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13 Jan 2010 : Column 294WH—continued

The project with perhaps the most visitors is the Rhyl youth action group at the Hub. The project is led by Shane Owen, a grass-roots professional who is setting the pace for youth engagement in the UK. The project is located in the heart of the most deprived ward in Wales
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and works with young people, providing accommodation above the project, youth club facilities, access to top-of-the-range computers and a retail training unit.

The facilities act as a honey pot for young people in the area, and the project has 1,000 people on its books. The key to its success is that in the same building are most of the professionals who deal with the back to work agenda in Rhyl, including Llandrillo college, the Rathbone Society, Remploy, Want 2 Work, Serco, Working Links, the Anti-Poverty Network and Mentrau Iaith. More office accommodation is being built as we speak.

Those organisations pay rent to the Hub, which means that within 18 months, that youth facility in the heart of the community will be self-sufficient. In return, the organisations have access to 1,000 young people in the same building as their offices. Synergies between organisations are enhanced by the fact that they are in the same building. Again, everyone is a winner because of the level of co-operation.

I want to mention two groups: Serco and the Wales Council for Voluntary Action. Serco is a private sector back to work organisation that is leading the way. It has established an outpost in Rhyl. In the heart of that poor community, it employs 14 local people and hopes to increase the number to 28. The employees work in a refurbished building in Edward Henry street in Rhyl. The WCVA's national office is in Rhyl. It took some of its functions from Cardiff and located them in Rhyl, in Morfa hall.

As a consequence of the investment by those two prestigious organisations, other organisations are following suit by investing in the town and employing local people. I pay tribute to Dafydd Williams of the WCVA for the investment, the work he does and the role he plays in the future jobs fund and the Rhyl city strategy.

Jobs are provided by the private sector. I highlight the work that Tesco has promised to do in my constituency, where it intends to open two stores, one in Prestatyn and one in Denbigh. Asda hopes to open a store in the west ward of Rhyl. I wrote to Tesco to ask if it would participate in our national-local employment partnership project at 50 per cent., meaning that when the stores open, 50 per cent. of the people employed there will have come off the unemployment register. Tesco has agreed. That could make a huge difference: 1,000 people employed and 500 of them off the register. I thank Tesco for that and hope that Asda follows suit.

One novel project-please pardon the pun-is the initiative of the author David Hughes, who grew up on the same council estate as me and wrote a book about his experience. He is now turning it into a film using children and young people from the council estate as extras. He will teach them the media skills needed to make the film.

Pobl@Gwaith is an existing initiative that the Rhyl city strategy has helped. It is run by Clwyd and Alyn housing association, under the Pennaf banner and is one of the best unemployment projects I have come across. It runs on a shoestring, but its impact on the community and the unemployed is massive. It is headed by Rukhsana Nugent, who is inspirational. She works with clients, some of whom have been unemployed for more than 20 years. They include ex-offenders and people with alcohol or drug issues. To date, 115 clients
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have been on her course and she has found employment in the care sector for 92. The key to her success is that she takes a direct and personal interest in each and every attendee. She manages the scheme and delivers the courses. Her clients are taught health and safety theory, diversity, self-respect and communication skills.

The key to the scheme's success is that clients have meaningful work placements, for which they receive a pay packet at the end of the week. Many of the placements are with Clwyd and Alyn housing association, which used to spend tens of thousands of pounds on recruitment and now uses that money for Pobl@Gwaith. It spots the best workers and employs them itself. That is a win-win-win situation.

I ask the Minister to reflect on the benefits of that excellent initiative and the difference it has made to at least 100 people in my community. It has given each of those people back their pride, belonging and sense of self-worth. The state has also benefited because instead of those people being unemployed, they are employed and paying taxes.

The police and the probation service have played a big role in the success of the Rhyl city strategy. I highlight the work of the divisional commander for Conwy and Denbighshire, Rob Kirman, and Steve Ray from the probation service. Both have enlightened viewpoints on the role of employment in their fields of policing and court issues. Both realise that meaningful work and training are the key to an inclusive society. I believe our success has resulted in Denbighshire being the third best crime and disorder reduction partnership of all 360 in England and Wales.

Rob Kirman came up with the idea of having unemployment advisers in custody suites. I asked the Minister to monitor the progress of that idea. The adviser will literally have a captive audience. Many people are in the custody suite for 10 to 15 hours, and they have certain issues. An adviser will be there to give advice on health, drugs, alcohol, basic skills and employment.

None of the schemes would have been successful without Rhyl college. The local community college is key to many of the successes. It offers top-class training to the many community initiatives. The principal, Celia Jones, is a passionate believer in community education and open access. She has built on the success of previous principals, Irene Norman and Jerry Jenson, and the college has just won a merit award for open access in the UK further education beacon awards. The college is going from strength to strength.

Rhyl city strategy has not rested on its laurels. It has scanned the skies for new DWP national initiatives and applied to be part of them. In the past three months, it has been successful in bidding for the future jobs fund. It has received £2.4 million to put 340 young people between the ages of 18 and 25 back to work. There is a £1 billion national investment. Such young people will not be left on the margins, as happened in previous recessions. The offer of a job and training will ensure that they have the skills, self-confidence and work record to access long-term employment when the upturn in the economy comes later this year.

The future jobs fund has also been taken up by the Wales Council for Voluntary Service and BTCV, which will supply additional placements for unemployed young
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people in my constituency. The majority of those young people will be employed in environmental projects. The primary concern of my constituents is the quality and feel of our local environment, in particular the built environment. The impact of 200 young people planting trees and flowerbeds, putting up hanging baskets, laying hedges and cleaning up derelict land and grot spots will be enormous. It makes so much sense.

In conclusion, I shall summarise why we have a unique winning formula for the back to work agenda in Rhyl. The first reason is the national leadership of the Government, who believe that long-term unemployment in specific communities must be addressed. I am thankful for national initiatives, such as the city strategy, "Fit for Work" and the future jobs fund. A hands-off, laissez-faire, unemployment-is-a-price-worth-paying attitude will not help the communities I represent.

Secondly, I believe our success is to do with partnership at strategic and grass-roots level. There is partnership between the public, private and voluntary sectors and between all levels of government, including local government, the Welsh Assembly Government, the UK Government and-dare I say it-the EU, through objective 1 funding. There is a partnership in which ideas, initiatives and funding are shared.

Thirdly, the agencies delivering the services are located in the heart of the communities they serve, not tucked away on a leafy business park discussing theory. Fourthly, our unique governance arrangement as a community interest company has given us the flexibility and independence to achieve results.

The Minister has been to see many of the projects in my constituency, as has the Secretary of State for Wales. Will the Minister relay my request to the Secretary of State for Work and Pensions to visit my constituency, look at our successful initiatives and spread such best practice throughout the UK?

4.37 pm

The Parliamentary Under-Secretary of State for Wales (Mr. Wayne David): I congratulate my hon. Friend the Member for Vale of Clwyd (Chris Ruane) on securing this debate and on his tremendous and assiduous work on behalf of his constituents to tackle one of the main concerns of this Government, namely unemployment.

The Rhyl city strategy is an extremely good example of the best possible practice. My hon. Friend outlined the partnerships that are in place. He has done great work in pulling people together and providing coherent local leadership. He stressed the co-operation between the local college, Serco, the Wales Council for Voluntary Action, the private sector, Tesco and voluntary organisations. Such partnership undoubtedly produces effective results.

As my hon. Friend said, I have had the privilege of visiting the Rhyl city strategy and seeing the good work for myself, as has the Secretary of State for Wales. I join him in paying tribute to Gareth Matthews and all his staff for their enthusiasm and the strong leadership they have provided for the local community.

My hon. Friend mentioned a number of extremely successful initiatives linked to the Rhyl city strategy. He mentioned the successful future jobs fund bid, which will help to create 340 jobs, principally for young people in the local community. He has described a microcosm
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of the best possible practice. It would be good to replicate that good practice as much as possible and the Government are seeking to do that.

This debate is about the efforts being made to tackle unemployment. Although my hon. Friend has focused on his constituency, I am sure he would agree that the measures he has mentioned can be successful only with a proactive Government who intervene effectively. As the Prime Minister said today, the Government must not stand on the sidelines, but adopt policies and strategies that are about involvement, engagement and stimulating the local community.

We can point to the great success of the new deal. In Wales alone, the new deal has so far helped more than 120,000 people into work and more than 55,000 of those were young people, who are especially important because we are determined not to have a lost generation. We are doing everything that is humanly possible to get young people in particular back into work. We can also point to the future jobs fund in a more general sense. Some £1 billion investment will create 170,000 new jobs throughout the United Kingdom. Again, that will focus on young people.

The co-operation to which my hon. Friend has referred is in evidence in a whole raft of local organisations, but also, significantly, in relation to the Welsh Assembly Government. The good partnership arrangements that are in place between the Welsh Assembly Government and Jobcentre Plus are certainly delivering for the people who need that support-for example, there is the £32 million Want2Work package. So far, that has helped some 2,500 people back into work in Wales and has given added value to the work that has already been conducted by Jobcentre Plus.

We can also talk about the ReAct programme, which is, again, a Welsh Assembly Government initiative. That has helped 129 people in Denbighshire to start training to improve their skills and has assisted them to return to work quickly. Similarly, we can talk about the extra £20 million that has been allocated by the Welsh Assembly Government to tackle youth unemployment in Wales. All of those measures are extremely important and they are all big macro-national initiatives. What gives them added value is how they are put to effective good use. My hon. Friend has given us a clear and graphic example of the kind of co-operation that can produce concrete results.

I conclude by saying that, as I said, I am hoping to see the excellent work that is being done in Rhyl, and we will continue to give our support to the excellent initiatives that are taking place. I would also like to make the point that there is a clear political divide between the sort of measures that have been outlined by my hon. Friend and I, and the alternative that is available and on offer. We experienced that alternative in Wales during the dark years of the 1980s and 1990s, when mass unemployment became endemic and a hallmark of Wales. We must judge the successful measures that are taking place against that backdrop.

The last thing the people of Rhyl, the people of Wales or the people of Britain want to see is the clock being turned back to the bad old days of long-term mass unemployment and a whole generation of young people being cast to one side and forgotten. As we move closer to a general election, which I believe will be in the not too distant future, it is very important that people
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realise the active work that is taking place, the good work that is being promised and the clear choice that is before us and the people of Britain.

Mrs. Janet Dean (in the Chair): We now move on to the next debate, which is on the supervision and regulation of the IBM pension scheme. I inform hon. Members that the debate will finish at 5.19 pm.

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IBM Pension Scheme

4.43 pm

Sandra Gidley (Romsey) (LD): I am delighted to have the opportunity to raise this matter today. Given the number of hon. Members in the room for a short debate, it is a pity that we could not have had a longer one. I have received representations from the hon. Members for Isle of Wight (Mr. Turner), for Croydon, Central (Mr. Pelling) and my hon. Friend the Member for Solihull (Lorely Burt), who have expressed support for what I am about to say.

Many other hon. Members and I have received large numbers of representations as a result of IBM's proposed changes to one of its pension schemes. The proposals have particularly impacted on workers in their 50s, who had carefully planned their retirement. Many of those employees feel aggrieved on two levels. First, they feel let down by IBM, which made certain promises about pensions a few years ago and is using the changes to force workers to retire earlier than planned. Secondly, they feel aggrieved that the Government's pension law does not provide them with sufficient protections.

It might be helpful to the Minister if I provide a little background. In 2003-04, many IBMers with a final salary scheme agreed to increase their pensions contributions by 50 per cent. There was much unhappiness about having to do that because the company had taken a pensions holiday for several years and also took funds from the final salary plan to fund the new defined contributions plan. In 2006, further changes were made to the defined benefit plan and there was a clear attempt to move workers to an enhanced defined contributions plan. Workers who did not transfer were effectively punished because they were told that only 67 per cent. of future salary increases would count towards the pension. That makes something of a mockery of the fact that it was supposed to be a final salary plan.

Although there was some unhappiness, the company ultimately managed to sell the scheme by promising that funding would be available until 2014 and that there would be no further changes until that date. Let us fast forward three years to 2009, when, seemingly out of the blue, IBM announced further changes. Employees were understandably unhappy that IBM proposed to close the final salary scheme, although there has been an acknowledgement from some that that is the way many company pension schemes are going.

There was also concern about the timing of the consultation, which was over the summer holiday period when many people were taking a break, and there was a feeling that the consultation period should have been extended. In the annual report from the pensions trustee, the trustee stated

in asking to change the plan and the scheme so soon after the changes made in July 2006. That is quite a telling and unusual statement. Unfortunately, to add insult to injury, IBM made some hard-hitting changes to the early retirement terms and conditions and that has had a significant impact on workers who had planned to retire over the next few years. The scheme was that any employee retiring early would have 3 per cent. deducted from the pension for each year they are under
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the age of 60. That effectively compensates for the fact that a person will be receiving a pension for a longer period of time. For example, someone retiring at 54 with an estimated pension of £20,000 would have it reduced by 18 per cent. to £16,400.

The changes effective from April mean the discount is calculated differently. The calculation is now based on age before 63, with a market reduction that is estimated to be 6 to 7 per cent. So if we assume a 6 per cent. rate, the reduction in the above example would be 54 per cent., giving a pension of only £9,200. As one constituent put it to me:

Much of the correspondence received has been rather emotive, for example:

Mr. Brian H. Donohoe (Central Ayrshire) (Lab): Does the hon. Lady agree that constituents such as mine, who are now having to retire as a consequence of the new orders that have been put in place, feel themselves immediately aggrieved about the proposals made by this company?

Sandra Gidley: Very much so. They will lose out, as I will go on to explain.

Mr. Lindsay Hoyle (Chorley) (Lab): Obviously the matter is important; a lot of constituents have been affected by the closure of this pension scheme. Does the hon. Lady agree that this is intimidation and bullying by a very wealthy company that is taking advantage of its employees? People are being forced out and we need to do more to protect them.

Sandra Gidley: People very much feel forced out and what is happening has been described as redundancy by stealth.

Chris Huhne (Eastleigh) (LD): I would like to reinforce the point for the Minister. When my hon. Friend, other hon. Members and I met the chief executive of IBM UK to discuss these matters, we pressed him on whether there was any reason why the finances of the company meant it needed to act in such a way. The chief executive was unable to give any comparative data during that meeting to show why the company was under particular stress, nor did he provide any subsequent data. Frankly, if we consider that IBM made record profits in 2008, that tells me that it has no reason for reneging on the obligations it has undertaken.

Sandra Gidley: My hon. Friend has saved me from having to read out part of my speech later. Certainly, we were all appalled that so little explanation had been given.

David Cairns (Inverclyde) (Lab): Is the hon. Lady aware that more than 70 people in IBM Greenock have been forced out the door by this shoddy move? At a time when we are encouraging long-term thinking in business, the loss of such highly experienced and excellent people will have a detrimental impact on IBM. Perhaps that is connected with yesterday's announcement that the chief executive who made these decisions has gone.

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