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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.

Mr. Philip Hammond (Runnymede and Weybridge) (Con): 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.

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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
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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?

Mr. Hutton: 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—

Mr. Hammond: Over 50.

Mr. Hutton: 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.

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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.

Helen Goodman (Bishop Auckland) (Lab): 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:

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

Mr. Hutton: 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.

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): I am grateful to the Secretary of State for his statement and for advance notice of it.

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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.

Mr. Hutton: 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.

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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.

Ann Clwyd (Cynon Valley) (Lab): 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.

Mr. Hutton: 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
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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.

Annette Brooke (Mid-Dorset and North Poole) (LD): 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.

Mr. Hutton: 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.

Roger Berry (Kingswood) (Lab): 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?

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

Stewart Hosie (Dundee, East) (SNP): 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?

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