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Fisher Frozen Foods

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sutcliffe.]

7.2 pm

Mr. Henry Bellingham (North-West Norfolk): I should like to thank Mr. Speaker very much indeed for granting this debate on the situation at Fisher Frozen Foods. I raised the matter under Standing Order No. 24 a week ago and asked him for an emergency debate, which was understandably turned down, but I am grateful to him for awarding me this debate. I should also like to thank the Minister for coming here to respond. I point out that the hon. Member for North Norfolk (Norman Lamb) is going to say a few words, which has been cleared with the Minister's office, and the hon. Member for Banff and Buchan (Mr. Salmond) would also like briefly to speak, as his constituency is obviously affected by the receivership of the Albert Fisher Group plc.

It was announced on 23 May that the Albert Fisher Group had collapsed into receivership. KPMG was appointed by the banks with instructions to sell off the various individual plants as going concerns if that were possible. One of the biggest plants was Fisher Frozen Foods on the Hardwick road in my constituency. The factory had been operational since the mid-1960s and employed more than 400 people. Its main business was processing, sorting, packing and freezing various vegetables, but in particular, it dealt with peas, beans, carrots, cauliflowers, rice and French fries. Indeed, one in four of all frozen vegetable packs in UK supermarkets were processed at the plant.

KPMG moved into the factory and gave two weeks to find a buyer for the company as a going concern. In spite of the receiver's efforts, none of the six parties that visited the site came up with a bid for the business as a going concern. On 16 June, KPMG dropped a massive bombshell on King's Lynn and west Norfolk when it announced that the plant would close, with the immediate redundancy of 351 employees at the firm. Frigoscandia, the neighbouring cold store, issued 84 HR1s. The pea crop in East Anglia was imperilled and many experts in the processing and packaging industry said that the knock-on effect in unemployment would be job losses at a 4:1 ratio. We were obviously faced with possible devastation throughout the locality and the prospect of unemployment in my constituency almost doubling.

When I applied for a Standing Order No. 24 debate on Tuesday 10 June, the situation appeared grim. It looked almost inevitable that the plant, equipment and site would be broken up and the factory asset stripped. I am extremely pleased to say that today the receiver, KPMG, announced that a buyer has been found for the site, the plant and the equipment. It is a Belgian company called Pinguin, which is in partnership with Frigoscandia, which owns the plant next door.

The chink of light emerged last Friday, and slightly unexpectedly. At that stage, the hon. Member for North Norfolk and I were fairly depressed. However, an announcement was made today that a deal has been completed. As we speak, Pinguin and Frigoscandia are bringing staff into the plant to start the pea processing campaign tomorrow. This year's pea harvest will be dealt with, and when the six to eight week campaign is over, I hope that the new company will turn its attention to other crops and vegetables.

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There is every chance that it will be taking on 200 to 250 employees out of the previous 400 or so. It is extremely good news that a dark cloud has been lifted. I take the opportunity to wish Pinguin and Frigoscandia every success in running the plant.

Last week, I was critical of KPMG, the receiver. I said that I felt that it had not given enough time to find a buyer of the business as a going concern. Strong language was used, and I apologise for any offence that was caused. At the time, there was a great deal of emotion in west Norfolk, with 351 people being made redundant at Fisher Frozen Foods, and another 84 next door. It was a bleak time.

I put on record now my gratitude to KPMG. Since the announcement of redundancies was made, it has worked tirelessly to try to find a buyer of the site, the plant and the equipment. The hon. Member for North Norfolk and I had a constructive meeting with KPMG. It made it clear that it would work tirelessly to try to find a solution to the problem, and to find a buyer who would continue production on the site.

I pay particular tribute to the partner in charge, Michael McLoughlin, and to his colleague who was on site conducting negotiations, Murray Stewart.

A complication set in earlier this week. It revolved round an outstanding Anglian Water bill of £228,000. In the words of the receiver two days ago, the bill was a real "deal breaker". Understandably, Anglian Water was insisting that either the receiver or the incoming buyer should clear the bill. It was in a strong position because the incoming buyer would need water to continue to run the business. There were also discharge consent charges.

The hon. Gentleman and I talked to the receiver on that point and on other matters. As a result of negotiations between the receiver and Anglian Water, a deal was done on the bill. I thank him and my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) and my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) for discussing the issue with Anglian Water. Initially, it took a legalistic view, but we managed to talk to personnel at the highest level. They understood that it was in their interests to have a thriving business on the site paying water rates and discharge consent fees rather than having no one on the site. It is a good example of a real team effort to resolve a potentially serious obstacle.

Another obstacle has arisen, on which I would like the Minister to comment. I was telephoned this morning by the senior Transport and General Workers Union steward on site, Neville Addison. He is working hard with the new owners of the company to bring in a large number of staff so that the pea campaign can start tomorrow and the business can get under way with processing.

The problem revolves around the Transfer of Undertakings (Protection of Employment) Regulations 1981—the TUPE legislation—because the staff coming in to work for the new company will have TUPE entitlement. This is a problem, because they were made redundant roughly 10 days ago, and the average redundancy payment could be anywhere between £5,000 and £20,000. That redundancy is in respect of Fisher Frozen Foods, and those people feel strongly that they should have that redundancy money because it relates to the employment that they had with that firm. On the other hand, TUPE is giving them the same rights, pay and conditions as they had before, and they will effectively be doing the same job.

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I would like the Minister to comment on that. The hon. Member for North Norfolk might also have an idea of the answer to this problem, because he is a former employment lawyer. This is a real problem, first, because the company is determined to get as many people in as possible who are experienced and have the appropriate skills; obviously, most of them are former employees. Some, however, are holding back because of the threat to their redundancy payments.

Secondly, the receiver kept 28 employees on at the plant to ensure that—certainly, to begin with—it was kept on a care and maintenance basis. What will happen to them? Will they get extra compensation as well, if the 351—or perhaps 250—people come back into the plant with their TUPE entitlement as well as their redundancy payments? On a further, smaller point, if the redundancy money is not paid and the employees come back into the plant and are entitled to TUPE protection, what will happen in relation to the eight, nine or 10 days during which they were out of work? Will they get jobseeker's allowance?

I would like the Minister to comment briefly on the employees of the company who will probably not be brought back into the operation. There will still be a significant number who, having been made redundant, will probably not have a job, and they are obviously concerned about their jobseeker's allowance entitlement, and about re-skilling and retraining. Perhaps the Minister could tell the House what his Department would recommend to help those employees to get back to work as soon as possible.

The new owners of the company have made an important and significant commitment in terms of cash resources and of the investment that they are going to make for the future. They will undoubtedly be looking at new technology and at various other forms of innovation. Perhaps the Minister could pass on to the Department of Trade and Industry the new owners' concern that they want to hit the ground running, and to find out whether they have any entitlement to Euro-grants, innovation grants or any other form of DTI grant. North-West Norfolk is not an area with any special status, but if there is any possible entitlement, it is important that the company should know about it now. All too often, in my experience of dealing with grants, I have found that if a grant application goes in once an investment has been made, it is almost certainly too late. Perhaps the Minister will comment on that important point.

The Department for Environment, Food and Rural Affairs has also had a watching brief on all this, because when the announcement was made about the closure of the factory and the redundancies, there was a real threat to the entire pea harvest of East Anglia. There was also a serious threat to jobs in agriculture, haulage and contracting. If the factory closure had gone ahead, no bidder had come forward for the plant and equipment, and the pea campaign had not been able to start in the very near future, much of that pea crop—up to 24,000 tonnes, grown over 14,000 or 15,000 acres—would probably have remained in the ground because it would have been uneconomical to harvest.

There was a great deal of national coverage of this issue, but I am afraid that DEFRA was noticeable by its silence on it. There are lessons to be learned here, because

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there are strategic implications when one crop is controlled by a small number of contractors and totally dependent on one plant, as was the case here. That would have had an impact right across Norfolk, Suffolk and Cambridgeshire. I would have liked to see DEFRA being much more proactive.

I am very pleased to have been able to come to the House for this Adjournment debate with this very good news. There is a huge sense of relief, although I have no illusions about the possible future pitfalls. I shall be particularly pleased if the Minister will be able to talk to other Departments, and to answer some of the specific questions that I have put to him. This has been a very bleak few days for west Norfolk, but a huge cloud has been lifted and we are now much more optimistic, thank goodness.

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