National Minimum Wage

John McDonnell Excerpts

Wednesday 15th January 2014 Commons Chamber

[Vince Cable]

The rise to £20,000 is a fourfold increase. However, the big difference is in applying that fine per worker rather than per company. That is a considerable escalation of the penalties. I hope that we will have the support of Opposition Members in voting that through.

[John McDonnell (Hayes and Harlington) (Lab)]

Is not the difference between this country and the countries cited by the right hon. Gentleman that they still have vibrant trade union rights and are not condemned annually by the International Labour Organisation, as this country is, for undermining trade union rights?

[Vince Cable]

Those countries have had a variety of Governments, both left-wing and right-wing. I was simply making the point that it is possible to have a perfectly viable system without a national minimum wage. I agree with the hon. Gentleman that in practice what is needed is either a strong system of trade union rights or a national minimum wage. We have now all accepted that the national minimum wage is the best system. I think all the minority parties accept that, too.

--- Later in debate ---

[John McDonnell (Hayes and Harlington) (Lab)]

Let me use the last few minutes of the debate to identify some cases, as my comrades have done. We have been asked to name and shame, so let us do that. We have been campaigning in the maritime sector for a national minimum wage for a long time. To be frank, people were disappointed at developments under the last Government, but we did secure a working party between the National Union of Rail, Maritime and Transport Workers, Nautilus and the Department, which produced a redefinition of the national minimum wage qualifications for seafarers. It was done on the basis of the individual’s connection with the country and so forth, and we felt that it was a breakthrough, but it is not being enforced.

Let me provide an example. The most notable exception that we found involved the lifeline passenger freight ferry routes from Portsmouth, Poole and Weymouth to the Channel Islands. They are operated by Condor Ferries, which employs seafarers from outside the European economic area who are paid £2.35 an hour. Despite frequent protests against the pay discrimination by the RMT, the HMRC enforcement team has taken no action, and is not enforcing the Government’s own policy. I agree with the Public and Commercial Services Union that that is because there are so few staff and they are not given enough powers or resources. That firm is a disgrace. We have raised the issue time and again, but we have been completely ignored, and enforcement action is now necessary.

In 2012, we pointed out that Streamline Shipping was operating a freight service from Aberdeen to the Shetland Islands and exploiting the Government’s lax national minimum wage and Equality Act 2010 regulations to employ Filipino workers and pay them half the minimum wage. We want all workers, whatever their nationality, to be paid a decent wage.

Another scam has been referred to by my hon. Friends. The cost of accommodation is now being deducted from seafarers’ wages. The sum deducted is currently £4.91 per day, or £34.73 per week. On most ships that sail from our ports, seamen work two weeks on, two weeks off, so that amounts to a deduction of some £70. That is extraordinary. Do the seamen clock off and go home on their own boats? Are dinghies attached to the boats? It is ridiculous, and it is yet another way of undermining pay in the sector.

Finally, let me take up what was said by my hon. Friend the Member for North Tyneside (Mrs Glindon) about apprentices’ pay. Along with the UK Chamber of Shipping, the employers and the unions—the RMT and Nautilus—we have embarked on a drive to get young people back on to British ships as ratings. They can train with a grant, and subsequently rise to officer level. We are trying to encourage people to learn the skills of British seafaring so that we can maintain the industry itself. Our efforts are not helped by some recruitment practices, but at least we have a campaign going. Paying people £2.68 an hour, even when they are apprentices, is not acceptable. In the last few years, the apprenticeship rate has gone up by 18p. That is a derisory amount, and I do not think that it can serve as an incentive for our young people.

We want the national minimum wage regulations to be reviewed again. Following a campaign by us, they were reviewed, and we were told that the minimum wage would apply in British waters, but the Government then redefined the concept of British waters, which became a narrow channel consisting basically of the Norfolk Broads. That was about it. As a result, employers were able to pay below the minimum wage, and also to avoid some elements of the Equality Act. That is unacceptable in this day and age. I urge the Government at least to consider enforcement against that company, so that we can use it as an example to make clear to other shipowners that we will not tolerate any more poverty pay on British ships.