I wish to make a statement on the modernisation of Remploy. Since Remploy was founded in 1945, it has played a central role in the lives of thousands of disabled men and women by providing supported employment for those who need it and, increasingly, by placing others in mainstream employment.
Both as a local MP and as a Minister, I have for the past 17 years worked closely with and supported Remploy and, as Secretary of State for Work and Pensions, Remploy workers will continue to have my full support. May I record the grateful thanks of the House for the diligence and commitment of my hon. Friend the Minister for Disabled People.
Of course, the world has developed dramatically since the end of the second world war, not least in how the aspirations and expectations of disabled people have changed, and changed for the better. The vast majority want jobs in mainstream employment, and that is the Government’s priority. That is why we extended the scope of the Disability Discrimination Act 1995. That is why we have been transforming the support that we give to disabled people, moving away from a system that abandons people to the margins to one that helps them to realise their potential.
That is why we spent £66 million last year on the Workstep programme to support 17,000 disabled people. That is why we spent £62 million on access to work, to help 24,000 people. These programmes are already helping disabled people to take their place in an inclusive society. That is why we are introducing the employment and support allowance, which will replace incapacity benefit next autumn. That is why we are extending pathways to work across the country by April next year, offering tailored support to help people on incapacity benefit back into work. And that is why last year, Remploy’s employment services division placed 5,000 disabled people in mainstream employment, for the first time outstripping the number employed by the factory network.
We have helped more disabled people into jobs than ever before. For example, since 2001 the new deal for disabled people has helped over 150,000 into work. None the less, there remains a vital role for supported employment, providing a chance to work for thousands of disabled people who might not otherwise be immediately ready for mainstream work. That has been a central part of Remploy’s work since it was founded, but increasingly, Remploy has struggled to fulfil this role effectively.
Low-wage, low-skill competition from countries like China and the EU accession states has put Remploy factories under enormous pressure. In turn, Remploy has failed to move adequately into higher-value, higher-skill work. Losses have spiralled, and Remploy’s ability to support disabled people has been put at risk. Change is therefore essential for Remploy’s 83 factories across the country, and the 5,000 people whom they employ.
Following the National Audit Office’s report in 2005 and the independent report by PricewaterhouseCoopers and Dr. Stephen Duckworth of Disability Matters last summer, Ministers asked Remploy to develop a new five-year restructuring plan. This was to modernise the business, avoid compulsory redundancy for Remploy’s disabled workers, support substantially larger numbers of disabled people into mainstream work, and stay within a funding envelope of a £555 million taxpayer subsidy over five years, to ensure that escalating costs do not put at risk funding for other Department for Work and Pensions programmes for disabled people.
The reality is that without modernisation Remploy deficits would obliterate our other programmes to help disabled people into mainstream work. With no change, in five years’ time Remploy would require £171 million a year on current trends. That would be £60 million over the £111 million funding envelope, which represents nearly the entire current annual Workstep budget.
In May 2007, Remploy made a proposal, for consultation with the trade unions, to close or merge 43 of the 83 Remploy factories. When I took over as Secretary of State a month later, however, it was clear that national and local management had not exhausted procurement opportunities to maintain the maximum number of Remploy sites. There was also a huge gulf between Remploy management and the trade unions, and the likelihood of destructive confrontation.
In August I therefore asked Roger Poole, a former assistant general secretary of Unison, to act as the independent chairman of fresh negotiations, and I want to record my thanks for the way in which he managed to achieve real dialogue and progress. Although there was no agreement on factory closures, there was significant common ground for the first time. There was agreement on the £555 million funding subsidy, on the quadrupling to 20,000 the number of disabled people Remploy would help into mainstream work, on significant cuts in management jobs and costs, on more efficient working practices, and on the vital importance of generating more public sector contracts—and, in consequence, the need for fewer factory closures.
In September I reaffirmed Government policy on Remploy: that everyone should do their utmost to get a negotiated outcome; that there would be no factory closures without ministerial agreement; and that all public authorities should be encouraged to take advantage of European procurement rules allowing contracts to be reserved for supported businesses. I also reaffirmed, as I do again today, that there would be no compulsory redundancies for Remploy’s disabled workers and that they would retain the protection of Remploy’s terms and conditions, including—uniquely for workers facing plant closures or transfers—their salaries and final salary pensions. Both workers and management now need certainty to end the insecurity and worry for Remploy employees and their families and to allow Remploy management to begin the radical changes that we all recognise are needed.
The final proposals that I am announcing today represent the best package for Remploy’s disabled employees in those difficult circumstances. Copies of the modernisation plan are available in the Vote Office, and a letter with agreed proposals to the trade unions has been deposited in the Library. There will be 15 fewer factory closures, with 55 factories remaining open and 11 merging—down from 32 closures to 17. The sales target for public procurement will increase to £461 million over five years, up from £298 million since the company’s proposals in May. That is a huge and challenging 130 per cent. increase over the current rate of sales of £200 million. There will be a total cost saving of £59 million from around 25 per cent. fewer managers, changes in working practices and reductions in non-wage costs.
Last week I had productive discussions with the leaders of the GMB, Unite and Community, joined by Remploy chairman Ian Russell, and I pay tribute to Ian Russell for his energy and commitment to get the best for Remploy workers. As a result, we have reached further agreements to protect Remploy’s future and its workers. New skills in public procurement will be brought in to ensure that its marketing and sales effort is targeted appropriately. Appropriate employment advice will be available to all disabled employees whose factories are closing. Remploy will provide a travel-to-work package wherever necessary, where employees transfer as a result of mergers. Furthermore, Remploy has been contacted by third parties interested in keeping some form of production or training at six of the sites due for closure—Lydney, Glasgow Hillington, St. Helens, Treforest, Ystradgynlais and Brynamman. At four other sites—Mansfield, Pinxton, Plymouth and York—there is the possibility of staff transfers to nearby plants, most of which are local authority-supported.
I know there will be disappointment that we are unable to keep even more factories open, but the reality is that it is simply not viable. For those sites, including those mentioned above, this is my message: if management, trade unions, MPs and others come up with a credible option involving a takeover or transfer, we will, of course, co-operate, and Remploy will help to facilitate. However, time is very short. The new funding envelope starts in four months’ time—from 1 April 2008.
We have managed to keep open 55 sites only on the basis of very stretching procurement targets and a tough forward plan. It will be up to everyone with an interest in Remploy—Government, management, trade unions, local MPs and other political representatives— to pull together to ensure that those factories meet their ambitious targets, otherwise they, too, could be put at risk.
The proposals that I have presented today are both realistic about the challenges facing Remploy and ambitious for the future. The plan makes some difficult choices, and many hon. Members wish that the circumstances were different, but we are where we are. What is now vital is that everyone concentrates their efforts on making the new Remploy a success. There will be a top-to-bottom restructuring and reskilling of Remploy. The plan will deliver a new beginning for Remploy requiring a radically new approach across the entire operation, which must include better management and better union relations. Last week, I agreed with union leaders that the modernisation and procurement plan will be properly monitored to ensure that it remains on course, so that Remploy can look to the future with a degree of confidence not enjoyed for some years—the people that it was set up to serve deserve no less. I commend this statement to the House.
I start by thanking the Secretary of State for giving me advance sight of the statement.
Today’s announcement will come as a massive disappointment for thousands of Remploy workers, some of whom are in my constituency at the factory in Leatherhead, which is to be closed as a result of today’s news. I suspect that it is also a massive disappointment for hon. Members on both sides of the House who have campaigned in support of the factories threatened with closures. I do not imagine that many Labour Members entered Parliament expecting to be part of a Government who would take tough decisions such as this.
We know and understand the nature of the challenge that Remploy faces, and I know that its staff do as well. I have visited several of the threatened factories, which have hard-working and committed work forces who are very anxious about the future. No one on either side of the House would disagree with the objective of helping as many people as possible with disabilities back into mainstream employment. We all want to live in a society where people with disabilities are not outsiders. If the proposals are about achieving that goal, then they are worthy of support. However, there is one huge proviso: they have to work.
I understand the financial issues behind these changes and the importance of the Government offering a wide range of programmes to get people with disabilities into mainstream employment. However, we must not forget the interests of the people whose lives will be turned upside down by today’s announcement. The terms on offer to Remploy staff may be generous—their pay and benefits are protected—but no one will benefit if some of them end up being paid to sit at home.
I know that there are anxieties among the staff about whether the company can really deliver its promises on job placements. When I visited one factory, its workers had just been told by head office that there were nearly 100 vacancies open to them locally, but their local employment placement specialists in Remploy said that the actual number was only one third of that figure, so there is still some confusion. Will the Secretary of State tell the House what work he has done to reassure himself, and hon. Members, that Remploy is really capable of placing all the people who are being displaced by this announcement in proper mainstream jobs?
At the time of the Labour party conference, on the day that the unions were threatening to embarrass Ministers about the proposed closures and to call strike action, the Secretary of State responded—arguably he bought them off—with the promise of a review. The Government are good at using reviews as a way of burying bad news these days, but they are not so good at doing the actual burying. Is it not true that precious little has changed since the announcement of that review? Is it not true that even the factories not in the immediate closure programme now face financial targets so stringent that in reality they have little prospect of meeting them? Why did it take the threat of strike action to get the Government to consider seriously the issue of public procurement? I appreciate that the Secretary of State is new to his job, so it may well be that that question should be directed at his predecessor. Why did it take so long, however, before the issue was addressed in detail?
Will the Secretary of State say how much extra potential Remploy business he has identified since his announcement in September? What practical commitments have the Government made to the company to enable it to continue to identify potential additional business in future? What progress has he made in encouraging public bodies to adopt the permitted rules that would allow them to give Remploy and similar organisations a ring-fenced position in the procurement process?
I agree with the Secretary of State that everyone now needs to work together to ensure that the remaining factories have a strong future. Let me assure Remploy and its employees that the next Conservative Government will continue the process of identifying additional potential procurement opportunities for them and the public sector work force.
No one can have spoken to Remploy employees in the past few months without gaining the clear impression that from their perspective the whole process could and should have been handled more carefully and sensitively. If the process really works and all the employees are placed successfully in mainstream work, it will prove to be right and justified. The challenge now is for Remploy to prove that it can keep its promises to those employees.
I agree that Remploy’s challenge now is to keep its promises; the challenge for Ministers and the whole House is to make sure that that happens. Of course it is disappointing—I am disappointed—that even one factory has to close and that others are having to merge. However, that is the reality that we face. I urge the hon. Gentleman to join every other Member with an interest in Remploy in helping to make sure that the maximum amount of public and private procurement is levered in, and that, in respect of factories that are closing—I have said that 10 might—other options are explored with the help of the relevant local Members.
The hon. Gentleman suggested that we might forget about the future of Remploy employees; that is precisely why we have built protections into their future in respect of maintaining their pensions and pay. We are very aware of the need to remember them and to make sure that they have the maximum support. I do not know about his information, but there are 660,000 job vacancies across the United Kingdom in every constituency, and they include vacancies at Remploy factories. Remploy has a successful record, which, as a result of the agreement and plan, will improve to quadruple the number—at present 5,000—that it gets into mainstream jobs. We have built in protection to monitor the situation and make sure that we check whether the jobs are sustainable. That is a result of last week’s meetings, which I have described.
The hon. Gentleman suggested that nothing had changed since the Labour conference, but a lot has. We have had agreement with the trade unions on a range of different measures, although they have not accepted the closures and, like us all, are disappointed about them. There has been a lot of agreement with trade union leaders, which is why we have managed to move forward. We have also identified 15 sites that will now not be closed; others may have a future under a badge different from Remploy’s.
The hon. Gentleman asked what procurement activity I had undertaken. I have discussed that matter with a range of Cabinet colleagues, and I have written to every one of them to say that we want the maximum procurement to be levered in from Whitehall and to go to Remploy. That has had the personal backing of the Prime Minister at a Cabinet meeting. We have also contacted the Scottish and Welsh Assembly Governments about the issue and encouraged all local MPs to do the same.
As in so many other instances, after listening to the hon. Gentleman I do not know what his alternative policy is. In the absence of one, I suggest that he backs our programme.
I, too, am grateful to the Secretary of State for advance notice of his statement, which will mean that more Remploy factories can stay open, through better marketing and procurement of Remploy products. That is welcome. The Liberal Democrats agree that promoting mainstream employment must be the right approach to deliver independent living and that expanding Remploy’s successful inter-work programmes is the right thing to do.
Will the Secretary of State confirm—I think that he did in his statement—that the expansion of Remploy’s Interwork programme to help 20,000 disabled people into mainstream work will still go ahead? He made it clear in his statement and in his letter to Paul Kenny that the plan is based on “extremely ambitious” targets. Although it is a nice surprise to hear about extreme ambition from the Department for Work and Pensions, will the Secretary of State say where the priority will lie if the targets cannot be met? Will it be retaining the factories announced today or helping more disabled people into mainstream work? If he cannot answer that question, will he confirm that he will make available additional resources to Remploy if it needs them to meet its target of getting 20,000 disabled people into work every year?
Today’s statement will have a devastating effect on the current Remploy work force in the factories to be closed. In areas such as north Wales, there are real local concerns about the local proposals. It seems that there is still room for local flexibility in applying the plans. What process will the Secretary of State put in place to make sure that local concerns can still be heard?
Remploy employees have endured a long period of uncertainty, which has caused real stress. Over what time scale will the closures be phased, and how long will the affected employees have to find alternative employment? Does Remploy have the additional capacity to provide the counselling and skills-focused help needed by workers in the closure areas?
Finally, will the Secretary of State put the Government’s money where his mouth is on the procurement proposals? Although his Department has made good use of Remploy services and products, answers that I have received to written questions show that the Wales Office, the Scotland Office, the Northern Ireland Office, the former Department for Education and Skills, the former Department for Constitutional Affairs, the Cabinet Office, the Department for Culture, Media and Sport, the former Department of Trade and Industry, the Foreign and Commonwealth Office and the Treasury did not make any use whatever of Remploy products and services. What is the Secretary of State doing to encourage his Cabinet colleagues in those Departments to make use of Remploy services and products and guarantee that their Departments play a role in helping Remploy meet its procurement targets?
Let me express my gratitude for the hon. Gentleman’s support for the primary objective of putting more disabled workers into mainstream employment and of sustaining a viable, supported employment network.
The hon. Gentleman asked about what other initiatives I am taking in respect of other Departments. Officials and trade union representatives are going to each Department to see what is possible. A range of Ministers has helped with that, and we are going to take it forward. He asked whether the 20,000 disabled people—that represents a quadrupling of the number that Remploy will help into mainstream work—will be at risk if the ambitious plan is not realised. The answer is no: that part of Remploy’s funding is protected. We have already committed an average of more than £111 million per year of the £550 million to subsidise Remploy for the future. There will also be modernisation funding of more than £100 million to help, particularly with the transition; substantial amounts of taxpayers’ money is rightly going to help some of our most vulnerable disabled employees.
Of course I will respond to local concerns. The hon. Gentleman will have noted that I mentioned both Brynamman and Ystradgynlais, proposals for which have been put to me. The hon. Members for Carmarthen, East and Dinefwr (Adam Price) and for Brecon and Radnorshire (Mr. Williams) have already made their own plans and we are happy to talk to them about the future. However, I do not want to give false optimism; my announcements today are based on a credible plan, but a very ambitious one. Of course, we will co-operate with anybody who wants to do so about alternative options.
The hon. Gentleman asked about time scales. The proposals will kick in pretty well immediately from 1 December. However, the new funding and arrangements have to come in by the end of March, when the £555 million cost envelope over five years begins.
Finally, let me point out what would happen if we did not take these steps. By the end of the five-year plan, we would be looking at funding Remploy with an additional £60 million. That is equivalent to a substantial part of our specialist disability programmes—Workstep, access to work, work preparation and job introduction. To find that money, we would need to deprive almost 20,000 disabled people of support from those programmes. There are tough choices involved. However, I believe that this plan is the best available, and I will work with anybody to improve it.
Is the Secretary of State aware, as I am sure he is, that anybody who visits a Remploy factory is drawn to the immediate conclusion that it is a place where people go to work who would otherwise never get to work—some of them, although not all—because it is part of an extended family? Those people are also members of a trade union, which is as important today as it has always been. He said that he is going to talk to the Scottish Parliament, the Welsh Assembly and all these others, but will he go further? An instruction needs to go out to every Remploy management. Most of them are pathetic, as he knows. They have to be told to meet local authorities such as Derbyshire county council, Nottinghamshire county council and others in the area to try to save the two factories at Pinxton and Mansfield. If he will take those extra steps, I am sure that they will be able to come up with even more procurement, and the result will probably be to save another 200, 300 or however many hundred jobs.
I very much appreciate and echo my hon. Friend’s passionate support for Remploy workers. I first met Remploy workers some 17 years ago in my constituency. The Neath plant has subsequently merged and moved to Baglan, but I work closely with it. He rightly says that there is an extended family atmosphere, which is very precious, and that they are trade union organised, which he, like me, welcomes. As I said, we have already been in touch with the Administrations in Scotland and Wales, who have promised to do what they can, but every local authority, health trust, health authority and local education authority should look to do what it can. I cannot promise that the Mansfield and Pinxton factories will remain Remploy-badged factories, but there is interest in at least some of the staff transferring, and I will consider all credible options. However, I must not mislead anybody. It will be tough to keep the existing 55 sites open, and we must all concentrate on reaching that ambitious target. If there are other options for those sites, such as being transferred or taken over, we will do our best to help to achieve that.
The Secretary of State did not make clear the basis on which it was decided to save some factories from closure but not others. Having visited the factory in Bradford, I can tell him that many people there are very concerned at the prospect of its closing. A lot of them have worked there for many years, and while some may be able to find jobs in mainstream employment, very many will not, and those who do so may not stay for long. I hope that he will think again about the Bradford factory, which serves a very important social purpose for those people. None of them wants to sit at home and get their money—they go there because they want to do something worth while.
I appreciate the case that the hon. Gentleman makes on behalf of the Bradford site, as I do the case made by every hon. Member on behalf of their local site. We explored every available opportunity, as did Remploy. In the process of doing so, we managed to save an additional 15 factories, and there have already been discussions involving 10 of the others due for closure. I can only repeat that if a credible option comes up we will help to support it, and I urge everybody to get behind making this plan work.
Perhaps I should now deal with the point made by my hon. Friend the Member for Bolsover (Mr. Skinner). Yes, I do want managers to go out and do what they can. As I said, that has not been happening properly or with sufficient vigour and expertise over the years, which is why we have ended up where we are. Nevertheless, I cannot promise the Bradford site any other future than the one that I have announced to the House.
My right hon. Friend mentioned factories several times in his statement. He will be aware that I have already made several representations on behalf of a place of employment in Fforestfach in the constituency of my right hon. Friend the Member for Swansea, West (Mr. Williams), where 30 of my constituents work. It is an anomaly, in that it is not a factory but a shared service centre. Unfortunately, it does not appear on any of the closure lists or other lists that have been published. My constituents are very concerned about their jobs. They have been doing a sterling job in purchasing, paying bills, auditing and accounting. I would like reassurance on their behalf that they will be given the same consideration as those in the factories, because their jobs are equally important.
I agree with my hon. Friend. She has made strong representations to me and to my right hon. Friend the Member for Swansea, West (Mr. Williams) about the shared service centre. She will see from the documentation that it is scheduled for merger, with some of the staff being transferred to the nearby site at Baglan. We will look closely at her representations, but I cannot promise any different outcome at this stage, as we had the discussions only a couple of days ago.
I am especially concerned about young adults with learning difficulties. Does the Secretary of State agree that they need and deserve access to training and employment, because they are vulnerable adults and it is vital for their self-esteem and self-confidence that they get this help? He said a lot about physically disabled adults, but what is there in the measures that he announced specifically to assist young adults with learning difficulties who need this assistance so badly?
Our objective is to continue to work with young adults with stress or other forms of perhaps more serious mental illness, and those with a range of learning difficulties, to move them off incapacity benefit into mainstream jobs. We have been pretty successful in doing that. The hon. Gentleman is right that they need help, especially the young adults. That is why, earlier this week, we announced new programmes to support under-25s in moving off incapacity benefit—the stock of under-25s rather than those recently applying—and to reduce the numbers on incapacity benefit to significantly below what they are even now. He will know that over the past four years we have reversed the trend that started under the Conservative Government, when the numbers on incapacity benefit trebled, by reducing those numbers. In the past four years, some 120,000 people have come off incapacity benefit—the first time that this has been turned around. More and more people will do so, including those with stress, a mental illness or some form of learning disability.
This will be a very sad day in Plymouth, which has one of the factories listed for closure, where 35 people currently work. I understand that 21 of those people are looking for alternative employment, and I hope that they will soon join the 93 who have been found employment locally since April this year in local Remploy services alone; there are a lot of other help services in Plymouth. It has already been agreed that four or five of them will go to Pluss—a sheltered workshop that has, by diversifying, done exactly what Remploy should have been doing all these years. May I invite my right hon. Friend, along with my hon. Friend the Minister with responsibility for disabled people, to visit Pluss, to give assurances that there will be employment and a place for all those 35 people, and to see how that award-winning factory operates so that he can draw on that experience when he works with Remploy to take these matters forward?
My hon. Friend has been a fantastic champion of disabled people in her constituency and I pay tribute to the way in which she has worked with the staff concerned to try to offer people a new future; she has been hugely successful so far. We will continue to work together to ensure that there is a future for others affected. The case of Pluss is a model example of what should have been possible a long time ago, and I will look to see whether I can visit, because I have heard a lot about it from her, as has my hon. Friend the Minister with responsibility for disabled people. My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) is right—it is a good example of some of the things that Remploy should have done a long time ago.
I was pleased to hear mention of Brynamman and Ystradgynlais in the statement made by the Secretary of State. The hon. Members for Carmarthen, East and Dinefwr (Adam Price) and for Llanelli (Nia Griffith), myself, the unions, the local authorities and the work force have been working for a successful conclusion, knowing that the status quo cannot survive. Key to the issue is the Vector furniture product; without that, those two manufacturing units cannot survive. Will the Secretary of State assure me that he will intervene on Remploy to ensure that the Vector furniture product can remain with those two very effective work forces?
I am grateful for what the hon. Gentleman said, and also for the work of Joyce Watson, the local Welsh Assembly Member. She came to see me last Friday to discuss a plan that she had talked about with the hon. Gentleman and the hon. Member for Carmarthen, East and Dinefwr (Adam Price) to establish whether European convergence funding could be put to a different use, perhaps involving some sort of training facility on the Brynamman site. We are also looking at what can be done on the Ystradgynlais site, but I cannot hold out any prospect of retaining the existing furniture work distributed between those sites, because that would put at risk the Baglan site—a new, state-of-the-art facility that I opened a few years ago. The matter needs more work as a result of the problems that have built up, but let us see what we can do in respect of those two sites outside the Remploy network.
I thank my right hon. Friend and my hon. Friend the Minister with responsibility for disabled people for the work that they have done to address this difficult issue. Will my right hon. Friend advise the House on whether mainstream work remains the prime objective of employment policy on disabled people and on whether supported employment should be seen, wherever possible, as a stepping stone to mainstream employment, rather than an end in itself?
I agree with my hon. Friend and I pay tribute to the work that he has done throughout the country and in the House to advocate increased rights and opportunities for disabled people. He has talked to me about his ideas and they are admirable. I agree that mainstream employment is a major objective of the whole of Government policy towards disabled people, and we want to see supported employment where it can be a stepping stone into mainstream employment. We are putting huge resources into Remploy over the next five years—more than £0.5 billion pounds—and there will be a vital role for supported employment. When it comes to supporting people in getting into mainstream work, Remploy’s employment services and factory network must work hand in hand.
As the other Member in this House who represents Brynamman, I am extremely disappointed with the Secretary of State’s statement. Why is it that the factories in Brynamman and Ystradgynlais, which produce a profitable product line, should be closed to make up for a shortfall in orders elsewhere in the Remploy group? The offer of the transfer of ownership is an empty one unless a product line comes with it, because a factory without a product line is simply not a credible business option.
I do not accept that the two factories are viable, because they would not be candidates for closure otherwise. We have gone through all the different criteria that we have applied and the hon. Gentleman is simply wrong: those are not viable factories. I wish that they were, as I have constituents who work at both of them and they have come to talk to me about them. I know the plants well; I have visited both. However, instead of adopting the stance that he has, I would urge him to work for a future for the site in his constituency, as many other hon. Members have done, including my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy). The best future is to ensure that this plan works and to see what we can do with the existing sites and their workers.
I should like to express my disappointment at my right hon. Friend’s response to the hon. Members for Brecon and Radnorshire (Mr. Williams) and for Carmarthen, East and Dinefwr (Adam Price), and to beg him to reconsider the idea of the product. While Baglan is ideally situated to provide a training centre that can do everything we want to get people into other employment, there is no doubt that if we have a product that is successful and is making a profit, in an isolated valley community, it does not make any sense for a third party to take over without having the option of making that product. I would like my right hon. Friend to reconsider what he has said and see whether there is any way in which that product can be taken over if we find a viable third-party group that can do so.
I am afraid that I have to disappoint my hon. Friend. To tell it absolutely straight, I have constituents in both of these sites; I know them, and I tried my very best to save them both. But no Remploy site anywhere in the network is profitable. The network needs a huge subsidy, as it has had in the past, which is right, because we are talking about supported employment. I wish it were otherwise, but those two sites are not viable. If we tried to keep them open, they would pull down the rest of the network, including those working in the furniture area at Baglan as well. Having had Ystradgynlais and Brynamman in mind, which are remote from the Baglan site up at the top of the valleys, we have made additional transport cost support available where necessary, and I hope that that will help. I hope that my hon. Friend noted that.
We agree with the principle that as many people as possible need to be encouraged into mainstream work, but can the right hon. Gentleman reassure me that support will be in place for vulnerable people who may have been working at factories for a very long time and for whom closure or even merger, which represents longer journey times, will pose significant difficulties? Will he give some more detail on the specifics of skills and counselling advice that will be given to those people?
May I say to my right hon. Friend that many of us appreciate that he has had a most difficult job in dealing with this situation? I thank him and my hon. Friend the Minister with responsibility for disabled persons’ rights for the sheer sensitivity that they have applied to this extremely difficult situation. It is important that my right hon. Friend continues to work with management, and Mr. Russell has made a substantial contribution; in many ways, it is a great pity that he was not there earlier. The role of the trade union movement is extremely important because it understands that for many people, working in Remploy is therapeutic.
Finally, will my right hon. Friend join me in congratulating my hon. Friend the Member for Motherwell and Wishaw (Mr. Roy) on his outstanding representations, which have meant that the Lanarkshire factory has been retained and that training will take place? Given the support of the Lanarkshire community for Remploy—I am sure that such support is present elsewhere—we welcome that decision in what is an extremely difficult situation.
I am grateful for my right hon. Friend’s support and for what he said; the situation has been very difficult. I think that we have the best possible outcome, and I congratulate my hon. Friend the Member for Motherwell and Wishaw (Mr. Roy) on the work that he has done in his constituency. That is a model of what needs to be done in such circumstances, and I urge others with local concerns to look at it.
The Remploy factory on the west side of Edinburgh at South Gyle is not down for closure. Will the Secretary of State take on some concerns expressed to me by employees there? One is that all Remploy factories struggle to be viable because of the central, top-heavy management costs that have been distributed throughout the entire network. Secondly, while there is a push to get many employees into mainstream employment, many struggle. For example, those who use sign language can do a mainstream job, but are isolated if they are the only such person in their workplace.
The hon. Gentleman makes some good points, to which we are extremely sensitive. He will have noted that I said that management costs are to be reduced by a quarter, which is a pretty substantial amount. I also said that I wanted better management. The new chairman, Ian Russell, who was appointed earlier this year by my right hon. Friend the Member for Barrow and Furness (Mr. Hutton), has proven to be outstanding. He has won the confidence of trade unions so they feel that they have someone who is driving forward the best possible plan. We wish him all the best.
Will the Secretary of State say what decision he has made on the Remploy factory in the Wirral? Will he clarify the conditions for workers moving from secure employment to the private sector? Are we right to conclude that they will never suffer pay cuts or cuts in pension entitlement throughout their working lives? Although everyone in the House wants the Government’s programme to be a success, sometimes successes are more difficult to achieve than we realise at the outset. Will the Secretary of State come back to the House in a year’s time so that we can consider how performance has matched his high hopes?
The conditions that Remploy workers who are unable to continue to work for the company will enjoy are unique, as my right hon. Friend has noted, and final salary pensions and salaries will be maintained. We have built in a monitoring mechanism. I am certainly happy to report on where we are, in writing or orally, in a year’s time.
May I first congratulate my right hon. Friend the Secretary of State on his statement? It was an extremely difficult statement to make, as hon. Members and hundreds of Remploy employees today had the final confirmation that their factory is to close. I am in the fortunate position that the factory in my constituency, the Aberdeen Remploy, is to be saved. My right hon. Friend did not read out the list, but I hope that it still is.
My right hon. Friend made a number of references to changes in management. That is crucial. One of the most serious criticisms of the way in which Remploy has been run concerns the quality of the management. Management needs not only to be cut, but to be improved, too. Extremely difficult targets have been set, and I for one do not want to be here in three or four years’ time after we have gone through another similar process.
Remploy management have been particularly deficient in centralised purchasing, as the hon. Member for Edinburgh, West (John Barrett) mentioned. Since we launched the campaign to save our Remploy factory in Aberdeen, we have encountered a huge response from the local community and local businesses. “Local, local, local” is a strong marketing tool.
I very much welcome what my hon. Friend has said, and the work that he has put in to get new work for his factory, including from the oil industry. Aberdeen will remain open, partly because of the work that he has done.
Let me clarify my earlier point for my right hon. Friend the Member for Birkenhead (Mr. Field), because there is a long list of factories involved. Birkenhead CCU will merge, but Birkenhead factory will stay open.
I am glad to hear that the Treforest site is now off the list for immediate closure. Will the Secretary of State say a little more about that? Would it not be a better idea for Treforest to become a social enterprise, perhaps with help from the Welsh Assembly? It could move into a new factory and not work under the badge of Remploy, but retain its contracts. Instead of making table tops in south Wales, taking them all the way to Sheffield to put legs on them and then bringing them back down to Wales to sell them, would it not make sense to make a complete unit in south Wales? What on earth has Remploy been doing, buying tables from Complexia which is not a disabled company?
I understand my hon. Friend’s points. Treforest is on the list for closure and will remain so. I am happy to confirm to my hon. Friend that I have had expressions of interest from two Welsh Assembly Government Ministers—the local Assembly Member, Jane Davidson, and the deputy Minister concerned, Leighton Andrews—to consider whether the Assembly Government can help to give Treforest a viable future. As my hon. Friend says, it will operate under a badge other than Remploy. If that is possible, we will facilitate it if we can.
I appreciate the endeavours of the Secretary of State and the Under-Secretary of State for Work and Pensions, the hon. Member for Stirling (Mrs. McGuire), who has responsibility for disabled people. However, I am greatly disappointed by the decision on the Barnsley factory, which is in my constituency. It is listed as a merger with Sheffield but it is in effect a closure because Sheffield is a good distance from Barnsley and many people from that factory will not travel to Sheffield. In Barnsley, we have a high level of people on incapacity benefit and probably a larger number of disabled people than any other metropolitan borough. There will be little chance of finding those people jobs in the mainstream. Will the Secretary of State consider reviewing whether factories should be kept open in areas such as Barnsley, which have high levels of incapacity benefit and disability? In such situations, there is a need to keep supported employment. Will he review his decision? The factory in Barnsley has started to improve, and I ask him to give us the opportunity into the next year to see whether we can build on that improvement and retain the factory.
I am afraid that, much as I would like to, I cannot give my hon. Friend the assurance he seeks. He came to see me a few days ago with colleagues. Much as I would like to keep the Barnsley factory open, along with the others that are due for closure, to do so would pull the whole lot down. That is the problem. In the Jobcentre Plus district that encompasses Barnsley, 580 disabled people secured employment in the first six months of 2006-07. It is possible to see a future for his constituents, and I hope that we can work together to achieve that.
In Sheffield, we have an excellent modern Remploy factory that has not been threatened with closure, but my concern whenever I have been to visit is that it does not appear to be working at anything like full capacity. The complaint that is heard over and over again from trade union reps and employees is about the several multi-tiered levels of management and the lack of focus in management on getting in high-quality, high-value work. The Secretary of State has given assurances on a national level about reductions to management costs and refocusing. Will he assure us that there will also be local discussions between management and trade unions, so that there can be agreement between them to work together to ensure that we get in the extra work that is needed to keep the proposals on course?
I agree with everything that my hon. Friend has said. To visit a factory such as his—many others are like it—that does not work at its full capacity and where working practices have not been of the current age, to put it diplomatically, has often been as much of a disappointment to the employers as it has to everybody else. He will see in the detail that Remploy will be restructured and reskilled from top to bottom, led from the top by the chairman, Ian Russell. We are determined to get a modern, viable Remploy network, of which the Sheffield factory will be an important part.
I thank my right hon. Friend for listening to the powerful arguments put forward by the work force at the Ashington factory and lifting the threat of closure. That has been welcomed by the whole work force. The Ashington factory is the only facility of its type in Northumberland. However, although it is an excellent site, it is much underused. Would my right hon. Friend consider expanding the Ashington site and making it a centre of excellence for training, allowing not only disabled people but able-bodied people and apprentices to use the facilities?
I thank my hon. Friend for what he has said and for his constructive suggestion. I agree that it has been a source of frustration. I visited his constituency, although not the site, earlier this year. He lobbied me most strongly on the matter. It is a source of frustration that the maximum potential for Remploy sites has not been developed. Ashington is a good example, as the training dimension could be so developed.
It would be churlish not to accept that there has been significant progress under the stewardship of my right hon. Friend and his ministerial team, not forgetting the terrific campaigning work carried out by the trade unions. However, Glasgow’s Hillington factory is still under threat of closure. If there are talks with third parties, will my right hon. Friend allow reasonable time for those discussions to come to fruition? If and when the factory is closed, will he assure those who want to stay in the Remploy family that they will be allowed to transfer to other Remploy sites that are close at hand?
Yes, of course, if it is feasible for transfers to take place, they will. I applaud my hon. Friend for his work to secure alternative opportunities, about which he is in discussion. That is why I mentioned his site of Glasgow Hillington, for which we are looking to provide a secure future. I want to place on record, as my hon. Friend has, my appreciation of the work of the trade union movement. It has made life difficult for the Government, but that is its job, and it got a much better plan out of it. The trade unions did not get all they wanted—I did not get all I want; it is not possible—but a much better outcome was secured through the pressure that they applied.
I thank the Secretary of State for the decision to keep the Wrexham factory—the only such factory in north Wales—open, in response to the tremendous local campaign that Councillor David Bithell led. Union representatives Dennis Morgan and Ray Lonsdale also played an important part. I am anxious about the local stakeholder groups, which I want to be taken forward as powerfully as possible. May I therefore invite the Secretary of State to chair the first meeting of the Wrexham local stakeholder group, of which I expect to be a member, as soon as possible?
I appreciate the work that my hon. Friend, local councillors and others that he named have done, which helped persuade me that the Wrexham plant has a viable future simply because it has so much energy behind it. However, it is still important to lever in more public and private procurement, and I know that my hon. Friend will do his best through the stakeholder group to achieve that, and we will support him. I cannot promise to chair the group’s first meeting. If I visit his constituency, as I have done from time to time, I will see what I can do, but I do not want to mislead him about that.
The reason that my right hon. Friend has not heard from me or my hon. Friend the Member for Erith and Thamesmead (John Austin) is that we are not yet in a position to approach him with a project for the Woolwich factory. In our discussions, it has come to light that the cost of the site to the freeholder is £24,000 a year, but it shows up as £140,000 in the Remploy budget for Woolwich. There is more to investigate regarding the Woolwich factory. Remploy has said that it will lay on a bus to take workers from Woolwich to Dagenham, which will take approximately an hour on top of the journey that factory workers have to make to Woolwich to get the bus. The cost is likely to exceed the costs of the site, as described by the freeholder. We believe that more is to be had from the site and that more investigation is needed. May I urge my right hon. Friend to give us a little more time so that we can approach him with a project to salvage the site, if possible? It looks as though it will cost Remploy more to effect its plans than to keep the site open.
I do not think that that is right, but I shall obviously look into the figures that my hon. Friend cited. As in other areas, 300 disabled people were placed in mainstream work in the Jobcentre Plus district that includes his constituency and the Woolwich plant in the first six months of last year. There are opportunities out there, and we will work with those who do not want to move to the alternative site with which Woolwich is merging. I know, because my hon. Friend has spoken to me about it, that the time problem is serious. If there is an alternative—if the local borough council or anyone else can help provide an alternative for the site, albeit not under a Remploy badge—of course, we want to help facilitate that.