With permission, Mr Speaker, I would like to update the House on the Government’s proposals for the implementation of home information packs. It was the Government’s intention to implement home information packs, including energy performance certificates, on 1 June. In debate last week, reference was made to the judicial review requested by the Royal Institution of Chartered Surveyors. That judicial review focused on energy performance certificates, not home information packs. On Wednesday, the judge issued an interim order, which was received by my Department on Thursday. That order would have effectively prevented the introduction of energy performance certificates on 1 June, while the case was being considered.

The Government believe that introducing home information packs without energy performance certificates would be neither practical nor acceptable. It is important to introduce energy performance certificates and home information packs at the same time, because cutting carbon emissions should go hand in hand with market transformation. We have been in detailed discussion with the RICS to prevent lengthy legal delays. Both the Government and the RICS are committed to the swift and smooth introduction of home information packs and energy performance certificates. I am pleased that we have reached a pragmatic way forward—[Interruption]—that gives certainty and allows us to get on with implementation.

Order. Let the Secretary of State speak. Hon. Members often say that they wish Ministers would come before the House. The Secretary of State is here before the House; hon. Members should listen to her.

Thank you, Mr. Speaker.

As a result, we propose to withdraw the home information pack regulations to clear the way for successful implementation of revised arrangements.

Although the issue of the judicial review is now resolved, long-running uncertainty has already had an impact on the numbers of energy assessors. For implementation on 1 June, we would need at least 2,000 assessors to be accredited, with over 2,500 by the end of the month. Today I am updating the House with the latest figures. There are over 2,500 people currently in training. A further 3,200 have already passed their home inspector or domestic energy assessor exams. Of those, 1,500 have been accredited or have applied for accreditation, but only 520 have been fully accredited. These figures show that the number of assessors is unlikely to meet our needs for 1 June implementation. Equally, they show that in the long term there will clearly be enough assessors to meet demand.

The Government remain convinced of the importance of home information packs and energy performance certificates. Home information packs will cut costs and delays in buying homes. Energy performance certificates will help to reduce energy bills and cut carbon emissions from our homes, which, as they make up 27 per cent. of our national carbon emissions, could make a big difference in our effort to tackle climate change. The measures in the energy performance certificates will cut carbon emissions by nearly 1 million tonnes every year.

I have always said that the right test of the legislation should be how it brings benefits for consumers and how it protects the environment. Today, therefore, I am setting out a practical way forward. I propose to change the start date for home information packs to 1 August, and intend to phase their introduction. From 1 August home information packs, including energy performance certificates, will be required for the sale of four-bedroom properties and larger—the properties where there is the greatest potential to make energy efficiency savings. This will ensure work for energy assessors who have already been trained and accredited. We will extend to smaller properties as rapidly as possible, as sufficient energy assessors become ready to work. As we see the number of accredited assessors rise, so more properties will be included in the system.

We are also introducing a number of transitional measures. First, until the end of the year, we propose to allow people to market their properties as soon as they have commissioned a pack, rather than make them wait until they have received it, in order to avoid unnecessary delays when the systems come in. Secondly, to allow energy performance certificates to be implemented at the earliest opportunity, we will make amendments to allow energy performance certificates to be up to 12 months old when the property is put up for sale, extending the current three-month age limit.

Thirdly, we are inviting councils and registered social landlords to work with us to introduce energy performance certificates on a voluntary basis in social housing—for example, at the time of stock transfers. This will also provide work for energy assessors at an early opportunity. I will shortly introduce revised regulations to implement the changes that I have outlined.

Towards the end of the year we will assess the implementation of home information packs and consider what further steps might be needed to maximise the reduction in carbon emissions and drive forward the reform of home buying and selling. This assessment will be informed by the operation of the market from 1 August, by the results of the area trials, and by a further consultation on the next steps in implementing home information packs and energy performance certificates, which we will begin in the summer.

The approach that I have set out gives clarity to everyone about the next steps. It delivers home information packs and energy performance certificates, removes uncertainty for energy assessors and others, and ensures a smooth transition for the people buying and selling their property. Most importantly, it provides an opportunity to make real progress towards cutting carbon emissions from our homes.

I thank the Secretary of State for her grace and courage in coming to the House to make the statement today. It cannot have been easy announcing a retreat on a policy that she had no part in implementing originally. It is big of her to take the flak.

I also thank the Secretary of State for allowing me sight of her announcement, which I received just 25 minutes ago—clearly this is a day for doing everything at the last minute.

May I ask why, after being warned more than a year ago that they were comprehensively mishandling this issue, Ministers have seen fit to retreat only now with eight days to go before home information packs were due to be implemented? Why did Ministers not take the opportunity that we offered last week to think again? Was it stubborn vanity or sheer incompetence? The Secretary of State may argue that this humiliating climbdown was precipitated by the judgment issued in the High Court today, but that prompts the question that goes to the heart of the matter: why did Ministers find themselves in court in the first place? Why did they press ahead with a scheme that everyone who knows anything about the housing market told them was flawed at the heart?

Those warnings, unlike this climbdown, did not come at the eleventh hour. In this House at this Dispatch Box a year ago, we told the Government that their scheme was flawed. The Government told us that we were scaremongering, but 11 months ago they were compelled to execute the first in a truly embarrassing series of U-turns by dropping the mandatory home condition report, which was the keystone of the original home information pack, just hours after the Minister for Housing and Planning had defended it in this House. However, they were still determined to press ahead after that U-turn. Why did they not take the opportunity to work with us and others to put the stability of the housing market first? Why did Ministers decide to ignore the growing chorus of concern, shut out expert advice and carry on regardless?

On 21 February, all the key stakeholders who were originally invited to help the Government set up the scheme issued a warning letter to the Minister for Housing and Planning asking for an emergency meeting to address fundamental concerns with the scheme. They were not granted the meeting for which they asked: why? In desperation, the same group wrote to the Secretary of State on 2 March asking for a collective emergency meeting. Again, they were snubbed and no collective meeting was granted: why? What explains that refusal to listen to the experts, who were once charged with setting up the policy and whose involvement would be key to implementing it? Was it because this Government could not bear to be told that they were in the wrong, or did they not realise what a mess they were presiding over? Was it deadly arrogance or fatal ignorance? After today’s announcement, we know that this lady is for turning.

There are still many unanswered questions. The Government were warned that there were not enough qualified, accredited and certificated home inspectors in place. Over a year ago, I warned that getting those people in place was crucial. Only last week, the Minister for Housing and Planning told us that we had enough people to ensure the smooth operation of the scheme—she told us that everything would be all right on the night. Why did she offer that cavalier assurance, when the Secretary of State has told us that there will not be enough people in place after all? We know that relations between these Ministers are bad, but did the Secretary of State find out only in the past few days how few qualified people are in place? When did she know the real numbers? And why was not the House informed about the truth last week?

How can Ministers ever again ask to be taken seriously on the environment, when they have comprehensively mismanaged a measure that they argued throughout was vital to fighting climate change? Will the Secretary of State also confirm that today’s judgment in the High Court underlines what we have argued all along and what best practice in the European Union shows—you do not need home information packs for energy performance certificates? Will she agree to meet me, my colleagues, the Liberal Democrats and everyone with an interest in getting the housing market right to ensure that there is at last some expertise in this process?

Is this not a desperate, last-minute retreat designed to ensure that the Minister for Housing and Planning is airlifted out of this Department by her friends in the Treasury in a future reshuffle, so she does not have to cope with the chaos that she has created? And is it not truly tragic that confidence in the industry, the stability of the housing market and the battle against climate change have all been damaged by this Government’s arrogance and incompetence?

I am absolutely delighted to see the hon. Member for Surrey Heath (Michael Gove) enjoying himself and in his place. Indeed, only this morning the right hon. Member for Witney (Mr. Cameron) asked the Conservative party whether it wants to be a serious force for governmental change, or whether it wants to be a right-wing debating society. Today, we have had our answer, and there he is, the honorary president.

The hon. Gentleman asked me to meet him. I would look forward to, and enjoy, meeting him on any occasion to discuss our policy on energy performance certificates or HIPs.

Before I deal with the specific points raised by the thrusting, young, ambitious hon. Member for Surrey Heath, I cannot help but observe that he has clearly thrust aside the hon. Member for Meriden (Mrs. Spelman), who is sitting beside him. Is that because he enjoys debating so much, or is it because the hon. Lady has been barred from addressing the House today because she dared to speak the truth about her party’s position on energy performance certificates on television only last week? She said that

“the new feature is having energy performance assessors come round and actually look at how your house is put together…so it’s a very intrusive measure.”

I fail to see how she can claim to support energy rating of homes if she opposes the idea of people going round to other people’s houses to check what their energy ratings are. What does she have in mind—drive-by energy assessors? That does not sound very green to me.

Let me deal with the points made by the hon. Gentleman. He said that we have refused to meet stakeholder groups such as estate agents or the Royal Institution of Chartered Surveyors. I can tell him, and the House, that those groups have had meetings with my hon. Friend the Minister for Housing and Planning. Indeed, I offered to meet the RICS before the introduction of the regulations, but somehow it could not find the time.

The hon. Gentleman asked when I knew about the interim order and the judicial review. Our Department was informed on Thursday, and I was informed later than that, at the weekend. In the past half an hour, we have reached a resolution with the RICS and set out a practical way forward that recognises that 5,000 energy assessors are in training or have already passed their exams. It is clear that lots of people want to be energy assessors, but—perhaps unsurprisingly given the campaign of misinformation from the hon. Gentleman and the threat of judicial review—several of them have adopted a wait-and-see approach instead of paying their final £300 to become accredited. That means that we have certain practical considerations to address. We need to provide certainty for energy assessors. That is why we are delaying the implementation of the proposals but also bringing forward some of our social housing stock, on which EPC assessments can be performed.

Our approach must be based on the two tests that I set out earlier: first, how do we maximise consumer benefit; and, secondly, how do we meet our climate change goals? The package that I have put before the House is a sensible way forward that does both. I should have thought that Members on both sides of the House would agree with WWF and Friends of the Earth that EPCs are

“one of the most important pieces of environmental legislation to affect households in recent years.”

I do not think that anyone could say that the package of measures before us today is anything other than a sensible and pragmatic response to the current situation. That is why I welcome the hon. Gentleman’s support, look forward to meeting him, and hope that we can now establish a consensus in favour of the proposals.

I, for one, welcomed HIPs and energy performance certificates, understanding the valuable role that they would play in our efforts to curb climate change. I recognise what my right hon. Friend has done to get a viable solution for this country. She confirmed that the RICS’ objections centred on EPCs. We have established that sufficient people are in training to undertake EPC assessments when they are in place. Does she agree that the Opposition’s continuous opposition to this measure is very destructive, jeopardises people’s employment, and jeopardises the environment?

My hon. Friend has a long-standing interest in such matters. She is absolutely right—we have now proposed a sensible way forward. I ask hon. Members of all parties to welcome the steps that we have taken to come together and ensure the smooth implementation of home information packs and especially energy performance certificates.

Smooth implementation is fine but the Secretary of State might acknowledge that it is a bit of shambles at the moment. Last week, I referred to the scheme as a train crash. Today, the first aid workers are on the scene but many hon. Members do not have much confidence in the doctors and nurses who are ministering to the injured.

Matters first went wrong last July and we were assured that everything would be fixed and ready for this June. It has all gone wrong again. Will the Secretary of State publish the risk assessment for her decision to move the scheme to 1 August? Is she satisfied that the risks inherent in it will be resolved and settled positively before we reach that August date?

Will she confirm that 3,500 transactions will be completed by 1 August? Mr. McDonald from the Department told the House of Lords Select Committee on the Merits of Statutory Instruments that that number was needed before the pilot study could be validated. Is the Secretary of State’s choice of 1 August as the new date in any way connected to the fact that it is well beyond the reach of parliamentary scrutiny?

The statement refers to four-bedroom homes. Does the right hon. Lady have a legal definition of a four-bedroom home? How many offices, studies, boxrooms and loft conversions will suddenly crop up? What regulations will she propose? Will she confirm that, according to most people’s estimates, the number of homes that she is considering will represent around 10 per cent. of the housing stock? How does the two-month delay and the reduction by 90 per cent. of the number of transactions fit with the capacity of 1,500—it may be 5,000—assessors who will be in the market looking for work at that time?

The Secretary of State referred to stock transfer of local authority housing. I welcome the inclusion of social housing in the scheme. However, to do it at the point of stock transfer, when there may suddenly be 1,000 or 10,000 homes all at once, makes little sense. Will she take a second look at the way in which social housing should be integrated into the scheme?

Is the Secretary of State persuaded that her Department’s third attempt under her leadership to deliver the scheme will be any more successful than the other two, or does she take comfort from the thought that, if it is not, a different Minister will have to be held to account?

We chose 1 August because it maximises certainty for energy assessors, delivers on our climate change goals at the earliest opportunity and maximises the benefit for consumers. That is also the reason for our choice of four-bedroom properties—I am happy to work with the hon. Gentleman on a definition, if he wishes; I am sure that a common-sense approach will be adopted. However, I understand that four-bedroom properties represent about 18 per cent. of the market. The assessment is cautious and based on the number of assessors who have already been trained.

To provide assessors with sufficient work or give them greater opportunities for work in the interim period, we will work with social housing providers—both local authority and registered social landlords—to try to bring on stream, through stock transfers or perhaps other measures, enough work to continue to generate additional demand for energy assessors so that they can become available in due course to meet the demands that are placed on them in the home-buying and selling process. That is a sensible way forward, which guarantees that there is work for them to do.

The hon. Gentleman asked for information to be published. I said that we will publish a consultation paper, to which a full regulatory impact assessment will be attached. I am sure that he will take the opportunity to comment on that. However, I hope that he agrees that that is a sensible and pragmatic way forward.

National Energy Services, based in my constituency, is one of the major trainers for energy assessors and I have seen the training and work that is done on site. It is quite clear that many assessors have not paid for the final accreditation precisely because of the misinformation and the opportunistic opposition of the Conservative party and the Royal Institution of Chartered Surveyors. What is necessary now so that people who have committed themselves to training as assessors have some certainty of employment is to ensure that there is no further delay beyond what I understand has had to be a pragmatic accommodation between the Secretary of State and the RICS. Has my right hon. Friend received an assurance from the RICS that it will stick to that agreement and not cause further insecurity by backtracking or derailing this measure, which is so important for home owners and for improving the energy efficiency of homes?

I thank my hon. Friend for her comments. As I said, in the last three quarters of an hour we reached a resolution of the judicial case with the RICS. My hon. Friend is absolutely right that we need some certainty in the market to encourage energy assessors to pay their final fees in order to become accredited. I think that everyone can take comfort from the fact that, within less than a week, more than 1,000 extra energy assessors have passed their exams. People are going through training, becoming qualified and passing their exams at a quite dramatic rate. The challenge now is to ensure that they have the time to become properly accredited and that there is then work for them to do. That is why we are taking this sensible and measured approach.

In recognising this as the Government’s second great triumph over the previous week, may I ask whether the Secretary of State will give the House an assurance that she will not seek to recruit assessors from the ranks of junior doctors?

I always enjoy the hon. Gentleman’s wit. He makes his point in his own way, but the fact is that we have to provide as much certainty as possible for energy assessors while ensuring that we meet our climate change goals and maximise benefits for consumers. I believe that I have set out a sensible way forward on that.

May I express the disappointment of, I am sure, the whole House that lawyers have interfered with the democratic will of the people? In areas such as Wakefield, where many houses were traditionally reliant on coal-fired fuel, estate agents have welcomed HIPs and have advertised their services in the Wakefield Express. People will feel very cheated by this latest delay. Does my right hon. Friend agree that, in areas such as mine, where people are heating water with very inefficient back boilers or heating their homes through often dodgy flues, energy performance certificates have the potential to reduce the number of accidents and the number of people dying of carbon monoxide poisoning or from scalds?

I know that my hon. Friend has championed the cause of safety in the home ever since she became a Member of this House. I give her credit for doing so. She is right that many estate agents up and down the country have been implementing systems to bring in HIPs and energy performance certificates at the beginning of June. No doubt they will be disappointed by today’s news. The fact is that we have to minimise the risks and ensure that we sensibly introduce measures that provide some work for energy assessors, continue to build the market and inject a greater degree of confidence in the system.

May I ask the Secretary of State about a three-bedroom house for which a planning application has already been made for a third bedroom—[Interruption.]

Four.

Sorry, I mean a three-bedroom house where a planning application has been granted for a fourth bedroom. When a home information pack has been commissioned for a four-bedroom house, but it is not received by the time of exchange, will the purchasers be allowed to go ahead?

The hon. Lady clearly wants to become involved and help us with the definition of a four-bedroom property. Trading standards, which will enforce the regulations, will take a common-sense approach. I have outlined an approach whereby a potential seller who has commissioned an energy performance certificate and has it in place at the point of exchange will be able to proceed with the sale of the property.

Last week, I was in favour of the principle of energy performance certificates and of the principle of changing the way we buy and sell houses in this country. I am still in favour of those principles. I recognise that my right hon. Friend has found it necessary to make some changes and postponements today, but I greatly welcome the idea of rolling out energy performance certificates for social housing, which could help some of the poorest families in our community. Does she agree that, however regrettable the resistance of the RICS to energy performance certificates on this occasion, it is nothing compared to the double standards of Conservative Members who want to vote blue and talk green only if no effective action follows?

I welcome my hon. Friend’s support. I am absolutely clear that energy performance certificates and home information packs have an important role to play, and everyone should take the opportunity today to back those principles. Faced with tough decisions on tackling climate change, the hon. Member for Surrey Heath and his party duck the challenge at every opportunity. Today is yet another example of their failure to live up to their slogans.

The Secretary of State has told us that there are only 520 fully accredited inspectors, and that that number is inadequate to implement the regulations on 1 June. That was also true last week. Why were we not told that in last week’s debate on this matter? Why were we told last week that, on the contrary, there were sufficient inspectors? That was not true. I would have thought that this was a resigning issue.

The right hon. and learned Gentleman is not right. The House was told the appropriate number of energy assessors—the number who had passed their qualifications and who intended to start work. Since those figures were given to the House, the number of energy assessors who have completed their training and passed their exams has risen by a further 1,000. We only need 2,000 in place at the beginning of the process. There is clearly sufficient demand, but there is also uncertainty about whether to pay the accreditation fees. The package that I have put before the House today is designed to give that extra certainty.

I understand why my right hon. Friend has had to make this statement today, but I have to say that I am deeply disappointed. In my constituency—where there is not 18 per cent. of four-bedroomed houses—270 people are working for a specialist company providing HIPs. As a result of the action of the RICS and the support of the Conservative party, there is a risk that they will be put out of work. When laying the necessary orders, will my right hon. Friend take into account the needs of the people working for those specialist companies so that they do not suffer unemployment as a result of the Tories’ actions?

I certainly will. I have been very concerned about the impact on individual energy assessors, who have parted with good money—their own money—to be trained and who intend to work to provide valuable energy certificates for my hon. Friend’s constituents and others. That is why we intend to introduce the full scheme at the earliest opportunity and why we are bringing forward work in the social housing sector. That will not only help us to meet our climate change goals, but provide additional work for energy assessors.

The right hon. Lady has come here to make a statement about problems that she has now resolved. She has been asked a simple question about the definition of four-bedroom and three-bedroom houses. Let me remind her that only one group is lower in public opinion than we are: the estate agents who will now be responsible for this provision. She knows very well that people will be able, quite happily, to take one of their four bedrooms and turn it into a boxroom, creating a three-bedroom house. There is no way that she can define that in any legal sense. This is a thoroughgoing disaster. Why does she not drop it and start again?

It is pretty clear to me that if a house owner has applied for planning permission for a fourth bedroom, it must be a three-bedroom house. It is pretty hard to carry out an energy performance assessment on an extension that has not yet been built. This just serves to prove that a common-sense approach will be adopted by the trading standards officers who will have to enforce our policy.

I hesitate to use words such as “capitalism” in this place, but is it not a prime example of the wasteful nature of market forces to insist on a situation in which the same survey is carried out time after time on the same property by different purchasers? This process is designed to end that practice, which the Conservatives and their lawyer friends are trying to keep going. It is essential that we get the process back on the road and ensure that the careers of people such as my constituents who have committed themselves to becoming inspectors are protected, preserved and enhanced. They will not be impressed by the hilarity on the Conservative Benches this afternoon.

My hon. Friend has made an extremely good point. Home information packs are incredibly important to the transformation of the home buying and selling process, which has not changed for a great many years. It is right for us to provide information up front, in as successful a form as possible, for purchasers before they enter into protracted legal negotiations.

Last week, the Minister for Housing and Planning told the House that there were more than enough energy assessors and that she had every confidence that the scheme could go ahead on 1 June. More important, she told the House that the RICS judicial review was “completely groundless”, as can be seen in column 643 of Hansard. Why is the Secretary of State having to cover for the incompetence and arrogance of a Minister who is not doing her job sufficiently well?

My hon. Friend the Minister spelled out the position to the House. She outlined the numbers of those in training and those who had passed their exams. In fact, since then the number who have passed their exams has increased by 1,000.

In six days?

In six days. The figures are changing rapidly as more and more energy assessors pass their exams, gain their qualifications and pay their dues to become fully accredited. However, they clearly need enough certainty in the system to part with the final £300, and we are not providing that certainty.

The Secretary of State must know that the vast majority of the public want to make their homes more energy efficient, but does she really believe that this bureaucratic and expensive measure is the best way of achieving that? Given all the problems and all the retreats, is it not time to get everyone around the table to think about what is in the best interests not just of energy efficiency and climate change, but of the public?

No doubt my hon. Friend will contribute her views to the consultation that we are organising. The results of the area trials, which are continuing, and wider consultation with the public show a clear need to provide clarity and transparency in the home buying and selling process. The purpose of home information packs is to deliver more transparency and information at the beginning of the process of purchasing a house, rather than waiting until the end of the process to provide that vital information. I consider that to be a common-sense change.

Does the Secretary of State not understand that vendors do not want to incur what is effectively a tax on their transaction before they have gained any money from the sale that they are trying to carry out? Does she not understand that when in a hole one should stop digging, and that it is not a good idea to go against the wishes of the many people who would like to sell their houses or flats in the normal way without Government interference and an effective tax?

I can only conclude from his comments that the right hon. Gentleman does not support energy performance certificates, which are the only new documents in the home information packs.

I would support voluntary certificates, but not mandatory ones.

I hear the right hon. Gentleman say, from a sedentary position, that he does not support mandatory energy performance certificates. Is that the view of his party’s Front Bench? If it is, I suggest—

Order. It is not for the Secretary of State to ask the questions.

What discussions has the Secretary of State had with the Chancellor of the Exchequer? This delay is clearly hugely to his advantage, because it will give him the opportunity to knock home information packs on the head when he becomes Prime Minister and, hopefully—for him—not to lose quite so many votes at the next general election.

The Chancellor of the Exchequer has made his absolute commitment to the policy completely clear.

I understand that the RICS has not agreed to much of what the Secretary of State has said and that the court decision has been stayed, not withdrawn.

As the Secretary of State will know, for many weeks I have been asking a named-day question about the number of accredited domestic energy assessors. Week after week, the Minister for Housing and Planning has replied, “I will answer shortly.” The Department chose to answer the question in that way for one of two reasons. Either it knew that it did not have sufficient accredited domestic energy assessors, which would be negligent, or it did not know how many it had, which would be incompetent. Which was it, negligence or incompetence?

As a result of my comments today, the hon. Gentleman will be aware that the figures are changing rapidly. I will put a full set of figures before the House today—I will place a copy in the Library—and I will also make sure that his parliamentary questions are fully answered.

I have come to this House to be as open and transparent as possible. It is clear from the figures that I have presented today that a huge number of people want to become trained energy assessors. However, it is also clear that many of them feel worried about paying their accreditation fees because of the uncertainty that has been hanging over the process. The way ahead that I have set out today is designed to resolve that uncertainty.

I listened to the statement with great interest and it seemed to me to be bizarre and surreal. Among those blamed were solicitors, the market and the Opposition. Do the Secretary of State and her Ministers accept any responsibility for the situation in which they find themselves? If they do not, I suspect from the tone of the debate that the House will soon be roofless.

Our policy is the right one: there should be up-front information for the consumer and we should introduce energy performance certificates to try to meet our climate change goal. However, the uncertainty created by the campaign of misinformation led by the hon. Member for Surrey Heath, combined with the threat of judicial review, has led in the final weeks to not enough energy assessors paying their dues. I have come to the House to put that right.

I wish to make a statement on the modernisation proposals announced by Remploy earlier today. Remploy was established after the second world war to support injured servicemen and women to progress into mainstream employment. Today, Remploy factories employ about 5,000 disabled people across a range of sectors, from office furniture to electronics. Despite profound shifts in our economy over the past 60 years, there has been relatively little change in the nature of Remploy factories. However, the combination of new technology and the most far-reaching programme of disability rights legislation in Europe is creating new opportunities for disabled people in mainstream employment.

In 2005, a National Audit Office report argued that

“most of the businesses—particularly those in more traditional manufacturing and factory settings—are not currently sustainable in economic terms and are unlikely to become so in the future.”

The NAO also found that Remploy Interwork, which places people primarily in outside employment, appears to offer a more cost-effective service and accounts for three-quarters of all progressions to unsupported employment. The report stated that

“there remains substantial advantage in expanding this area of provision further, both in terms of reduced costs and the number of individuals who can be helped.”

Following the publication of the NAO report, in March 2006 I commissioned PricewaterhouseCoopers and Stephen Duckworth to conduct a strategic review of future business options for the company. The report set out a range of scenarios for the business, from no change to complete closure of the factory network. I explicitly ruled out both of those options. In responding to the report last July, I said that I was willing to invest more in Remploy, but on the basis of reform, to help more disabled people and to provide better value for the taxpayer.

The average subsidy for a Remploy factory worker is about £20,000 per year, which is substantially more than the subsidy available under my Department’s Workstep programme, and also far greater than the £5,300 average one-off cost of getting someone into a mainstream job through Remploy’s work placement arm. Last year, Remploy placed 5,200 people into mainstream employment, thereby outstripping for the first time the number employed in its factory network. Last July, I set out a five-year funding envelope for the company, maintaining baseline funding of £111 million per year to give it stability, and asked its board to bring forward a restructuring plan to modernise the business to support substantially larger numbers of disabled people into work. I also made it clear that any such proposals must fully and fairly protect Remploy’s disabled employees from compulsory redundancy.

After extensive consultation with the representatives of the work force, Remploy has today produced its proposals. There are five core components. First, and most importantly, the company aims to quadruple mainstream job entries to 20,000 a year over the next five years, helping more disabled people gain sustainable employment. Secondly, it is planning significantly to decrease management overheads by £49 million over the next five years. Thirdly, it proposes the closure of 32 of the existing 83 factories, with a further 11 factories to transfer employees to neighbouring sites. Fourthly, the company has again confirmed that there will be no compulsory redundancies for disabled employees. And fifthly, a comprehensive support package will help employees through the transition. That latter step will ensure that all disabled employees continue to enjoy their current terms and conditions, including their membership of Remploy’s final salary pension scheme, should they decide to take employment outside of Remploy. The company is now beginning a formal consultation with its trade unions and employees, as well as preparing a disability impact assessment as part of its disability equality duty obligations.

I understand the concerns that the proposals will raise for some of Remploy’s employees. It is important that employees, and the trade unions representing them, are now given the time and space to respond to the consultation. Support and guidance is being made available for all Remploy staff through the factory network today and throughout the consultation period. That will include the option of counselling and advice from an independent organisation. I recognise that many hon. Members in the House today will have Remploy factories in their constituencies. I want Members to be fully involved in the consultation process and I will make sure that that happens. I understand that the Remploy chairman has already briefed Members earlier today.

I expect to receive the company’s final proposals later this year. No decision on the future of the company will take place until then. Once final proposals have been submitted, I will consider whether we are able to offer the company additional funding to facilitate modernisation beyond the £555 million already pledged.

Reform of Remploy is about extending opportunity to disabled people. It is about the fundamental principle that disabled people should have the opportunity to work in mainstream employment, but that a sheltered environment should also be provided where that is the best option. As six of the biggest organisations representing disabled people made clear last week in a letter to The Guardian:

“The minute you assume someone cannot work in the outside world you will certainly ensure they don’t. Disabled people want to work in ordinary places doing ordinary jobs. It is a matter of human rights.”

Increasing employment opportunities for disabled people and ensuring Remploy’s duty of care to its staff are the two fundamental tests against which Ministers will ultimately assess Remploy’s proposals.

I thank the Secretary of State for an important statement on the closure of 43 factories employing some of the most vulnerable workers in the country. As he reminded us, Remploy was set up at the end of the second world war, primarily to provide meaningful and productive work for people who suffered tragic disabilities as a result of the war. It provided great service during the post-war period and continues to do so today.

Remploy also has a proud history of adjusting to and moving with the times. Initially set up as a factory network, Remploy has been able to adjust to the decline in UK manufacturing and expand into the service sector, setting up businesses where there was demand at the time. As the nature of the disabilities people face has changed, and the expectations of disabled people and the society around them have also changed—with more focus on creating opportunities for disabled people and a wider acceptance of disability and the contribution that disabled people can make across society—Remploy has once again moved with the times, expanding its operations to help individuals find work in businesses outside its own factories and workshops. As the Secretary of State said, it is now placing as many people each year in work outside the organisation as it employs itself.

In the face of the rising costs of maintaining the Remploy network and the increasing challenges of the global economy, coupled with the changing needs of disabled people, the time is now right for another evolution of Remploy. My party supports the principle of reform that the proposals that the Secretary of State spoke about embrace, and we support the goal of greater levels of inclusion of disabled people in mainstream employment. We shall take a close interest in the consultation process that now follows but, as the Secretary of State would expect, we have a number of specific concerns. They relate not to the objective but to the transitional process and to the impact on individuals, many of whom will have worked for Remploy all their adult lives.

The Secretary of State’s statement did not say so explicitly, but the one made earlier by Remploy makes it clear that the proposal will entail 2,270 disabled employees being transferred out of the company’s employment. How many of them are over 50, and thus within 15 years of normal retirement age? How many are people whose primary disability is a mental health problem or a learning disability, and what special provision is envisaged for the more challenging retraining requirements that that group is likely to have? What will be the total retraining and job placement budget for dealing with those 2,270 people? Does he have any plans to make special provision for proposed closures in areas with significantly above average unemployment, such as Leicester, where it might be expected that the challenge of retraining Remploy employees and placing them in mainstream employment will be greater?

We recognise the need for Remploy to shift its focus as the world about it changes. Work in a sheltered factory is no longer a financially viable option, nor is it the most socially desirable outcome for many disabled people entering the work force. However, moving on, retraining and facing a new and unfamiliar environment is a challenging prospect for anyone, and it will be especially so for some of the employees of Remploy. We fervently hope that the process will be successful, but what is the Secretary of State’s plan B if it proves impossible to place some existing Remploy employees in mainstream employment? Does he have one? Has Remploy had discussions with the voluntary and social enterprise sectors to examine the possibility of alternative work placements for the—hopefully—very small number who cannot be placed successfully in mainstream employment?

Work works, as the Secretary of State frequently reminds us, and over the years the 2,270 Remploy workers have benefited from the dignity of being engaged in productive employment. The worst possible outcome of the changes that we are discussing today would be for some of them to be left high and dry without work. I accept that they will still have their salaries and other support mechanisms, but it would be very unsatisfactory if they were left without work and the self-respect that it brings.

Finally, is today’s announcement the full agenda, or is it the first step in a longer-term programme? How secure are the jobs in the remaining 40 Remploy factories? Does the Secretary of State envisage that they will continue indefinitely as they are now, or is the outplacement of those employees also the ultimate objective?

I very much welcome the hon. Gentleman’s support in principle for what Remploy is trying to do. That will be very welcome to the company.

The hon. Gentleman asked a number of specific questions. I shall try to answer most of them now, and I will correspond with him about the rest. I think that he asked me about the number of employees over 60—

Over 50.

In that case, I must have misheard the hon. Gentleman. However, I have the figures for the number of Remploy employees over 60, and can tell him that there are 650 in that category. I will get the figure for the numbers aged over 50.

It is true that many of those who will be caught up in the changes will be learning disabled. I think that the majority of disabled people now supported by Remploy are in that category. I have no doubt that the company’s experience in the field and willingness and ability to work with others mean that it will do all it can to help those people to find alternative work.

The hon. Gentleman made an important point about factories in areas of high unemployment such as Leicester. The Remploy board has made it clear today that its final proposals—and I remind the House that there are no final proposals before Ministers yet—will have to take local labour market conditions fully into account. That was one of the factors the company took into account when drawing up the proposed sites that may be affected by the closure programme, but it will certainly reflect on the matter.

I certainly agree with the hon. Gentleman about the importance of work. It is important that Members appreciate that no disabled person will lose the prospect of employment through these plans. As he said, about 2,300 disabled people will be affected by the proposals and the company has guaranteed that every person who wants to continue employment will be found alternative work, whether within the Remploy family, in sheltered employment environments or in mainstream employment. Again, I make it clear that there will be no compulsory redundancies.

The hon. Gentleman, like me, referred to the support package on offer from the company. The support package is unprecedented; it is not TUPE—and, indeed, goes significantly beyond TUPE, especially in relation to continued membership of the final salary pension scheme, which will be important if the changes are to be made in an appropriate and sensitive way, as they must be.

Finally, the hon. Gentleman asked about the remaining factories in the Remploy network. As yet, there are no final proposals before Ministers, but the view of the company and the board is that the plans, subject to the outcome of the consultation, offer the company the best prospect of securing sustainable, long-term employment for the Remploy factory network. It is true, as I am afraid I have to say clearly today, that there can be no 100 per cent. guarantee for the indefinite future—that is no longer the world in which we live—but I strongly believe that, subject to the outcome of consultation on the final proposals, the generally accepted view is that the right way forward will consist of those types of change. That is the best way to offer the prospect of secure long-term employment for the remaining employees of Remploy.

My constituents in the Remploy factory at Spennymoor will be disappointed by the Secretary of State’s announcement. He put great emphasis on the National Audit Office report, but is he aware of the comments of the Public Accounts Committee, which usually toughens up NAO reports? The PAC noted:

“A highly supportive environment is the only appropriate option for some people and Remploy has provided unique opportunities for thousands over many years. The current review of Remploy should safeguard this achievement.”

The closure of factories in Hartlepool, Stockton and Spennymoor will remove those possibilities in a significant area of the north-east.

I fully understand that my hon. Friend’s constituents will be disappointed by the announcement today. What we and the company are trying to do is to strike the right balance between making sure that the business has a sustainable, long-term future and providing a range of choices to disabled people so that they can find secure, meaningful employment. I believe strongly that part of the range of options that should be available to disabled people will include sheltered employment. We are not removing that option. Remploy has an established network of sheltered employment environments, which will continue to operate, and the company will continue to work with a range of local partners, including local authorities, to find alternative sheltered employment where that is appropriate. I repeat that Remploy staff who choose to move to those new working environments will continue to draw down their existing Remploy terms and conditions package, including membership of the final salary pension scheme. We are trying hard to be fair in the circumstances. We are not saying that there is no role for sheltered employment; we are saying that we have to find a different balance between mainstream and sheltered employment.

I am grateful to the Secretary of State for his statement and for advance notice of it.

In principle, promoting mainstream employment must be the right approach to deliver independent living, and Remploy is to be congratulated on the success of its programmes to get people into mainstream employment. Expanding such schemes is both necessary and appropriate and I particularly welcome the consultation that will take place.

Nevertheless, today’s statement will have a deeply unsettling effect on the Remploy work force, some of whom I met in Halifax yesterday. Can the Minister confirm that half of all Remploy factories will be affected in some way by the initial proposals announced today? Can he explain why there was such a long period of uncertainty before the announcement was made, which added to the stress on many of the employees waiting for the announcement?

The Government owe a duty of care to the individuals involved, and their interests must be at the forefront of our minds today. Over what period does the Secretary of State expect the closure programme to be phased in? How long will the affected individuals have to find alternative employment? Perhaps he could also say a little more about the assistance that will be offered to those people. Is he satisfied that the programme announced today and the plans for the workers from now on are consistent with Remploy’s disability equality duty?

Today’s announcement cannot be isolated from the Government’s wider policies for helping disabled people into work. If Remploy is to redirect its resources, the Government need to do the same. Is the Secretary of State willing to provide additional support for Remploy, if necessary, to meet its target of getting 20,000 additional disabled people into work every year through its mainstream employment programmes? In the same vein, has the Minister been able to find the additional resources needed to roll out the pathways to work programme appropriately, and has he been able to persuade the Treasury to accept the new funding mechanism, proposed by David Freud, which would allow additional resources to be invested in the area?

What steps are the Government taking to increase employer engagement in order to help disabled people into work, and what steps are they taking to tackle prejudice and promote the benefits of employing disabled people and those with mental health conditions? The Government have a responsibility to expand dramatically the efforts to help all disabled people into work. They need to do so to ensure that all disabled people, including Remploy employees, have the fair opportunities to work that they deserve and that they have every right to expect.

Again, I welcome the hon. Gentleman’s general support. It is true that half the factory network will be affected by the proposals. He asked why it took so long for the proposals to come through, following the publication of the reports last summer. The company has been working on the schemes, and of course a new chairman was appointed at the beginning of the year. It was quite right and proper for Ian Russell to take time to cast his eyes over the plans to make sure that they are appropriate and take the company in the right direction.

The hon. Gentleman asked me about the time scale for the programme. I remind him, and the House, that there are no final proposals yet. We will not know the time scale until we see the final proposals from the company and Ministers have made a decision. Clearly, the consultation period will last for the appropriate time—90 days. The company will then need to reflect on that and bring forward its final proposals, which will be done before the end of the year.

I accept that Remploy is bound by the disability equality duty. That is clearly a statutory obligation on the company and it will discharge that—it has no alternative. I agree with the hon. Gentleman that Remploy has a clear and specific duty of care towards its employees and that it must discharge that duty. I will make sure—as I am sure will hon. Members—that that duty of care is properly discharged.

The hon. Gentleman asked whether there would be additional support on top of the £555 million that we have committed to Remploy. I have made it clear that I am prepared to consider putting additional resources in on top of the more than £500 million currently available to Remploy, if that is necessary to support the transition programme.

The hon. Gentleman asked me about the Freud report. A response to that will be made later this year. Finally, in response to his point about pathways, my view is that pathways is being properly funded and that the Government are making significant additional resources available to help people who have a disability to find employment. That is right and proper.

Many of us will want to suspend judgment until we have had an opportunity to look at the proposals in more detail. I would just say to my right hon. Friend that when I spoke to workers at the plant this afternoon they said that they were devastated and gutted by the news that the factory in Aberdare was to close. Only last week—this underlines the sensitivity with which these matters are handled—they were given a report that said that all their targets had been met. As a result, they had expectations that their factory was going to remain open. It is a great disappointment to them that it is not. They also raised the question of outsourcing. If Remploy claims that some factories are unprofitable, why does it outsource some of its work to India and China? I know that my right hon. Friend has dealt with this matter by fully consulting Members of Parliament. Nevertheless, when such a decision is made, it is a considerable body blow to the areas concerned.

I fully accept the points that my right hon. Friend powerfully makes. If a factory is in danger of closing, clearly we can all understand the concern that employees will feel, especially in an organisation such as Remploy. However, we simply cannot ignore the fact that the world is changing. We expect Remploy to discharge a very simple and clear responsibility as the transition is managed. As I have said, it is my duty first and foremost to ensure that Remploy handles this in the appropriate way—and I have no doubt at all that it will do so. We must think ahead and consider how we can help more disabled people to get into mainstream employment than at present. The prospect of quadrupling the number of disabled people who get jobs in mainstream employment is a prize well worth reaching for. I repeat that we, and the company, will behave properly and fairly when dealing with the challenge. If the work force at Aberdare feel that they have been misled by the company in any way, I very much regret that.

Can I be assured that the board will consider wider strategic solutions to help it to achieve all its aims? For example, in Poole, Dorset, there is a real opportunity to manage the transition of the factory while setting up a centre of excellence for the training of people with disabilities, which would obviously serve the whole of Dorset, bearing in mind the distance from the Poole site to any other Remploy factory in this country.

Yes, I think that the consultation will be full and open. Members can put forward views and I am sure that the work force at Poole will put forward views about the future of their place of work. The company made it clear today that every serious proposal will be studied and examined carefully.

I understand the cause of the concerns that have been expressed, but I welcome the principles behind my right hon. Friend’s statement. Does he agree that Remploy’s objectives must be to offer the widest choice of employment opportunities for disabled people, to ensure that it can secure the maximum number of jobs for disabled people, and that the largest possible number of disabled people should be employed in mainstream employment, when that is what they wish? Will he assure me that during the consultation process, everything will be done to ensure that the views of disabled people and their organisations are clearly sought and acted on?

I am grateful to my hon. Friend for his opening remarks. I can certainly give him the assurance that he seeks.

A number of my constituents were deeply anxious about the threats to the factory in Dundee, which I understand has been saved. That is welcome. The factory lies in the Dundee, West constituency, so I will leave the hon. Member for Dundee, West (Mr. McGovern) to say more about it.

In general terms, I welcome what the Secretary of State said in his statement, especially regarding the fact that there will be no compulsory redundancies for employees with disabilities, and that they will keep their final salary pension scheme. What guarantees can he offer to the non-disabled employees, especially with regard to their final salary pension scheme? Will he guarantee that if the factories that might close are sold, any receipts will go back into the business, or will be used to help people with disabilities into mainstream or sheltered work, rather than being grabbed by his Department or the Treasury?

We have no plans to grab any money in the way that the hon. Gentleman suggests. This exercise is not designed to reduce spending; quite the opposite. As I said earlier, I am prepared to invest more in the business to give disabled people the prospects and choices to which my hon. Friend the Member for Kingswood (Roger Berry) referred.

I welcome the general support of the hon. Member for Dundee, East (Stewart Hosie) for the package that has been made available to disabled employees. Of course the accrued entitlements of Remploy’s able-bodied employees under the final salary pension scheme will be fully observed by the company. However, the same offer could not be made to able-bodied employees as has been made by the company to its disabled employees. The company has made the choice—the right one, I think—that the proper and effective way to discharge its responsibilities and duty of care is the one that it has outlined today. That is the right way forward.

I too welcome in principle the move, which has to be right, of those with disabilities into mainstream employment—but the Central Cutting unit at Birkenhead, which is to be merged, where I have constituents working, is devastated by the news today. Can my right hon. Friend confirm on the record once more what we were told in a briefing earlier by the chairman of the company: that all the existing work force will be guaranteed their terms and conditions, and access to the pension fund, and that level of support in any employment that they undertake in the future, for the whole of their employment life? “For life” was what the chair said to us when we met him earlier today. Can my right hon. Friend confirm that that is indeed the case?

I am grateful to my hon. Friend. I want to emphasise two things. She referred to the Remploy factory in her constituency merging. That is the proposal; a final set of decisions has not yet been made by the company’s board, and that will not happen until later this year. There is therefore the opportunity for her constituents and herself to be involved in helping to shape the final proposals that the board bring forward to Ministers. I am very happy to make it absolutely clear again that what the chairman of Remploy, Ian Russell, said today is the company’s position—that there is an absolute guarantee along the lines that he indicated to my hon. Friend earlier in the day, and that that undertaking will be honoured.

The Secretary of State has used the words “sensitive” and “sensitivity” several times, and the company has been careful to try to get that message across. Will he continue that theme, bearing in mind that there are quite a number of these closures in the old pit areas, where unemployment is still a problem? There is one in my constituency, there is also one five miles away in Mansfield, and there was a closure a few years ago nearby. So will the Secretary of State look sensitively at that, as the operation has not been completed? And will he not keep referring to that £20,000 cost for each Remploy employee, because there are a lot of people in Britain that cost £20,000 to employ? In fact, there are some down in the sheltered accommodation at Buckingham palace who would all be put out to grass.

In relation to my hon. Friend’s most important point, I reassure him that the company has already looked at those issues very carefully, and it will have to take them into account in making its final proposals. There is one overwhelming obligation now; that is clear from what the chairman of Remploy said today. The company must honour the guarantee of no compulsory redundancies. If that cannot be done for the list of factories currently scheduled for closure, the company will have to come forward with alternative proposals. I hope that my hon. Friend will not mind if I do not get drawn on the last point that he made.

I think that we will all agree that what my right hon. Friend proposes is sensible in theory, but we will all take a close interest in how it works in practice. I was glad to hear him say repeatedly that he would take account of local economic conditions—although when we hear that factories in, for example, Aberdare are to close, we do wonder how far they have been taken into account.

Is not the danger that when we help people into mainstream employment, they will remain in it for as long as the subsidy to the employer continues, and as soon as that subsidy ceases they will not be in it any more? Does my right hon. Friend have any long-term research on how long people who have already been helped into jobs have remained in them?

I shall certainly make available all the research information that the Department currently has. The guarantee from the company is to support employment for the rest of a person’s working life. It is inevitable, I suspect, that there will be occasions when a period of mainstream employment may come to an end, but the company’s job and obligation there is to help the person find alternative work, and throughout that time that person will be employed by Remploy, on Remploy terms and conditions. I genuinely think that that is a very extensive offer of help and support.

I agree with my hon. Friend in one very important respect: I think we should all reserve our judgment until the final proposals have come through. I am willing and available, as is the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling (Mrs. McGuire), who is the Minister with responsibility for disabled people, to meet any hon. Member to discuss their concerns and how we can best take forward this sensitive matter, which is important to all of us.

I was at the Halifax factory yesterday morning, and I am disappointed and angry at the news today, especially for the dedicated and hard-working staff there. Will the Secretary of State outline to the House why the Halifax factory has merited the proposed closure? What will be done to find suitable alternative employment for the staff, particularly considering the area we are in, and the proposed closure of the two Remploy factories nearest to Halifax—those in Barnsley and Bradford?

Again, I understand my hon. Friend’s point, but I want to make something clear to her. She has, I think, assumed—wrongly—that the Halifax factory is going to close, but whether that is so will be clear only when the final proposals have come through. If she and her constituents believe that there are strong arguments against the closure of the Halifax factory, I know that the board of Remploy will fully consider them.

May I stress to my right hon. Friend the Secretary of State that the consultation must be genuine? I cannot imagine how the workers at my local factory must be feeling, having heard the recommendation that their workplace should close. My concern is that the recommendations are being made before Remploy has had the opportunity to prove that it can find places in mainstream workplaces for current Remploy employees. I think that that will be an extremely difficult task.

May I suggest that there is a way forward that has not been put forward by Remploy or been considered in enough detail? It is that Remploy factories could provide a training base—a stepping stone—for people with disabilities who are trying to go back into mainstream work. Although it is important that people have dignity in the workplace and should be supported in mainstream employment, there is undoubtedly an element of the Remploy work force that cannot be employed in any other setting. Getting rid of these unique workplaces, where people can have dignity and be safely employed, will be a retrograde step. We will not be able to recreate them. We need to consider innovative ways to use Remploy factories in a new form, to meet all the needs of the work force for whom we are trying to provide a service.

My hon. Friend’s last point has not been discounted by the company. I think it remains very much one of the options. I am sure that he and others will put that case to the Remploy board in the next three months or so, and I am prepared to act as interlocutor on his behalf if he feels that that would be helpful.

On my hon. Friend’s first question—about whether we should be confident of our ability to find alternative employment—it is worth reminding ourselves that Remploy currently has 1,500 vacancies on its books to help disabled people to get employment in mainstream employment situations. We are therefore entitled to be reasonably confident that we will be able to provide alternative employment. However, I accept absolutely—it is baked into the Remploy proposals—the need for sheltered employment in future. No one is proposing that disabled people should have no choice. The express purpose of the reforms is to give disabled people more choice.

My right hon. Friend will know that the trade unions have been calling for diversification and change in Remploy, because they could see what was coming. It seems to me that they have shown a lot more perspicacity than, historically, the management of Remploy have shown. If this is solely in the hands of Remploy, I have no great confidence that a plan will be brought forward in the consultation that will lead to security of employment in future. I think that a fund for change and modernisation is available. Is my right hon. Friend prepared to use that fund during the consultation period to explore the possibilities of establishing new employers with new products and new marketing schemes that could provide better long-term stable employment for those people, still secured under the terms and conditions that are broadly available at Remploy?

I did indicate in my statement that we were prepared to put additional resources into the business if that would help to sustain the factory network, or in fact the company, in future. As for my hon. Friend’s point about the board, there is a new chairman who has handled himself exceptionally well in the last few months, and who has begun to build good relationships with the work force and the trade unions. Notwithstanding the disappointment that many will feel, now that there is a plan, it is important that we take advantage of it to help to shape and mould the company, so that it can help to meet the priorities that he and I share. Those priorities are the need to provide choice, opportunities, and the dignity of proper, effective, meaningful employment for more disabled people. We will not be able to do that without reform. I do not believe that we can do all the things that he and I want to do if we simply carry on as we are. That would let down many disabled people in the long term, and it would not give disabled people and their families some of the things that he and I want for them.

May I first express my serious concern about the proposed closure of the Ashington factory in my constituency, which is at the heart of one of the areas of greatest unemployment in Northumberland? Indeed, the Remploy factory is the only factory in Northumberland. The work force were informed of the closure; they were told that the factory would close by the end of the year, and that is contrary to the spirit in which my right hon. Friend made his statement. Will he comment on that, and on the statement made today by Ian Russell, the chairman of Remploy, who said that no factory would close until suitable alternative employment was found for all those affected?

I cannot explain how it came about that my hon. Friend’s constituents were told what they were told. Clearly, it is flatly contradicted by what the chairman of Remploy said. I simply urge my hon. Friend’s constituents to listen to the chairman of the board, and not to what they have been told by others.

Seventy-seven people are employed at the Remploy factory in Stockport, which is based in Heaton Chapel in my constituency, and 74 of them are disabled. They will be offered opportunities for employment at the Oldham Remploy factory, but will my right hon. Friend explain how they will be offered support in accessing those job opportunities, as that is obviously crucial to them?

That will ultimately be a matter for the company to decide, assuming that the proposals are implemented as they are currently formulated. If that were to happen, clearly it would be incumbent on the company to find a way of making sure that my hon. Friend’s constituents were able to work at Oldham. If that means providing help with transport and other costs involved in the move, the company will do that.

Like the hon. Member for Dundee, East (Stewart Hosie), I am delighted to hear that the Dundee Remploy factory will remain open. However, I have some concerns about Dundee, and other places. Will the Secretary of State confirm that factories for which closure is not proposed will remain unaffected by the plan? He says that the terms of transfer will go beyond the Transfer of Undertakings (Protection of Employment) Regulations 1981; will he confirm that, at the very least, TUPE will apply, so that if, five years down the line, the Remploy factories that remain open offer a beneficial 50 per cent. wage increase, it will apply to all former Remploy employees, regardless of how long ago they left and where they are employed at the time?

Yes, I can confirm that the offer from the company is to maintain people’s existing Remploy terms and conditions, and it is under those terms and conditions, whatever they are, that people will be employed in future. I am grateful to my hon. Friend for his opening remarks; I am glad that a way forward has been found, and that the company does not propose to close Remploy in his constituency. Clearly, some of the factories that are to stay open will be affected by the closures, because employees will be transferred to them, but I can only repeat what I said earlier: we are talking about the company’s initial set of proposals, and we have to find a way to secure the long-term future of Remploy as a business. By that I mean its future as a provider of sheltered employment and as a provider of mainstream employment opportunities for disabled people. That is very much what the board wants, and what my hon. Friends and I want.

I beg to move,

That leave be given to bring in a Bill to require planning approval for the change of use of housing to multiple occupation; and for connected purposes.

Right hon. and hon. Members will be familiar with the housing landscape in many of our towns and cities, where parts of those towns have become areas where the house in multiple occupation is the predominant form of housing. In many instances those houses are not what one might call traditional HMOs—an original large house subdivided into flats—but are a single house remaining as such, occupied by perhaps half a dozen people paying rent for their individual occupation of an otherwise unconverted house.

This is particularly the case in towns and cities where there are substantial numbers of students. With the expansion of higher education over the past two decades, there are many such towns. The city that I represent, Southampton, is one of those, with an estimated population of 28,000 students in a city of about 220,000 people. It is a city that I represent along with my right hon. Friend the Member for Southampton, Itchen (Mr. Denham), the former president of the students union. Although university authorities have built increasing numbers of halls of residence and student flats, the majority of students live in such HMOs, under one roof, sharing facilities and, according to a court ruling of 1995 in the Barnes v. Sheffield case, living as a single household.

It is right that a range of types of accommodation should be available to people. HMOs of various types provide important accommodation for young people, single people and people who are seeking shorter-term accommodation. The difficulty that local authorities face in considering how the different types of housing stock are to be deployed is that most types of stock—flats and small or larger houses—and changes of use of building from commercial to residential are all subject to the local planning regime, whereas the conversion of houses from family occupation to multiple occupation is not.

Under present planning legislation, a landlord can simply purchase a family house, possibly with a buy-to-let mortgage, and place five or six tenants in the house immediately. Cumulatively, such HMOs have a substantial impact on the character and amenity of neighbourhoods and, over and above the self-sustaining market that they create, on the inability of families to purchase houses where “studentification” has taken hold, because of the power of purchase that such landlords hold. HMOs raise all the issues of transient tenancies, of large numbers of extra cars parked, and possibly of noise. In short, the area becomes quite different in character.

Despite the fact that HMOs are a specific kind of housing, they are the only kind that is effectively beyond the reach of local planning arrangements. That is because under present planning law, dwelling-houses are regarded as one kind of use, and are so defined in the use class orders that derive from planning legislation. According to the use class orders, with minor but important exceptions a dwelling-house is a dwelling-house is a dwelling-house, regardless of who occupies it. That is understandable in planning terms, as planning law is blind to occupants, and is concerned with land use and its effects.

To an extent, planning law acknowledges that multiple occupancy of a house has land use consequences, but the use class order effectively exempts a change of use within the class for a house with up to seven occupants. A very large HMO, therefore, can come under local planning scrutiny, but the vast bulk of HMOs do not have seven occupants, so the distinction is pretty redundant.

Housing law has moved to recognise the reality of houses in multiple occupation. As right hon. and hon. Members know, the Housing Act 2004 established extensive procedures whereby local authorities can register HMOs and license landlords to run them. The qualifying point for general registration under the Housing Act is five occupants living in a three-storey house, although more widespread registration schemes may be introduced with the agreement of the Secretary of State.

That is a welcome change. As it is implemented, it delivers the prospect of HMOs that are better managed, and the revocation of licences for landlords where such management consistently falls below a level acceptable to local communities. However, it does nothing about HMOs becoming HMOs in the first place. Furthermore, it introduces two different regimes for the definition of HMOs. The Housing Act, for example, specifically includes student houses in its definition of HMOs, because it defines an HMO as a dwelling in which a number of people not related to each other live under one roof. That, in turn, entails a definition of a family and what it means, in housing terms, to be related. Nevertheless, the Act encompasses the reality of HMOs in a way that planning law does not.

What is to be done? The title of my Bill indicates what should be done: the process of effectively changing the use of a family house to that of an HMO, whether that happens through the purchase of a previously occupied house or, as is becoming increasingly common, through the purchase of a new property for buy-to-let purposes, should be regulated through the local development and planning process.

It has been suggested that the way to achieve that aim is to change the use class definition of a dwelling-house and to place use as an HMO outside the definition—the placing of an HMO into the category of use changes that always need planning permission. That is, essentially, what has been done in Northern Ireland. That route is attractive, but the numbers entailed in the revised order in Northern Ireland—more than two unrelated people in a house—suggest that there might be difficulties in defining what relationships trigger what definition, and whether a small HMO can in reality be said to lead to a real effect on land use as a result of the change in the nature of occupation.

In my view, it would be far simpler to bring the definitions in the Housing Act 2004 of numbers licensable, and what constitutes a family, into planning law—in this instance into the use class and schedules in the use class order derived from the Town and Country Planning Act 1990. My Bill would redefine an HMO as requiring planning permission for change of use if more than four people were to occupy the house, and to bring the Housing Act 2004 definition of a family into planning law. In that way, local authorities would have the ability, subject to all the proper safeguards and requirements of the planning process, to determine whether all but the smallest HMOs should receive the go-ahead. That might be backed up by guidance statements about density in local planning framework documents. Local authorities would also be able to cross-reference the houses coming before them for licensing purposes to check whether those houses should go through the planning process, and whether enforcement action should be taken. In truth, this Bill would be a modest amendment to existing planning law; indeed, it would amend existing orders following primary legislation.

The Bill is modest, but it could have a large effect on the weave of the local variety of housing provision in localities in towns and cities, so that the unplanned and often unanticipated swing of entire streets or neighbourhoods towards HMOs would become, over time, a thing of the past. I therefore commend the Bill to the House—but in the uneasy knowledge that it is just possible that it may not complete its passage through the House, even if its progress is agreed today.

I therefore also commend the provisions in the Bill to Ministers in the Department for Communities and Local Government, who by felicitous coincidence are sitting on the Treasury Bench this afternoon in anticipation of future business. I say to them that spending an afternoon Upstairs in Committee would make a real and substantial difference to the future mix and balance of communities, as I have described today.

Question put and agreed to.

Bill ordered to be brought in by Dr. Alan Whitehead, Mr. John Denham, Mr. Andy Reid, Dr. Roberta Blackman-Woods, Alan Simpson, Dr. Phyllis Starkey, Martin Salter, Sandra Gidley and Fiona Mactaggart.

Houses in Multiple Occupation

Dr. Alan Whitehead accordingly presented a Bill to require planning approval for the change of use of housing to multiple occupation; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 October, and to be printed [Bill 109].