Remploy

Maria Miller Excerpts

Thursday 15th December 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

It is a great pleasure to serve under your chairmanship, Mr Benton, and under that of Mr Havard, who is no longer in his seat. I congratulate the right hon. Member for Cynon Valley (Ann Clwyd) on securing this debate and right hon. and hon. Members on making a strong case on their constituents’ behalf for the importance of providing the appropriate support for disabled people to get into employment. I, too, note that many people in this room today other than right hon. and hon. Members have an interest in that.

It is also important to note how much time hon. Members have taken to come talk to me. My hon. Friend the Member for Eastbourne (Stephen Lloyd), the hon. Member for Swansea West (Geraint Davies) and the right hon. Members for Wythenshawe and Sale East (Paul Goggins) and for Cynon Valley have all taken a great deal of their own time to ensure that they put their views in a measured and sensible manner, and I thank them all.

It was interesting to follow the right hon. Member for Stirling (Mrs McGuire), who speaks for the Opposition. Having been in my place, she is right to say that we face a dilemma. She stated that she understands the tensions. I have no doubt that she does, having done this job before me, but what was not clear is exactly what the Opposition’s position is. She might feel that she has made her position clear, but it was not clear to me.

[Mrs McGuire]

I have made it clear that we expected the five-year plan that was in place to run its course. The problem is that it is the Minister who has to wrestle with the decisions, but I have made our position very clear.

--- Later in debate ---

[Maria Miller]

The right hon. Lady and I are, therefore, absolutely at one. This Government have made it clear that, despite the very difficult financial situation that we have inherited, we will continue to support the modernisation plan. We are in year four of that plan, and it is absolutely right that we should plan for the future. It would be wrong and a dereliction of our duties not to look to the future, particularly given the fact that the modernisation plan has, it pains me to say, struggled to be achieved.

The right hon. Lady and others have asked a lot of detailed questions. I want to answer as many of them as I can, so I hope that hon. Members will forgive me if I keep interventions to a minimum. The first was the right hon. Lady’s question about whether we support the modernisation plan. The answer is absolutely. We are in year four of it. There is great concern about the failure to meet its targets, but we are continuing to make sure that the money is available and that we put in the required effort to see the plan continue.

I discussed both the modernisation plan and the Sayce report with the trade unions and the Remploy board at a recent meeting in Leicester, and my officials will have further meetings with the unions in, I think, the second week of January. The right hon. Lady should be reassured that we are trying to do the same thing as the previous Administration, which is to take something that was created in 1946 to rehabilitate ex-service personnel after the second world war and try to find a sensible and constructive way forward in these difficult times.

The right hon. Lady also talked about a number of issues in relation to terms and conditions for those in the Remploy plan who took redundancy. I am sure that she already knows this, but I wish to clarify that those terms and conditions were for the period of the plan.

The world has changed immeasurably over the 65 years since Remploy was established. Our responsibility as constituency Members of Parliament, Ministers and Opposition Members is to make sure that we look forward to the future and make sure that we have the right support available for disabled people to be able to reach their full potential in life. That is our responsibility and our Government’s focus.

In Britain, our manufacturing industry faces increasingly competitive markets from overseas. The overall development of Remploy over the years has not been focused on the business environment in which it operates. That is a plain fact. Some sectors, such as the automotive sector and CCTV, have been able to develop offerings of higher value-added products and services, but they are the exception, not the rule. The vast majority of the network continues to produce products that, as a nation, we are more used to seeing imported from overseas and, indeed, at lower costs.

Fifty-five per cent. of disabled people in this country work in offices, shops and public services, and—my hon. Friend the Member for Eastbourne has talked eloquently about this—increasingly want to be involved in all aspects of employment and be part of a national work force. When I talk to employers such as BT, Royal Mail and B&Q, I start to feel heartened about a change in attitude among employers towards employing disabled people. That is only a start, and there is still a great deal more to be done. I do not underestimate the challenges that we all face to overturn entrenched attitudes.

[Jim Dobbin]

It just so happens that, before I came to this debate, I attended a reception held by the Council for Disabled Children in the Jubilee Room next door. A young man spoke to me about the situation, and I told him about this debate. He told me that he had just lost his job. I asked him why, to which he replied, “Because I am disabled.” I asked him how he was disabled, and he said that he was deaf. He has tried and tried to get re-employed, but he has failed.

[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.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Is the Minister aware—I believe that she is—of the Blindcraft factory in Glasgow, which is a very successful supported employment workplace? Will she acknowledge that it is the business plan, not the business model, that is failing, as the management themselves acknowledged to her and me earlier this year?

[Maria Miller]

I thank the hon. Lady for her intervention. We have met on several occasions to discuss the issue. There are examples of areas where there can be success. Indeed, the hon. Member for Swansea West has walked the talk and made sure that the procurement issue has been uppermost in his local authority’s mind, and he has been very successful in that regard. There are opportunities for success, but the problem is that that success is not across the board.

I have already confirmed that the amount of money going into specialist disability employment is not the issue, because we have protected that pot of money. This is about ensuring that that money works hardest for disabled people. This is not about reducing funding; it is about using the money most effectively in whatever way that comes about. We have to consider those alternatives.

I have met Remploy trade union representatives on a number of occasions to discuss the matter. I have visited factories and listened to the views of employees, and I attended one of the consultation events in Reading in September. Let me restate that the Government’s commitment is to the five-year modernisation plan introduced in 2008. We are now in year four of that and those targets are not being met.

Last week, Remploy published independently audited annual reports and financial statements for 2010-11, which revealed that the Department for Work and Pensions spent £68.3 million supporting 2,200 disabled people in Remploy enterprise businesses at an annual cost of £25,000 per person. That is £5 million more than in 2009-10 and is more than 20% of the total budget available to help disabled people into work through the specialist employment budgets. We have to take a long hard look at the situation.

[Geraint Davies]

Does the Minister accept that there is a case for some job subsidy, even if it is as low as the amount that that person would otherwise be paid for unemployment benefit and health on-costs, or is she going to stick to her guns and say that there should be no subsidy and we should therefore make a loss to the Exchequer?

[Maria Miller]

The hon. Gentleman asks a very detailed question. He knows that we have not yet made the decision about the way forward. A significant amount of money is available to support disabled people. My hon. Friend the Member for Eastbourne talked about the Access to Work programme, which he rightly said is exceptionally effective. The Sayce report clearly says that if decisions are made about the prioritisation of the available money, more money—significant amounts of money—could be yielded to support Access to Work. That could well be the sort of support that the hon. Gentleman’s constituents in Swansea West would want.

[John McDonnell]

Will the Minister give way?

[Maria Miller]

Will the hon. Gentleman forgive me if I make some progress? He and others have raised a lot of points, and I want to be able to deal with them.

The chairman’s annual report confirms that, last year, on average, half Remploy’s factory employees had little or no work to do and that the operating results for the factories have been significantly out of line with the modernisation plan. The perception that Remploy has turned work away is, I am afraid, simply unfounded. Some bids have been unsuccessful because they do not have the required capability or capacity in the factories, and sometimes Remploy has been outbid on price.

The right hon. Member for Cynon Valley talked about the order books being strong. The simple truth is that, even at full capacity, the factories are still making large losses, which demonstrates that the business model is wrong. That is why I asked Liz Sayce to review not only Remploy, but the specialist disability employment programmes that we have available.

The annual report also confirmed that Remploy employment services have been able to secure 20,000 job outcomes in the past year at a one-off unit cost of £3,300 per job. We should absolutely applaud that. Remploy employment services have been making great headway for many thousands of disabled people. I should like that to be recognised in this debate.

My hon. Friend the Member for Eastbourne talked about alternative support for disabled people, particularly Access to Work. I absolutely understand his support for that programme, which has great potential if we have the funding available to support it. We should all be pleased that there are opportunities in all our constituencies for Remploy employment services to help disabled people into employment through the work that it does with organisations such as Asda, BT, Marks and Spencer, Sainsbury’s, Tesco, McDonald’s, the Royal Mail and the NHS. That has been its achievement over the past 12 months; indeed, results of a similar magnitude are predicted for the next 12 months.

I shall talk briefly about some of the specific points raised by hon. Members. The hon. Member for North Tyneside (Mrs Glindon) asked whether I would consider the consortium of trade unions plan. Absolutely. I will look at all the plans that have been put to us. I am particularly interested in the trade unions’ approach. The Secretary of State and I have made it very clear that we would be delighted for the trade unions to propose ways that they want to work with us to free the factories from Government control and to ensure that they can have a successful future. We will always be open to thoughts being given to us on that front.

The hon. Member for Wansbeck (Ian Lavery) talked about the involvement of the workers in the Ashington factory in his constituency. It is absolutely to be commended that the workers in that factory are involved in building a success of the business. There are 27 people in the Ashington factory, but I remind him that there are more than 10,000 disabled people in his constituency. I want to ensure that more of those people get the sort of support that they need, so that we can ensure that they are not only in employment, but reaching their potential in life.

The right hon. Member for Wythenshawe and Sale East raised a number of incredibly important points. He and I have had long and, for me, useful discussions about his experience in this area. His main point was the importance of ensuring more local control and autonomy for the factories. He is very much echoing the Sayce review in saying that, if we are to drive effectiveness and have a successful network of factories in the future, it might be useful to consider enabling people such as the manager whom he talked about to have more autonomy. Again, there are 19 people at the factory in his constituency, where more than 15,000 disabled people live. I want to ensure that more help is available for them to be able to succeed in their lives and secure jobs that they can do.

The hon. Member for Blaenau Gwent (Nick Smith) talked about the fact that it pays to care. Again, he and I are as one on that. He talked about the importance of ensuring that people who are subject to changes in their jobs are looked after. For the record, some 1,809 redundancies were put in place by the previous Administration. The figures seem to have got jumbled up over time, so I thought it would be useful for hon. Members to have the facts. Some 1,611 of those people were disabled. Indeed, when we consider the facts and figures, we can see that just under 40% of those individuals took early retirement. Some 252 people took modernisation terms and continue to be in employment elsewhere. Of those people who took the support on offer, some 70% found work. The problem was that not enough people took that offer of support. That is the learning from the previous modernisation plans that were put in place.

The hon. Member for Hayes and Harlington (John McDonnell) was very critical of the previous Administration in his comments. I would not be so critical. I think that they were trying to do the right thing.

[John McDonnell]

Will the Minister be clear about the future before she finishes? She says that she accepts the Sayce report. The Sayce report says that Remploy enterprises will be given six months to prepare a business plan and then 24 months to implement it, by which time all subsidy will be withdrawn. So there will be no subsidy within two years of the implementation of a business plan. Is that what the Government are saying?

[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.

[Ann Clwyd]

I am very happy to give my time to the Minister, because there are a lot of questions left unanswered. If she would like my extra time, I am very glad to give it to her.

[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.

[Gemma Doyle]

The Minister is drawing to a conclusion, but I do not think that she has mentioned the issue of bonuses, which we discussed earlier this year. She promised to look at the scandalous practice of management still collecting millions of pounds in bonuses. Has she decided to take action on that?

[Maria Miller]

The hon. Lady has raised the issue of bonuses before. I think I can remember either writing to her or perhaps replying in detail. It is vital that any business is run in a proper way. As an incoming Government, 18 months ago we took over a set of commitments that the previous Administration had put in place. That included many things including not only the modernisation plan, but the issue of bonuses for senior managers at Remploy. The performance incentive payments in the annual report—the statement made this year—relate back to 2009-10. The executive directors are contractually entitled to those payments, but, unfortunately, those contracts predate this Administration. The hon. Lady may know that there are legal issues that we have to be aware of. The Department has no power to limit bonuses, but from 2010-11 all Remploy’s executive team and senior managers have agreed to cap their bonuses in line with the senior civil service bonus cap. That was a particular request made by the Secretary of State, so that we can ensure that there is some—[Interruption.]

[John McDonnell]

Are they getting a bonus? Even though they are failing, are they getting a bonus?

[Maria Miller]

As the hon. Gentleman has just heard me say, his Government put those contracts in place. [Interruption.] Sorry, Mr Benton, I was not giving way.

[Mr Joe Benton (in the Chair)]

Order. Either submit an intervention, or allow the Minister to answer.

[Maria Miller]

Thank you, Mr Benton. I was in the process of trying to answer that intervention. What is very clear is that there are legal issues. We are contractually obliged to pay those bonuses, and we have been advised that there is no alternative. The hon. Gentleman can take that up with his colleagues.

[Stephen Lloyd]

I thank the Minister for giving way. I very deliberately have not intervened, because the previous Chair was very kind and gave me a long time and people were very patient, but I am grinding my teeth a wee bit. Does my hon. Friend agree that this has been going on for years under both Governments and is incredibly intractable, which is why we are still here? The whole issue is a complete red herring. We have absolutely no choice, because we have to implement what the previous Government actually agreed.

[Maria Miller]

My hon. Friend is absolutely right that we should not get away from the facts here. Disabled people listening to this debate expect us to show a way forward for the future. All the meetings that I have had with the leading disability organisations on this issue have made it clear that disabled young people, as was said in an earlier intervention, want to ensure that they have sustainable jobs in the future. Those disabled young people want to make sure that they learn the skills that will give them those sustainable jobs into the future, which is my priority. That is where I want to ensure the Government’s funding is being placed. We have made it clear that this money is ring-fenced, so it is secure. The issue is about getting the best outcomes for disabled people. Some hon. Members questioned whether this was the right way forward. I tell them first, second and third that we will make sure that the priority is the best outcome for disabled people. That is what comes first rather than vested interests or the history, because we have to look at the future.

[Lindsay Roy]

Will the Minister distance herself from the comment that Remploy factories were ghettos?

[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.

[Ann Clwyd]

Disabled people want jobs and the jobs are not there. Where are they going to come from?

[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.