P&O faces calls to hand back government Covid funds after firing UK crew

P&O Ferries is under growing pressure to repay millions of pounds in government support it received during the pandemic after a decision to replace 800 UK-based crew with cheaper agency staff sparked fierce condemnation from politicians and unions.

The company, which is owned by Dubai’s DP World, on Thursday suspended sailings and ordered ships back to port to fire their crews, who were dismissed with immediate effect through a short video message.

“When companies behave badly as P&O clearly has, it’s right that the government calls it out,” James Heappey, the armed forces minister, said on Friday.

Unions said the company received £10mn in furlough money during the pandemic.

Heappey said: “It certainly feels to me it would be the right thing to do for P&O to hand that money back. I’m sure that colleagues in the Treasury and DFT will be looking at it.”

P&O was also paid £4.4mn through an government emergency scheme to keep freight flowing during lockdown between May and July 2020.

DP World has invested in the Thames Freeport, and its Southampton deep-sea container port was one of eight bidders to be awarded freeport status — which brings tax advantages — by the government last year.

A Downing Street official said the government would need to “establish the facts” before deciding whether DP World should lose its access to freeports or return furlough funding.

Grant Shapps, transport secretary, added that it was not too late for management to meet workers to discuss the redundancies, and that he would be “putting pressure on all sides” for them to do that. He said he had asked officials and legal teams to “look at” whether the government has any contracts with P&O.

Government officials were made aware of P&O’s plans to sack UK crews on Wednesday evening, but ministers did not know until Thursday.

Labour said ministers should claw back money handed over during the pandemic, suspend government contracts handed to DP World, and remove it from the UK government’s Transport Advisory Group.

“The government must now stand up for loyal workers in Britain being undermined by overseas billionaires,” shadow transport secretary Louise Haigh said.

Peter Hebblethwaite, chief executive of P&O Ferries, told the company’s remaining employees, in a letter seen by the Financial Times, that replacing UK-based crew with cheaper staff would reduce crewing costs by 50 per cent.

“It is a model that is proven to work across the industry, while still allowing us to retain service and safety levels,” he wrote.

Irish Ferries uses the agency recruitment model but most others in the industry, including Denmark’s DFDS, another of the three ferry operators between Dover and Calais, employs the majority of crew directly.

A large crowd of protesters led by union leaders and MPs gathered at Maritime House in Dover on Friday morning before marching towards the docks.

Drawing comparisons with actions taken against Russian oligarchs, the RMT Union said ministers should “seize” P&O’s ships.

Darren Proctor, national secretary of the RMT, said sacked workers were being advised not to sign severance packages while unions sought legal advice.

He said the agency staff brought on to ships over the past 24 hours were only contracted to work a two-week period, and that management would probably bring in cheaper overseas staff after that.

“This is an international route, so in order to employ a UK seafarer at this moment in time you would have to pay the national minimum wage. If they employed someone from outside the UK they would not have to pay them the national minimum wage,” he said.

P&O has warned it does not expect to be able to restart sailings for days.

The sudden gap in capacity on crucial freight routes, including the short straits between Dover and Calais, led to warnings of pressure on already stretched supply chains.

DFDS said passenger bookings were three or four times higher than usual for the coming days, as well as across Easter and summer.

The Danish operator added that it had been able to handle the traffic in the ports so far and the weekend lull in freight volumes should help to keep goods and passengers flowing. Dover port handles £144bn of trade in goods and a third of UK trade with the EU.

Some P&O freight ferries such as those into terminals on the river Thames, which are owned and operated in a different manner to the ferries directly affected by the job cuts, are still operating.

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