Oral Answers to Questions
Jim McGovern Excerpts(10 years, 9 months ago)
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Esther McVey
My hon. Friend raises an important question about how we support all people back into work. It really is important that advisers have the flexibility to offer skills and job-search support to people of all ages, including those who might need extra support on the Work programme and, equally, those in local areas that might have an over-50s digital group or 50-plus work clubs. We need to make sure that everybody is getting the support and I would be more than happy to meet my hon. Friend to discuss the matter further.
Jim McGovern (Dundee West) (Lab)
T8. I have put this question to the Department for Work and Pensions on two previous occasions in the Chamber, but I will try again and perhaps, as the old adage goes, this will be third time lucky. More than 90% of the Work programme participants in my home city of Dundee have not been helped into work by it, so my simple question is: why not?
Esther McVey
The Work programme supports those people who are furthest away from the job market. We have helped more than 1.4 million people and we now know that more than 400,000 of them have had a job start. We have to get them closer to the workplace, so it is working well. We always say that there is more to do, but this has done a significant amount for those people who are the hardest to help.
Oral Answers to Questions
Jim McGovern Excerpts(10 years, 11 months ago)
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Mr Duncan Smith
That is exactly right. The reality that my hon. Friend has spotted is that the Opposition have voted against every single one of our welfare reforms. Not only would the welfare bill have been £45 billion higher under them, but more people would be out of work and they would have failed the British people.
Jim McGovern (Dundee West) (Lab)
On the Work programme, can the Minister explain why Dundee is once again the least supported city in Scotland, with only 9.79% of people being helped back into work by the programme? Will she apologise to the people of Dundee and explain why 90% are still not being helped?
The Minister of State, Department for Work and Pensions (Esther McVey)
The majority of people are being helped by the Work programme. As I said earlier, this is the first time we have had a co-ordinated approach to support, and it has supported 2.5 million people so far. Of course we have to make it better and support more people, but 444,000—that figure is from industry statistics—have actually got a job.
Oral Answers to Questions
Jim McGovern Excerpts(11 years, 5 months ago)
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Mr Speaker
Well, that is a first, not just from the hon. Gentleman but more generally.
Jim McGovern (Dundee West) (Lab)
The most recent figures suggest that of the people who are on the back-to-work programme in my city of Dundee, 9% have managed to get back to work. I admit that that is an improvement on the farcical 1.4% that we had last year—the lowest in the UK, I believe—but it is not necessary to be an expert in arithmetic to work out that that means that 90% of people on the programme have still not found work. Will the Government admit that with the recent bedroom tax, which has been mentioned, and welfare benefit cuts, they are not just starving families in work but starving them full stop—
Pensions Bill
Jim McGovern Excerpts(11 years, 6 months ago)
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Dr Whiteford
I will not for the moment, because I have been carried off track from the debate about single-tier pensions and am keen to discuss the consequences of the administrative hold-ups, particularly for defined benefit pension schemes.
About 6,000 defined benefit schemes are still operational in the UK, but half of them are now closed to new members. Even given the proposed employer override, there is a pressing need for the regulations to be introduced for consultation at a very early stage. The ACA estimated the time scale required and it has already brought it forward by a year. It says that it will need time to do actuarial work and consult properly with scheme members. Will the Minister outline the time scale for the introduction of the draft regulations, and will he confirm that the Government remain committed to meaningful consultation with the key stakeholders and those who will have to deal with these issues in practice?
The Government argue that the proposals will incentivise saving. Certainly, it will become easier to save for retirement, but it would be more accurate to say that the proposals remove disincentives for savings. We should scrutinise the claim that there will be significantly better incentives to save and temper our expectations.
On the face of it, the single-tier pension should, in theory, encourage people to save for retirement, but I have a few reservations about how that will work in practice, simply because we have had a succession of pension reforms in 1998, 2002 and 2006, all of which have shifted the goalposts for certain cohorts. The reforms have had a cumulative effect, in that they have eroded some people’s confidence in the value of saving for retirement. That has been compounded in the past few years since the financial crash by extremely poor annuity rates and poor terms for draw-down pensions, while older people trying to derive an income from their savings have been hit on all sides by historically low interest rates and the value of their capital being reduced by quantitative easing. People who thought that they were doing the right by saving are seeing little reward for their efforts. From speaking to people of working age, I know that many are looking at their parents’ experiences and thinking twice about how to save for the future and, indeed, whether it is worth doing so.
I hope the Government are right that people will be encouraged to save for retirement, but we must be wary because my sense is that public trust in state pension provision is at a low ebb. That uncertainty will continue to play out with people who are set to retire many years from now, but who are looking at this reform thinking that there is not an awful lot in it for them.
A number of people have talked about the single-tier pension extending the state pension to more women. It is true that most women will be entitled to the state pension in their own right, but the Bill is far from a panacea for the historical problem of women facing an impoverished old age. Even under the new arrangements, women will be less likely than men to receive the full pension. If the main drawbacks of the proposed scheme are that in the long term, the majority of people will have reduced pensions, the fact that the state pension will constitute a lower proportion of people’s income, will be lower as a proportion of average earnings and will be less money in real terms than pensioners have now means that we risk inscribing existing inequalities into the single-tier pension.
The Government hope that a lower state pension will encourage a greater reliance on occupational pensions. Although there is protection in the Bill to allow those who take time out to look after young children or frail elderly relatives to get credit for the single-tier pension, there is no equivalent protection for full-time parents and carers in private pensions. As the value of the state pension erodes and people become more reliant on what they have saved in their occupational pension to maintain a decent standard of living, disproportionate numbers of women are once again likely to be poorer because it is predominantly women who punctuate their working lives with breaks to care for others.
Many women take low-paid jobs so that they can juggle family and work responsibilities. There is also a persistent gender pay gap, so even women who have not taken breaks find that their pay, on average, is lower than that of their male counterparts. That is by no means a new problem, but much of the income inequality between men and women in later life can be attributed to more men having private and occupational pensions. I am far from convinced that the introduction of NEST and auto-enrolment will make much difference to the gender gap in private pension provision or do enough to help women secure a comfortable lifestyle in old age, given that they will be more dependent on what they have saved.
I also have concerns about people who do so-called mini-jobs. Many women with young children work two or three low-paid part-time jobs to support themselves and their family. The Government have encouraged such patterns of work. There is a danger that somebody who works only a few hours a week for a number of employers will miss out on both the threshold for national insurance contributions and auto-enrolment. Again, in the long term, women are likely to be disproportionately affected.
I want to ask the Minister about one last point. Under the current legislation, one way in which full-time stay-at-home parents earn state pension entitlement is by being in receipt of child benefit for a child under 12. When child benefit was a universal benefit, that was a good way of ensuring that mums and dads who took a break from work to care for children did not lose out. Now that child benefit has been withdrawn from higher-income families—often it is higher-income families who have a stay-at-home parent—what mechanism will the Minister use to ensure that a stay-at-home parent in a high-income household does not miss out? With single-tier pensions being unique to the individual and not transferable between spouses, it is more important than ever that such parents are not disadvantaged and are not pushed into total dependence on a high-earning partner.
It is clear that we cannot look at the single-tier pension outwith the context of other changes to the tax and benefits system. The changes will potentially impact on other forms of pension provision. I am aware that many of these matters will be covered in Committee and in regulations that are still to be brought forward. I seek assurance from Ministers that they will heed the concerns of the professional bodies that will have to put the legislation into practice and keep the unresolved issues on their radar.
Dr Whiteford
I will not give way because I am just finishing.
Every round of pension reform over the past few decades has been touted as the last for a generation. I am not persuaded that what is being proposed today is the final chapter in the pension reform on which we are embarking. I wonder how it will stand the test of time. I fear that in a few years’ time, the goalposts may shift yet again, notwithstanding the reviews that the Government have built into the system. I hope that the Government will look carefully at the equality issues in the Bill and do more to ensure that pensioner poverty for women, as well as men, becomes a thing of the past.
Housing Benefit (Under-occupancy Penalty)
Jim McGovern Excerpts(11 years, 9 months ago)
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Mr Redwood
I am afraid that I cannot give way again. I am running out of time, and if I give way I will not be given any injury time.
We need to look at the issue of under-occupation among the elderly, and we need then to look at the issue of the disabled. That was why I approached this debate with considerable nervousness. As I think my hon. Friends know, I wish us to be more generous to the disabled, not less generous, and I think we all feel a little nervous about how far we should go. I was somewhat reassured to see that there are different definitions of disability and a rather wider definition is being used than would, perhaps, be normal. I am interested in the people who are seriously disabled, as recognised through the receipt of disability benefit.
I urge my ministerial friends to be as generous as possible. We must not presume that there is an easy solution, however. Again, if there are issues that need to be sorted out, the best way to do that is through support and persuasion and offering people something better. That must be the aim. Why would somebody move if their new home is going to be worse than their current one? If it can be shown that there would be better, more appropriate and better supported accommodation, however, I might be more willing to accept that we should follow the proposed course of action. I urge my ministerial friends to be extremely careful about the definition of the disability category, however.
One Opposition Member argued that this is a cynical policy and there might not be many savings if it works. That is a misunderstanding of the true nature of the policy. It is not primarily a public spending-cut policy; it is a policy designed to try to get more people into public sector housing that is suitable for them. That is the bigger picture.
We have an inadequate amount of housing stock, and some people have more of it than they strictly need, whereas others do not have as much of it as they strictly, technically need on the needs definition. We are arguing here about the balance between those two groups, and whether it would be feasible to solve the overall shortage by producing more housing. Even the Labour party must understand that if we were to go for the big build answer, that would take several years to come through. Ministers are feeling very frustrated at present that they have identified places for building and the means of financing that building, but it is taking a very long time to get the building to come through so we can start to tackle this problem.
My next topic is how to tackle the problems of insufficient housing and excess welfare spending. The issue of eligibility is key. My constituents tell me that they feel much more inclined to pay taxes to make sure that people who have been settled in this country for many years, or who have been born and brought up here, can get access to proper housing than to provide housing for people who have only just arrived and seem to know how to work the system to get access to housing. The Government could productively focus on that. I am sure there will be European Union rules, but we need to negotiate on this with our European partners, and make a stand if necessary, because there is a strong feeling in our country that public housing will be limited—more limited than some would like—and if we are to make choices, the priority must be those who have been here for some time and who have made a contribution and are part of our settled community. That does not always seem to be the case. I hope Ministers will see the issue of eligibility as a proper avenue for addressing both excess benefit expenditure and the shortage of available property.
These are difficult waters. Anyone who looks at the situation rationally will agree that there is under-occupation and we need to tackle it sensitively. They will also agree that we need more housing provision overall, and we need to do what we can to tackle that. I hope we can all agree that the best answer is to find a way to enable more people to enjoy what every MP takes for granted. We take it for granted that we have a well-paid job and that we can afford to buy a house. I think that every MP owns a property. Indeed, some of them own rather more than one property, I believe, and that has sometimes become a matter of comment. It is normal for an MP to own a property—to be an owner-occupier—and to enjoy a good income, and I am sure most MPs own a spare room or two.
I do not think there is anything wrong with people striving, getting a better job, earning more money and having spare rooms. I am personally very much in favour of spare rooms when people can afford to have them. We also need to make sure we have a fair tax system so that we are all making a decent contribution to those who cannot afford spare rooms.
Jim McGovern (Dundee West) (Lab)
May I ask the right hon. Gentleman how many spare rooms he has in his house—or has he not got round to counting them yet?
Mr Redwood
My spare rooms are a matter for me because I paid for them myself, and I am sure the hon. Gentleman has spare rooms and I dare say he paid for them himself. That is exactly the kind of society we all want to live in, I would have thought. I do not know of any Labour MPs who could stand up and say that they are at the minimum accommodation level—I invite them to do so, but I do not see anyone rushing to stand up.
Stewart Hosie
No, as I have only two and a half minutes left.
The other 2,804 households will lose 14% of their housing benefit. Tenants in two-bedroom council properties could lose benefit entitlement of approximately £9.93 a week, which is £516 a year. Those with two so-called spare rooms will lose an entitlement of £20.07 a week, which is more than £1,000 a year. Does the Minister understand what the loss of £1,000 a year means to families who are already struggling to make ends meet? Does he understand the consequence of that level of indebtedness? Legitimate lending companies will not lend to people in those circumstances, and credit unions can only do so much. This policy will drive people into the hands of loan sharks and illegal moneylenders, and the consequences of that will be picked up by social work departments, health services and the police, at a cost to the public purse for a policy that is unlikely to save this Government any money in the first place.
Jim McGovern
A couple of weeks ago, I attended a meeting with officers of Dundee city council who said that discretionary payments would be extremely limited because they have never had the funds for that. I asked whether they had smaller houses for people who were willing to move. They replied, “No.”
Stewart Hosie
The hon. Gentleman sums up the situation nicely. The discretionary pot is too small. I do not dislike discretion generally—I think it is quite helpful—but there are too many categories of people who should be fully exempt but who will be subjected to the tender mercies of discretionary decision making, which may go against them when it ought not to.
In short, this remains a very bad policy with too many of the wrong people suffering a very bad impact, and it must be reversed. It risks destabilising communities; it disproportionately hits disabled people; it puts the burden of paying the cost of this Government’s economic failure on the backs of some of the poorest in society. That, I think, tells us everything we need to know about the Tory-Liberal Government, many of whom—most of whom, I suspect, or perhaps even all—have not been poor and, more important, do not understand what it means to be poor in society today.
Jacob Rees-Mogg
Owing to pressure on the availability of larger properties, many social landlords provide significant incentives for people to move.
It is important to remember that the housing market is dynamic. It is not a static market, with people staying in the same house their whole lives, and they should not expect that to be the case. I understand that people move house, on average, every seven years. It is perfectly reasonable that that happens, and that it should continue to happen, because it frees up the properties people need. I intervened on the hon. Member for Dundee East to make that important point.
When a three or four-bedroom property in the social rented sector is freed up, it might well be filled by someone who had been living in the private rented sector, which is more expensive, so they will be moving into the cheaper social rented sector. The person who had been living in the three or four-bedroom property might move back into the private rented sector, which has a higher cost, but there would be a bigger saving because the other person had moved into the social rented sector. That is important, because some of the debate has focused on the inflexibility of the housing market. It has been said, for example, that there are not enough one-bedroom properties in the social rented sector for people to move down to, but there are plenty of properties across the country as a whole. People will move more freely between the private and public rented sectors and will continue to have their rents paid for them unless they choose, as they will be free to do, to earn more money by working a few more hours a week or by taking in a lodger and so on in order to get the extra income.
Jim McGovern
May I ask the hon. Gentleman—he is making the speech, but this applies to everyone on the Government Benches—whether he can imagine asking his mother, sister, brother, daughter or son to take in a stranger as a lodger?
Jacob Rees-Mogg
I would be very happy to take in a lodger myself. Indeed, in my earlier life I had lodgers in my house, which helped to pay the bills.
Remploy Marine Fife
Jim McGovern Excerpts(11 years, 11 months ago)
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Mr Gordon Brown (Kirkcaldy and Cowdenbeath) (Lab)
I rise on behalf of myself, my hon. Friends the Members for Dunfermline and West Fife (Thomas Docherty) and for Glenrothes (Lindsay Roy), and, I believe, the whole communities of the county of Fife to urge the Government to save the jobs, the work programme and the marine business of the Remploy factories in Leven and Cowdenbeath in Fife. The two factories, set up in 1948, have been part of the industrial fabric of Fife for six decades. These factories, like those in Dundee, which is represented here today, Stirling and other parts of Scotland and the United Kingdom, have trained and employed thousands of workers with disabilities over the past 60 years, who have found confidence from working in these units. As I will show in a minute, these factories in Fife have an order book and an established product that people want to buy. Indeed, the order book could be rapidly extended in the right circumstances and, as I will also show, two prospective buyers have indicated to me and to my hon. Friends the Members for Glenrothes and for Dunfermline and West Fife that they would be interested in purchasing the factories.
I am pleased that the Secretary of State, as well as the Minister, is here this evening. These factories cannot be expected, in current circumstances, to be able to move from making a loss of £1.6 million two years ago and a prospective loss of £800,000 this year, to overnight financial viability under the Government’s proposals, even with the subsidy that is on offer for a short time. I want to show the Government why they have to be more flexible in ensuring that jobs that can be saved and should be saved are actually saved, and that these privatisations do not become either the liquidations of factories in Leven and Cowdenbeath, as has happened in so many other parts of the country, or the decimations of the work force. They also need to ensure that that does not happen at one of the most difficult economic times and in circumstances where the most vulnerable workers need our support.
We could talk about the general history and the policies being applied to Remploy, but I want to talk specifically about Fife, and about Leven and Cowdenbeath in particular. I wish to suggest that the Secretary of State and his Minister join a meeting with the Scottish Government and the council of Fife; this should be a tripartite group that works together to devise a plan that gives financial viability over a period of months to these factories, which we accept the Government are determined to sell on but which, in my view, could be saved.
Why do I say that? I do so because the assets of the two factories, which I have known for 30 years, are not just a loyal, dedicated and committed work force, who have made enormous sacrifices over the past year—the wage bill has been cut by 30% from £1.6 million to £1.1 million—but a product that is well established across the world as one of the most successful and sophisticated products available for marine safety. The factories are producing 30,000 of these garments each year, and I am told that they could easily move to 40,000, an increase of more than 25% or 30%. That is easily achievable in the existing factories. The design is selling not just in this continent, but worldwide and there is a market that I know can be extended over time.
Of course, the assets are not only physical assets—the ability to produce a large number of goods—but that of our having managed to approach two prospective buyers who are interested, in certain circumstances, in purchasing the factories and who would be prepared, if the conditions were right, to take over the factories and ensure that, after a short period, they are viable.
What is the problem that has to be solved? It is clearly this: the financial viability of these factories is incredibly difficult in the current circumstances, given that they have had losses of £1.6 million and, we expect, will lose about £800,000 this year—they have halved their losses, but they are still substantial losses for two small factories—and given that they have fixed costs as well as overheads and raw materials that mean that the input costs are very high indeed. Rents and rates are £57,000 or so and they pay £200,000 in central administration costs, which could be reduced but not entirely eliminated, as that figure covers insurance, payroll and a number of unavoidable administrative items. They need to buy in materials, obviously, at a major cost of £800,000 for the factory. That cost can be reduced significantly over the next few years, but it will not be reduced overnight unless we can take extraordinary action.
We have a product that people want to buy, a market that could be expanded, a sophisticated good that is world leading and an order book that is full—of course, the buyers would be prepared even now to extend the orders beyond the date they have been given—but the costs have historically been high and so, before even a penny is paid in wages, the factories are having to fork out more money than the sales revenues they receive from their goods. That is the problem we have to address.
Of course, the terms on which the Government will sell the two factories allows a buyer to come in and offer less than £1.2 million, which will be the cost of redundancy. It is possible that someone could take the factory off the Government’s hands and be paid about £1 million to do that. The problem, however, is that that redundancy cost might at some time have to be paid out and no responsible person would tell the buyer that they should not safeguard against the possibility that the redundancy costs will have to be paid. We must come up with something better.
I say to the Minister and the Secretary of State that the £6,400 subsidy that is on offer for three years—an average of about £2,000 a year, although it is about £4,000 in the first year—cannot overnight eliminate losses that were more than £20,000 per employee two years ago and are probably about £12,000, £13,000 or £14,000 per employee at the moment. The idea that a subsidy that averages £2,000 can eliminate the shortfall overnight is impossible. Today, I talked to the Minister in the Scottish Parliament, Mr Fergus Ewing, about what he can do to help. My view, and that of my colleagues and Fife council, which has also been involved, is that there is a way forward for a viable product, that the Government should try to make these two factories work and that they need to give them the time that is necessary to achieve viability. The employment support that should be on offer must be greater in this case than the average of £2,000 a year. That is simply inadequate to bridge the gap between the current losses and the financial viability that is obtainable.
The Scottish Parliament is prepared to pay £5,000 per disabled employee over a period of 18 months. That would make a difference and I welcome it. I know that Fife council is prepared to do more, because it has an employment fund to help people secure jobs. If we are to save these two factories, which I have known for 30 years and which do spectacularly good work, we need the Government, the Scottish Administration and Fife council to come together. I urge the Minister to consider this proposition.
Jim McGovern (Dundee West) (Lab)
I have a Remploy factory in my constituency and we have set up an action group composed of MPs, MSPs, elected local councillors and so on. May I urge my right hon. Friend to use his good offices to ask Fife council to contact Dundee council to see whether we can work together to form some sort of co-ordinated rescue package?
Mr Brown
Of course. The cutting equipment that is necessary for the raw materials that produce the manufactured goods in Fife is in Dundee. If a rescue is going to work, there must be some relationship between what happens in Leven and Cowdenbeath and in Dundee. We will follow up my hon. Friend’s suggestion about a meeting between Fife and Dundee.
I urge the Government to agree to hold a meeting, preferably in Fife, with representatives of the Government, the Scottish Administration, who have agreed that they will attend such a meeting, and Fife council, who will be there, to see whether the combination of what is on offer in employment support can achieve the financial viability over a short period of time that is essential if this product is to be produced in Britain. It will be sold and made somewhere, so the only question is whether it will be produced in Britain and not, as is likely, in Asia or elsewhere in the world.
The price of failure is that 50 or more Remploy factories will move from privatisation to liquidation. If they do not move to liquidation, it will mean the decimation of the work force. I know that large numbers of people employed in Fife will never work again, despite the employment support that is available. We will be throwing away the opportunity to make a viable product, which with help to make it financially viable is one that people will be prepared to buy not just in this country but around the world.
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
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 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.
Remploy
Jim McGovern Excerpts(12 years ago)
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Esther McVey
I will indeed meet my hon. Friend, just as I have met so many hon. Members to discuss the best way forward and to learn from what has happened so far.
Jim McGovern (Dundee West) (Lab)
I am on record as saying that I have been to the Remploy factory in my constituency so often that I am on first-name terms with most of the work force, and I have always regarded them as a happy work force who are reasonably well paid and happy to be where they are. This morning, I visited that factory and, needless to say, found that the work force are distraught at the fact that they are going to be closed down. What succour can the Minister give the Remploy work force in Dundee? What sort of perverse policy is it for a Government to throw the disabled work force on the dole and then tell them that if they cannot find alternative work they should work for nothing?
Esther McVey
An announcement has been made and there is now a 90-day consultation to find out who would wish to take over the business as an ongoing concern; otherwise it is open for people to buy the assets to open up social enterprises, as has happened in Aberdeen and is happening in Wigan. I also wish to mention at this point that in the hon. Gentleman’s constituency there are 10,300 people with disabilities, while at the factory itself there are 37, and that last year alone Remploy Employment Services did find 169 people jobs. First we have to go through the process and see what we can do for the good people of Dundee.
Esther McVey
As to why the previous Government failed, that question should be put in the direction of the right hon. Member for Birmingham, Hodge Hill (Mr Byrne). I reiterate that we are working as closely as possible with these people. We have put in place personal support and that is increasing on a daily basis. We intend to get as many of these people as possible into work.
Mr Speaker
Points of order come after statements and we have a statement now, so if the hon. Gentleman is patient he may have his opportunity ere long.
Mr Speaker
I understand that it relates to this matter, but I am afraid that the rules do not change for the circumstance.
Remploy Factories
Jim McGovern Excerpts(12 years ago)
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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?
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. 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.
Specialist Disability Employment
Jim McGovern Excerpts(12 years, 5 months ago)
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Maria Miller
My hon. Friend obviously speaks up strongly for the Penzance factory, which employs 32 disabled people, but the problem is that in employing them the factory runs an operating loss of more than £700,000 a year. It is unfortunately difficult to resolve that situation and achieve financial stability, however, and, although I am always available to meet him, I am not sure how satisfactory the outcome of such a meeting would be for him.
Jim McGovern (Dundee West) (Lab)
I have visited the Remploy factory in my constituency so often that I am almost on first-name terms with most of the work force, and I can assure the Minister that they do not regard themselves as a segregated work force. There seem to be two lists—one of factories with no agreed business plan and one of those inviting bids—but Dundee’s factory does not appear on either. What does the future hold for the Remploy factory in Dundee?
Maria Miller
The Remploy factory in the hon. Gentleman’s constituency will be taken forward; I am not sure why that is not on his list.
Employment Support
Jim McGovern Excerpts(12 years, 9 months ago)
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Maria Miller
I am always happy to meet the hon. Gentleman. I think I have visited the factory in Coventry. We had a consultation on the process, with many contributions from hon. Members, but obviously I shall be happy to meet Coventry Members at any point in time.
Jim McGovern (Dundee West) (Lab)
I have visited the Remploy plant in my constituency so often that I am practically on first-name terms with most of the work force. They are fantastic—a mix of able-bodied and disabled people—and I cannot help but fear that they would be offended by the continuous references to a segregated workplace. Thankfully, Dundee is not earmarked for closure, but what assurances can the Minister give the work force in Dundee that they have a future there?
Maria Miller
The assurance I can give the hon. Gentleman and the work force in Dundee is that whether their factory is phase 1 or phase 2, they will get the support they need, either to work in mainstream employment through our £8 million support fund, or to look for alternative viable ways of taking the factory forward outside Government control. The hon. Gentleman will share with me the desire to make sure that more of his disabled constituents can get work, which is why I hope he can support our plans today.