let in 1.5 million Turks... DANIEL HANNAN outlines ten

bombshells the EU's keeping secret until after you've voted’’, Daily Mail, 14 June 2016

14 Oxera, Agenda - Brexit: implications for the transport sector, June 2016 15 e.g. ‘‘French politicians tell Britain 'take back your borders'

Future of the UK Maritime industry 9

4. Press Articles

Best fleet forward; Navy to spend £1bn extra to combat Russia threat

The Mirror, 1st January 2017, Keir Mudie

Shipbuilding report calls for increased competition and end to BAE monopoly

The Telegraph, 29 November 2016, Auslan Cramb

US antitrust officials call for careful scrutiny of shipping alliance

The Financial Times, 28 November 2016, Jessica Dye

World's leading shipbuilder warns of 50pc cut in revenues

The Telegraph, 3 November 2016, Alan Tovey

Shipping industry criticised for failure to reach carbon emissions deal

The Guardian, 28 October 2016, Fiona Harvey

Britain's shrinking merchant fleet risks 'sea strangulation' of our economy

The Telegraph, 4 October 2016, Alan Tovey

How Britain sank its shipping industry by waiving the rules

The Guardian, 30 August 2016, Polly Toynbee

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5. Parliamentary Material

5.1 Parliamentary Questions Department for Transport: Merchant Shipping: Recruitment: Written question - 56670

Asked by Karl Turner

Asked on 07 December 2016

To ask the Secretary of State for Transport, what plans the Government has to encourage more young people to take up careers as Merchant Navy ratings.

Answered by Mr John Hayes

Answered on 12 December 2016

The Government is fully committed to encouraging more young people to enter the Merchant Navy at all levels working across the maritime sector.

To support the training of ratings and officers the Government provides support through the £15m “Support for Maritime Training” (SMarT) scheme. There is also a 3 year pilot within the tonnage tax training link allowing tonnage tax companies to train three able seafarer ratings in place of one officer trainee each year responding to industry calls to provide more flexibility. Ratings training is also offered through maritime apprenticeships and further ratings apprenticeships are under development.

To encourage the take up of ratings training, the Government works with the maritime industry including the maritime unions in addressing this through, for example, the Ratings Taskforce. The Maritime Growth Study also highlighted the need to raise awareness of careers in the maritime sector. As a result, the industry led “Maritime UK People and Skills Steering Group”, has created an “Awareness subgroup” to identify ways to raise the profile of maritime careers. The group comprises of a cross section of representatives from across the sector, including Government.

Ministry of Defence: Shipping: Written question - 39966

Asked by Ian Mearns

Asked on 08 June 2016

To ask the Secretary of State for Defence, what steps his Department has taken to implement recommendation 15 of the Department for Transport's Maritime Growth Study, published in September 2015, on improving links between the Royal Navy and the wider UK maritime sector.

Answered by: Penny Mordaunt

Answered on: 15 June 2016

Future of the UK Maritime industry 11

The Royal Navy (RN) has a Memorandum of Understanding (MOU) with the Maritime and Coastguard Agency (MCA) to allow Warfare Officers to obtain commercial Standards of Training, Certification and Watchkeeping (STCW) certificates of competency. Discussions with the MCA have commenced to develop a similar MOU for Engineer Officers and Ratings. More widely the RN continues to seek to align its training with STCW requirements. The RN Resettlement Service also offers impartial advice on second careers with many strong links with maritime sector organisations and companies.

Ministry of Defence: Shipping: Written question - 39967

Asked by Ian Mearns

Asked on 08 June 2016

To ask the Secretary of State for Defence, what discussions he has had with his Ministerial colleagues on the potential effect of the recommendations of the Maritime Growth Study, published in September 2015, on the future supply of UK-domiciled merchant seafarers to the Royal Fleet Auxiliary.

Answered by Penny Mordaunt

Answered on 14 June 2016

The Royal Fleet Auxiliary (RFA) recruits and trains UK Merchant Seafarers for service with the RFA. The RFA as one of the largest trainers of UK seafarers is fully engaged with the UK Chamber of Shipping and Merchant Navy Training Board in shaping the current and future training requirements of seafarers. The RFA as part of the wider Naval Service is represented at the Ministerial Working Groups for the Maritime Growth Study by the Royal Navy.

Department for Transport: Merchant Shipping: Written question - HL7487

Asked by Lord West of Spithead

Asked on 11 April 2016

To ask Her Majesty’s Government what assessment they have made of whether there has been a reduction in the number of British seafarers being employed by the world's merchant marine, and if there has, what action they are taking to ensure that the necessary numbers exist to meet national requirements for British seafarers in time of war.

Answered by Lord Ahmad of Wimbledon

Answered on 18 April 2016

The latest UK seafarer statistics can be found in the attached document “Seafarer Statistics, 2015” that is also available on gov.uk.

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In 2015 the total number of UK seafarers active at sea was 23,380, an increase of 2% on the 2014 figure and 2.3% on 2013 figure. The figures for the last five years are shown below:

The Maritime Growth Study, chaired by Lord Mountevans and published on 7 September 2015, recognised the need for more proactive action to replenish and develop the skills needed to maintain the UK position as a world-leading maritime centre. The Government has accepted the recommendations and has already let a research contract to Oxford Economics to establish the requirement for trained seafarers in the UK.

However, the Government does not hold data on national requirements for British seafarers in time of war.

Department for Transport: Merchant Shipping: Written question - 33210

Asked by Ronnie Cowan

Asked on 08 April 2016

To ask the Secretary of State for Transport, what plans his Department has for the future role of the merchant navy.

Answered by Mr Robert Goodwill

Answered on 14 April 2016

The Government appreciates the role played by the merchant navy and recognises the need for an adequate supply of UK maritime expertise to meet the nation’s economic and strategic requirements. This includes the demand for experienced seafarers in the shore-based maritime services sector.

The Department continues to provide support for the training of officers and ratings through the £15m Support for Maritime Training (SMarT) scheme.

Apprenticeships are at the heart of the Government’s drive to give people of all ages the skills employers need to grow and compete. Maritime is a key part of this with the Maritime Trailblazer which is employer led and has one approved standard for deck ratings and a further three in development for maritime mechanic, maritime caterer and onboard services.

The Maritime Growth Study, chaired by Lord Mountevans and published on 7 September 2015, recognised the need for more proactive action to replenish and develop the skills needed to maintain the UK position as a world-leading maritime centre. The Government has accepted the recommendations. We have already let a research contract to Oxford Economics to establish the requirement for trained seafarers in the UK. This will assist both government and industry to plan ahead and to

Year 2011 2012 2013 2014 2015

Active seafarers at sea 27,010 24,100 22,840 22,910 23,380

Future of the UK Maritime industry 13

make efforts to address priority shortages where gaps are identified. We are also working to address the other skills recommendations including conducting a review of SMarT funding, better links into schools teaching and enlarging the awareness programme to encourage entry into the merchant navy.

Department for Transport: Shipping: Skilled Workers: Written question - 26238

Asked by Richard Burden

Asked on 08 February 2016

To ask the Secretary of State for Transport, pursuant to the Answer of 4 February 2016 to Question 24416, what steps the Government is taking to prevent the downturn from further affecting the national maritime skills base.

Answered by Mr Robert Goodwill

Answered on 11 February 2016

The Maritime Growth Study chaired by Lord Mountevans and published on 7 September 2015 identified areas that would help the UK to compete successfully within a global market. These included Government and industry carrying out an assessment of the requirement for seafarers in the UK. Work on this has already commenced alongside an extension of the apprenticeship programme.

The Government remains committed to the training of seafarers and has a number of policies to grow the UK’s maritime skills base, in particular through the £15m Support for Maritime Training (SMarT) fund. A review of the SMarT programme will start shortly and will take into account the impact of the low oil price on the North Sea fields.

Department for Transport: Shipping: Training: Written question - 24309

Asked by Richard Burden

Asked on 26 January 2016

To ask the Secretary of State for Transport, what assessment he has made of the recommendations for increasing the training and employment of UK seafarers in the Maritime Futures report by Professor Helen Sampson of Cardiff University, published in January 2015.

Answered by Mr Robert Goodwill

Answered on 29 January 2016

A number of recommendations made within the Maritime Futures report were put forward in the call for evidence for the Department’s Maritime Growth Study and the Department has taken forward a number of those.

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The Department provides support for the training of officers and ratings through the £15m Support for Maritime Training (SMarT) scheme. A company or group which elects for the Tonnage Tax is required, each year, to recruit one new officer trainee for every fifteen officer posts in its fleet. Following a proposal from the UK Chamber of Shipping, RMT and Nautilus to allow companies to recruit and train three able seafarer ratings in place of one trainee officer, a pilot to allow ratings to be counted against the training commitment started on 1st October 2015.

Apprenticeships are at the heart of the Government’s drive to give people of all ages the skills employers need to grow and compete. Maritime is a key part of this with the Maritime Trailblazer which is employer led and has one approved standard for deck ratings and a further three in development for maritime mechanic, maritime caterer and onboard services.

The UK government’s position on island cabotage remains unchanged but this is kept under constant review. At present those providing such services remain significant employers of UK seafarers.

UK seafarers working for UK companies on a UK flagged vessel are not entitled to an exemption to national insurance payments. They may, however, benefit from the Seafarers Earning Reductions tax relief for income tax.

An ‘in personum’ approach to the application of national minimum wage is preferred as it ensures that those who are entitled to it will benefit. International law prevents the UK from interfering in the ‘internal market’ of a vessel, this includes wages, and is applicable to those vessels visiting or operating out of UK ports. HMRC is responsible for NMW enforcement and the government takes non-compliance of the legislation very seriously.

The Carter Report was commissioned under a previous administration and was already considered at the time of the drafting of the Equality Act 2011 (Work on Ships and Hovercraft) 2012 regulations.

The Maritime Growth Study, chaired by Lord Mountevans, was published on 7 September 2015 and contained a number of recommendations for government and industry on skills, including to help maintain the UK’s future supply of seafarers. The Government formally respond to the Study in December 2015 accepting all the recommendations

5.2 Debates Offshore Oil and Gas Industry

HC Deb 3 Mar 2016: C 359-94WH

Access to Ports

HC Deb 27 Mar 2014: C 150-76WH

Future of the UK Maritime industry 15

Maritime Apprenticeships

HC Deb 24 Jan 2014: C 628-34

5.3 Written Statements Government Response to the Maritime Growth Study: Written statement - HCWS402

Made by Mr Robert Goodwill

Made on 16 December 2015

In November 2014, the Department for Transport launched a comprehensive study, chaired by Lord Jeffrey Mountevans, now Lord Mayor of the City of London, into maintaining the UK’s status as a world-leading maritime centre. The Maritime Growth Study: keeping the UK competitive in a global market was published on 7 September, the opening day of London International Shipping Week 2015, with a commitment from government to formally respond to the report by the end of the year.

The last such review took place nearly two decades ago and the global economic landscape has changed significantly since then. However, one constant has been the continuing contribution of UK maritime and marine industries to our economy and in keeping seaborne trade moving worldwide. The Study highlights that this has been achieved through a highly advanced, world-class maritime cluster spread across the nation that attracts investment and exports services worldwide. The sector’s direct economic contribution is at least £11bn, while directly supporting at least 113,000 jobs and 6,600 businesses. The UK is truly a ‘one-stop-shop’ for the global maritime market, but the Study concludes that there is still much more that it can achieve.

The report recognises that other maritime centres in Europe and the Far East are experiencing rapid growth and seeking to replicate our success. Government and industry must therefore work together to reinforce the UK’s role in the global market and put our nation in the best possible position to exploit the expected doubling in world sea trade by 2030. A successful maritime sector will support the government’s commitment to enhancing domestic productivity, rebalancing the UK economy, increasing exports and raising our global status.

The Study involved extensive engagement and independent research to inform and shape its conclusions and recommendations. The process also benefitted from the scrutiny and support of an industry advisory group chaired by Michael Parker, Chairman of the UK arm of global shipping company, CMA-CGM, and comprising senior business leaders from across the sector.

The report encompasses Lord Mountevans’ recommendations for government and industry, focusing on four themes in particular; government leadership, industry leadership, the need for a skilled workforce and the opportunities for marketing maritime UK. The

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government welcomes his findings and will take forward the recommendations in all four of these areas, partnering with and involving industry as required.

Significant progress is already being made. A new Ministerial Working Group for Maritime Growth has been established to drive growth and tackle issues impacting the sector. The Working Group, including representatives from industry, met for the first time last month to discuss items on maritime inward investment and export growth, as well as the opportunities presented by the government’s proposed reform of apprenticeships. The Working Group will be supported by a committee that will bring together senior officials from key Departments with an interest in maritime in the New Year to identify what further action is required.

Officials will shortly begin the process of updating the government’s assessment of the seafarer requirement in the UK maritime sector so we have the most up-to-date picture of supply and demand. This will ultimately inform the chair’s recommended review of our Support for Maritime Training (SMarT) scheme to ensure it remains fit for purpose.

A key focus of the Study was the role played by the Maritime & Coastguard Agency (MCA) administered UK Ship Register. The Register has now seen nearly 12 months of modest, but continuous growth in gross tonnage. However, we will not be complacent about this success and fully support Lord Mountevans’ ambitions for the Register, which were informed by evidence from the independent UK Ship Register Advisory Panel. In addition to the Agency’s existing plans for creating a more efficient, flexible and customer-focused survey and inspection function, I am pleased to be able to announce the appointment of Simon Barham as Director of the UK Ship Register. Simon brings a wealth of commercial shipping experience to the role and will begin the process of making the Register more independent from the MCA’s regulatory functions when he starts in 2016. These improvements are being implemented against the backdrop of longer term work by the Department exploring the scope for more significant reform of relevant MCA services, in particular the UK Ship Register.

While the specific recommendations for industry are for them to consider and respond to, the outcomes being sought, including greater coordination to promote the sector as a whole, are vital to achieving the chair’s vision for maritime. The government is happy to support industry in this endeavour.

I am grateful to Lord Mountevans for his chairmanship of the project. His leadership and experience have helped to produce a compelling report on a sophisticated sector consisting of multiple markets and industries. He played an important role in successfully corralling the views of an expansive and diverse industry with varying interests. It is now for government and industry to work in partnership to lever the findings from the Study and keep the UK maritime sector at the forefront of the global market.

Future of the UK Maritime industry 17

The report, Maritime Growth Study: keeping the UK competitive in a global market can be found on GOV.UK and copies were made available in the libraries of the House on its publication in September.

5.4 Early Day Motions Early day motion 231

Non-Payment of National Living Wage and Seafarer Employment on Onshore Supply Vessels

Session: 2016-17

Date tabled: 15.06.2016

Primary sponsor: Mearns, Ian

Sponsors: Smeeth, Ruth, Carmichael, Alistair, Hopkins, Kelvin, Matheson, Chris, Ferrier, Margaret

That this House is concerned by ongoing job losses, alleged visa abuses and low pay in the offshore supply vessel (OSV) sector which services the UK oil and gas industry in the North Sea; notes that the downturn in oil prices since August 2014 has led to over 1,000 job losses amongst UK seafarers on OSVs, in many cases being replaced by non-EEA seafarers on rates of pay as low as £2 per hour; is further concerned that seafarer ratings replaced by low-cost foreign crews in the OSV sector will be lost to the maritime industry; believes that this practice puts UK seafarers and the national economy at an unfair disadvantage, particularly in the event of an increase in oil prices; further notes that the number of UK owned OSVs fell by 10 per cent in the year to 31 December 2015; is concerned that a record number of OSVs are currently laid up in UK ports, in some cases with non-EEA crew living on board in contravention of transit visa requirements and the Maritime Labour Convention (MLC); and calls on the Government to enforce visa and employment law and the MLC in the OSV sector as a matter of urgency.

Early day motion 1282

Support for British Merchant Seafarers

Session: 2015-16

Date tabled: 21.03.2016

Primary sponsor: Carmichael, Alistair

Sponsors: Shannon, Jim, Meale, Alan, Saville Roberts, Liz, Brake, Tom, Lamb, Norman

That this House notes reports of increased redundancies of British merchant seamen in the North Sea; further notes the 65,000 job losses in the North Sea oil and gas industry in the last year; understands the pressure shipping companies are under to cut operating costs; expresses its concern at reports of British merchant seamen being replaced by

18 Number CDP-2017/0009, 10 January 2017

cheaper and often less qualified foreign crew; recognises the problem of marine recruitment companies advertising jobs abroad but not in the UK; acknowledges the impact this may have on the British merchant shipping industry and the employment prospects of young sea cadets; believes the increase in numbers of foreign crew on British ships has the potential to cause problems in the industry due to language barriers and unfamiliarity with local seas; calls on British shipping companies to work with the maritime union Nautilus to support seafarers who have lost their jobs or are facing redundancy; and further calls on the Government to review the recruitment practices of UK shipping companies and provide an assessment of the impact these redundancies are having on the UK maritime industry.

Early day motion 160

Day of the Seafarer 2014

Session: 2014-15

Date tabled: 23.06.2014

Primary sponsor: Turner, Karl

Sponsors: McDonnell, John, Cunningham, Alex, Morris, Grahame M, Clark, Katy, Davidson, Ian

That this House recognises 25 June 2014 as Day of the Seafarer; notes the critical economic, social and cultural importance of the UK's 10,840 officers, 8,590 ratings and 1,990 officer cadets working at sea today; expresses dismay at the ongoing decline in the number of registered UK seafarers, with a 30 per cent fall in the number of ratings alone since 2011; further notes that this decline is largely due to the continued exclusion of seafarers from the full protections of the national minimum wage and the Equality Act 2010, which has allowed the undercutting of employment standards in the maritime industry; further notes that this has resulted in pay rates for seafarers in the UK ferry industry as low as £2.35 per hour, whilst ship owners in the Tonnage Tax scheme are benefiting from tax relief currently standing at over £1.5 billion; supports the National Union of Rail, Maritime and Transport Workers' Ships of Shame campaign which highlights this exploitation of seafarers; and calls on the Government to mark Day of the Seafarer by committing to full enforcement of the national minimum wage in the maritime sector and implementation of the recommendation of the Government-commissioned Carter Review which called for the end of differential pay in the shipping industry.

Future of the UK Maritime industry 19

6. Reports 2017 is the Year of the Navy

Ministry of Defence

UK National Shipbuilding Strategy: an independent report

Sir John Parker (with regarding the Naval procurement)

Maritime Growth Study: keeping the UK competitive in a global market

Department for Transport

One Voice for Marine Conservation

North Sea Marine Cluster

A World Class Maritime Nation

HM Government

Blueprint for Growth

UK Chamber of Shipping

SMarT Plus: A proposal to increase the number of British seafarers

UK Chamber of Shipping

Blueprint for Ports Policy

British Ports Association

Maritime Manifesto for UK seafarers training and employment.

Rail Maritime and Transport Workers Union (RMT)

The Free Ports Opportunity

Centre for Policy Studies

Library briefings

The Royal Navy's new frigates and the National Shipbuilding Strategy: December 2016 update

20 Number CDP-2017/0009, 10 January 2017

UK offshore oil and gas industry

Brexit: how will it affect transport?

DEBATE PACK CDP-2017/0009 10 January 2017

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