Ford and Visteon UK Ltd

Debate between Simon Burns and Huw Irranca-Davies

Thursday 12th December 2013 Commons Chamber

[Mr Simon Burns (Chelmsford) (Con)]

I thank the Backbench Business Committee for granting this important debate. I also pay tribute to my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) for the tremendous work that he has done as chair of the all-party parliamentary group in support of Visteon pensioners since his election to the House, and the way in which he has led his merry band of warriors in keeping this issue at the forefront of people’s minds. We are not prepared to allow it to fade away with time and be forgotten. I think that the strength of feeling and the outrage over what is basically an issue of decency and morality have been obvious in the two speeches that we have heard so far today.

I, too, do not wish to use my speech to knock an international company that provides valuable jobs, expertise and innovation in this country. However, I am baffled by the fact that that it is seemingly being led by its north American approach to business—which is infinitely hard-nosed—and is not prepared to recognise what it is doing to a group of people who, although totally innocent, are being made to suffer ruined retirements, despite the assurances that they were given back in 2000 that their pensions would be looked after and would be on a par with the pensions of those who worked for Ford.

I am surprised at Ford’s intransigence in not recognising its moral duty to act decently. I know that business can be very cynical—Bob Dylan used to say that money shouts—but one would have hoped that there was still a sense of decency, and that this company would be prepared to consider the position of a small group of people who, although they have fought magnificently, will always be the Davids in this David and Goliath battle.

Like my hon. Friend, I find it sad that nothing has moved forward since the last debate, in which I was unfortunately unable to participate because I still wore the shackles of ministerial office. It seems that if we are not careful and if Ford is not prepared to regain its sense of decency, the matter may have to be resolved in the courts, which I do not think is in anyone’s interests, especially given the time scale.

It appears from all the evidence that even if, back at the turn of the century, Ford was following what other companies were doing and removing its suppliers from its direct control by creating new companies, the hands of Visteon, a company created to be independent from Ford, were tied from the outset. I understand that Ford had a virtual monopoly over the parts coming out of Visteon, and was thus in a position to drive down prices unilaterally. There was no proper, vibrant, functioning market, and that is not in any independent company’s natural interest. I also understand that Visteon had to buy its materials from the Ford foundry in Leamington, although they could have been obtained elsewhere at a more competitive and lower price. Once again, Ford seems to have kept Visteon’s hand behind its back and thwarted any opportunity that it might have had to develop as a vibrant, successful company.

I find it incredible that when Ford was keen to create Visteon and cast it aside, in effect, from Ford itself, those who worked for Ford and were going to be employees of the new Visteon were advised that the Ford European works council agreement guarantees that

“Visteon employees transferring their past service benefits to the Visteon Fund will receive the same benefits as at Ford, both now and in the future for all their pensionable service.”

Beyond that, employees were encouraged to join the Visteon scheme and transfer their pensions with statements such as:

“Your accrued pension rights will be protected.”

To me, and probably to all those people who were about to become Visteon employees, those were cast-iron, concrete statements of fact that gave them protection.

We also have to remember that this is not some plan to change pension arrangements in the future. I accept that many private companies over the last decade—as well as Government, and including Members of this House—have been changing their pension arrangements because it has been found that the existing arrangements are too expensive in the current economic climate. They are moving to salary-average schemes, but that is always for the future. They do not start tinkering with the commitments, the payments, the arrangements and the deals that have been done in the past. These changes are for the future. That is not what has happened to the Visteon pensioners, however. Their pensions—that they took out in good faith, and that they believed were safe and secure for all their pensionable life—have now, because of what happened to Visteon in 2009, been noticeably, and in some cases severely, cut by this cynical operation to create a new company independent of Ford.

[Huw Irranca-Davies]

The right hon. Gentleman is making a powerful point, particularly on this issue of the assurances that were given to Visteon pensioners. He, like me, will have received the Visteon action group briefing so he is clearly familiar with this quote:

“Your accrued pension rights will be protected.”

It was also stated that “not only” would their pension be “secure” but it would be in their best interests to “transfer” their pension and their pension benefits were “guaranteed”. People were not being greedy or stupid; they were acting in the best interests of their families and themselves on the best available advice, and it is morally repugnant for a company to walk away from those assurances now, when they were either delivered by that company or were vetted by that company before being delivered.

[Mr Burns]

I am extremely grateful to the hon. Gentleman for making that point because he is absolutely right. There were no weasel words. There were no cop-out clauses or any excuses that could be made that people had misunderstood what had been said to them or the commitments that had been given to them. They were, in so far as anything in life can be, cast-iron guarantees that those people, who in most cases had worked so loyally for so long for Ford, would have their pensions guaranteed. Having met a number of them, including constituents of mine, I have no doubt that they feel as though they have been kicked in the stomach because of what has happened to them and that they are having to suffer through no fault of their own.

That is why I say that Ford—and in particular Ford in the United States of America, which I believe is leading Ford in the UK on this issue—should sit down and quietly consider their conscience again. [Interruption.] The hon. Member for Colchester (Sir Bob Russell) says, “If they’ve got one,” and I can understand why he says that because it does seem that they are without conscience. Of course companies have a responsibility to their existing work force and their shareholders to make a profit, but this is even more important: “You don’t make a profit if you don’t have a loyal, hard-working and decent work force.” If the company is prepared to see some of its work force treated like that, despite the cast-iron guarantees that it gave them, we have to wonder what kind of conscience it has.

I hope that the company will think again as a result of this debate and of the lobbying by Members on both sides of the House, by the trade unions, by the action group and by others, and that it will not consider drawing the matter out even longer, because, sadly, some of those pensioners will die during that time. I hope that the company will do the decent thing, the morally right thing, and restore those pensions to the people who should never have had them taken away from them in the first place.

Local Pharmacies

Debate between Simon Burns and Huw Irranca-Davies

Thursday 24th November 2011 Commons Chamber

[The Minister of State, Department of Health (Mr Simon Burns)]

May I begin by congratulating the hon. Member for Ogmore (Huw Irranca-Davies) on securing this debate? I know that he has been assiduous in highlighting this important issue in his constituency and beyond, and anyone who doubts that need only have listened to his speech—or read it in Hansard tomorrow—to know about his commitment to, knowledge of and passion for this issue of genuine concern in many areas. It is also a pleasure to see my hon. Friend the Member for Stourbridge (Margot James) in her place, as I know that she has a long-standing interest in the subject, having secured a debate on the pharmaceutical situation earlier in this Session.

I assure all hon. Members that I am sadly all too aware of the difficulties that pharmacists and members of the public have had in obtaining some prescription medicines. It was particularly moving when the hon. Gentleman spoke of the experience of someone he knows who regrettably had trouble getting hold of one of her medicines, Femara, which is used to treat breast cancer. We freely discuss policy at meetings and in the Chamber, but those discussions suddenly seem very distant when we are confronted with the reality of what it means to be unable to access a drug. I am aware that some pharmacists have had difficulties getting Femara, but those difficulties have recently been greatly reduced following the expiry of the patent earlier this year. The generic version of Femara is now widely available under the name letrozole. I know that it is of little consolation to the hon. Gentleman’s friend, but what it does mean is that other people will not have to go through the same heartache as that lady.

I am also aware of how frustrating it is when such problems occur with other drugs—not simply cancer drugs—because for people who need them at the time, they are equally important. The coalition Government have already taken action and we will take further action if necessary.

Supplying medicines to patients requires a complex, international infrastructure. There are around 16,000 licensed medicines covering tablets, capsules and injections, and different dosages, and nearly 900 million NHS prescription items are dispensed every single year. As hon. Members will appreciate, it is a vast undertaking. Given that complexity and scale, there are difficulties from time to time, and not only the UK is affected: recently the US has had problems of its own. There are many different reasons why patients might have problems getting hold of their medicines, and they range from difficulties in obtaining raw materials to manufacturing problems and the overseas sale of medicines intended for this country. I would like to speak about all of these.

Supply issues can arise as a result of parallel trade, as the hon. Gentleman mentioned. That is when medicines are bought at low prices in one European country and then resold at higher prices in another. When the euro got stronger relative to the pound, exporting UK medicines to other European countries become more profitable. At the moment, parallel trade exports are therefore reducing the supply of medicine available to UK patients. I stress that this parallel exporting is legal and can be carried out by anyone who holds the necessary licences under the medicines legislation. Indeed, in the past, UK patients have benefited from medicines being imported to this country by the same process.

I cannot stress firmly enough that there are existing legal duties on manufacturers and distributors, within the limits of their responsibilities, to maintain a suitable supply of medicines to pharmacies so that the needs of patients are met, but regrettably a minority of operators in the supply chain are thought to be putting profit before patients. I know that this is not condoned by the majority of those in the supply chain. Indeed, manufacturers and pharmacies have to fill the gap that these practices create.

Manufacturers have introduced quotas to try to target supply but this reduces pharmacies’ flexibility to meet unexpected patient need. Pharmacies use contingency arrangements to get medicines directly from the manufacturer rather than from their usual wholesaler. We have recognised this in NHS funding for community pharmacies but it still annoys the majority that are putting patients first. I understand that that is frustrating for many parts of the supply chain and can lead to delays in some patients getting their medicines. However, the Department of Health, the Medicines and Healthcare products Regulatory Agency and the supply chain stakeholders—manufacturers, wholesalers and pharmacies —are working together to reduce the impact on patients.

In order to address the issues with supply, the previous Government set up a ministerial summit in March 2010. A wide range of organisations and individuals participated, including those representing pharmacists, wholesalers and doctors. The summit agreed a package of tough actions to be taken forward in collaboration with the industry and other partners. This Government have taken forward many of the actions proposed by the previous Government. We continue to work with all parts of the supply chain to make sure it functions as well as possible through collaboration and collective agreement rather than by increasing the regulatory burden.

Actions taken forward following the summit include: publishing updated guidance on the legal and ethical obligations placed on manufacturers, wholesalers, registered pharmacies and others involved in the supply and trading of medicines in December 2010; publishing best practice guidance agreed by stakeholders of the supply chain clearly stating that under normal circumstances pharmacies should receive requested medicines within 24 hours—if all members of the supply chain followed this, patients might get medicines more quickly—and developing and maintaining a list of products in short supply published on the Pharmaceutical Services Negotiating Committee’s website so that no one trading in these products can say that they are not aware of supply difficulties.

On top of that, MHRA site inspections and follow-up inspections have been conducted and progress has been made, including through written undertakings to comply with the agency’s recommendations. To date, no breaches of the regulation have been established.

[Huw Irranca-Davies]

This is not a new phenomenon. As the Minister said, the previous Government recognised it, set up the taskforce and introduced proposals on which this Government are acting. The difficulty is that the system is not working properly, despite the best will in the world. I understand the one-in, one-out rule and the necessity to avoid an undue regulatory burden, but a light-touch approach would be welcomed by most of the industry. A manufacturer told me the other day that he was producing 140% of the needs of the UK but there was still a shortage of the drug that he was supplying. Surely a patient service obligation would fit the bill by ensuring that certain things have to happen. It has been done in most other European countries.

[Mr Burns]

I am grateful to the hon. Gentleman, and I will come to that point a little later in my remarks.

As I was saying, exporting medicines is only one source of supply difficulties. Problems such as obtaining raw materials or problems with manufacturing processes can also cause supply problems. The increasing concentration of pharmaceutical manufacturing has made the situation worse. A medicine may be made only in one or two sites globally, which means that there is not much flexibility if problems are experienced at a particular factory or manufacturing site. Production schedules have to be planned months in advance and if one company has a shortfall, suppliers of alternatives may be unable to make up the shortfall at short notice.

The current trend in the supply chain of pharmaceuticals over the past few years is to move towards a “just in time” set-up, which results in lower stocks of medicines throughout all parts of the supply chain. This trend has resulted in significant savings, but requires more active and reactive stock management. Again, the Government work closely with pharmaceutical companies, wholesalers, pharmacists and the NHS and have well-established procedures to manage these risks.

The Department of Health published joint best practice guidelines with the Association of the British Pharmaceutical Industry and the British Generic Manufacturers Association in January 2007. The guidance gives companies advice on what to do in the event of a shortage and recommends early communication with the Department about possible shortages that might affect patient care. This allows us to work together to explore whether any action can be taken to reduce the impact on patients.

The Department has also created a small buffer stock of some medicines to help manage shortages during pandemics and other emergencies. We are also taking action through the European Commission’s falsified medicines directive to strengthen the supply chain against the risk of counterfeit medicines. This aims to improve the reliability of the medicines supply chain and to respond to the increasing threat of falsified medicines entering it.

As a direct result of the arrangements I have described, combined with the diligence and professionalism of most of the supply chain, patients overwhelmingly have access to the right medicines in a timely and efficient manner. We are continuing to monitor the situation very closely. Of course, we are not prepared to be complacent. That is why we are working so closely and collaboratively with the supply chain, monitoring and intervening as appropriate.

The hon. Gentleman’s intervention was about the public service obligation. I am aware that some—like him, and quite honourably—would prefer to see a public service obligation placed on the medicines supply chain to maintain supplies of medicines. As I have said, it is already the case that manufacturers and distributors must ensure continuous supplies of medicines to meet patients’ needs. Failure to do so could put them at risk of regulatory action or criminal prosecution.

Some other EU member states have a very precise definition of how soon medicines should be received, but we are cautious about going down that road. It would vastly increase regulation on the industry and drive up costs across the board. This is why, as I have said, we have chosen to go down the route of best practice guidance instead. Best practice arrangements exist; they have been agreed with all parts of the supply chain and they have been very successful in minimising the impact of shortages. It is a much more flexible approach than statutory regulation.

In conclusion, I am grateful to the hon. Gentleman for raising this issue—one that will be relevant to all Members across all party divides, as well as to every single community and individual person. It is an issue of true universal interest and concern. I assure the hon. Gentleman that the coalition Government are absolutely committed to patients getting their medicines as quickly as possible. We are also certain that in the supply of medicines, everyone in the supply chain has their part to play, including manufacturers, wholesalers, pharmacists, prescribers and patients. The Government will continue to work closely with all those involved in the supply chain, making sure patients receive their medicines in a timely manner and without any unnecessary complications. This is not an issue that will be discussed just once and then forgotten. We are determined to keep a watchful eye on the situation to see if there are ways to improve it and minimise disruptions or problems for patients, ensuring that they get the best service, to which they are entitled.

Question put and agreed to.