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19 July 2006 : Column 120WH—continued

I return to the matter of the London orbital railway. My hon. Friend the Member for Battersea and other hon. Friends made powerful cases about the levels of deprivation and unemployment in London, which many people do not realise. The Government certainly do, and we see benefit in providing a transport infrastructure in places for which regeneration is a huge opportunity. We see the benefit of the orbital network relieving congestion, and alongside orbital services we must recognise the need to maintain journeys on the
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radial routes into London as journeys on those services are also vital to the economic well-being of London.

We must also recognise the importance of allowing freight traffic to serve London and pass through its rail network from, among other places, the channel ports. My hon. Friend made a powerful case but nearly lost me when he appeared to suggest that freight from the channel ports should not come through London. Perhaps he momentarily forgot that I represent a constituency that is a channel port and that many of my constituents are employed in putting freight on a line that comes through London.

Martin Linton: I am suggesting not that freight should not pass through London to reach its destination but that it might benefit the channel ports and London if there were a simpler route. There was at one time talk of a tunnel under the Thames at Shell Haven to allow freight from the channel to reach the rest of the country without having to use the congested and clogged railway lines of London.

Dr. Ladyman: My hon. Friend is right that freight currently has to pass through London. Maybe in the future we can find simpler and more straightforward ways to move freight around. The hon. Member for Epsom and Ewell (Chris Grayling) pointed out that dilemma, but the difference between him and the Government is that we are making investments that will allow us one day to deal with that problem, whereas I suspect he has no intention of even thinking about such investment.

On 14 February this year we announced the transfer of responsibility for the management of the rail services collectively known as the North London railway to Transport for London. That transfer will become effective from November 2007, from when TFL will be responsible for the franchising of passenger services that are currently operated by Silverlink. It will be responsible for the management of the franchise—or as I understand it intends to call it, the concession—and the financing of future enhancements. Those matters will need to be judged alongside other TFL priorities. It is important to pause and reflect on what that means: that a London organisation, answerable to London politicians and therefore to the people of London, will be deciding the priorities for London, rather than national politicians such as myself trying to second-guess them. That is an important step forward.

Of course Network Rail will remain the owner and operator of the track infrastructure, and the agreement that we have struck with Transport for London does not change the status of that ownership. As part of the handover process, TFL has named the four bidders that pre-qualify to tender for services and it will soon issue invitations to tender. Services under its control will include Gospel Oak to Barking, Stratford to Richmond and Euston to Watford Junction. TFL’s aspiration is four trains an hour on each of the core routes and significantly greater frequencies on some sections, especially at peak times.

Although the scheme has not yet been committed to and is subject to agreement with Network Rail on the
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availability of paths on the route, TFL also plans significant station upgrades and a fleet of new trains. Two new stations on the West London line—Shepherd’s Bush and Imperial Wharf—are planned to open in 2007, with four new stations being added as part of the northern East London line extension.

I say as an aside that my Parliamentary Private Secretary, my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Slaughter), who is here with me today, has reminded me how useful it would be if there were an additional station on the West London line in his constituency, linked to Crossrail. I must tell him that we cannot always get what we want, but I know that he intends to campaign hard on his idea.

The 60 existing stations, including those south of New Cross Gate, will be cleaned, renovated and upgraded. All the changes are being made possible by the record level of investment in London’s transport infrastructure facilitated by TFL’s five-year investment programme and the funding settlement reached with the Government for the period 2004-05 to 2009-10. The first phase of the North London railway infrastructure enhancement is expected to be completed by early 2011, and it will be in good time for the Olympics. Used properly, the North London line has the potential to be a vital radial route around a wide arc of north London, shortening journey times for those travelling across London and relieving congestion at the central London terminus stations.

However, when considering such services we must also be aware of the important role that the North London line has for freight and the contractual rights that freight operators have on it and on other routes. The North London line is part of the main route between the major east coast ports, Felixstowe and Harwich, and the west midlands and north-west. The route has been cleared to allow larger containers to operate along it, with the aim of maintaining rail’s modal share as the container market changes. Any changes to passenger services must be considered alongside freight requirements, and we know through work with TFL and Network Rail that the requirements of freight operators have been a major issue in identifying the infrastructure requirements to deliver enhanced services on the North London line. That probably answers the question posed by my hon. Friend the Member for Battersea about why the extension of the line around Highbury and Islington and Canonbury, although it is only a short stretch of line, is so much more expensive than the other parts of the enhancement. It is because of the need to provide extensive signalling and other work to meet the needs of freight traffic and those using the interchange between the two lines.

We have not ruled out the further devolution of franchising powers, and we will need to consider it on a case-by-case basis. We need to be mindful of the synergy between London’s services and those further afield in any decisions that we make, and understand the impact on issues such as performance that may be the result of such decisions. The hon. Member for Epsom and Ewell pointed out the problems that would be caused if the Mayor were to make decisions on commuter trains stopping frequently in London and the impact that that would have on the hon.
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Gentleman’s constituents and mine. We would clearly need to engage with the Mayor on that matter, but it is sensible that he is allowed to make suggestions about the need for trains to stop at particular interchanges so that people can take an orbital route around London rather than having always to come right into the centre and travel out again. It is a matter of getting the balance right and listening to the Mayor’s ideas rather than allowing him to dominate the decision-making process.

TFL has not taken over the franchising role for the north London railway, so we shall have to assess how that project develops in the coming years. Orbital services will be significantly enhanced in 2010 when the East London line extension phase 1 opens. That project will link the rail network north and south of the river to the east of the city and provide, for the first time in a number of years, regular and fast journeys between north, east and south London, with services between Dalston in the north and west Croydon and Crystal Palace in the south. Journey opportunities will be significantly enhanced by opportunities for connections with existing services. Preparatory infrastructure works to facilitate the extension have commenced and as part of them Shoreditch station recently closed.

The planned and committed investment in enhancing London’s orbital rail network up to 2012 is in excess of £1 billion. The Department is aware of further aspirations for enhanced orbital services: the East London line extension phase 2, as mentioned by my hon. Friend the Member for Battersea, would provide further orbital journey opportunities, but it is not funded within TFL’s current business plan and I am afraid that it is not expected to take place until after 2012. I am of course aware of the representations that my hon. Friend has made to my ministerial colleagues on that project and the importance that he places on it, and the Government will consider the funding of such enhancements as part of the next spending review, and in TFL’s submission to the Department if it TFL proposes it.

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4 pm

Mrs. Linda Riordan (Halifax) (Lab/Co-op): I am delighted to have secured this debate, in which I, and many of my colleagues, can put my concerns directly to the Minister. My worry is that the current review of Remploy could take the shine off many of the good things that this Labour Government have done for the disabled, including the Disability Discrimination Act 2005. I am pleased that complete shutdown has been ruled out, at least for now, but any new five-year plan for the business must have the needs of employees at its centre. Work must be done with the trade unions that are close to the organisation and that can offer help and support.

There are many misconceptions about disabled people, among them the notions that, because their bodies do not work as normal people’s do, they cannot cut it in the world of work, and that their work is unimportant. I am concerned that nearly 40 disabled people employed at the Lightowler road factory in my constituency, and many other disabled Remploy employees across the country, may lose their jobs as a result of the Government review of Remploy. Many of the workers are suffering from great stress because of the uncertainty about the future of their workplace, and there has been insufficient dialogue between management, workers and the unions. Remploy’s management needs to consider how best to become more efficient. I am sure that it knows that its relationship with its employees and local communities is very special.

Mr. Jim McGovern (Dundee, West) (Lab): I am sure that my hon. Friend has had a chance to read at least part of the report, “Remploy—Review of Future Business Options”, which was published only a couple of hours ago, and I am sure that she will be aware that the trade unions are calling for the management structure to be reorganised; they regard it as top-heavy. Page 39 of the report says that substantial savings could be made through a restructuring of the management. Does she agree that that would be a good place to start, in re-evaluating Remploy?

Mrs. Riordan: Yes, certainly I do. I have had meetings with the relevant trade unions this week, and I have managed to read much of the document published today.

We must do all that we can to protect and develop the relationship between Remploy and the communities. In a letter written to me in April, the chief executive of Remploy, Mr. Bob Warner, welcomed the review, because he believes that it is time for strategic change at Remploy, but many, including me, believe that major changes have been taking place. They include the introduction of the Interwork scheme.

David Taylor (North-West Leicestershire) (Lab/Co-op): My hon. Friend mentioned that the trade unions are quoted extensively in the report. Has she had an opportunity to look in detail at Remploy’s scenario 3, which is its alternative business plan? I believe that a CD has been sent to all MPs, and it makes a powerful case for an alternative way ahead for Remploy that
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does not involve factory closures on the scale originally envisaged. Not least, that could involve developments in the service sector similar to the arrangements used by Tesco in some of its midlands Express stores, where as many as 40 per cent. of staff are contracted through the Remploy service arm. Is not that a possibility?

Mrs. Riordan: That is a very realistic possibility, but it is early days for those schemes, although we must keep them under consideration. However, we must retain the sheltered work schemes, too.

It is the senior management’s role to review and increase productivity wherever possible, but not to the extent that it undermines the whole ethos of Remploy, a business built on a history of caring and supporting its most valuable resources—its employees.

Mr. Mike Hancock (Portsmouth, South) (LD): The hon. Lady will certainly have my support and that of all Remploy employees in the Portsmouth factory. The Minister has said that she would give adequate time and funding to allow the changes to be considered properly, but does the hon. Lady agree that in some instances that could be a fairly lengthy period? I hope that the hon. Lady will agree that we must avoid a concertina time frame that would destroy any real sense of consultation.

Mrs. Riordan: I thank the hon. Gentleman, and I shall cover that point later. Any changes must be made in consultation with the employees and trade unions.

I will list the reasons that Mr. Warner gives for his welcome of the review. First, he rightly points out that Remploy has proven that Interwork, a specialist recruitment agency, can deliver jobs in ever greater numbers, and at a cost that provides excellent value for money for the taxpayer. However, money should not be the only issue. A recent survey carried out by my local paper revealed that an overwhelming majority supported retaining Remploy at the taxpayers’ expense.

Ms Katy Clark (North Ayrshire and Arran) (Lab): Does my hon. Friend agree that one reason why there is a great deal of public support for initiatives such as those introduced by Remploy is that there is recognition among ordinary people of how difficult it is for people with disabilities to gain employment in other workplaces? All of us would like a wide range of employment options to be available to people with disabilities, but unfortunately that is not the case at the moment. Does my hon. Friend agree that that is why schemes such as those run by Remploy must be supported, and must continue for as long as they are necessary?

Mrs. Riordan: That is the ideal, and we will strive to achieve it, but it is a long-term plan, so we must retain sheltered work places.

Secondly, Mr. Warner argues that unemployed disabled people have said that they prefer to work in mainstream employment, rather than in a sheltered factory. Although that is true in many cases, and although that is an ideal that we must always strive for—the Interwork scheme is successful in that
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regard—it is not always possible for a disabled person to be employed in anything other than a sheltered environment, or indeed to find employers who will take them on. Not all factories and workplaces are disabled-accessible.

Mr. Warner goes on to say that many of Remploy’s businesses are in declining sectors, where the loss per person is high and the work experience of the individual is unsatisfactory, either because of idle time or lack of opportunity to develop marketable skills. I understand that statement, and I understand the dilemma, but new factories and businesses can and should be started in partnership with Government at local, regional and national level. I would go as far as to say that the board of Remploy should agree on an expansion plan in areas that show development potential.

However, the management of Remploy could do even more. It is clear to many, especially those closest to the organisation, that there are management issues that need to be addressed. It would be possible to reorganise the 10 Remploy organisations into three, making them more efficient and streamlined. Further changes could be made; for example, why does Remploy sell wheelchairs to another organisation, but not sell direct? Remploy produces excellent quality products in its 83 factories, and it should do much more to promote its products, instead of aiming to change its core business. The products need to be better marketed and sold directly, if appropriate. Every effort should be made to work with the workers’ trade unions and with management to develop the business, in order to avoid cuts and reductions that make the business less productive overall. Interwork has benefits, but many of its jobs are short term and in non-unionised work environments; that is not what I would expect for vulnerable staff who need as much protection as possible.

Mr. Warner argues that 80 per cent. of the grant that Remploy receives from the Government supports jobs in Remploy’s own businesses, although more than 80 per cent. of the jobs that it creates are in mainstream employment, through Interwork. Some £90 million of the grant that it gets from the Department for Work and Pensions is used to support factories. That means that about one quarter of the DWP budget for the employment of disabled people is spent on just 5,000 people. That cannot be the right use of resources, Mr. Warner says.

Although that may be the case—I and others dispute the figures—the basic point is that not all employees are able to work in the mainstream, and they should not be thrown on to the scrapheap because of employment challenges. There must be a place for the sheltered environment, and taking that option away from communities throughout the country is not the way forward.

Unfortunately, all of Mr. Warner’s arguments and statistics are better used as illumination rather than support. Many calculations and figures are supplied by the failing Audit Commission, and the fall within the “How long is a piece of string?” category. It is possible to alter the cost per head for Remploy from under £10,000 to more than £20,000 depending on what is included in or excluded from the per head calculation, such as sites, costs from third parties and income from
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other enterprises. Some people have even suggested a figure of more than £40,000. Surely, no one can take that seriously. I certainly do not. Workers should not suffer because of management’s inability to run a business. The simple message that I want the debate to convey is that Remploy is a major company, producing real goods and services and providing real jobs. “Real jobs for real people”, as the company likes to say.

The company was started in 1945 to provide work for war-disabled ex-servicemen and servicewomen. It is now the biggest employer of disabled people in the country, with 5,700 people in 83 factories at locations including just about every decent-sized town and city in Yorkshire. Remploy is in textiles, furniture, health care, electronics, mechanical assembly and other manufacturing sectors. It is run like any other business, on a commercial basis, competing for contracts on the open market. In Halifax, 30 people work in a purpose-built factory in Lightowler Road, where there is a long and proud tradition of bookbinding for universities, hospitals and libraries, including the British Library. Until recently, Hansard was bound in a Remploy factory. It is a tradition that I would like re-established.

Remploy in Halifax is due to celebrate 60 successful years next year. I hope that those celebrations go ahead and do not simply represent a further decline in Remploy’s employment in Halifax. There is a difference between Remploy and other companies, which Remploy calls “the paradox”. The firm exists to employ severely disabled people so that they can live independent, worthwhile and self-supporting lives. At the same time, Remploy has to operate efficiently and compete in the commercial world. It is a tall order.

Jim Sheridan (Paisley and Renfrewshire, North) (Lab): Does my hon. Friend accept the proviso that although Remploy requires Government support, there is also a role for local companies in buying Remploy products, such as textiles? In my constituency, companies such as Rolls Royce and Glasgow airport purchase uniforms for their employees, and I should like those companies, as well as the Government, to support Remploy.

Mrs. Riordan: I agree. The problem is marketing, and it is not done efficiently.

Many people employed in Remploy’s purpose-built factories might not be able to find work anywhere else. What Remploy offers is critically important to them. It is perhaps the difference between a life of tedious struggle and a life worth living. For many working in the factories, the alternative is a life on benefits, which costs national and local taxpayers more than it does to keep them at work. I have seen no mention of that in the report published today.

Mr. Jim Devine (Livingston) (Lab): We should consider not only the financial but the emotional aspect. People have something to get up and get dressed for in the morning, they meet friends and colleagues and they establish a social network. That could also be lost.

Mrs. Riordan: I agree. As I said, it is the difference between a life of tedious struggle and a life worth living.

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In the commerce-dominated world in which we live, those merely human considerations may end up taking second place. Until then, everything humanly possible should be done to keep Remploy alive and working.

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