Why P&O Ferries’ pariah status may never change
P&O Ferries’ summary sacking of hundreds of seafarers in March 2022 was and remains perhaps the most ruthless act of “restructuring” in British corporate history.
From the furthest left of the trades union movement to the right of the Conservative government, P&O and its lightning-rod chief executive Peter Hebblethwaite were condemned for shamelessly putting profit before people, without the courtesy of notice and due consultation.
Two years on, the company remains unapologetic and a pariah to some, including the transport secretary. That may never change. But long-overdue accounts for 2022 do illuminate why the company acted as it did.
In 2022, buffeted by Brexit and with passenger numbers devastated by COVID, P&O was holed below the water line, leaking cash and sinking fast.
Losses in 2021 had swelled to £375m, with payroll costs for 3,018 employees – 859 of them seafarers – of more than £132m.
It was also in breach of its covenants on more than £70m of loans from an external lender underwriting the cost of new hybrid cross-Channel ferries.
Read more: P&O spent £47m sacking and replacing 800 British workers
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Chancellor quizzed over P&O ferries
Only rolling and increasing loans from parent company DP World were preventing P&O from going under.
As well as earning at least the UK minimum wage, those seafarers were bound by work patterns negotiated with unions, including the RMT, that P&O says lacked flexibility and left some crossings unprofitable.
By contrast one of their competitors on the Dover-Calais route, Irish Ferries, was exploiting international maritime law to pay agency seafarers far less.
Peter Hebblethwaite, chief executive of P&O Ferries. Pic: PA
Mr Hebblethwaite’s response – and DP World insists it was his call – was breathtaking. The unionised workforce was fired by video call, escorted from vessels and, after a four-week shutdown, replaced by workers largely flown in from beyond Europe for rosters involving months at sea.
That move saved more than £21m from the payroll and helped a turnaround the company says will see a return to pre-tax profit this year.
Ask P&O executives in Dover or those from its parent company in Dubai, and they will tell you the ends justified the means, and point out that passenger numbers are increasing.
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New laws that came too late for sacked workers
And these accounts have been filed just as legislation takes effect that would have removed any advantage from the sackings.
Since May, French law has required the minimum wage to be paid in French waters, and from December, UK law will require the same, making the Channel a haven of relatively high pay in a maritime industry overwhelmingly fuelled by cheap labour sourced from Asia.
It is an irony unlikely to be lost on seafarers who paid with their jobs.
The first three railway companies to be nationalised have been named as part of the new Labour government’s plan to bring rail into public ownership.
In May the service from London’s Waterloo station to southwest London, South Western Railway, will become the first to be nationalised, the Department for Transport said.
It will be followed by the London to Essex route c2c in July and east coast operator Greater Anglia in autumn, the department said.
Taking the businesses out of private ownership will reduce delays and cancellations that have plagued rail services across Britain, the government said, in turn encouraging more people to take the train.
It hopes £150m will be saved by passenger fares going to services rather than company shareholders.
Money blog: Market town with average house price of £440k named happiest place to live
The pledge was a key point of differentiation between Labour and the Conservatives during the election campaign.
Services are currently contracted out, meaning companies such as Italy’s primary operator Trenitalia bid to run services.
Under the new system, taxpayers will not have to compensate firms for terminating their contracts.
Eventually, all companies will come under the auspices of a new state-owned company called Great British Railways.
This rail nationalisation process is expected to be completed over the next three years, according to the Department for Transport.
Of 14 train operating companies to be taken over by the government, four are already under state control having been put under special administration for poor services.
Not all train services will become public with services such as the Heathrow, Stansted and Gatwick Expresses remaining in private hands.
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In total, there are 28 British rail operators.
Transport Secretary Heidi Alexander told Sky News privatisation has not worked due to “huge fragmentation” under the system with a “dizzying array of private companies”.
“Financial incentives are misaligned, and there’s no real overarching direction. And so I think as a result of that, no one’s in control,” she added.
When asked, she did not say rail fares would come down under nationalisation.
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‘Admirable’ for Haigh to resign
It’s Ms Alexander’s fourth day on the job after the shock resignation of former transport secretary Louise Haigh.
She resigned after Sky News revealed she pleaded guilty to an offence related to incorrectly telling police that a work mobile phone was stolen in 2013.
Woodbridge is the place to be for residents wanting to live the happiest life, according to new research.
The market town in Suffolk topped Rightmove’s annual list of the happiest places to live in Britain for the first time after knocking London’s Richmond upon Thames off the top spot.
Residents of Woodbridge gave high scores for feeling that they are able to be themselves in the area, the community spirit and friendliness of the people, and access to essential services such as doctors or schools.
Richmond upon Thames came in second, while Hexham, in Northumberland, nabbed third.
Woodbridge mayor councillor Robin Sanders said: “The happy mood of residents is a reflection of the vibrant town centre.”
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More than 35,000 people across Britain completed the Rightmove study, with residents asked questions such as how proud they feel about where they live, their sense of belonging, public transport and whether they earn enough to live comfortably.
Richmond Thames riverfront. Pic: iStock
According to the property portal, Monmouth is the happiest place to live in Wales, while Stirling was top in Scotland.
Feeling proud to live in an area was the main factor in overall satisfaction, Rightmove said, while living near family and friends was the smallest driver.
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