The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
I congratulate the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) on securing the debate. It is a pleasure to see him in his place for such an important debate. I am pleased, too, that the hon. Members for Glenrothes (Lindsay Roy) and for Dunfermline and West Fife (Thomas Docherty) made their points. We must ensure that we have, as we have had this evening, a constructive and positive discussion so that we engage potential bidders for the site. We need people to come forward and to have that constructive dialogue to make sure that we do as much as we can for the employees of Remploy.
I listened carefully to the issues raised during the debate. It is important that we put in context what is happening with the Remploy sites.
Esther McVey
We know that Remploy has faced an uncertain future for many years. The right hon. Member for Kirkcaldy and Cowdenbeath will be well aware of what happened under the previous Government and under his leadership in 2008, when 29 factories were closed. A modernisation plan that was put in place failed. Unrealistic targets were set that were never achieved, and it cost £555 million.
We must look at what this Government were left with, what had not worked before, what money—half a billion pounds—had been spent, and the situation now. A sixth of the entire budget for people with disability and their employment support was spent on 2,200 workers in loss-making Remploy sites, when we have 6.9 million disabled people of working age, all of whom we must help.
Esther McVey
Let me put that into local context, then I will give way. There are 36 disabled employees at Cowdenbeath Remploy, yet there are 13,800 disabled people of working age in that constituency. In Leven there are 28 disabled staff at Remploy, yet there are 13,600 disabled people in the constituency. As a Government we must help all those disabled people, so we have protected the £320 million budget. What we are doing is helping all those people.
Stewart Hosie
I thank the Minister for giving way. This is not just about money. It is also about information. The right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) referred to the Dundee plant which cuts the fabric for the Fife plants. It may well be able to be saved and rise as a phoenix as a social enterprise, but Remploy has been unable or unwilling to provide the cost breakdown for the factory, making the development of a business plan impossible. That at least the hon. Lady can surely sort out.
Esther McVey
I am happy to engage with the hon. Gentleman. All the information is coming out in a staged process, as announced in December. All the bids are now coming forward, but I will help the hon. Gentleman with any information that he does not have.
Esther McVey
I am running out of time and there is lots to say, so on this occasion I will not give way.
What is the vision for people with disabilities in the workplace? It is not our vision—we went out to disability experts and organisations and asked them to review the disability employment support and what we should be doing. They strongly supported the idea of moving away from the Remploy model. First and most importantly for the 21st century, they felt that we needed to get more disabled people into mainstream work. We need to get more disabled people into work because at present only 46% of working age disabled people are employed, compared with 76% of people who are not disabled. That means that there is a 30% gap in the employment rate and 2 million people out there whom we have to support.
In conclusion, the vision is that the money that has been protected must follow the person and will not go to loss-making businesses. Let me put that in context. Although the factory at Leven generated about £1.2 million in revenue for 2011-12, it is running at a loss of more than a third of a million pounds per annum. The factory at Cowdenbeath generated just under £0.8 million, but it loses £0.5 million in revenue per annum. We could use all that money to help support people with disabilities into work. We can help each one with, on average, £3,200 to get into work.
Of the 668,000 people with disabilities in Scotland, 152 work in a Remploy factory, but last year Remploy Employment Services got 1,700 people with similar disabilities into work. That is what we have to do—support all those people.
To answer directly some of the questions that have been asked, the Remploy commercial process is designed to maximise the number of jobs for disabled people. We are seeking viable bids for its business, wherever possible, and getting the best offers we can to come forward. That is what it is about—supporting disabled people.
Remploy is offering a three-year tapered wage subsidy of £6,400 per disabled person. The right hon. Member for Kirkcaldy and Cowdenbeath has said that that subsidy is insufficient and has called for more money, but how did we come to that figure? We worked on past precedents. The right hon. Gentleman’s Government put wage subsidies in place for Workstep and we were guided by that, but the subsidy is worth more than that and other subsidies, such as the Youth Contract. We also have to strike a balance between the needs of Remploy’s disabled employees and those of other disabled employees, to whom we cannot offer that wage subsidy.
Yes, we have to take into account support for the workers, but not in a way that affects the commercial market for other companies in the marketplace. Significantly increasing the subsidy and support provided to existing businesses risks the very test that the commercial process seeks to perform, in that a business must demonstrate that it can be viable without continued Government subsidy. We have given Government subsidy in the past and, as I have said, the past modernisation plan failed—£555 million was put into it over a continuous period and it did not work. Therefore, we have to look at what is feasible and viable and at how we can move forward.
Esther McVey
I have three minutes to go, but I will give way to the right hon. Gentleman.
Mr Brown
This debate is about Remploy Marine Fife and questions need to be answered about it. I have made a practical proposal that the Government, the Scottish Administration and Fife council should meet and look at flexible arrangements, so that the shortfall is eliminated as quickly as possible for a viable product. Will the Minister agree to those meetings?
Esther McVey
I will, indeed, agree to those meetings. In fact, I will be in Dundee on 4 February and I will be more than happy to meet Members.
Esther McVey
The hon. Gentleman knows that I will meet Members. I was in Scotland only a couple of months ago and, as I have said, we want to take part in direct discussions.
In the closing minutes, I want to explain the work and support that we have put in place for ex-employees of Remploy through the people help and support package. We have put £8 million into that package, which was never done in 2008. I will remind hon. Members of what happened in 2008: 1,637 disabled people left Remploy, 1,006 took voluntary redundancy and 631 retired, because they were offered enhanced amounts of money to take retirement and redundancy. We have not done that. We have secured people in a significant number of jobs and helped them.