Revealed: Government spends £230m with P&O and its owner after condemning the sacking of 800 crew

ITV News' Business and Economics Editor Joel Hills reports from Dover

At Port of Dover the peak summer season is in full swing.

P&O Ferries operates four ships here, shuttling passengers and freight between the UK and France, across the busiest shipping lane in the world.

The company’s fortunes appear to be dramatically improving. Traffic has almost returned to pre-pandemic levels, customers are coming back.

One of its customers never left: HM Government.

On March 17 last year, P&O Ferries fired almost 800 of its seafarers without notice or consultation and replaced them with cheaper, agency workers.

The company’s chief executive, Peter Hebblethwaite, later admitted that in doing so P&O had knowingly broken the law.

He presented the decision as regrettable but necessary. He insisted that P&O Ferries was on the verge of bankruptcy and urgently needed to cut costs.

The mass-sackings were brutal and they triggered widespread outrage. One of the company’s fiercest critics was the government.

The then transport minister, Grant Shapps, said P&O had acted “like Pirates of the high sea”.

He threatened the company with legal action, demanded that the seafarers were reinstated and called on Hebblethwaite to resign as CEO.

Last month, Louise Haigh MP, Labour’s shadow secretary of state for transport, submitted written parliamentary questions to every Whitehall department requesting details of how much money the government had spent with P&O Ferries and its parent company DP World since March 2022.

The responses reveal that, as of last month, approximately $291 million (£228,600,000) had been paid to both companies.

British International Investment (BI), which operates as part of the Foreign, Commonwealth and Development Office, had made disbursements of $290 million (£228,000,000) to DP World for “supporting the modernising and expansion of three ports in Dakar, Sokhna and Berbera”.

DP World and BII are members of a partnership which was formed 2021 to deliver the project.

Separately, the Ministry of Defence (MOD) made payments of £425,166 to P&O for movements of freight and £164,000 for business travel.

The disclosures are intriguing given that the government had clearly suggested that P&O Ferries and DP World could lose business from the taxpayer, as a result of its behaviour.

DP World received funding for the 'three ports' project in Africa

In a letter to Peter Hebblethwaite, dated March 18, 2022 (the day after the illegal sackings), Grant Shapps warned that officials planned to “review all contracts the government currently has with both P&O Ferries and DP World”.

He added: “There can be no doubt that the government is closely considering its relationship with your organisation”.

On March 21, 2022, in a parliamentary debate, Mr Shapps suggested the issue was a priority. He told MPs “we are reviewing, as a matter of urgency, all government contracts with P&O Ferries and with DP World. Where possible, we are looking to use other providers if there are contracts where the UK government is involved”.

He added: “We will makes sure we send a powerful message to every other employer in this country that such disgraceful treatment of workers will never be tolerated”.

Labour insists it would have withdrawn every government contract from P&O Ferries and DP World - which is based in Dubai and made a record profit last year - without exception. It accuses the government of weakness.

'I don't think we should be supporting, promoting, and giving taxpayer's money to companies that come to our shores, illegally sack 800 workers and brag about it to parliament,' Shadow Transport Secretary Louise Haigh said

“P&O Ferries illegally sacked 800 workers in this country. Afterwards there was a lot of hot air, a lot of anger from the government but since then, there's been very little action,” Louise Haigh told ITV News.

"We've not seen any individual action taken against Peter Hebblethwaite, who came to Parliament and boasted about the fact he had broken the law and has since been promoted.

"The company has received hundreds of millions of pounds in taxpayers money. Every single bad business around the world will look at P&O and what they did and they now know that they can get away with it".

John Lansdown was one of the 786 crew who was dismissed by P&O on an early morning Zoom. He was working as a chef on the Pride of Canterbury and went on to successfully sue the company for unfair dismissal.

He was hoping the government would also take legal action.

“As things stand, [ministers] have failed,” Lansdown told ITV News. “P&O Ferries and their parent company DP World have got away with breaking the law, and they’ve actually been rewarded for their bad behaviour to the tune of hundreds of millions of pounds. It’s an absolute disgrace”.

The government told us that it did review all contracts held with DP World and P&O Ferries and only uses their services when there is no other alternative. It added that a contract between Border Force and P&O Ferries was cancelled last May.

The government says that DP World is a huge multi-national company which specialises in developing port infrastructure and its involvement with the projects in Dakar, Sokhna and Berbera was unavoidable.

The government has changed the law in an attempt to compel P&O Ferries to pay its workers the National Minimum Wage of £10.42 an hour.

The Seafarers Wages Act received cross-party support and became law in March but the Secretary of State has yet to publish the statutory instruments which impose the requirement on ferry operators to comply with it.

As it stands, P&O Ferries can continue to pay its agency staff an average of £5.50 an hour with impunity - flying in crew from countries like India, Indonesia and Thailand to work 12 hour shifts, seven days a week for six week periods.

A source close to government told us that there is a desire to move “as quickly as possible” but parliamentary time is scare and it is likely to be “sometime in 2024” before the new law bites.

A government spokesperson said: "We reacted swiftly and decisively against P&O Ferries’ appalling treatment of its staff, and have made substantial progress on the nine-point plan we set out last year to improve seafarers’ pay and conditions.

"Having brought forward legislation to ensure seafarers are paid at least an equivalent to the UK National Minimum Wage, and consulted on a new statutory code to deter ‘fire and rehire’, we also recently launched a new Seafarers’ Charter with our French counterparts to further protect their welfare and pay."

The Seafarers Charter is voluntary agreement of standards for seafarers between the UK government and ferry operators. Last month, DFDS, Condor, Stena and Brittany signed the charter and pledged to guarantee "fair wages, proper rest periods and suitable training" for their crews.

P&O Ferries decided not to make this commitment.

The company told us that P&O already meets or exceeds many of its provisions and that the Charter, in its current form, would "present risks to the long-term commercial viability of our business."

It did not explain why. 

In a statement, a spokesperson for P&O Ferries said:

"P&O Ferries has returned to strength and is back as the biggest ferry operator on the Channel, carrying more freight and nearly twice as many passengers between Dover and Calais as any other. 

"We have saved the company, secured 2,200 jobs, and are making a major £250m investment in new hybrid ships as the first ferry operator to bring advanced green technology to the Channel crossing."

The Insolvency Service carried out a criminal investigation into the dismissal of P&O’s crew, it was closed last August without prosecution. A civil investigation, which could result in a fine and/or the disqualification of director/s, is ongoing. 

In P&O’s latest accounts, published in April, the directors’ view was that the Insolvency Service “would not be able to show” that a prosecution is in the public interest and “consequently there is a less than remote possibility of a related economic outflow in relation to any such action”.

DP World reported a profit of $1.2 billion (£940 million) in 2022 - the year in which P&O’s crew were sacked. It did not publish a figure for the performance of P&O Ferries.

Sultan Ahmed bin Sulayem, the chair and chief executive of DP World, told the FT last May that P&O was operationally independent but that the board had done “an amazing job” in restructuring the company.

DP World owns and runs the deep-sea container terminal at Port of Southampton. Earlier this year, the government approved DP World’s involvement in the Thames Freeport project, which is set to receive £25 million of of government funding via local authorities.

ITV News has approached DP World for comment.

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