Remploy

Ian C. Lucas Excerpts

Thursday 15th December 2011 Westminster Hall

[Ian Lucas (Wrexham) (Lab)]

It is a pleasure to take part in the debate. The hon. Members who are here have displayed a great deal of passion. Much of that passion is due to the fact that we have constituents who work in Remploy factories and that those factories are in our constituencies. When there was a proposal to close Wrexham Remploy, which I know very well, in 2007—a similar situation to that described by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—I learned how strongly the work force felt about working in a factory with their colleagues in Wrexham. I also discovered how powerful the support in the Wrexham community is for the factory. A local councillor, David Bithell, led a campaign to keep the factory open, and for a number of weeks in Wrexham town centre a great deal of support was expressed from within the community.

Like my right hon. Friend, we took forward a campaign to get more work for the Wrexham factory, which involved more orders for the furniture being manufactured there. I am pleased to say that that approach has borne fruit, and only yesterday Wrexham council made the decision to take forward the purchase of furniture and equipment from the local Remploy factory. I cannot understand for the life of me why that has not been happening for the past 60 years, and it must be the model that we follow in the future. I am very pleased to see the Minister nodding her head in that respect, because the problem with the Sayce report is that it proposes a model that will take that opportunity away.

None of us wants a situation in which people are forced to work in Remploy factories, a situation in which we create ghettos for disabled people. We want choice for those people. My concern about the Sayce report is its implicit and explicit statements that the opportunity to work in individual factories, supported by the local community, will be taken away. There is a very superficial nod in the report to the possibility of individual factories remaining open. The report talks about how local factories will have the opportunity to survive in the private sector. Let me tell the Minister that many businesses are having a great deal of difficulty surviving in the private sector at present. Local Remploy factories are not being given the information to enable them to prepare to build up a meaningful business case for their own future.

I wrote to the Minister when I saw the proposal in the Sayce report and asked her for the details of the income and expenditure for the Wrexham Remploy factory, which is pretty basic in preparing a business plan, but she refused to give that to me. She said:

“Remploy operations continue as normal and it is therefore not appropriate at this stage to make available commercially confidential information on factory operations.”

How on earth can Remploy factories that are facing closure prepare for the future and try to put together meaningful business cases, when the Government, who propose to close them, will not give them the information that they need to take forward business plans? Will the Minister please start to recognise that the people who work in those factories and the communities around those factories feel passionately about them? Will she start to be serious about supporting the factories?

Individuals deserve a choice, but the Sayce report will take that away. The report suggests that there is no future for Remploy factories across Britain, but that is entirely the wrong decision. Will the Minister please ensure that she does not become known as the Minister who destroyed Remploy?

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[Mrs McGuire]

Yes, indeed. We can also look at some of the more successful examples of supported employment, including factories where disabled people work, that have had unstinting support from local authorities. Not all of those factories are Remploy factories. For example, the Royal Strathclyde Blindcraft Industries factory in Glasgow has had enormous input and support from the local authority. It has supported the factory through thick and thin, and hopefully now through thick again, but obviously business conditions may change.

As I said earlier, I want to refer to the comments of the hon. Member for Eastbourne. I think that everybody who has spoken in the debate accepts—at least, I hope that can be said of everyone—that there is a change in expectation among most disabled people, and certainly among their spokespersons and the organisations that represent them, and that disabled people want to have a range of choice in employment. Disabled people want the same range of choice that non-disabled people have. Government support is crucial in helping to deliver on those aspirations. I say gently to the hon. Gentleman, who I know has a long and honourable history of working in the disability movement, that we cannot deliver on the aspirations for the majority if we trample over the expectations of the few. In many respects, that is the dilemma that we face in discussing the current issue.

I have heard today from many right hon. and hon. Friends and hon. Members about their own experience of the Remploy factory in their own constituencies. I share their admiration for those factories, because there is a Remploy factory in Stirling. I visited it on the international day of disabled people and took the baton from a young man who works there. As has been said of other Remploy factories, that company of people in that factory in Stirling recognise that Remploy is not only about a job but about a wider network of social support, economic support, health support and all the things that disabled people look for. Indeed, Liz Sayce, in her report, recognised the value of the Remploy environment, and I will read an extract from page 96:

“It was clear from this review that the best factories offer job satisfaction, a supportive and accessible environment and a reasonable income for those they employ. The factories have provided employment opportunities – sometimes for many years – to disabled individuals. They have also provided a sense of community for their employees. Some have pioneered learning and development, often led by Union Learner Representatives, through which individuals have (for instance) learnt to read for the first time, or worked towards qualifications. While some sheltered workshop environments pay staff less than the minimum wage, Remploy factories pay above the minimum wage and offer good terms and conditions.”

I am not going to run away from the fact that, like the Minister, I have wrestled with some of the issues about Remploy. I understand the tensions between wanting to open up everything to disabled people and the fact that some disabled people want to make a different choice, and we have to be careful about how we interpret the perceived settled will of disabled people. We also must recognise the legitimacy of a position that is not the mainstream view of the disability movement—to close sheltered factories—which is that factories should be maintained, to give disabled people a choice. That was always the position, and those of us parliamentarians who are veterans of the Remploy modernisation programme will remember that my right hon. Friend the Member for Neath (Mr Hain) made it very clear that there was still a place within our range of opportunities for supported factory employment.

I want to probe the current consultation with a series of questions to the Minister, which I hope she will be able to answer, if not this afternoon, in the very near future. In opposition, the Government supported a five-year modernisation plan, so why did the Minister embark on a review nearly two years before that timetable had been exhausted? I suggest that the five-year plan effectively had only two years to run before there was a general election, so why did the Minister go for the current timetable? With the greatest respect to Liz Sayce, the five-year plan did not come out of a review, in a few short months, but was the result of extensive financial investigations, consultations with the disability lobby before a consultation document was published, and extensive and sometimes very robust discussions with the Remploy board and the trade unions, which some of us here will remember. We felt that there had to be a plan with a time frame that would allow Remploy to turn the business around.

We have heard today that some of the factories are being turned around, that order books are overcrowded and new businesses are coming in. I agree with my right hon. Friend the Member for Wythenshawe and Sale East that there are still some issues about top-heavy management and decentralisation, and we had the five-year time frame so that the issues could be worked through, between the board and the trade unions, with the continued support of Government. I can say this only in the kindest fashion: the current situation has created uncertainty among workers, and indeed among management, about what will happen, and that is stymieing the development of Remploy the business. I have some sympathy with colleagues who suggest that there might be a bit of a withering-on-the-vine strategy behind that.

Given the Minister’s intention to embark on this course of action, what action did she take to involve the board of Remploy and its trade unions in discussions about the issues identified in the Sayce report? What recognition did she give to the trade union analysis of the current operation of Remploy’s enterprises and the questions it raised about the company’s business practices? Did she take any opportunity to discuss some of the issues with the unions? I am not talking about post-consultation discussion, after the paper was published, but about developing the consultation in line with the people who have a strong input into the process. There is a feeling that the consultation is flawed, not least because the Minister perhaps did not appreciate all the implications of the phrase on page 18:

“Government is minded to accept the recommendations of the Sayce Review”.

I do not understand how someone can put out a consultation and then say what they are minded to do before the results have come in.

When the modernisation statement was made to this House on 29 November 2007, the now Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) made the following commitment:

“Let me assure Remploy and its employees that the next Conservative Government will continue the process of identifying additional potential procurement opportunities for them and the public sector work force.”—[Official Report, 29 November 2007; Vol. 468, c. 451.]

What efforts have the Minister and her ministerial colleague made to fulfil that promise? What discussions has she had with the major procurement Departments, including the Home Office and the Ministry of Defence? Has she looked to ensure that her own Department has considered even more ways in which it could open up procurement opportunities for a business in which it has a significant investment? What discussions has she had with colleagues in the Department for Communities and Local Government to encourage local authorities to consider opening up opportunities for individual local factories? What efforts has she made to encourage her colleagues to identify procurement opportunities under article 19? If she is still “minded” after the consultation process closes, what responsibilities will the Government have towards Remploy?

Why is the current pension scheme issue raised in the consultation? Currently the DWP guarantees the company pension scheme, but would it still exist? How would it be managed, and would the DWP have a role in that management? Is the pension fund currently in surplus or deficit, and by how much? If it is in shortfall, what measures will be taken to deal with that? It looks as though the Minister has the figures to hand, but if she does not I would be pleased if she could advise us after the debate. What range of companies does she have in mind that might wish to buy all or some of the Remploy factories? Has she, or have her officials, had any communication with any such interested parties?

The Minister indicates in her consultation that staff might wish to consider acquiring the enterprise businesses, and that they could do so. The consultation also indicates that expert advice would be there to assist, but would any provision be made for a front-loaded capital investment on the part of Government? Would the DWP consider a legacy to those factories, given the deep and extended relationship between Government and Remploy? Those are all unanswered questions in a consultation.

[Ian Lucas]

My right hon. Friend is making a powerful case. Does she agree that one great weakness of the Sayce report is its complete lack of detail about what alternative model for going forward would be available to individual plants and factories? We are in a state of uncertainty about those individual plants, and they have no real knowledge of what is proposed for their future if the proposals go ahead.

[Mrs McGuire]

My hon. Friend is correct. I do not blame Liz Sayce for that, as her report dealt with principles and the direction of travel, but we can criticise the consultation for lacking fundamental details on some of the questions affecting the disabled people who currently work for Remploy.

If the businesses are to be transferred, what provision will be made to safeguard terms and conditions? Will they be guaranteed under the Transfer of Undertakings (Protection of Employment) Regulations 2006, or will people be sacked and rehired under inferior terms and conditions? Liz Sayce complimented Remploy on delivering good terms and conditions for its workers, but again, the consultation says nothing about that.

The consultation mentions a comprehensive package of support, which is one of the Sayce recommendations. What does the Minister have in mind? What kind of support will it be? How will it be delivered, and by whom? Has she factored the costs of that support into her budget for the winding-up of Remploy? What assessment has she made of the costs involved in selling off the factories and winding up Remploy enterprises, including all the calculations relating to redundancy payments, liabilities and creditors, a point made by my hon. Friend the Member for Glenrothes? How do they relate to the current budget, and how much money will actually be transferred to other Government support programmes after all those issues are taken into account?

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[Maria Miller]

I thank the hon. Gentleman for his intervention. The answer is that there is a great deal of legislation that would support that young man. I hope that the hon. Gentleman’s advice to him was to seek legal redress, although the particular instances of the circumstances would need to be taken into consideration. Our responsibility is to plan for the future and for young men like that who want to be able to work in the same jobs as their peer group in a class, and to make sure that they have the ability to do that, not only through legislation, but through the attitudes of their employers.

Procurement has been mentioned a number of times. Indeed, the right hon. Member for Cynon Valley raised the issue right at the beginning of the debate. It has been suggested that an increase in procurement sales, particularly from local authorities, would resolve Remploy’s current problems. In its briefing for this debate, the GMB initially chose to criticise the support provided by local authorities for Remploy, but, for the record, I want to thank local authorities for their support for Remploy. The hon. Member for Wrexham (Ian Lucas) has talked about his local authority’s work in that regard. Moreover, the local authorities in Blaenau Gwent, Swansea, Merthyr Tydfil and Newcastle already support Remploy. Indeed, my own county council in Hampshire also supports Remploy and is very proud to do so. It is important that we do not underestimate the existing support. We are most grateful and thankful for it.

[Ian Lucas]

Local authorities cannot support Remploy if Remploy is not there.

[Maria Miller]

The hon. Gentleman will know that the consultation talks about freeing Remploy from the control of Government and making sure that successful organisations can continue to thrive.

To return to the specific point that Members have addressed at great length, there are examples of local authorities and Remploy working together, but the problems in the factories will not be addressed by that alone. Article 19, to which Members have referred, is clearly a way to help public bodies use supported businesses, but it does not address the issue of value of money that procurement officers always need to consider, nor does it guarantee that Remploy will be given work in competition with other supported businesses.

The issues currently faced by Remploy factories are not new, and concern over the increasing cost, low productivity and sustainable jobs for disabled people has been an issue since the 1990s. The operating loss for the factories has increased into tens of millions of pounds, and the steps taken under the modernisation plan, which was rightly introduced by the previous Administration, including closing and merging 29 sites, has simply not addressed the fundamental weakness in the business model.

The right hon. Member for Cynon Valley mentioned my comment that I was minded to accept the consultation’s proposals. I want to make it clear that I have not yet made a final decision about the consultation, but I am persuaded that there is a need for change and that the Sayce review suggests a persuasive model for such change.