The boss of P&O Ferries – known for its fire-and-rehire of nearly 800 workers – has said he could not live on the less than £5-per-hour some of his staff are paid.
The ferry company is paying employees an average of£5.20 an hour, two years after making 786 people redundant, and rehiring cheaper workers, P&O Ferries chief executive Peter Hebblethwaite told the Commons’ Business and Trade Committee.
Some earn as little as £4.87 an hour, Mr Hebblethwaite added, as MPs on the committee presented him with evidence that some staff were paid as low as £2.90 an hour for their first eight hours of work.
Image: P&O chief executive Peter Hebblethwaite
During exchanges, committee chair Liam Byrne asked Mr Hebblethwaite: “Do you think you could live on £4.87 an hour?”
Mr Hebblethwaite replied: “No, I couldn’t,” before admitting he earned £508,000, including a bonus of £183,000 last year.
While he said he could not live on such pay, the CEO said the rates were “considerably ahead of international minimum standards”.
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“These are international seafarers who we are, or our crewing agent is, recruiting from an international field, and we pay substantially ahead of the international seafaring minimum wage,” he added.
But P&O Ferries uses maritime workers employed by an overseas agency, who work on ships which are foreign-registered in international waters, so the rates do not apply.
When he last appeared before the committee in March 2022, Mr Hebblethwaite said P&O Ferries workers would receive at least £5.15 every hour.
“People who could work anywhere in the world on any ship choose to come over to us and make a choice to come back,” he said on Tuesday.
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P&O chose to break the law by not consulting before sacking 800 staff because it knew
Fire-and-rehire fallout
Despite the move to get rid of the nearly 800 staff in March 2022, Mr Hebblethwaite said P&O Ferries has always complied with national and international law.
That decision is still under investigation by the government.
While a criminal investigation conducted by the insolvency service concluded in August 2022 that it would not commence criminal proceedings, a civil investigation by the government body is ongoing.
“I confirmed that this decision was legal,” Mr Hepplethwaite added. “That is not to say I don’t regret it, I regret it. I am deeply sorry for the impact it had on 786 seafarers and their families. I wish we’d never had to have made that decision.
Had it not been made, Mr Hebblethwaite said the operation of P&O Ferries would have been at risk.
“Without that difficult decision I would not be here today and we would not have been able to preserve the 2,000 jobs that we have been able to preserve.”
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Despite the widespread condemnation and political lens that zeroed in on the company, a seafarers’ rights charter has not yet been signed by P&O Ferries.
Mr Hebblethwaite couldn’t say whether workers were allowed to leave the ship during a 17-week working period and will write to the committee with an answer.
“I believe they are, but I believe there are some technicalities,” he answered.
Responding to the evidence, the head of the TUC (Trade Union Congress) Paul Nowak said: “It beggars belief that P&O Ferries has faced no sanctions for its misdeeds and that its parent company DP World has continued to be awarded government contracts.
“For too long, parts of our labour market have resembled the Wild West – with many seafarers particularly exposed to hyper-exploitation and a lack of enforceable rights.
“It’s time to drag our outdated employment laws into the 21st century. Without this, another P&O Ferries scandal is on the cards.”
A New York-listed company with a valuation of more than $21bn is to snap up Space NK, the British high street beauty chain.
Sky News has learnt that Ulta Beauty, which operates close to 1,500 stores, is on the verge of a deal to buy Space NK from existing owner Manzanita Capital.
Ulta Beauty is understood to have registered an acquisition vehicle at Companies House in recent weeks.
Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.
Those delivery targets are now being revised downwards.
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Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.
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The sale of Royal Mail was approved in December
The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.
A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.
It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.
A welcome change?
Unsurprisingly, the company welcomed the announcement.
“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.
“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”
Citizens Advice, however, doubted whether services would improve as a result of the changes.
“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.
“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”
Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.
Changing habits
Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.
According to Ofcom research, people want reliability and affordability more than speedy delivery.
Royal Mail has been loss-making in recent years as revenues fell.
In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.
“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.
Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.
An industry body has warned that the equivalent of more than one pub a day is set to close across Great Britain this year.
According to the British Beer and Pub Association (BBPA), an estimated 378 venues will shut down across England, Wales and Scotland.
This would amount to more than 5,600 direct job losses, the industry body warns. It has called for a reduction in the cumulative tax and regulatory burden for the hospitalitysector – including cutting business rates and beer duty.
The body – representing members that brew 90% of British beer and own more than 20,000 pubs – said such measures would slow the rate at which bars are closing.
BBPA chief executive Emma McClarkin said that while pubs are trading well, “most of the money that goes into the till goes straight back out in bills and taxes”.
“For many, it’s impossible to make a profit, which all too often leads to pubs turning off the lights for the last time,” she said.
“When a pub closes, it puts people out of a job, deprives communities of their heart and soul, and hurts the local economy.”
She urged the government to “proceed with meaningful business rates reform, mitigate these eye-watering new employment and EPR (extended producer responsibility) costs, and cut beer duty”.
“We’re not asking for special treatment, we just want the sector’s rich potential unleashed,” she added.
The government has said it plans to reform the current business rates system, saying in March that an interim report on the measure would be published this summer.
From April, relief on property tax – that came in following the COVID-19 pandemic – was cut from 75% to 40%, leading to higher bills for hospitality, retail and leisure businesses.
The rate of employer National Insurance Contributions also rose from 13.8% to 15% that month, and the wage threshold was lowered from £9,100 to £5,000, under measures announced by Rachel Reeves in the October budget.