P&O ferries made the right decision
Why outrage and grandstanding is clouding the real issues of globalisation
We hear today that the UK's transport secretary, Grant Shapps, will force P&O Ferries to re-employ its 800 sacked seafarers by requiring all ferry firms to pay the minimum UK wage if they operate from UK ports. The only thing this is likely to achieve is the loss of another 2,200 P&O ferry jobs when the company is forced into liquidation. Amidst all the outrage and grandstanding, no-one is talking about the real issues here: the effects of globalisation and how we can best respond to them.
In case you missed the story, a furore was unleashed when P&O summarily sacked 800 staff from its ships and replaced them with agency workers. The company deliberately ignored the law that requires them to consult with unions. 800 lives were ruined in an instant by the evil corporate psychopaths, who exist only to oppress the honest, hard-working British mariner. Or so you would believe from most of the press coverage and the explosive House of Commons Transport Select Committee that interviewed Mr. Hebblethwaite on 24th March.
The reality, in so far as I can establish it, is quite different. The commons committee is worth watching for an unvarnished view of the interaction which is considerably deeper than the headlines might have you believe.
It seems clear that P&O ferries felt it had no choice to take this drastic step. Peter Hebblethwaite repeatedly stated that the alternative was to close the business and lose all 3,000 jobs because the company had been losing hundreds of millions of pounds for years and simply wasn't viable. Now, you might think they did have a choice but given they foresaw the extreme reaction this act would produce, and consequent harm to their brand, it rings true that there was no alternative.
Why didn't they consult? Well, apparently they knew that the unions could not accept the change to their business model and it would have been a "sham" exercise to consult with the decision already made. Also (though not mentioned), I suspect the lack of any effective punishment for breaking this law was part of the decision. Finally, Hebblethwaite hinted at the huge problems they might encounter with their own staff if this plan became public before it was enacted.
Why the change to the business model? Well, there is a global mariner's market and the brutal reality is that salaries are low worldwide because there is a ready supply of people from poorer countries willing and able to work for wages far below the UK's minimum wage - wages that for them are NOT low, however we might feel about them. Competitors that use this labour can undercut P&O and operate routes at a lower cost. Apparently, this change will cut P&O's costs by 50%, so it is a pretty enormous change. The average new wage will be £5.50.
In the committee, MP after MP lined up to condemn these wages as "modern slavery", it was quite sickening to see the amount of virtue signalling on show as they condemned the wicked patriarch in front of them in their role as saviours of the people. These same MPs enjoy these low wages when they take advantage of cheap cruise ship holidays and can't stop telling their friends what a bargain they bagged at the travel agent.
Why shouldn't people from poorer countries be able to work for wages that may be low for us but are high for their country? Should we be stopping them supporting their families back at home as a route to a better life? Do we have the moral right to do that? What should our policies be? These are the kinds of questions the committee should have been exploring, but alas did not.
Of course, for those made redundant it is an awful thing for them and their families, but here too things are not as they seem. P&O recognised this and have offered a very generous redundancy package with one member of staff receiving over £170,000, forty more getting over £100,000 and the minimum - applying even to though joining in the last few months - of £15,000. For sure it is a terrible thing to lose your job but there are thousands of people losing their jobs every month who don't get anything like as generous a scheme and are left with the miserly statutory minimum. In the scheme of redundancies, these people have been made a good offer. Naturally, not a single MP acknowledged this.
The tone of the whole parliamentary session was set by the "when did you stop beating your wife?" starter question from the chair, who after rubbishing his CEO credentials asked Mr. Hebblethwaite: "are you in this mess because you don't know what you are doing or are you just a shameless criminal?". I really wish MPs would stop doing this because the "poisoned question" approach just puts witnesses on the defensive and stops us getting to the truth.
And so the real issue wasn't explored at all - which is, what do we do in a globalised world when paying seafarers our (relatively) high minimum wage isn't competitive. Should we accept cheap foreign labour? Should we pay higher taxes to subsidise services as some European countries do? I don't know the answer but I do know that we should not bury our heads in the sand and refuse to discuss it.
Where is this debate? It is certainly absent in Westminster.
It is also absent from Grant Shapps' response, which is largely just posturing, and the part that isn't is strangely specific - why only target Ferry operators with a change?
If what P&O are saying is true, this government change will lead to the company going out of business and the loss of another 2,200 jobs, jeopardise the redundancy packages for the 800, plus most likely double the ferry prices for UK port trips as the remaining companies are forced to pay the UK minimum wage. Of course, that doesn't affect most MPs because they don't use the ferries, but it certainly will affect ordinary families who depend on them. Congratulations Mr. Shapps, trebles all round!
In a feeble alternative to grappling with the real issues, Shapps also threatens to disbar Hebblethwaite as a company director on the grounds that he did not act in his employees' interest. I am certain this will fail and if it ever went to court, I imagine he could easily prove that he did the exact opposite faced with a persistently loss-making company that faced closure.
This is hopeless. This is not effective scrunity that stands up for people's rights. This is dysfunctional political posturing that completes fails to get to grips with the real issues.
We must do better.