38. COMMISSION PROPOSAL ON FERRY MANNING
AND CABOTAGE (9318/98)
Letter from Lord Tordoff, Chairman of
the Committee, to Mrs Glenda Jackson CBE MP, Parliamentary Under-Secretary
of State, Department of the Environment, Transport and the Regions
Thank you for your Explanatory Memorandum (EM)
dated 25 June on the above proposals which was considered by Sub-Committee
B at its meeting on 23 July. Your EM raises a number of issues
of concern to the Committee.
First, in paragraph five of your EM you state
that "there are currently 600-700 non-EU nationals currently
employed on ferry services run by four Member States". We
would be interested to know which these four Member States are.
Secondly, in paragraph 16, you state that the employers' side
has reservations about the proposal. We would like to know which
organisations were consulted and what were their responses? Thirdly,
in paragraph five of the Regulatory Impact Assessment you suggest
that the impact of this proposal is likely ultimately to be passed
on to the consumer. The Committee shares your concern on this
matter and would appreciate further explanation of this argument
and its likely financial consequences.
Furthermore, we are concerned that the proposal
raises issues of competition and safety which are not fully dealt
with in your EM. We would like to know whether parallels can be
drawn with this proposal and regulations in other transport industries.
Lastly, we would appreciate clarification of why this proposal
is being brought under Article 84(2) when it appears largely to
be an instrument of social policy rather than transport policy.
We look forward to receiving clarification on
these matters. In the meantime, this letter maintains the scrutiny
24 July 1998
Letter from Glenda Jackson CBE MP, Parliamentary
Under-Secretary of State, Department of the Environment, Transport
and the Regions, to Lord Tordoff, Chairman of the Committee
Thank you for your letter of 24 July requesting
clarification for your Committee on certain points raised in the
Explanatory Memorandum (93118/98) on the above proposals which
I submitted on 25 June 1998.
You ask which EU states currently employ non-EU
nationals on their services. The Commission communication mentions
that there are four, but is not specific: we however believe these
to be the UK, Denmark, Germany and the Netherlands. As regards
consultations, the Commission has held meetings with representatives
from both sides of the industry. We do not have access to the
details of their discussions, but the Commission has stated that
while the trade unions were supportive of the measure, the owners'
organisations were generally opposed. Trade union support seems
to come from their belief that the measure will protect jobs.
The arguments employed by the owners are likely to be similar
to those put to the Department by the European Community Shipowners'
Association, namely that the proposal runs counter to liberal
free trade principles, may lead to retaliatory action in international
traffic and is likely to involve considerable legislative complications.
The safety arguments contained in the Commission's
proposal are relatively low key, as this is not the primary purpose
of the legislation. The essential argument is that seafarers who
are employed on terms and conditions which would be unacceptably
low by European standards may work to lower standards. Conversely,
a better employment package is likely to lead to a better all-round
performance, which improve regard for matters of safety. The UK
would support this view.
On the issue of competition, it seems unlikely
that this proposal will make much impact on regular EU passenger
routes, as all services will be bound by the same rules and any
price increases will not be of an order to affect the competitive
balance with other modes of transport. There may, however, be
questions about the effects on combined freight and passenger
services. Some Member States are concerned that the proposal may
have adverse consequences for the competitiveness with freight
only services. This is difficult to quantify until the precise
application of the proposed legislation has been settled.
The cost to individual travellers on passenger
ferries seems likely to be minimal, as few non EU nationals are
currently employed on passenger services and those who are generally
occupy the post requiring least skills and commanding least remuneration.
Rounding up a small number of salaries by a relatively small amount
is not likely to lead to price rises of any more than a marginal
nature. The Commission explains that the proposal is designed
principally to prevent a possible future switch to cheap third
country labour by individual Shipowners in a competitive market.
There can be no comparison with other transport
modes as there is no other transport sector where third country
nationals are in competition for employment with nationals of
EU states on any significant scale. Passenger ferries are uniquely
labour-intensive in the passenger transport field and represent
a far greater potential loss of local employment opportunities
than would be the case in any other transport mode.
Finally, you asked why the proposal was being
brought forward under Article 84(2). The advice from Department
legal services is that Article 84(2) may be used as it allows
the Council to make appropriate provision in respect of sea transport.
When exercising this power, article 75(1) applies. Article 75(1)
provides that for the purpose of implementing the common transport
policy (article 74) the Council shall take certain specified measures
and "any other appropriate provisions".
The proposals are directed towards enhancing
the single market in maritime services by guaranteeing that the
terms and conditions of employment of seafarers will, as a minimum,
be in line with the level of social standards generally applicable
in the Community. Thus the proposals are directed towards ensuring
the competitiveness of maritime transport services and the protection
of employment of Community seafarers. As such they are appropriate
provisions for implementing the common transport policy in that
26 August 1998