Remploy Factories

Jim McGovern Excerpts

Tuesday 4th December 2012 Westminster Hall

[Mr William Bain (Glasgow North East) (Lab)]

It is a pleasure to serve under your chairmanship once again, Mr Streeter, and to have secured this debate on behalf of Remploy workers and their families in my constituency and across the country.

Tomorrow is the day of judgment for the Chancellor’s failure to grow the economy, but today is the day of decision for this Minister, the Under-Secretary of State for Work and Pensions, the hon. Member for Wirral West (Esther McVey). The honour of serving in the Government comes with responsibilities, and the hon. Lady and her colleagues must accept that it is not just the Chancellor’s fiscal and growth policies that are not working, but her Department’s strategy on long-term unemployment among the disabled, which has been worsened by the short-sighted and ruinous decisions to close 31 Remploy factories across the country this year. Now, 46 jobs in the Springburn Remploy factory in my constituency hang in the balance, and it is to those dedicated workers that the Minister must give hope, and clear answers, today.

The Minister will no doubt remind me that there have been Remploy factory closures before, under different Governments, but the economic, and particularly the employment, climate are now very different. This is the longest journey out of an economic slump for 140 years, with median wages in Scotland falling by 7.9% in the past two years. We need only look at the closed stores on our high streets to see the effects that the lack of demand is having on the spending power of local communities. If unemployment in general is far higher than it should be, nearly four years from the low point of the recession, how much worse is the picture for disabled people?

There are 63,000 more disabled people out of work than a year ago, and 554,000 of them out of work in total, which is a record high since figures were separately allocated for the disabled.

[Jim McGovern (Dundee West) (Lab)]

I congratulate my hon. Friend on securing this very important debate. I have visited the Remploy factory in my constituency so many times now that I am on first-name terms with almost all the members of the work force. They seem to be a happy work force. They are happy to stay where they are and do not wish to go elsewhere. Does my hon. Friend not agree that it seems a perverse Government policy to throw disabled people on to the dole, against their wishes, and then tell them that if they do not find alternative work they must work for nothing or have their benefits cut?

[Mr Bain]

Absolutely. My hon. Friend highlights precisely the complete lack of logic in the proposals, at this time when the disabled, young people and people in long-term unemployment are encountering the toughest employment conditions in decades.

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[Esther McVey]

I do not accept that. I have explained clearly how many people we have found jobs for in the hon. Gentleman’s constituency in the past year and what we have done since then. Since the general election, 1 million new jobs have been created by the private sector. As I have said, the issue is about sustainable, long-term work.

I will give examples of what some Remploy staff have been doing. The numbers might be small, but they show that things are developing. Four former Remploy employees have set up their own co-operative business to undertake sewing machine working. They are now registered as a company and have been given advice and specialist training. They are opening their factory in Aberdeen. In Wigan, Red Rock Data Processing Services has started. It was set up by ex-Remploy managers, who have so far recruited two ex-staff in management positions. By Christmas, 16 people will be employed. In Oldham, four ex-employees have found work with Dekko Window Systems. People have also found work at Cornwall college in Camborne near Penzance, at Hayman Construction in Plymouth, and at Asda.

What we are seeing is what disability experts had envisaged: the issue is about mainstream work and having people work and fulfil their potential in every way. Where Remploy factories can remain viable, they will do. Where they can be bought out as co-operatives, they will be. Where we can have people working in mainstream work, we will support them as best we can.

[Jim McGovern]

The Minister has not yet covered procurement, but she has mentioned sewing machines. The Remploy factory in Dundee is based on textiles and fabrics and on manufacturing uniforms—

[Mr Gary Streeter (in the Chair)]

Order.

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[Mr Gary Streeter (in the Chair)]

Order. Mr Jim McGovern is about to finish his intervention.

[Jim McGovern]

I did not realise that the Division bell had gone and I thought that I had said something out of order, so I am delighted to be called again.

The Minister was mentioning some of the functions in various factories. The Dundee factory is based mostly on textiles and the manufacturing of uniforms, and I hope that she will accept my invitation to see it at work. I have had discussions—

[Mr Gary Streeter (in the Chair)]

Order. There has been ample time for the intervention, if both parts are taken together, so I will allow just one more sentence.

[Jim McGovern]

I ask the Minister to make representations about uniforms to the Minister with responsibility for procurement, the hon. Member for Mid Worcestershire (Peter Luff), so that they can be produced in Dundee.

[Esther McVey]

I will indeed visit as many factories as I possibly can. I have been to several, and I have been up to Scotland recently—up in Edinburgh—so if I can and time permits, I will visit. Regarding procurement, I believe that a different Member now has that responsibility, but I will have a word with the relevant Minister.

Some right hon. and hon. Members have expressed concerns about the commercial process, but I am now satisfied that the Remploy commercial process has been open and transparent. It was published on 20 March on the Remploy website, which has communicated the outcome of the process at all stages and continues to do so. In the light of the assertions made by MPs, MSPs and the trade unions, I sought absolute assurances from the Remploy board that the commercial process for stage 1 was operated as published and that it allowed an equal opportunity for interested parties to submit a proposal for consideration. It is important to note that any assertions made—from all those who have made certain allegations—included no evidence of malpractice or wrongdoing as part of the commercial process.

The assurances provided by the Remploy board confirmed that: the commercial process was consistently delivered with equal opportunity for all interested parties, including in excess of five months for bids to be developed and submitted; the current preferred bid for Remploy Healthcare, excluding Springburn, remains the best value bid as a result of the commercial process; and the preferred bid will preserve the ongoing employment of 30 employees. The process was developed using expert advice on its design and structure, taking into account the need to ensure that employees and employee-led groups had an opportunity to take part actively and to develop robust bids. An independent panel was set up to provide independent assurance to the assessment process, because we recognised the need to ensure that proposals were robustly assessed. The panel played an active part in the assessment of bids at all stages of the commercial process.

To encourage employees and employee-led groups to take advantage of the opportunity, the Government made funding available, up to a maximum of £10,000, to be used for expert advice and support in developing proposals. The Government offered a time-limited, tapered wage subsidy, totalling £6,400, to successful bids for each eligible disabled member of staff as part of Remploy’s commercial process, again seeking to support the ongoing employment of as many Remploy disabled employees as possible. The offer of the wage incentive was a direct result of Remploy’s and the Department’s response to a number of proposals and of issues that were raised by bidders during the commercial process. To reflect such additional support, we extended the deadline for the submission of business plans, adding an extra three weeks to the time line.

Remploy’s preferred bidder for its Springburn factory put in bids for Springburn and for another of Remploy’s sites at Chesterfield. Unfortunately, Remploy has been advised by the preferred bidder that it no longer wishes to proceed with an offer for the Springburn site. There were no other viable bids for the factory, so it will now close. Remploy’s preferred bidder is, however, saving jobs at Chesterfield. The jobs saved might not be as many as people hoped for but, nevertheless, they are saving jobs. Without that bid, we are uncertain if there would have been a viable bid for Chesterfield. The design of Remploy’s commercial process has maximised the potential of the bids and proposals for the factories concerned but, clearly, that is not the end of the process. As with the factory in Wigan, where a new company has emerged, and in Aberdeen where a social enterprise has started, we are asking people to come forward with other bids and offers on how they would like to see the future of their Remploy factories, including Springburn.

I am grateful to hon. Members for raising the issues and for giving me the opportunity to set out what we are doing, how we are doing it and how best it can be done. I will continue to keep the House up to date with further developments for Springburn and other factories.