Thursday, March 27, 2014

Training for Freight and Passenger Shipping Crews Requires Tonnage Tax Amendment

Reform of Regulations Needed and Agreed by Commons Transport Committee and Trade Union
Shipping News Feature

UK – The RMT trade union, which represents many of Britain’s rail, maritime and transport workers, has given a ‘broadly welcoming’ response to the recent recommendations emanating from the Commons Transport Committee, which endorses the RMT’s view that the Tonnage Tax is in need of an overhaul to further support employment in the country’s freight and passenger shipping sector. The report had three main aims: to promote the UK as a globally competitive location for shipping which encourages maritime trade; to build a maritime skills base that supports a vibrant UK maritime sector; and to ensure that UK shipping is safe, secure and environmentally responsible.

Whilst the union agreed that the Committee also made helpful recommendations on resource and staffing levels at the industry regulator (the Maritime and Coastguard Agency) and employment standards on ships flying Red Ensign Group flags it was less enthusiastic regarding the lack of recommendations from the Committee to reverse what it terms an ongoing decline in UK seafarers, saying these numbers fell again by 5% in 2013 to a total of ratings and officers of 22,830.

The tonnage tax involves the taxable profits of UK shipping firms being determined according to the carrying capacity of the ships in their fleet. Firms generally pay less corporation tax than would have been the case before, in return for committing to train new recruits each year. It includes a minimum training obligation which shipping firms that benefit from the favourable tax treatment must meet. The DfT said ‘the training obligation requires each shipping company to recruit and train one officer trainee a year for every 15 officer posts in its fleet, and to consider employment and training opportunities for ratings'.

In 2010–11, the last year for which comprehensive figures are available, 87 firms provided over 22,000 months of training to trainees. Just under 19% of training months involved a payment being made in lieu of training. The total cumulative training commitment in 2012–13 was around 1,700 trainee places.

Although there is general support for the provision of training via the incentive of the tonnage tax, the RMT argued that the cost per officer trained since 2000–01 was around £100,000, significantly higher than the cost of subsidised training under the SMarT scheme, it also pointed out that the number of UK seafarers had continued to reduce since 2000 and the proportion of UK seafarers working on tonnage tax ships had fallen from 52% in 2001–02 to 23% in 2012–13.

The union called for firms which benefit from the tonnage tax to be required to employ more UK seafarers and also argued that the tonnage tax did little for the training and employment of ratings. On this issue, there was common cause between unions and ship owners and operators with the Department telling the Committee it wanted to see evidence that there was increased demand from industry for UK based ratings and long term employment opportunities for newly trained ratings.

With the Committee sympathising with the argument that the tonnage tax regime should support the training of ratings as well as officers and stressing it said it looked forward to Maritime UK and the trade unions working together to demonstrate that ratings trained in this way would find long term jobs in the shipping sector. Once this evidence is provided, it recommended that the Government introduce a pilot scheme to demonstrate whether this form of training would be viable. The union’s Senior Assistant General Secretary, Mick Cash, said:

“Today’s report offers some recommendations that are to be welcomed around seafarer training, most notably that the reform of the Tonnage Tax should include ratings’ training. [The] RMT also welcomes a proposed review of the Maritime & Coastguard Agency (MCA) to assess whether it can cope with implementing the Maritime Labour Convention and other responsibilities in light of ongoing cuts to its budget and staff.”

The RMT’s National Shipping Secretary, Steve Todd also commented on the report whilst taking the opportunity to mention the unions ongoing dispute with a company whose management once described British crews as ‘fat and tattooed’, saying:

“This is a welcome report in terms of training opportunities for ratings, defending the maritime skills base and providing a safe working environment for seafarers. Despite the positive recommendations in addressing the demographic problems facing the UK shipping industry, it is a shame that the Committee did not follow the logic of these statements and make some recommendations on reversing the decline in seafarer numbers which is being driven by unequal application of employment and equality law, and continues to threaten seafarers’ jobs in Stena Line in the Irish Sea for example. [The] RMT will continue to put pressure on employers and national governments to ensure decent pay, employment rights and safe working conditions for our seafarers.”

Photo: Dominic Serres (1722–1793) ‘An English frigate passing a Dutch merchantman’.