Ann Clwyd
Main Page: Ann Clwyd (Labour - Cynon Valley)Department Debates - View all Ann Clwyd's debates with the Department for Work and Pensions
(12 years, 10 months ago)
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Ann Clwyd (Cynon Valley) (Lab)
I am pleased to be here under your chairmanship, Mr Havard. You are my constituency neighbour and a friend, and you have similar problems in Merthyr Tydfil to ours in Cynon Valley. I am grateful to the Backbench Business Committee for giving us three hours before Christmas, which is important in case the Government come out with a statement early in the new year.
In a petition handed in to No. 10 last month, more than 100,000 people told the Government that they want them to stop the closure of Remploy factories and the privatisation of Remploy employment services. As most people know, Remploy has a long and proud history as the largest and oldest employer of disabled people in the United Kingdom. It was set up in 1946 by the Attlee Labour Government to provide returning brave servicemen with dignified work. Indeed, the name Remploy means “re-employ”.
The first factory was opened in Bridgend, south Wales, and Remploy quickly developed into the biggest and most important employer of disabled people in the UK. Over the following decades, it established a network of factories across the UK making a wide variety of products, such as school furniture, motor components and chemical, biological and nuclear protection suits for the police and military, as well as a variety of health products. Remploy currently employs more than 2,500 disabled people in its 54 factories.
Many Remploy employees now face the loss of their jobs if the Government fully accept the recommendations of the Sayce report, the Government-commissioned review of specialist disability employment programmes. The report was followed by a three-month consultation, to which many of us contributed and which came to an end in October. The Government—I am looking at the Minister—have already stated that they are
“minded to accept the recommendations of the Sayce review on Remploy”,
which recommends that Remploy leave Government support and that factories close.
The closure of 54 factories could mean that 2,500 disabled people will lose their jobs. Those people are frightened and worried about their future employment prospects, given the current level of unemployment. Remploy factories and workplaces provide stable and dignified places of employment. The system has provided a remarkably robust presence over the past 65 years, and I am convinced that it has a viable future based on a decentralised procurement system.
The vast majority of factories are in areas of previous heavy industry, such as my constituency, which is in a former coal mining area. On my first visit to Remploy, when I was first elected in 1984, I visited the Remploy factory in Aberdare and watched with amazement the skill and the love with which people worked. Those people were hand-stitching huge boots for disabled people, although that particular business has long since been lost. Cynon Valley, despite its proud industrial past—I am sure that we will hear the same thing from many colleagues here—is marked by unemployment rates almost double the UK average.
Lisa Nandy (Wigan) (Lab)
I thank my right hon. Friend for giving way and for initiating this debate, which is of importance to many of us, as she can see. In addition to the obvious problem of unemployment, which she is discussing, does she agree that even where jobs exist, it is difficult for people with disabilities to get to them, because public transport is often not accessible to them? Does she therefore agree that Ministers must address many things before they can even begin to think about asking people to find alternative employment?
Ann Clwyd
I thank my hon. Friend for making that important point, which I will discuss later. In Cynon Valley, 2,275 people are looking for work at the moment, a rate of 8.3% unemployment. All areas in Cynon Valley have the same problem of high unemployment, in addition to the multitude of factors, as my hon. Friend has said, that are stacked against a disabled person looking for a job in the area where they live or even in a neighbouring area. Disabled people should, of course, be supported in whatever work they choose, but there is no real choice if unemployment is high and if there is little or no employment elsewhere. The Secretary of State for Work and Pensions told the jobless of south Wales to get on the bus to Cardiff to find work—we all remember his comments. As you know very well, Mr Havard, he made those comments in Merthyr Tydfil, a town with five jobseekers for every advertised job. That is no help to a jobseeker in my constituency, where there are 21 jobseekers for every advertised job.
The Sayce report recommends that funding for Remploy should instead be channelled into expanding the Access to Work programme. Again, I note that the Secretary of State suggested that people in Merthyr Tydfil were unaware that they could make a one-hour bus journey to Cardiff for work. For many of us, that echoes Lord Tebbit’s comments about getting on your bike. The Secretary of State’s comment was of exactly the same order, and many people felt that it was a disgusting insult to the unemployed in the area. People are well aware that they can get a bus, but there is no point getting a bus to Cardiff when there are many people out of work in Cardiff who are also looking for a job.
Jim Sheridan (Paisley and Renfrewshire North) (Lab)
I congratulate my right hon. Friend on securing this debate. Does she accept that it is different for people with disabilities who are made redundant? A man in my constituency has a facial disfigurement so bad that he could not use public transport, go into a restaurant or do the normal things that other people do. Remploy was the only place that he had and the only thing that kept him sane. He is now locked in his bedroom with the curtains closed, more or less, and has nowhere to go.
Yasmin Qureshi (Bolton South East) (Lab)
I thank my right hon. Friend for securing this debate. Is her experience similar to mine? I visited the Remploy factory in my constituency twice and spoke to the people working there. They had enormous pride in the work that they were doing. When I discussed with them how they felt about going into the open market and working in another environment, their answer was categorically, “No. We like working in this particular environment. It’s safe, they understand our needs and it’s more comfortable for us.”
Ann Clwyd
I cannot emphasise enough the pride that people who work in Remploy factories have in their work. They do not want to sit there doing nothing—they want to work—but one of the problems with procurement, or the lack of it, is that too many of them are sitting, waiting for work that has not come. Members may have seen the recent lists of those local authorities that are procuring work through Remploy factories and those that are not. Some local authorities in this country are not getting any work done by the Remploy factories in their area, which is a tragedy.
In a period in which unemployment is rising, it is pie in the sky and cruelly misleading to suggest that expanding the Access to Work programme will result in more work for disabled people. In my area, people would like any opportunity to work, but it is particularly difficult for disabled people and always has been. I remember when the disablement resettlement officers tried to get work for disabled people and how difficult it was for them in a very different environment from the one we are in now.
Remploy is at a crossroads. All 54 Remploy factories are under threat of closure when the current public funding ends in April 2013. The threat is compounded by the factories being deliberately run at 50% of their capacity. It is crucial that, instead of deliberately running down the factories in order to, in my opinion, justify closure, an alternative Government strategy is devised to maintain funding and enable individual factories to secure work.
Mr Pat McFadden (Wolverhampton South East) (Lab)
In the House a couple of months ago, I asked the Minister a similar question about the factories. An allegation has been made that, although the performance of the factories varies from place to place, some are actually turning work away, perhaps in order to create the self-fulfilling prophecy of being financially inviable. The Minister said that she had not heard that that is the case, but has my right hon. Friend heard that it is? Since that exchange in the House, the allegation has continued to be made. When we talk about viability, it is important to establish whether that is what has been happening.
Ann Clwyd
I thank my right hon. Friend for making that point. I received a letter about half an hour ago from my hon. Friend the Member for Copeland (Mr Reed), who would have liked to have been present but could not make it. He wants me to mention the Cleator Moor factory in his constituency and says that it has operated very successfully for many years and currently has a large order book. Some factories, therefore, have large order books and are, in fact, turning work away.
Mrs Madeleine Moon (Bridgend) (Lab)
I thank my right hon. Friend for calling for this very important debate. The Bridgend factory is in a similar position. It has a long-standing relationship with Ford and is currently bidding for a new contract with it, but it is in the difficult position of not knowing what its future holds and whether it will in fact be there and be able to fulfil that contract, if it is awarded to it. It then faces the problem of whether it will be allowed, if successful, to recruit more disabled people to work at the factory. That insecurity is affecting the whole of the work force.
Ann Clwyd
I entirely agree with my hon. Friend. Uncertainty is having a very bad effect, both on the morale of the people who work in the factory and on that of their relatives. Everybody will want to make points about their particular areas and factories. Before I take another intervention, I want to mention the last round of redundancies in the Aberdare Remploy factory in 2008. Of the 18 disabled employees who took voluntary redundancy, only one person ever returned to work, although many others would have liked to have had a job and were able to have one had one been available.
Chris Bryant
I am grateful to my right hon. Friend the Member for Cynon Valley (Ann Clwyd), who is my constituency neighbour, because uncertainty is even affecting those Remploy offices, such as that in Porth in Rhondda, that have a very strong record and a very strong order book. It seems a dereliction of duty if the very strong parts of the business end up being undermined just because clarity is not provided.
Ann Clwyd
I could not agree more. I have two quotes, the first of which is from the general secretary of Unite:
“This report spells the death knell of Remploy factories—it is a blueprint to run-down and close the factories. The government needs to commit itself to making substantial pump-priming available to guarantee that the plants become successful as businesses in their own right—they won’t succeed without such cash.
The prospect for those who will have to battle it out for mainstream jobs is grim—it is a major blow for them. What will happen is that disabled people will be at the back of the employment queue and when they do succeed in finding work, too often, they are bullied and forced out of work. It is a vicious revolving door.”
Dame Anne Begg (Aberdeen South) (Lab)
In Aberdeen, we have a factory that struggled for a number of years, but in the past two years or 18 months it has turned itself around and is now going great guns, with new orders and new businesses. In fact, it has managed to rent out some of the factory to other businesses and social enterprises, so things are really looking up. Does my right hon. Friend agree that it is a supreme irony that, at the very point at which the Aberdeen factory looks, for the first time in many years, to have a successful future, it should be undermined by a decision taken by the Government?
Mark Hendrick
The factory in Preston recycles computer equipment—if any business is sustainable in the foreseeable future, it is the recycling of computer equipment. The factory is running at only half its actual capacity, which makes me think, as my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) has said, that there is work out there, but the factory is just not receiving it. That fact of the matter is that, when I have spoken to the workers, they have said that they feel that they are being condemned to a life of unemployment. The chances of getting work are negligible, and this signals the death knell for what has been recognised as a very important company since the war.
Jim McGovern (Dundee West) (Lab)
I congratulate my right hon. Friend on securing this important debate. Following on from what has already been said, I have visited the Remploy factory in my constituency so many times that I am almost on first-name terms with most of the work force, which has, unfortunately, shrunk from about 100 to perhaps 50. The management, the trade unions and the work force have made it clear that, if the factory closes, it is highly unlikely that the majority of the work force will find alternative employment. Is that also the situation in my right hon. Friend’s constituency?
Ann Clwyd
I suspect that the situation is exactly the same in all our constituencies.
The GMB union, which also represents Remploy employees, argues that the voluntary redundancy scheme is not the answer
“to the real problems facing factory based supported employment in Remploy.”
It argues that the structure of Remploy is
“top heavy with senior managers and millions of pounds can be saved”
by reducing the numbers of managers and associated costs, such as their bonuses.
Alison Seabeck (Plymouth, Moor View) (Lab)
My right hon. Friend is touching on the balance of posts within Remploy and whether the organisation is top heavy, and I share those concerns. Does she also share my concern that, if people are cast adrift—that is how families in my constituency feel about potentially not being able to go to Remploy—there will be the considerable additional costs, both to local authorities and the Government, of those people not being available and in work? Is she aware of any cost-benefit analysis that is being done by the Government to look at that impact?
Ann Clwyd
Again, many years ago when I was a Member of the European Parliament, I wrote a report for that Parliament on the social consequences of unemployment. I have been trying to dig out that particular report from the terrible filing system of my office, because, as I remember, the conclusions are absolutely as apt today as they were then. Nothing has changed in about 25 years. The conclusions will be exactly the same.
Andrew George (St Ives) (LD)
The Penzance Remploy factory in my constituency was one of those that managed to survive the closure programme under the previous Government. It has, indeed, been very offended by some of the remarks in the Sayce report about what goes on in the factory. On Remploy potentially having top-heavy management, it is very telling that many of the successful contracts that have been carried out by the textile factory at Penzance have, in fact, been won by the disabled people themselves. That is very telling and shows that those disabled people have demonstrated a great deal of dynamism and ability at the factory level.
Ann Clwyd
That is a very important point, because the quality of the work produced is also excellent. A focus on procurement is therefore key to the future development of the Remploy factories.
The unions argue that Remploy’s capacity has been driven down through bad management, making it possible for the Government to claim that Remploy is not working. If orders are gained through effective procurement policies, which they are in some areas, the unions argue that factories can work at full capacity and that they can be viable. Surely, the future of Remploy can be secured by enabling each individual factory to procure work and to work with other Remploy factories, if needs be.
Geraint Davies (Swansea West) (Lab/Co-op)
On that point, when I visited the Swansea factory in the spring, it was running under-capacity. I therefore visited the Driver and Vehicle Licensing Authority, the local authority, the university and the health authority. That factory is now running at full capacity with much higher margins. Does that not illustrate that there is a strategic problem and that there is an over-centralisation of UK management instead of sales teams being devolved to enable local factories to pick up orders from large clients based locally?
Ann Clwyd
I thank my hon. Friend for that remark. He wrote a very good article in the Western Mail last week on Remploy. I commend that article to my hon. Friends.
Remploy in Aberdare has failed to provide sufficient support to the factory since its so-called reprieve in 2008. Despite assurances, Remploy management have never made a concerted effort to make the Aberdare factory viable. There is a team of national sales staff—this picks up the point made by my hon. Friend the Member for Swansea West (Geraint Davies)—but they are all based in England and have generated little or no new work for the Aberdare factory. It is that model of procurement that urgently needs to change.
Across Remploy as a whole, major savings could be made by dealing with the over-staffing of management and senior management, the majority of whom are able-bodied. Savings could also be made by cutting the use of expensive outside consultants. The Sayce report suggested that Remploy factories could be taken over by worker co-operatives or mutuals. I hope that that is not just a cynical attempt by the Government to wash their hands of the Remploy factories. If there were an attempt to push a new model on Remploy without prior consultation or consent, it would obviously reflect very badly on the Government and be viewed as heavy-handed and top-down. Despite being among society’s most vulnerable people, disabled people should be treated like anybody else with dignity and respect.
Before the summer holidays, when I went to see the Secretary of State—the Minister was there as well—about my own factory, I questioned the quality of the information being provided by Remploy senior management, including to the Government. That was confirmed by a comment made during our meeting. It was said that my factory in Aberdare was part of the furniture business. I said, “Well, that’s news to me.” When I went to the factory a few days later, the people there confirmed that they do not make furniture—they make window boxes. I suppose that window boxes are furniture to some people, but they are not normally considered to be furniture.
The Aberdare factory still manufactures some items for the health care business. That was one of the main things it did that was taken away from it some years ago as a result of some fatuous reasoning. The manufacture of those items was transferred to Chesterfield. I have no objection to people in Chesterfield having a job, but not at the expense of my own factory. As I have said, we still manufacture some items for the health care business, including a subcontracted footwear contract from the Chesterfield factory. That seems to be a rather ridiculous situation that is like a sort of yo-yo approach. There is also a bra pocketing service and the manufacture of lumber supports. So the factory was not making furniture, and I question some of the things that are said to happen in certain places.
Finally, according to the economists, we know that unemployment is on course to hit 3 million for the first time in 20 years. It is clear that wide-ranging job cuts in the public sector are simply not being absorbed by the private sector. Those jobs are just not there in the private sector. It is the hallmark of a civilised society that it ensures that its most vulnerable people are protected. Those people should not be left to compete in a savage labour market, where hundreds of thousands more people will lose their jobs in the coming months. It will be hard enough for the able-bodied, but please let us safeguard Remploy and all who work within it.
Maria Miller
No, that is not what the Government are saying. The Government are still consulting on the Sayce review, as the hon. Gentleman will be aware. I have said that we are minded to accept these things, and as we move forward, we might or might not accept proposals in that report. We may accept them piecemeal or in their entirety. That is yet to be decided, so he will have to bear with me—as I am sure that he is willing to do—for a little while longer, so that we go through the proper processes with all these things.
The hon. Member for Swansea West—I see that he is not in his place—talked about there perhaps being problems with recruitment. Yes, indeed, because of the austerity that we are under at the moment, controls on new Government recruitment are in place. Owing to its non-departmental public body status, Remploy is covered by those controls, but I absolutely assure hon. Members in the Chamber today that since the austerity measures came into force, Remploy has successfully applied for exemptions through this process, where requests have been approved, to ensure that we can continue commercial operations. There are absolute safeguards in place to ensure that the business can continue in the way that it needs to.
The right hon. Member for Cynon Valley mentioned expensive consultants. She and I have a joint dread of the idea of having expensive consultants in place. I assure her that since austerity measures have been introduced, Remploy has not used consultants. I cannot speak for the previous Administration, but that is something that we feel very strongly about.
The hon. Member for Wrexham talked about when financial information will be available. As I have already made clear, no decision has been made on the recommendations of the Sayce review to date, so it would not be appropriate or possible for me at this stage to release financial information on a decision that is yet to be taken. We have to ensure that we adhere to the right proprieties. He would expect us to do that as a Government, and I assure him that, as soon as decisions are made, the appropriate information will be forthcoming for anybody who is interested in that detail.
The Remploy pension scheme has been mentioned. To assure individuals who may be concerned about comments that have been made about that, the Government have promised to protect fully the accrued benefits of pension scheme members in the event that the pension scheme were to close following the implementation of the Sayce review recommendations. It is an unfortunate fact that we have identified a £104.6 million deficit in the valuation of the pension scheme, which we inherited. A deficit repayment plan has been put in place, which is important because we want to ensure that both employees and pension scheme trustees are confident in the propriety of the finances of the scheme. Payments of £7.4 million, £25.8 million and £21.5 million have already been made into the scheme, which shows the commitment that this Government have, in tough economic times, to ensuring that we stand by our obligations and our commitments to Remploy staff.
I want to ensure that the right hon. Member for Cynon Valley who secured the debate has a few minutes at the end to sum up.
Maria Miller
That is extremely kind of the right hon. Lady. I have managed to race through most of the issues that I want to cover—I think that I have actually managed to cover almost everything raised by hon. Members.
Maria Miller
The hon. Gentleman is asking me to comment on something that I do not think I would ever say. [Interruption.] What I would say is that we have to listen to what disabled people want. Disabled people tell me that they want to live independent lives in communities like everybody else. To be able to do that, they want to have the jobs that everybody else would expect as well.
I fear that I will run out of time if I do not wind up my remarks quickly. In conclusion, getting this right is absolutely crucial for millions of people—millions of our constituents. It is only right that we take the time to consider the consultation representations before making any decisions. I have not yet made a decision about the future, and an announcement will be made as soon as is practically possible. Hon. Members can be sure that I will consider carefully not only the points that have been raised today, but the points that have been raised by hon. Members and right hon. Members in the many meetings that we have had in recent weeks. However, we need to look at the evidence. We need to be driven by that evidence and ensure that we are committed to the best decision for the future of disabled people. I recognise how vital it is to join up with work across Government to improve employment outcomes for disabled people. I have already answered one of the requests in the Sayce report to establish a cross-Government Committee that considers disabled people’s employment.
Maria Miller
The right hon. Lady makes a timely intervention. She will know that in her constituency 37 people are employed in a Remploy factory, and she has more than 13,000 disabled people in her constituency. My responsibility is to ensure that more of those 13,000 people get the support they need to get into work. We know that there are almost 700 vacancies in Jobcentre Plus in her area, and that Remploy employment services in Merthyr Tydfil has placed 254 disabled people into employment. In the Rhondda, that figure is 163 disabled people into employment; in Bridgend, it is 251.