Closure of St Paul’s Place BIS Office (Sheffield)

Friday 29th January 2016 Commons Chamber

11:14

[Louise Haigh (Sheffield, Heeley) (Lab)]

(Urgent Question): To ask the Secretary of State if he will make a statement on the announcement by the Department for Business, Innovation and Skills online yesterday morning that it is to close its St Paul’s Place site in Sheffield, which houses 250 jobs, and relocate them all to central London.

[The Minister for Small Business, Industry and Enterprise (Anna Soubry)]

The Department for Business, Innovation and Skills is committed to delivering efficiency savings and contributing to the Government’s deficit reduction targets. As such, we have developed the BIS 2020 strategic plans to modernise the way BIS works, reduce operating costs, and deliver a simpler, smaller Department that is more flexible and responsive to stakeholders and businesses. As part of these plans, the Department has announced its intention to close the BIS office in Sheffield at St Paul’s Place by January 2018.

All staff and departmental trade unions were informed of this decision yesterday, 28 January, and the statutory 90-day consultation process will now begin. Those staff most affected by this decision have been fully briefed and comprehensive support to all those facing a potential change or loss of job will be provided. This will include professional, external careers advice; professional outplacement support; working with the Department for Work and Pensions to host a jobs fair; allowed time out of the office to find jobs; and financial advice workshops.

This decision has not been taken lightly. Our current locations are based on what we call legacy decisions—decisions taken some time ago—and what can at best be described as ad hoc organisational changes. In future, our structures need to be designed in a more streamlined, efficient way. To support this effort, we will bring the number of locations we operate down from around 80 now to approximately seven centres, supported by a regional footprint for work at a local level. Each centre will focus on a key business activity and will bring together expertise and help to build our capability.

We have, and will continue to have, many more people based outside London than inside London.

[Louise Haigh]

Thank you, Mr Speaker, for granting this urgent question on an issue of such importance to people in Sheffield and to the Government’s hopes to build a northern powerhouse, because this decision came out of the clear blue sky for my constituents yesterday morning. The first any of them heard of it was when the permanent secretary arrived in their office at 9.30 yesterday morning. It speaks to this Government’s London-centric focus and contempt for the north of England that they think a consolidated

“combined central HQ and policy centre”

has to be, by rights, in London rather than in Sheffield where the operating costs are cheaper and the perspective on UK investment is much broader.

So why, despite Lord Maude of Horsham’s commitment to end “Whitehall palaces”, has the proportion of the civil service workforce in the capital gone up since 2010? The House will be aware that this is just the thin end of the wedge, as part of the BIS 2020 strategy, so can the Minister tell the House exactly when she is going to bother to announce which offices are going to be closed—or will civil servants have to wait uneasily at their desks for an appearance from the permanent secretary?

Secondly, the board at BIS must have seen a business case for the BIS 2020 report, prepared by McKinsey & Company at great cost. Will the Minister publish the business case so that we can see how the Government can possibly hope to reduce operating costs by moving to central London?

Indeed, is it not economically irresponsible to create more jobs in central London, which is suffering an incredibly overheated housing crisis? Given that there is a 40% cut to partner organisations coming down the line, can the Minister rule out today, categorically, that the Insolvency Service and the Skills Funding Agency based in Sheffield will not be closed?

Sheffield has already lost 500 jobs at HMRC, 100 jobs at Forgemasters and 400 jobs at the local authority. People in my city will be right to ask: why have the Tories got it in for Sheffield?

[Anna Soubry]

As somebody who was born and bred only 17 miles from Sheffield, I do not need any lectures from the hon. Lady, and in particular not from the Labour party given that the last Labour Government closed offices in York and Liverpool and axed over 1,500 jobs in Preston and across the Fylde coast as part of a major rationalisation of DWP offices.

The hon. Lady may not be familiar with, and understand the nature of, the Sheffield city regional deal, which was supported by people from all political parties, and rightly so, and I find it very sad, and somewhat shameful, that the hon. Lady seems to in some way criticise the northern powerhouse—[Interruption.] She laughs, and I hope Hansard will record that. The northern powerhouse has been supported, as I said, notably by some of our outstanding Labour leaders of councils across the whole of the north, and rightly so.

As I have said, there will be six business centres around the United Kingdom, including the following: a business-facing centre, likely to be in south Wales; an institutional and research centre, likely to be in Swindon, but which may initially also include Bristol; a further education funding centre, whose location is yet to be decided, but we are seriously considering Coventry; one or two higher education student finance centres, initially in Glasgow and Darlington; and a regulation centre in Birmingham. Conservative Members understand the need to ensure that taxpayers’ money is spent wisely, efficiently and effectively, and that is what we will do. All of this is our clearing up of the mess that was left by the previous Labour Administration.

[Mr Gordon Marsden (Blackpool South) (Lab)]

I congratulate my hon. Friend the Member for Sheffield, Heeley (Louise Haigh) on her urgent question. Today’s announcement that the Department for Business, Innovation and Skills is scrapping its office in Sheffield, which has 247 jobs, is a hammer blow to the people there. It is also a huge worry and a warning to the 12 other BIS regional offices, six of which are in the north, that they are at risk from this so-called restructuring. What assurance can the Minister give us that there will be no compulsory redundancies in Sheffield, and will she tell the House what offers of relocation expenses or even relocation itself there will be?

The BIS press statement talked vaguely about six business centres, which the Minister also mentioned in her answer, but they are servicing a centralised headquarters in London. Will the Minister say precisely where those centres will be—we have been told that possibly five will be in the south, and one in the north—and how many people will work in them? Are they simply a hastily drafted afterthought? Will they be just fig leaves, ministerial post boxes or possibly even digital fig leaves?

The BIS statement also said that the closure would reduce operating costs, so will the Minister tell the House what savings there will be from this closure, which comes on the backs of the people of Sheffield? The union, Prospect, said yesterday, that it was given only 30 minutes’ notice of this announcement. What discussions did Ministers have with workers and trade unions before the announcement was made?

The announcement comes on the back of the latest Centre for Cities report, which places Sheffield in the low wage, high welfare economy—half of the UK’s biggest cities are in that report. The report underlines the stark north-south divide and undermines all the Chancellor’s spin and rhetoric about a rebalanced economy. It is no wonder that civil servants told Radio Sheffield that they felt betrayed.

In the light of the 100 jobs lost at Sheffield Forgemasters and HMRC’s November announcement, to which my hon. Friend the Member for Sheffield, Heeley has already referred, I have to ask whether this is what the Tory industrial strategy amounts to—cutting and running. This is not a strategic approach; it is a kick in the teeth. The Financial Times said that 20% of civil service jobs had been lost in the regions since 2010 as opposed to only 9% in London. With infrastructure spending in the north standing at £539 a head and London’s at £3,386, BIS is shifting more jobs to the Chancellor’s Whitehall comfort zone and exposing the empty rhetoric of his northern powerhouse.

Did the Minister’s Department discuss the decision with the Secretary of State for Communities and Local Government who is busily promising devolution to local authorities while her officials are undermining it, and did the Minister’s Secretary of State discuss the closure with the Chancellor and did he approve it? Did BIS speak to council leaders in Sheffield and across West Yorkshire to see whether an alternative package could be put together? This Government need to tackle our skills emergency. [Interruption.] Perhaps the Minister should listen. The Government have dithered and missed opportunities—[Interruption.] Will the Minister stop chuntering from a sedentary position? They have missed opportunities to save our steel industry—[Interruption.]

[Mr Speaker]

Order. This speech will be heard—[Interruption.] Order! Minister, you have had your say, and you will have further says. There is something here about a basic dignity. Just sit and listen. It is not about you; it is about the issue. It is not about the hon. Gentleman either. Be quiet and listen. That is the end of it. It is not a request; it is an instruction.

[Mr Marsden]

As I was saying, the Government need to tackle our skills emergency and poor productivity, but they have dithered and they have missed opportunities to save our steel industry. They are now abandoning a great historic steel town. They are comprehensively failing to deliver enough of the high-skilled, better paid jobs for England’s regions that Labour wants to see. Let me see whether the hon. Lady will be as candid in expressing disappointment about BIS pulling the plug on Sheffield as she was about the Chancellor’s poor tax fix for Google.

[Anna Soubry]

Thank you, Mr Speaker. It is not about me; it is not. It is about the workers. I am very proud of, and pay tribute to, all those civil servants who work in the Department for Business, Innovation and Skills, and indeed I am proud of all our civil servants, which is why Conservative Members understand how important it is to have a sustainable civil service and to spend public money wisely.

There were so many questions in what apparently was a speech that I have not got the time to answer them all. [Interruption.] If I have to shut up and listen in silence, so, too, does the hon. Member for Blackpool South (Mr Marsden). What is goose for the gander is also goose for that hon. Gentleman.

Of the 20,000 staff paid for by BIS, only some 2,000 —about 10%—work at No. 1 Victoria Street. The vast majority are spread around the country. I pay particular tribute to the 60 who work in BIS local and provide an outstanding service not only locally, but to us working in the ministerial team at No. 1.

Let me repeat this: members of staff who have been affected have been fully briefed. Comprehensive support will be provided. Some of the staff will be able to transfer and apply for jobs in London; others will of course take voluntary redundancy. Mr Speaker, I do take great exception to Labour Members who stand up and talk down the great city of Sheffield, which has an outstanding city deal. That is recognised locally, which is why it has been supported by political parties of all colours in Sheffield. Labour Members might do well to listen to their own members locally before spouting nonsense and talking down the great city of Sheffield.

[Conor McGinn (St Helens North) (Lab)]

I do not know why the Minister seems to be taking criticism of her decision so personally. The people who should be doing that are the hundreds of workers whose jobs are at risk and who have not heard a shred of sympathy or regret from the Minister. Local government leaders in Sheffield and places such as St Helens do not need to receive the praise of the Conservative party; they are already doing fantastic work in encouraging investment and jobs to come to our areas. Public sector jobs provide the economic ballast for our areas. The Government cannot keep cutting jobs and services and expect us to build a northern powerhouse. We are the people who are working on the ground in communities and we do not need to hear from the Minister on a day when people might be losing their jobs.

[Anna Soubry]

I am sorry, Mr Speaker, but there was no question there. The hon. Gentleman made a speech. It was not accurate and it was rubbish.

[Mr Speaker]

It was also perfectly orderly, of which I am the judge. The hon. Lady should stick to the discharge of her responsibilities to the best of her ability. I am the arbiter of good order. I handle those matters, and I certainly do not require any advice from a junior Minister.

[Robert Jenrick (Newark) (Con)]

Representing the Nottinghamshire communities—we are 15 to 20 miles from Sheffield and many of my constituents commute into Sheffield for work or to use public services—which include the childhood home of my right hon. Friend the Minister and of her mother, who is a formidable lady, it gives me no pleasure to hear of the job losses today. None the less, it is surprising to hear Labour Members criticise the Sheffield city deal, because my constituents in Nottinghamshire explicitly want to be part of it, as do the constituents of my friend and neighbour, the hon. Member for Bassetlaw (John Mann), because it is such a good deal, creating as it does both jobs and opportunities.

[Anna Soubry]

Dare I say it, Mr Speaker, I do not think there was a question there. As it happens, I agree with everything that my hon. Friend said.

[Mr Speaker]

It was also orderly.

[Sarah Champion (Rotherham) (Lab)]

I do not recognise any of the criticisms that are being laid on my party about Sheffield. We are very proud of it, which is why we are here today. I would like the Minister to explain simply why taking jobs from Sheffield to London is in any way supporting the region or the Government’s ideal of a northern powerhouse.

[Anna Soubry]

I hoped that I had explained that to the hon. Lady. We are having to ensure that we spend public money wisely. Unfortunately, that means that we have to reduce the number of people who are working for us. We must make sure that we use the money to best effect, which is why we considered the decision so very carefully, as I hope that she understands we would. Nobody on the Government Benches takes any pleasure whatsoever when anybody loses their job. That is why we are so keen to make sure that we put the support in. We are confident that many of the workers will choose to take new jobs down in London. The simple truth is that we have to take tough decisions. We took tough decisions during the five years of the previous Government and we saw the fruits of that in the reduction in the deficit, a reduction in debt and our economy once again getting back on its feet so that there are now more than 2 million people in work who did not have a job before.

[Neil Coyle (Bermondsey and Old Southwark) (Lab)]

In my short time in Parliament, this is perhaps the most undignified spectacle at the Dispatch Box that I have seen. Is it not also undignified for the Department for Business, Innovation and Skills to spend £200,000 of taxpayers’ money developing a business case to shut down jobs? When will that full business case be published?

[Anna Soubry]

I shall make inquiries. If I can assist the hon. Gentleman, I will. As I say, in difficult times when we have to make sure that we continue with our long-term economic plan, difficult decisions have to be made, but we take the view that this is the best way to spend public money more efficiently and more effectively.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

I do a lot of training of young people who aspire to public life and I always tell them it is important to comport oneself well in public life. The Minister has fallen below that standard this morning, unfortunately. However, I agree with her that there are great Labour leaders across the north of England. One of those is Julie Dore, who is the leader of Sheffield city council and the driver behind the Sheffield regional deal. In relation to this matter, she said:

“Yet again the actions of this government speak far louder than their empty words about commitment to the north.”

Does the right hon. Lady agree with one of our great northern Labour leaders?

[Anna Soubry]

As I say, the Sheffield city regional deal is an outstanding deal for the people of that city and that area. As a result of it, I understand that the number of people in work in Sheffield has risen and unemployment continues to fall.

[Mr Steve Reed (Croydon North) (Lab)]

May I invite the Minister to do what she has so spectacularly failed to do so far this morning—apologise to the people who are at risk of losing their jobs and just show a little human compassion for people who this morning are fearful for their livelihoods, for themselves and their families?

[Anna Soubry]

I am sure Hansard will record that as I said to the hon. Member for Sheffield, Heeley (Louise Haigh), nobody enjoys it when people lose their jobs and nobody takes any pleasure in it. We will do everything we can to support those people who will have to be made redundant if we reach that stage. It is rich coming from Labour, which brought this country almost to the level of bankruptcy, which resulted in millions of people losing their jobs. I am delighted that we have now got 2 million more people in work, thanks to our long-term economic plan.