UK politics live: minister ‘horrified’ to hear P&O knowingly broke law by not consulting on sacking workers | Politics

Andy McDonald (Lab) is asking the questions now.

Q: Will ministers consider stepping in and operating these ferries as an operator of last resort?

Courts says what P&O have done is “disgusting”. But the government has to act within the law.

McDonald replies: “This is the law factory. We can make the law.”

Courts ignores the point, and just says government has to act within the law.

Q: Will you cancel DP World’s involvement in two freeports?

Courts says the government is looking at this. But these schemes have implications going beyond transport. And, as the PM said at PMQs yesterday, the government also wants to protect inward investment.

Ben Bradshaw (Lab) is asking the questions now. He asks why the government won’t seek an interim injuction now to suspend the sackings in the light of the P&O Ferries’ admission that they broke the law.

Scully says the government has already asked the Insolvency Service to look at this. He says he is speaking to them on a daily basis.

Bradshaw asks if they have consulted the attorney general, the government’s most senior law officer, about what might be done.

Scully implies he hasn’t. Huw Merriman, chair of the transport committee, asks if he will now consult the attorney general in the light of the new evidence heard today. Scully says he will.

Scully tells the committee that, when companies realise that they rise unlimited fines for breaking these laws, that will stop them.

Here is my colleague Gwyn Topham’s snap story on the committee hearing.

The commitee is now taking evidence from Paul Scully, the business minister, and Robert Courts, the transport minister.

Scully says he was “horrified” to hear Peter Hebblethewaite say earlier that the company had broken the law by not consulting its workers. (See 11.48am.)

The government is writing to the Insolvency Service about this. It will look at the liability of individual directors, he says.

He says ministers want answers as soon as possible.

Huw Merriman (Con), chair of the transport committee is asking the questions.

Q: What are you going to do immediately? They are laughing at parliament.

Scully says the government is looking at whether directors are fit and proper; at whether the government broke the law on notification, in Cyprus and in the UK; and at whether they broke the law on consultation.

Q: Have you considered an injunction? They have just said they broke the law.

Scully says the government has looked at this. An official giving evidence alongside him says they have not found any powers they could use to seek an injuction.

Merriman says the government should go to the high court anyway, even if there is risk of losing.

Scully says, if the company has breached notification law, the company could face an unlimited fine.

Q: Have you seen the notification letters sent to three different juristictions?

Scully says the government has not. A failure to notify Cyprus would come under Cypriot law, he says. The goverment is looking at the implications under UK law.

He says P&O Ferries has responded to requests for information. But the government is not taking that at face value.

Darren Jones (Lab) says P&O Ferries chose not to consult the workforce, and to pay off staff instead. Are you in breach of your obligations as a company director?

Hebblethwaite says the company did not think it had any alternative. He does not dispute the claim that the company broke the law.

In response to claims that the company is now “morally bankrupt”, if not financially bankrupt, Hebblethwaite accepts that the reputation of the company has taken a hit.

But he says that if the company had not acted, it would have gone bust. He says:

The whole business would have closed and we would have lost a British icon and 3000 people would have lost their jobs.

He admits that bookings have gone down as a result of what happened, particularly on the Dover-Calais route.

Q: Did the company give the government any advance notice of what was happening?

Hebblethwaite said Grant Shapps, the transport secretary, was in Dubai last November for Expo. He said Shapps met some executives from DP World, the P&O Ferries parent company, and as part of a wider discussion about investment in the UK, “the subject of P&O Ferries was brought and that we would be needing to make some changes to our business this year”.

Hebblethwaite said at that point the plans had not been finalised. So, he said, he doubted Shapps was given much detail.

Later, when pressed on this again, he said he did not think the conversation with Shapps in November about restructuring would have contained “much substance”.

Hebblethwaite says this was a board decision by P&O Ferries. He says it was not forced on them by DP World, their Dubai-based parent company.

He says they anticipated it would be “very difficult, very controversial”.

Q: Are you worried this could bring about the end of the company?

Hebblethwaite says it will be a tough job rebuilding the company. But it will now be competitive.

Hebblethwaite clarifies the lowest pay rate being offered. It is £5.15 an hour, not £5.50 an hour, which was the figure MPs thought he said earlier. But he says it varies between £5.15 and £6 – depending on exchange rates.

UPDATE: PA Media has more on this exchange.

Asked how much money P&O Ferries will save by sacking 800 staff and employing agency workers, Hebblethwaite said: “This entirely different model is about half the price of the previous model.”

Questioned on what the lowest hourly rate would be in the new model, Hebblethwaite said: “About £5.15. The average rate is from about £5.50 to about £6, depending on exchange rate.”

Commenting on whether he believed that was a fair wage or whether he saw it as “modern day slavery”, Hebblethwaite said: “The rates we are paying are in line or above ITF minimum standards and it is the operating model that the vast majority of operators across the globe work to. So this is the competitive standard.”

Hebblethwaite admits the company did not consult the workforce about the sackings. He says workers are being compensated for that.

Asked why security guards were employed to escort people off ferries yesterday, Hebblethwaite says it was a stressful time for them. McDonald says the company made it stressful.

Hebblethwaite says, where the company is governed by the national living wage, it will pay it. But he says it does not apply in all circumstances for shipping.

On the routes that are international routes, that are governed by ITF [International Transport Workers’ Federation] standards, we are paying above ITF minimum wages …

Where we are governed by national minimum wage, we will absolutely pay national minimum wage. This is an international seafaring model that is consistent with models throughout the globe and our competitors.

Asked by Labour’s Andy McDonald if he could survive on £5.50 an hour, Hebblethwaite declines to answer. McDonald says he takes that as a no.

UPDATE: PA Media has more on this exchange.

Hebblethwaite did not answer when asked by McDonald: “Could you sustain your lifestyle?” if he was paid the same as the new workers.

McDonald went on: “No, you couldn’t, could you? Why do you expect people who’ve got such responsible jobs to be able to do that? How do you expect them to be able to feed their families and pay their bills?”

Peter Hebblethwaite, chief executive of P&O Ferries, is about to start giving evidence to a Commons committee investigating his companies decision to sack 800 seafarers last week with no notice.

Darren Jones (Lab), chair of the Commons business committee, started by saying he had looked at Hebblethewaite’s CV. He asks if the company is in this mess because Hebblethwaite does not know what he is doing. “Or are you just a shameless criminal?”

Hebblethwaite starts with an apology. He says he wants to start with an apology to the seafarers affected by last week’s decision, to their families and to other employees.

Can I start these with an apology? An apology to seafarers that were affected on Thursday of last week, an apology to their families, an apology to the 2,200 of our employees who have had to face very difficult questions over the last week or so.

You may see this as a late apology and I just want to reassure you the reason that you’re hearing this for the first time today is because I’ve spent the last week in the business, talking to our people one to one.

He says the company was losing “an unsustainable amount of money”. If the firm had not acted, it would have had to close, he says.

He disputes claims heard by the committee earlier that the firm was in breach of its obligations to give sufficient notice of the sackings to the authorities where the ships are registered.

Hebblethwaite says he is paid £325,000.

Q: Would you take a performance related bonus if offered?

Hebblethwaite says that is not something he has considered.

He claims some of the dismissed staff could receive as much as £170,000 as a pay-off. When pressed, he admits that very few people are in this category. But he says 40 people could get more than £100,000.

And here is a full summary of the key points from Paul Johnson’s IFS briefing. (See 10.38am.)

• The IFS described Rishi Sunak as a “fiscal illusionist”, stressing that overall taxes are rising under his plans. (See 10.38am.) Sunak is presiding over “a very big increase in the tax burden”, despite his rhetoric implying otherwise, Johnson said.

• The IFS said the income tax cut pencilled in for 2024 would not lead to the overall tax take falling that year because of inflation and fiscal drag (tax thresholds not rising as fast as wages). Johnson said:

On current plans Mr Sunak’s income tax changes won’t actually depress income tax revenues in 2024-25. Despite the cut in the basic rate planned for that year, the income tax take will stay about the same as in the previous year, and then continue rising. That’s the effect of inflation and fiscal drag. They have magically doubled the scale of the tax rise he announced last year – the four-year freeze in the personal allowance and higher rate threshold. The proposed cut in the basic rate gives back only about half of the additional windfall he is now expecting to enjoy from that measure.

• The IFS said it was inevitable that the £2.4bn cut in fuel duty announced yesterday would end up being permanent – and not a 12-month one-off, as intended. That means that next year the Treasury will have to find the money to fund it. Johnson said:

There’s another illusion in there too – the annually repeated illusion that fuel duties will actually rise next year. Not only do the public finance forecasts depend upon the 5p cut being reversed, they assume an increase in line with the RPI on top of that. The odds against the former feel long. I reckon an RPI increase on top is about as likely as my winning the national lottery. And I don’t play the lottery.

• The IFS said public sector workers face “hefty” real-terms pay cuts in the future. (See 10.38am.)

• It said that increasing the national insurance threshold was a “pretty progressive giveaway”. But it said cutting the basic rate of income tax was “regressive”.

• It said the statement had exposed the “absurdity” of claiming that the health and social care levy (the national insurance increase) was linked to health and social care spending. Johnson said:

The absurdity of the idea that the NI increase, which will become the health and social care levy, is in any way hypothecated to health and social care was laid even more bare yesterday. The cut in NI receipts from yesterday’s new measure is not leading to, and of course should not lead to, a cut in funding for the NHS and social care.

• The IFS said Sunak had not taken the chance “to protect the poorest more fully” by uprating their benefits in line with actual inflation.

• It said increasing national insurance while promising to cut the basic rate of income tax was “indefensible from an ecnomic point of view”, although it said there might be political reasons for these moves.