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Shapps told about P&O ‘challenges’ but not redundancies in November meeting

New minutes show the Transport Secretary was told a new ‘low-cost competitor’ would cause issues.

25 March 2022

Transport Secretary Grant Shapps was warned about a “new low-cost competitor” which could present “challenges” to P&O Ferries, in a meeting with the boss of the firm’s parent company last year.

Newly-released minutes of a meeting between Mr Shapps and the chief executive and chairman of DP World, Sultan Ahmed Bin Sulayem, showed Mr Shapps was told Irish Ferries would pose “challenges in respect of P&O’s operations”.

The Department for Transport said that Mr Shapps was not told about any plans to lay off workers, and it is understood the comments by Mr Bin Sulayem were considered open-ended and to not give any clear indication of planned redundancies, or the way in which the company ended up carrying these out.

P&O Ferries announcement
A demonstration against the dismissal of P&O workers (Andrew Milligan/PA)

According to the minutes, from a meeting during a visit to the United Arab Emirates on November 22 last year, Mr Shapps told Mr Bin Sulayem: “I’m aware of the issues relating to P&O. I recognise you will need to make commercial decisions, but please do keep us informed.”

It comes as Prime Minister Boris Johnson backed Mr Shapps’ call for P&O Ferries’ chief executive Peter Hebblethwaite to quit, over the sacking of 800 workers without notice.

Mr Shapps said he did not know of P&O’s actions until he was standing at the despatch box in the Commons, and said the company was trying to “distract attention” from its failure to provide notice of job cuts by claiming it informed him of its plans last year.

Mr Hebblethwaite said on Thursday that Mr Shapps knew about the intention to slash jobs in November.

Asked if Mr Hebblethwaite was lying about this, the Transport Secretary told Sky News: “I think we can all see that what they’re trying to do is distract attention. The fact of the matter is that they needed to give 45 days’ notice to ministers, in fact to the secretary of state for business, if you’re making these kind of redundancies.

“They did not do that, they did not provide the notice.”

Asked when he first became aware of the crisis at P&O, he said: “I was actually stood at the despatch box on Thursday when news started to come out about it. For completeness, I should say that the night before I was informed by my office that there’d be another round of redundancies at P&O.

“But P&O have made redundancies in the normal way in the past, including particularly during coronavirus, and so that in itself, whilst obviously really unfortunate – if they’d gone through the normal consultation process, worked with the workers, worked with the unions, we wouldn’t be sitting here where we are today.”

Mr Shapps said Mr Hebblethwaite should resign after his “brazen” comments to MPs, where he admitted breaking employment law.

Speaking on Good Morning Britain, Mr Shapps promised to “make sure the laws are changed to stop them using loopholes like flagging their ships in Cyprus to avoid and evade British law and not give notice of what they were doing, and not talk to the workers and the unions”.

The Transport Secretary told Sky News: “I thought what the boss of P&O said yesterday about knowingly breaking the law was brazen and breathtaking, and showed incredible arrogance.

“I cannot believe that he can stay in that role having admitted to deliberately go out and use a loophole – well, break the law, but also use a loophole.”

Pressed on whether that means he is calling for Mr Hebblethwaite to resign “right now”, he said: “Yes.”

Asked later if the Prime Minister supports the call for Mr Hebblethwaite to quit, a No 10 spokesman said: “Yes.”

On Thursday, Mr Hebblethwaite was urged by MPs to quit after acknowledging there is “absolutely no doubt” the ferry operator was required to consult with trade unions.

The company replaced its crews with cheaper agency workers last week.

The chief executive admitted the new crews are being paid below the UK’s minimum wage apart from on domestic routes, but insisted this is allowed under international maritime rules.

Mr Hebblethwaite, whose basic annual salary is £325,000, said the average hourly pay of the new crew is only £5.50.

The minimum wage in the UK for people aged 23 and above is £8.91 per hour.

P&O Ferries
Peter Hebblethwaite, P&O Ferries chief executive, answers questions in front of MPs (House of Commons/PA)

Mr Shapps said: “What I’m going to do… is come to Parliament this coming week with a package of measures which will both close every possible loophole that exists and force them to U-turn on this.

“We are not having people working from British ports… plying regular routes between here and France or here and Holland, or (anywhere) else, and failing to pay the minimum wage. It’s simply unacceptable and we will force that to change.”

“P&O will need to re-employ people on the proper salaries,” he said, confirming this would mean national minimum wage.

Mr Shapps also said P&O Ferries had “attempted to pay off their staff with higher redundancy payments… and therefore buy their silence”.

The Rail, Maritime and Transport union said it will be meeting P&O Ferries on Friday to demand the reinstatement of the sacked seafarers.

The union is also organising a protest next week outside the Glasgow offices of Clyde Marine Recruitment, claiming the company has been taking on workers to replace some of the seafarers sacked by the ferry giant.

The Nautilus union has also criticised the firm.

A spokesman for Clyde Marine Recruitment told the PA news agency: “We are disappointed that the RMT and Nautilus continue to single out our small company.

“We have spoken with them and explained the limited numbers involved in this situation, many of whom were on (board) before P&O sacked their workforce, and yet they continue to highlight us unfairly.”

TUC general secretary Frances O’Grady said it was a “watershed moment” for the UK shipping industry and workers’ rights.

“(P&O’s) owner must be given pariah status and lose all its Government shipping and freeport contracts with immediate effect until workers are reinstated.”

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