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Westminster Hall

Thursday 15 December 2011

[Mr Dai Havard in the Chair]

backbench Business


Motion made, and Question proposed, That the sitting be now adjourned.—(Mr Vara .)

2.30 pm

Mr Dai Havard (in the Chair): Before we start the debate, there is clearly a great deal of interest, so I remind Members about discipline. Interventions are welcome and important to facilitate debate, but please make them interventions, not small speeches. My colleague, Mr Benton, will take over from me later. He and I have decided that we should allow the last three quarters of an hour for the Opposition spokesperson and the Minister to reply, and for the sponsor of this debate, Mrs Clwyd, to intervene at the end should she wish to summarise the debate, as this is a Backbench Business Committee-sponsored discussion.

2.31 pm

Ann Clwyd (Cynon Valley) (Lab): I am pleased to be here under your chairmanship, Mr Havard. You are my constituency neighbour and a friend, and you have similar problems in Merthyr Tydfil to ours in Cynon Valley. I am grateful to the Backbench Business Committee for giving us three hours before Christmas, which is important in case the Government come out with a statement early in the new year.

In a petition handed in to No. 10 last month, more than 100,000 people told the Government that they want them to stop the closure of Remploy factories and the privatisation of Remploy employment services. As most people know, Remploy has a long and proud history as the largest and oldest employer of disabled people in the United Kingdom. It was set up in 1946 by the Attlee Labour Government to provide returning brave servicemen with dignified work. Indeed, the name Remploy means “re-employ”.

The first factory was opened in Bridgend, south Wales, and Remploy quickly developed into the biggest and most important employer of disabled people in the UK. Over the following decades, it established a network of factories across the UK making a wide variety of products, such as school furniture, motor components and chemical, biological and nuclear protection suits for the police and military, as well as a variety of health products. Remploy currently employs more than 2,500 disabled people in its 54 factories.

Many Remploy employees now face the loss of their jobs if the Government fully accept the recommendations of the Sayce report, the Government-commissioned review of specialist disability employment programmes. The report was followed by a three-month consultation, to which many of us contributed and which came to an end in October. The Government—I am looking at the Minister—have already stated that they are

“minded to accept the recommendations of the Sayce review on Remploy”,

which recommends that Remploy leave Government support and that factories close.

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The closure of 54 factories could mean that 2,500 disabled people will lose their jobs. Those people are frightened and worried about their future employment prospects, given the current level of unemployment. Remploy factories and workplaces provide stable and dignified places of employment. The system has provided a remarkably robust presence over the past 65 years, and I am convinced that it has a viable future based on a decentralised procurement system.

The vast majority of factories are in areas of previous heavy industry, such as my constituency, which is in a former coal mining area. On my first visit to Remploy, when I was first elected in 1984, I visited the Remploy factory in Aberdare and watched with amazement the skill and the love with which people worked. Those people were hand-stitching huge boots for disabled people, although that particular business has long since been lost. Cynon Valley, despite its proud industrial past—I am sure that we will hear the same thing from many colleagues here—is marked by unemployment rates almost double the UK average.

Lisa Nandy (Wigan) (Lab): I thank my right hon. Friend for giving way and for initiating this debate, which is of importance to many of us, as she can see. In addition to the obvious problem of unemployment, which she is discussing, does she agree that even where jobs exist, it is difficult for people with disabilities to get to them, because public transport is often not accessible to them? Does she therefore agree that Ministers must address many things before they can even begin to think about asking people to find alternative employment?

Ann Clwyd: I thank my hon. Friend for making that important point, which I will discuss later. In Cynon Valley, 2,275 people are looking for work at the moment, a rate of 8.3% unemployment. All areas in Cynon Valley have the same problem of high unemployment, in addition to the multitude of factors, as my hon. Friend has said, that are stacked against a disabled person looking for a job in the area where they live or even in a neighbouring area. Disabled people should, of course, be supported in whatever work they choose, but there is no real choice if unemployment is high and if there is little or no employment elsewhere. The Secretary of State for Work and Pensions told the jobless of south Wales to get on the bus to Cardiff to find work—we all remember his comments. As you know very well, Mr Havard, he made those comments in Merthyr Tydfil, a town with five jobseekers for every advertised job. That is no help to a jobseeker in my constituency, where there are 21 jobseekers for every advertised job.

The Sayce report recommends that funding for Remploy should instead be channelled into expanding the Access to Work programme. Again, I note that the Secretary of State suggested that people in Merthyr Tydfil were unaware that they could make a one-hour bus journey to Cardiff for work. For many of us, that echoes Lord Tebbit’s comments about getting on your bike. The Secretary of State’s comment was of exactly the same order, and many people felt that it was a disgusting insult to the unemployed in the area. People are well aware that they can get a bus, but there is no point getting a bus to Cardiff when there are many people out of work in Cardiff who are also looking for a job.

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Jim Sheridan (Paisley and Renfrewshire North) (Lab): I congratulate my right hon. Friend on securing this debate. Does she accept that it is different for people with disabilities who are made redundant? A man in my constituency has a facial disfigurement so bad that he could not use public transport, go into a restaurant or do the normal things that other people do. Remploy was the only place that he had and the only thing that kept him sane. He is now locked in his bedroom with the curtains closed, more or less, and has nowhere to go.

Ann Clwyd: That is a very sad case. I am sure that we could all discuss similar cases. I know of one man in Penrhiwceiber who also never comes out of his house. It is tragic to see the effect on a whole family when somebody cannot leave the house, for whatever reason.

Yasmin Qureshi (Bolton South East) (Lab): I thank my right hon. Friend for securing this debate. Is her experience similar to mine? I visited the Remploy factory in my constituency twice and spoke to the people working there. They had enormous pride in the work that they were doing. When I discussed with them how they felt about going into the open market and working in another environment, their answer was categorically, “No. We like working in this particular environment. It’s safe, they understand our needs and it’s more comfortable for us.”

Ann Clwyd: I cannot emphasise enough the pride that people who work in Remploy factories have in their work. They do not want to sit there doing nothing—they want to work—but one of the problems with procurement, or the lack of it, is that too many of them are sitting, waiting for work that has not come. Members may have seen the recent lists of those local authorities that are procuring work through Remploy factories and those that are not. Some local authorities in this country are not getting any work done by the Remploy factories in their area, which is a tragedy.

In a period in which unemployment is rising, it is pie in the sky and cruelly misleading to suggest that expanding the Access to Work programme will result in more work for disabled people. In my area, people would like any opportunity to work, but it is particularly difficult for disabled people and always has been. I remember when the disablement resettlement officers tried to get work for disabled people and how difficult it was for them in a very different environment from the one we are in now.

Remploy is at a crossroads. All 54 Remploy factories are under threat of closure when the current public funding ends in April 2013. The threat is compounded by the factories being deliberately run at 50% of their capacity. It is crucial that, instead of deliberately running down the factories in order to, in my opinion, justify closure, an alternative Government strategy is devised to maintain funding and enable individual factories to secure work.

Mr Pat McFadden (Wolverhampton South East) (Lab): In the House a couple of months ago, I asked the Minister a similar question about the factories. An allegation has been made that, although the performance of the factories varies from place to place, some are actually turning work away, perhaps in order to create

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the self-fulfilling prophecy of being financially inviable. The Minister said that she had not heard that that is the case, but has my right hon. Friend heard that it is? Since that exchange in the House, the allegation has continued to be made. When we talk about viability, it is important to establish whether that is what has been happening.

Ann Clwyd: I thank my right hon. Friend for making that point. I received a letter about half an hour ago from my hon. Friend the Member for Copeland (Mr Reed), who would have liked to have been present but could not make it. He wants me to mention the Cleator Moor factory in his constituency and says that it has operated very successfully for many years and currently has a large order book. Some factories, therefore, have large order books and are, in fact, turning work away.

Mrs Madeleine Moon (Bridgend) (Lab): I thank my right hon. Friend for calling for this very important debate. The Bridgend factory is in a similar position. It has a long-standing relationship with Ford and is currently bidding for a new contract with it, but it is in the difficult position of not knowing what its future holds and whether it will in fact be there and be able to fulfil that contract, if it is awarded to it. It then faces the problem of whether it will be allowed, if successful, to recruit more disabled people to work at the factory. That insecurity is affecting the whole of the work force.

Ann Clwyd: I entirely agree with my hon. Friend. Uncertainty is having a very bad effect, both on the morale of the people who work in the factory and on that of their relatives. Everybody will want to make points about their particular areas and factories. Before I take another intervention, I want to mention the last round of redundancies in the Aberdare Remploy factory in 2008. Of the 18 disabled employees who took voluntary redundancy, only one person ever returned to work, although many others would have liked to have had a job and were able to have one had one been available.

Chris Bryant (Rhondda) (Lab) rose—

Mark Hendrick (Preston) (Lab/Co-op) rose—

Mr Dai Havard (in the Chair): I call Mr Bryant. It would help me if only one Member stood up at a time.

Chris Bryant: I could not see behind me, Mr Havard.

Mr Dai Havard (in the Chair): You need wing mirrors.

Chris Bryant: I am grateful to my right hon. Friend the Member for Cynon Valley (Ann Clwyd), who is my constituency neighbour, because uncertainty is even affecting those Remploy offices, such as that in Porth in Rhondda, that have a very strong record and a very strong order book. It seems a dereliction of duty if the very strong parts of the business end up being undermined just because clarity is not provided.

Ann Clwyd: I could not agree more. I have two quotes, the first of which is from the general secretary of Unite:

“This report spells the death knell of Remploy factories—it is a blueprint to run-down and close the factories. The government needs to commit itself to making substantial pump-priming available to guarantee that the plants become successful as businesses in their own right—they won’t succeed without such cash.

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The prospect for those who will have to battle it out for mainstream jobs is grim—it is a major blow for them. What will happen is that disabled people will be at the back of the employment queue and when they do succeed in finding work, too often, they are bullied and forced out of work. It is a vicious revolving door.”

Dame Anne Begg (Aberdeen South) (Lab): In Aberdeen, we have a factory that struggled for a number of years, but in the past two years or 18 months it has turned itself around and is now going great guns, with new orders and new businesses. In fact, it has managed to rent out some of the factory to other businesses and social enterprises, so things are really looking up. Does my right hon. Friend agree that it is a supreme irony that, at the very point at which the Aberdeen factory looks, for the first time in many years, to have a successful future, it should be undermined by a decision taken by the Government?

Ann Clwyd: Again, I absolutely agree and thank my hon. Friend for making that point.

Mark Hendrick: The factory in Preston recycles computer equipment—if any business is sustainable in the foreseeable future, it is the recycling of computer equipment. The factory is running at only half its actual capacity, which makes me think, as my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) has said, that there is work out there, but the factory is just not receiving it. That fact of the matter is that, when I have spoken to the workers, they have said that they feel that they are being condemned to a life of unemployment. The chances of getting work are negligible, and this signals the death knell for what has been recognised as a very important company since the war.

Ann Clwyd: Again, I agree.

Jim McGovern (Dundee West) (Lab): I congratulate my right hon. Friend on securing this important debate. Following on from what has already been said, I have visited the Remploy factory in my constituency so many times that I am almost on first-name terms with most of the work force, which has, unfortunately, shrunk from about 100 to perhaps 50. The management, the trade unions and the work force have made it clear that, if the factory closes, it is highly unlikely that the majority of the work force will find alternative employment. Is that also the situation in my right hon. Friend’s constituency?

Ann Clwyd: I suspect that the situation is exactly the same in all our constituencies.

The GMB union, which also represents Remploy employees, argues that the voluntary redundancy scheme is not the answer

“to the real problems facing factory based supported employment in Remploy.”

It argues that the structure of Remploy is

“top heavy with senior managers and millions of pounds can be saved”

by reducing the numbers of managers and associated costs, such as their bonuses.

Alison Seabeck (Plymouth, Moor View) (Lab): My right hon. Friend is touching on the balance of posts within Remploy and whether the organisation is top heavy, and I share those concerns. Does she also share

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my concern that, if people are cast adrift—that is how families in my constituency feel about potentially not being able to go to Remploy—there will be the considerable additional costs, both to local authorities and the Government, of those people not being available and in work? Is she aware of any cost-benefit analysis that is being done by the Government to look at that impact?

Ann Clwyd: Again, many years ago when I was a Member of the European Parliament, I wrote a report for that Parliament on the social consequences of unemployment. I have been trying to dig out that particular report from the terrible filing system of my office, because, as I remember, the conclusions are absolutely as apt today as they were then. Nothing has changed in about 25 years. The conclusions will be exactly the same.

Andrew George (St Ives) (LD): The Penzance Remploy factory in my constituency was one of those that managed to survive the closure programme under the previous Government. It has, indeed, been very offended by some of the remarks in the Sayce report about what goes on in the factory. On Remploy potentially having top-heavy management, it is very telling that many of the successful contracts that have been carried out by the textile factory at Penzance have, in fact, been won by the disabled people themselves. That is very telling and shows that those disabled people have demonstrated a great deal of dynamism and ability at the factory level.

Ann Clwyd: That is a very important point, because the quality of the work produced is also excellent. A focus on procurement is therefore key to the future development of the Remploy factories.

The unions argue that Remploy’s capacity has been driven down through bad management, making it possible for the Government to claim that Remploy is not working. If orders are gained through effective procurement policies, which they are in some areas, the unions argue that factories can work at full capacity and that they can be viable. Surely, the future of Remploy can be secured by enabling each individual factory to procure work and to work with other Remploy factories, if needs be.

Geraint Davies (Swansea West) (Lab/Co-op): On that point, when I visited the Swansea factory in the spring, it was running under-capacity. I therefore visited the Driver and Vehicle Licensing Authority, the local authority, the university and the health authority. That factory is now running at full capacity with much higher margins. Does that not illustrate that there is a strategic problem and that there is an over-centralisation of UK management instead of sales teams being devolved to enable local factories to pick up orders from large clients based locally?

Ann Clwyd: I thank my hon. Friend for that remark. He wrote a very good article in the Western Mail last week on Remploy. I commend that article to my hon. Friends.

Remploy in Aberdare has failed to provide sufficient support to the factory since its so-called reprieve in 2008. Despite assurances, Remploy management have never made a concerted effort to make the Aberdare factory viable. There is a team of national sales staff—this picks up the point made by my hon. Friend the Member

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for Swansea West (Geraint Davies)—but they are all based in England and have generated little or no new work for the Aberdare factory. It is that model of procurement that urgently needs to change.

Across Remploy as a whole, major savings could be made by dealing with the over-staffing of management and senior management, the majority of whom are able-bodied. Savings could also be made by cutting the use of expensive outside consultants. The Sayce report suggested that Remploy factories could be taken over by worker co-operatives or mutuals. I hope that that is not just a cynical attempt by the Government to wash their hands of the Remploy factories. If there were an attempt to push a new model on Remploy without prior consultation or consent, it would obviously reflect very badly on the Government and be viewed as heavy-handed and top-down. Despite being among society’s most vulnerable people, disabled people should be treated like anybody else with dignity and respect.

Before the summer holidays, when I went to see the Secretary of State—the Minister was there as well—about my own factory, I questioned the quality of the information being provided by Remploy senior management, including to the Government. That was confirmed by a comment made during our meeting. It was said that my factory in Aberdare was part of the furniture business. I said, “Well, that’s news to me.” When I went to the factory a few days later, the people there confirmed that they do not make furniture—they make window boxes. I suppose that window boxes are furniture to some people, but they are not normally considered to be furniture.

The Aberdare factory still manufactures some items for the health care business. That was one of the main things it did that was taken away from it some years ago as a result of some fatuous reasoning. The manufacture of those items was transferred to Chesterfield. I have no objection to people in Chesterfield having a job, but not at the expense of my own factory. As I have said, we still manufacture some items for the health care business, including a subcontracted footwear contract from the Chesterfield factory. That seems to be a rather ridiculous situation that is like a sort of yo-yo approach. There is also a bra pocketing service and the manufacture of lumber supports. So the factory was not making furniture, and I question some of the things that are said to happen in certain places.

Finally, according to the economists, we know that unemployment is on course to hit 3 million for the first time in 20 years. It is clear that wide-ranging job cuts in the public sector are simply not being absorbed by the private sector. Those jobs are just not there in the private sector. It is the hallmark of a civilised society that it ensures that its most vulnerable people are protected. Those people should not be left to compete in a savage labour market, where hundreds of thousands more people will lose their jobs in the coming months. It will be hard enough for the able-bodied, but please let us safeguard Remploy and all who work within it.

Several hon. Members rose

Mr Dai Havard (in the Chair): Order. Before we begin the rest of the debate, a number of hon. Members clearly wish to speak—about a dozen Members have indicated to me that they wish to contribute. I remind

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colleagues about the time available for the discussion, even if we try to squeeze in the reply period. A bit of internal discipline from colleagues would be extremely helpful. Thank you. I call Mr Stephen Lloyd.

2.58 pm

Stephen Lloyd (Eastbourne) (LD): I thank the right hon. Member for Cynon Valley (Ann Clwyd) for securing the debate. It is interesting to note that when I saw the subject, I had a couple of conflicting thoughts. One thought was, “Stephen, if you speak in this, you can pretty much guarantee that it will be you against the massed ranks. Do you really want to do that considering that you have been an MP for a mere year and a half?” The other thought was, “You should contribute because you really believe that what you have to say is right.” I am glad to say that, in my judgment, I chose the latter.

It is a privilege to speak in this very important debate. I have been involved with the issue, on and off, for nigh on 19 years. I would like to tell the Chamber a little bit about Liz Sayce, who wrote the report. In the field of disability, Liz Sayce is held in tremendous respect and regard by both disabled and non-disabled disability consultants. I hope that even if the right hon. Member for Cynon Valley disagrees fundamentally with the review, she agrees that Liz Sayce knows of what she speaks with regard to disability. I have had the privilege of knowing her for many years.

I am fully aware that this is a debate against the closure of Remploy factories, but I want to take the opportunity to make the case for something I feel profoundly exercised about: supporting disabled people to realise their employment potential. An outsider might think that the Sayce review is solely about closing Remploy factories. In my judgment, it is not about that. It is about the future of disability employment support and making sure that the money is used where it makes a real difference to as many disabled people as possible. It is also about disabled people’s employment aspirations as well as, crucially, society’s attitude towards disabled people.

There is a story to be celebrated, which is that disabled people’s employment levels have risen significantly in recent years, especially among disabled graduates. I remember, years ago, campaigning for the Disability Discrimination Act 1995 when John Major was Prime Minister. Compared with where we were 15 years ago, where we are today might as well be a completely different planet. Disabled people have higher aspirations, are increasingly breaking through the job market, and are rightly becoming ever more visible in public life. The increase in support for disabled people, and new employment rights and changed attitudes towards disabled people have certainly helped.

Since 1994, Access to Work has helped tens of thousands of disabled people to get a job or stay in a job, despite its being called Whitehall’s best secret. At this juncture, I pay tribute—so that it will be in Hansard—to the enormous investment that the Labour Government put into Access to Work. Many years ago, I remember meeting the then Minister with responsibility for disability, the right hon. Member for Barking (Margaret Hodge); another former Minister is in the Chamber today—the right hon. Member for Stirling (Mrs McGuire), who I

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knew in my previous life. They put tremendous investment into Access to Work, for which I have always been very grateful.

The Disability Discrimination Act 1995 secured rights for disabled people to be free of discrimination. Those rights have been strengthened, most recently through the Equality Act 2010. Furthermore, the UN disability rights convention, signed and ratified by the UK Government, explicitly recognises the right of disabled people to work in open employment. Earlier this month, an organisation I know very well, the Employers’ Forum on Disability, celebrated 20 years of achievement and very hard work on behalf of disabled people. It supports its members, companies and organisations large and small to become disability confident, thus making it easier to recruit and retain disabled employees, and to serve disabled customers properly. Its members, and many other employers, are committed to breaking down barriers, because they recognise that it benefits them to tap into that huge pool of talent. They know that employees—disabled and non-disabled—function better in an environment where everybody is treated with respect, and where they get the support they need.

The EFD, and other organisations, know it is not the disability, but the person that matters—otherwise known as the social model of disability. My very good colleague, the hon. Member for Aberdeen South (Dame Anne Begg), the Chair of the Work and Pensions Committee, has, like me, been campaigning for the social model for a long time. When I first started doing so with other disabled people, we were seen as if we were talking double Dutch. There is much greater understanding of the social model of disability today.

Despite that progress, 50% of disabled adults of working age remain unable to access paid work. This is 2011. What a shocking waste of talent and experience. The figure is probably even higher for certain disabilities, such as profoundly deaf British sign language users, and those with mental health issues and other specific disabilities.

Dame Anne Begg: I call the hon. Gentleman my hon. Friend because we have served on the Select Committee together. During the recent visit of the Committee to the Port Talbot-Neath Remploy, we met a group of pupils and a teacher from a local special school who were getting work experience in that factory—the only place where those youngsters could possibly get any kind of work experience. In the Aberdeen factory, the Remploy employment service is now in the factory, and the factory provides work experience places for people with disabilities. Does my hon. Friend agree that there is a role for the factories to help to support disabled people in obtaining experience that they can then use to access open employment, or other employment opportunities?

Stephen Lloyd: I thank my hon. Friend for that contribution. I agree entirely. Later on in my speech, I have a cunning plan about how Remploy could be better used, and that was a very good example.

There is a real need to step up the level of support available to disabled people, as well as tackling outdated and ignorant attitudes among career advisers and employers. I heard a good example only a couple of weeks ago. One of my constituents complained to me about the cost of fitting

“all these wheelchair ramps into shops.”

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I agreed wholeheartedly on the proviso that rather than spending all that money providing, say, escalators for non-disabled people to use at underground stations, why do we not just chuck a rope over the edge so that they can climb up? I think I lost that chap’s vote, but there you go.

How best can we support disabled people into sustainable employment? That is the $64,000 question. The Sayce review makes a recommendation on how the coalition Government can use the £330 million budget for specialist disability employment support to help more disabled people into employment, and to help more effectively disabled people already in employment. This is the key: employment and retained employment. Currently, that budget is spent on Remploy, Access to Work and residential training colleges. To my mind, after years of studying these things, there are three key issues at stake: how our resources can be best used to help as many people as possible in the most effective way; whether disabled people should be supported in open employment or whether there is a place for sheltered employment; and how the future of current Remploy workers can best be protected.

On the first point, I offer some facts. We are spending five times as much on a Remploy worker as on a disabled person in open employment, yet with the right support, disabled people can have real careers—I know many disabled people who do—alongside their non-disabled peers in the open workplace. They are similarly skilled, similarly unskilled, similarly bright, and similarly less so. In fact, they are pretty similar to all of us here, but with different needs.

Mrs Moon: The hon. Gentleman makes the point that currently spending on a Remploy worker is five times more than on a worker in an ordinary job. Does he not agree that part of the problem has always been the high level of expenditure on consultants, the high level of over-management, and the high cost to each individual Remploy factory for central services? It is the management structure of Remploy, not the workers, that makes Remploy more expensive. Let us remember that and stop criticising the workers and start criticising the management structure and framework.

Stephen Lloyd: What is so hilarious is that I have been doing that for a long time. That point was being made years ago, when the previous Government were in charge. Yes, there is a grain of truth in it—of course there is. Remploy is top-heavy and sclerotic, but that is ancient history. I remember exactly the same argument when Labour was in charge. There is an issue and I will come to it later. We need to be smarter in the way we use Remploy, but that particular tack is so ancient, that if it was on the floor it would curl over and die.

Kelvin Hopkins (Luton North) (Lab): Another point that has not been made so far is that disabled people and disabled workers are not a homogeneous group, and disabilities vary enormously. One can see people with mild disabilities in open employment, and they may not require much subsidy, but those with more serious disabilities need protected workshops, such as those at Remploy.

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Stephen Lloyd: I thank the hon. Gentleman for making that incredibly important point. The variability of the support that disabled people need is absolutely vast—it is like a length of string. Let me give an example. I missed a vote a few months after I was elected, because I did not hear the Division bell, which is not surprising, because I am half deaf. What was the solution? I made an adjustment in my office in Norman Shaw North, and I now have a flashing light there; it is not complicated, but there are some advantages. Of course, a lot of us in this Chamber sometimes appreciate it if we do not hear the Division bell, but that is by the bye.

However, that is a good example of what we are talking about. My disability is pretty minor—I have been hard of hearing ever since I got measles when I was six or seven years old—and one can accommodate it quite easily. However, someone with, say, profound mobility problems will need more support than someone like me, and someone with severe mental health issues will need even more support. I therefore entirely agree that this is not black and white, and it is not easy to pigeonhole people. If Access to Work is done properly, however, and there are other supporting mechanisms, it can be very effective, even for people with a profound disability, as I will explain a bit later.

Remploy employs 2,800 people, whereas Access to Work currently supports 37,000 and could support 70,000 if the budget were used better. Furthermore—this is unpopular but important—there are few new entrants to Remploy factories, as more and more disabled people are supported in moving to open employment. Given what the right hon. Member for Cynon Valley said, I am absolutely certain that some of the factories in the group are, despicably, not taking on some of the disabled people they should be; I cannot prove that, but I am sure she is right. However, one of the main reasons they are not taking on as many disabled people as they used to is that more and more of those who want to work are getting support to help them move into open employment.

Geraint Davies: Swansea Remploy, which I mentioned, is very productive and effective, but the voluntary redundancy scheme there and elsewhere was in danger of taking key people out of the production chain. Currently, Remploy’s management has imposed a virtual employment freeze; the factory is, for instance, looking for a design technician, which is holding back orders. In other words, the Government and Remploy’s management are preventing Remploy from succeeding, contrary to what the hon. Gentleman suggests.

Stephen Lloyd: I thank the hon. Gentleman for that intervention, but I am not sure it is true. That is the same situation as we had years ago—it really is. These things have not come out of the woodwork under this Government.

Geraint Davies: I got that information first hand on a visit to Remploy in Swansea last week. It has a showroom and it is getting new people in ordering things, but it faces production constraints because it cannot recruit the right people. It wants to recruit more people and to be more successful, but it is being held back.

Stephen Lloyd: I thank the hon. Gentleman for his further intervention. As I will explain later, the Remploy model needs changing. Remploy’s corporate size is a disadvantage and makes it very sclerotic, so it cannot

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move swiftly to adapt to circumstances. The Government need to be more creative about how Remploy factories and branches within the corporate body act. I do not deny what the hon. Gentleman says—indeed, I am sure it is true—but I guarantee that it could have been said 10 years ago. I absolutely promise that, because I know the subject.

Mark Hendrick: The hon. Gentleman gives the impression that he feels that what has been said about the Remploy management is a specific criticism of this Government, but the management was equally inefficient and incompetent under the Labour Government. The issue is that some people are so profoundly disabled that they will never find mainstream employment, while there is a possibility that the majority he is talking about will get employment through Access to Work, even though that is extremely unlikely given the current level of unemployment.

Stephen Lloyd: I thank the hon. Gentleman for his intervention, but I disagree. We are in a different place from where we were a few years ago. Things will be challenging, and I wish the heck we were not in the economic mess we are in. However, I know from experience that people with certain disabilities would never have been employed 10 years ago, yet some of them are being employed now. None the less, I appreciate that things are challenging.

The reality is that, whether we like it or not, the global economy has restricted the market for Remploy factories, as the National Audit Office identified as early as 2005. As I said, Remploy’s overall corporate business model makes it impossible to generate a workable profit even from the parts of the business that are viable. I therefore accept that Remploy’s model is sclerotic, and it needs to be changed if Remploy is to have any success in the future. I will move on, because a lot of people want to speak.

We must be flexible. The economic climate dictates that, but it is also the right way for disabled people. We all know that we are living in incredibly difficult times, which is why it is even more important that disabled people receive individualised support to get jobs and stay in work. Access to Work is a shining example. Today, every Access to Work recipient brings in, on average, £1.48 for every £1 spent—a real success story.

We can take the steps necessary to prevent upwards of 300,000 people from losing their jobs each year for reasons of disability. Many could keep their employment if they got the right support and if Access to Work were promoted to them better via employers and health professionals.

Making Access to Work available to people taking up internships, apprenticeships and work experience could help to address the scandalously low employment rates among young disabled people, who are twice as likely as non-disabled young people to be not in education, employment or training. At present, they cannot even get their first chance of work, because Access to Work does not cover internships, work experience and apprenticeships. I am convinced they must be given that opportunity.

The reality is that there are many things we can still do, even in hard times, to increase equality. I would go so far as to say that it is even more important in difficult

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times to push, promote and advocate the case for disability equality. Let me take this opportunity to ask the Minister directly—no, we did not agree this beforehand, believe you me—whether the Government will commit to a clear action plan to improve and promote Access to Work in line with the recommendations of the Sayce review.

The second issue is whether disabled people should be supported in open employment—this is important—or whether there is a place for sheltered employment. Having disabled people living, studying and working alongside non-disabled people is vital to achieving a more cohesive society. Therefore, it concerns me that this might be a debate over whether we should have sheltered or open employment, when it is more than that: it is about equality of access, as well as equality of opportunity; it is about giving more disabled people the tools and the power to run their own lives. For sure, there was a place for sheltered employment after world war two, when disabled people were routinely segregated, and sheltered employment was one of the few means for disabled people to earn an income, but that was almost 70 years ago.

It is worth bearing in mind the goal of Remploy’s founder, the extraordinary George Tomlinson MP.

Kelvin Hopkins: The hon. Gentleman is talking about when Remploy was first established in the 1940s. During the war, everybody was employed, and there was also full employment for a period after the war. If Remploy was necessary then, it is surely even more necessary when we have high unemployment, as we have now.

Stephen Lloyd: I thank the hon. Gentleman for that intervention. George Tomlinson’s goal was to help disabled people to secure open employment and to lead full lives, and the Remploy factories existed as a short-term solution for rehabilitation and learning new skills. Tomlinson never intended them to be places where disabled people stayed for long. As Andrew Lee, chief executive of People First, who happens to have a learning disability, has said:

“People with learning difficulties want the chance to have the same job opportunities as everyone else. Organisations such as Remploy that segregate disabled people will not provide the opportunities to work that disabled people want for the 21st Century.”

Surely, therefore, in this modern world, there is something wrong—we are back to Remploy—when workers are mostly disabled, but managers are mostly non-disabled. Many disabled people successfully run their own businesses, employing disabled and non-disabled people, so can it be right that we support in 2011—solidify, even—such an old-fashioned, paternalist attitude towards people with disabilities?

Andrew George: I respect the bravery of the case that my hon. Friend is making, although I have not necessarily come to the same conclusions. Recommendation 5 of the Sayce report emphasises choice for disabled people. One choice should surely be the stepping-stone of sheltered workshops. The problem with the recommendation is that, if the funding follows the disabled person, the money will not be in place to provide either the certainty or the capital investment to ensure that sheltered workshops will continue to exist, to provide that choice.

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Stephen Lloyd: My understanding is that if the money follows the person—if, hypothetically, 15 people work in a workshop and the money follows them—that will be inclusive within the budget. I would be willing to check that. The key, for me, is that it is time finally to address the low expectations that some disabled people have, as well as to challenge stigma that comes from outside. That is why it is so important that disabled people should become more visible in open employment. We are in a completely different place from where we were 15 years ago, and I want to go five times further again.

Sayce identifies confident, well-informed disabled people as one of the key enablers to a successful disability employment support programme. Disabled people must therefore have access to the right support mechanisms and adjustments, as well as peer advice and mentoring. Often, where one disabled person has paved the way, others will follow. We have seen that many times. At Radar’s MP disability dialogue parliamentary reception a few months ago, a deaf man came up to me after I had spoken and said that seeing a hard-of-hearing MP inspired him. It gave him the confidence and belief that, one day, he could also become an MP, if he chose. His choice, his belief and his life: that is what it is all about.

I profoundly believe that we all deserve those things. It is our right, whatever challenges we face, to aspire to be whatever we want to be, as long as society provides the right support to level the playing field—not to be given an unfair advantage, but just to be given the chance. I am convinced that there is an enormous well of disabled talent, which we must unlock. One of my reasons for coming into politics was to help to unlock that talent and to play a role, however small, in the mother of Parliaments, in making that difference.

Perhaps I can give hon. Members an idea of the size of the pool of talent: despite the good work that the previous Government did, shockingly, in 2011, more than 3 million disabled people are out of work— 3 million, for pity’s sake. That is an absolute scandal. If the whole budget for disability employment programmes were spent on evidence-based programmes such as Access to Work, many more disabled individuals would get the support that they need. We cannot just keep accepting the status quo.

If the budget were used better, we could double the number of people getting Access to Work to 70,000. Crucially, that would also send a clear message that the nation was no longer prepared to allow such waste and was determined to do what it takes to change a deplorable status quo. In the process, I am certain that a doubling in numbers could be the catalyst to a transformation in the area of disability. Bluntly, although I am sure that the Minister will not thank me for increasing her budget exponentially, I will not be satisfied until 1 million additional disabled people get into jobs through Access to Work. I leave the Minister to work out the sums. In the process, the Exchequer’s tax receipts would go through the roof.

Thirdly, and equally importantly, how can the future of current Remploy workers best be protected? Again I will give some facts. There may be reasons for them, whether or not they are appropriate, but they are facts. About half of Remploy workers at any given time have no work. They are being paid for doing nothing. Is not

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it much more fulfilling for someone to be paid for what they do, rather than because they are a disabled person in a Remploy factory?

I do not know whether anyone here has ever been in receipt of paternalistic charity, but I would lay odds that it is not a good feeling. I remember years ago a close friend of mine, who is a wheelchair user, explained to me that if he was insulted by, say, an idiotic and ignorant member of the public, he would feel anger. It was not something he enjoyed, but at least, as he explained, anger is empowering. He felt in charge, and that he was fighting his corner. What crucified him was when he was patronised—when a waiter in a restaurant perhaps talked to his wife about what he wanted to eat, rather than directly to him. What did he feel then? He felt shame, because that is what human beings feel when they are routinely talked down to. Although my friend knew that it was the non-disabled person who was at fault and who was ignorant, he still felt the shame. I ask hon. Members what they would rather feel: shame, or anger? I know my answer.

The subsidy could be better used to transform Remploy factories into individual viable businesses and to support more Remploy workers into open employment. The money freed up could then be used for more individualised support for disabled people. It is true that past transitions, under previous Governments, have utterly failed some Remploy employees because of insufficient individual planning and support, so it is vital that we learn from those mistakes and do things properly this time.

I urge the Minister to ensure that disabled individuals working in Remploy factories are fully involved and to offer them personalised support, not only with employment but also with family and community life. I call on the Minister to do things right this time, if we go down that road. If the Government do that, I believe that tremendous good will come from the Sayce review, and serious life-changing work will be done on cutting that grotesque figure of 3 million disabled people not in employment. Let us grasp the nettle and begin the journey. Let us make that difference, so that disabled people can be what I know they are—the equal of any of us in the Chamber today.

Several hon. Members rose

Mr Dai Havard (in the Chair): Order. Before further debate, hon. Members can, clearly, look at the clock and do the mathematics as well as me. It was important to balance debate, and Mr Lloyd took several interventions. However, I ask the hon. Members on my list who want to speak to plan for about five minutes, including interventions.

3.27 pm

Paul Goggins (Wythenshawe and Sale East) (Lab): Strongly as I feel about the issue, Mr Havard, I shall bear your advice in mind. I congratulate my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on obtaining this important and timely debate. I thank the Minister for the opportunity to meet a short time ago to talk about the factory in my constituency, which I appreciated.

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I want to make the general point that it would be completely wrong and inaccurate to portray people who want to defend Remploy and keep Remploy factories open as opposing change and modernisation. I speak for myself, but I am confident that no one taking part in the debate, from whatever side, wants an old-fashioned model of factory life for any disabled person. There is no conflict between wanting to keep Remploy factories open and wanting Remploy employment services to do well. For those who can get into mainstream employment, that is great. I want the organisation to work well, but it is not for everybody. It is not an either/or question, but a both/and question. That is an important point.

The Wythenshawe factory in my constituency does print work and fulfilment work. I pay tribute to the manager, Mike Tarry, his predecessor, Alan Reeves, and Brian Anderson, the trade union rep there for many years. I worked closely with all of them. Altogether, there are 21 staff, 19 of whom are disabled. Their employment is life-changing for them and their families—we should not forget their families. That those people can go out and get a full-time job takes pressure off the family and gives parents a real sense of pride in their adult children, seeing what they can do in the world of work.

Four years ago, when the Wythenshawe factory was on a list, facing closure, I pulled together a support and action group including local housing trusts, the local hospital, Manchester airport and a number of private companies in my constituency such as Authentic Food Co., Virgin and Select Service Partner—serious organisations. We came together for two things: first, to save the factory, which, thankfully, we managed to do; and, secondly, not simply to congratulate ourselves on a successful campaign but to work with the factory to build up more sales and business. Based on that experience of the past four years, I want to make three points to the Minister, which I hope that she will bear in mind, along with the many others that will be made.

First—this has already been touched on—local factories must be given more autonomy and control over their budgets and business plans. There is no contradiction in making that argument and saying that we need Remploy to remain in place. The Wythenshawe factory contributes £135,000 to the central coffers of Remploy. It is particularly galling that the £3,700 a month rate relief from Manchester city council goes not to the factory but to the central coffers of Remploy, which simply cannot be right. The manager, Mike Tarry, has already demonstrated over recent months the kind of savings that he can make and the efficiencies that he can drive. If he had more control over the whole of his budget, he would drive efficiencies that, frankly, the centre of Remploy has failed to do.

Secondly, every Remploy factory should be a flagship in its own community, which is certainly the ambition in Wythenshawe. The ambition of the manager and staff is that every year 50 people will get work experience in the factory, so people can work there not full-time or for ever but in the short term on the road back to mainstream employment. People can use the experience of the factory in a variety of ways. The factory is about not only the long-term employment of 21 disabled people but all the other opportunities. My constituency has double the national average for people on incapacity benefit, and we need opportunities for disabled people to get back into work more than most. The idea of closing a factory as a way of getting more disabled people into work is ridiculous.

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Finally, we, as Members of Parliament, all have a responsibility to promote our local Remploy factories. Let me give a couple of figures: this year, the Wythenshawe print factory will achieve its highest level of sales ever, £460,000; next year, sales are already predicted to be in excess of £600,000, including substantial contracts with JCB and the City Facilities Management part of Asda, which provides the in-house cleaning and so on for all its stores. Those are substantial contracts for the factory, and the trajectory of sales is upwards all the time. We work with the local authorities, other businesses, the hospital and the airport and airport companies to promote the business, so we are on the way. As has been said, however, the current uncertainty is making it difficult for the manger to get out there and to make sales, because people keep saying to him, “Aren’t you closing? What’s the point of doing business with you if you are facing closure?” So £600,000 sales have been predicted for next year, and if the factory can get sales up to £1 million a year, it will be self-sustaining and not need a penny from anyone.

I have a challenge for the Minister: locally, we are prepared to keep working to ensure that sales go up, but £250,000 of print from central Government would secure the future of the factory. Out of the millions of pounds that central Government must spend on print, that kind of figure must be possible. I openly admit that, when I was in government, we should have done more of that, but we did not. It now falls to this Minister to do more: £250,000 of print from central Government to the Wythenshawe factory would secure its long-term future without a penny of help or support from anywhere else. Then, perhaps, we can talk about different models of ownership, management and all the rest of it, but let us do so once we have the factory on a self-sustaining footing.

The idea that we should close factories to get more disabled people into work is preposterous. It is time for the Minister to be clear that that should not happen and that we should use the factories that we have as a basis for building a progressive and better future for disabled people in work.

3.35 pm

Roger Williams (Brecon and Radnorshire) (LD): It is a great pleasure to take part in the debate under your chairmanship, Mr Havard. I congratulate the right hon. Member for Cynon Valley (Ann Clwyd) on obtaining this timely debate, which has given hon. Members an opportunity to express their views on employment for disabled people and on how it affects their constituencies. The right hon. Lady reminisced about her time in the European Parliament, and I delivered a few leaflets for her in her election campaign, although by the time she stood for Westminster, in a by-election a few years later, I was on the other side. If I say that I am on her side today, it is to support the spirit of her argument.

I congratulate my hon. Friend the Member for Eastbourne (Stephen Lloyd), because he showed considerable courage to speak from his personal experience and from his experience of working with disabled people throughout the country as well as in his constituency. This afternoon, his contribution achieved something that is rarely seen in the House, because, to an extent, he changed the mood of the debate. He might not have carried everyone with his full argument, but he changed the mood.

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I recently visited the Remploy factory in Baglan and was amazed to see the good work going on and the excellent materials being turned out. It is a furniture part of Remploy, and it produces laboratory equipment and equipment for schools, the Ministry of Defence and a number of other public sector bodies. I met representatives from the factory today, and I was told that they have a good order book and are putting on an extra shift. In its new way, Remploy can not only deal with employing people with disability but play an important part in the local economy.

I do not have a Remploy factory in my constituency, because, sadly, it was closed by the previous Government. I have seen a BBC press report that said that it is not closing but merging with the operation in Baglan, but I can tell the Chamber that it did not feel like that in Ystradgynlais when it was closed. A lot of people in my constituency still feel bitter, because many felt that they could not travel down to Baglan, took the redundancy and have not been able to find employment since. A number transferred to Baglan, and I met them when I visited. They are gainfully employed and enjoying that experience. Indeed, their families have written to me to say how desperate it would be for them if they did not have that opportunity in future.

My visit to the Remploy factory in Baglan was an extraordinarily positive experience on a number of levels. The operation is outward rather than inward looking, and it engages with the community. Many of the employees are taking training opportunities in local colleges, but the factory is also providing work experience for pupils with disability, so they can see what opportunities might be available to them not only in that factory but in the broader working market. It would be a real sadness if the facility closed down. It would be a loss not only for the people employed there, but for other people, who see it as an example of how disabled people can come into the workplace.

None of us disagrees with the argument that people with disabilities should have access to the broader market labour market. In more benign employment times, when employers came to me to say that they were short of people to work in their facility, factory, restaurant and so on, I have encouraged them to take a wider approach to labour recruitment and to recruit people whom they may not have believed could play a part in their business because of their disability or other needs. Those employers were rewarded with a talented, skilful and loyal work force as a result of broadening their recruitment process. There is a role for workplaces such as those provided by Remploy, and I shall be very disappointed if the Government cannot see that as part of providing work experience for people with disabilities.

3.41 pm

Nick Smith (Blaenau Gwent) (Lab): I congratulate the Backbench Business Committee on selecting this important issue for debate today and my right hon. Friend the Member for Cynon Valley (Ann Clwyd) and other colleagues on their powerful advocacy in support of Remploy. I apologise, Mr Havard, for having to leave early this afternoon, because I have a long-standing appointment.

Remploy workers have my wholehearted support. I know from the packed lobby of Remploy staff in Parliament in October that there is backing for them throughout

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the country, and I congratulate the GMB and Unite on their sustained and high-profile campaign on their behalf. Workers at the lobby were rightly furious about the prospect of losing their jobs.

The Abertillery Remploy factory in my constituency was opened in 1949, and in 1955 one of my illustrious predecessors, Rev. Llewellyn Williams, called on Ministers to ensure that it operated at full capacity, which was then 100 workers. Today, it has just 21 workers. Abertillery Remploy manufactures upholstery for wheelchairs, and it does a good job, but it needs more contracts and a management that properly sell the skills of its first-class work force.

The world has changed much since the 1950s, and the drive for full equality for disabled people is to be supported. In her review, Liz Sayce said that she wanted employment support that would meet the future aspirations of disabled people in the context of a changing economy and the big changes in the way we all work. I wholeheartedly agree with her top-level analysis, which must be right. Others today have outlined the Sayce review recommendations, and there have been some good proposals, such as giving Remploy factories the opportunity to put forward plans to form new businesses or to retain existing ones. It is important that those ideas are independently evaluated.

Sayce also said that non-viable factories should close and that Government funding should end. However, is that really the most sensible strategy in the current economic climate and when there are few new jobs in the south Wales valleys? Recently in my home town of Tredegar in Blaenau Gwent, which is one valley over from Abertillery Remploy, 250 people applied for 25 jobs in a new Tesco store that is about to open.

Sheffield Hallam university has recently reported on the impact of incapacity benefit reforms in different parts of the UK. Its report estimates that by 2014 the reforms will cut incapacity claimant numbers by nearly 1 million, 800,000 of which will be existing incapacity claimants who will lose their entitlement. As many hon. Members are aware, people on incapacity benefits are not evenly spread throughout the UK. There are large variations from just 2.3% of the work force in Wokingham to 13.9% in Blaenau Gwent in the south-east Wales valleys. Wales, the north-west, the north-east and Scotland are the areas that will feel the greatest impact of incapacity benefit reforms. They are areas where deprivation is high, and economies are weak. I am fearful that Remploy closures in places such as Abertillery will lead to its workers moving not to private sector jobs with the appropriate support, but to joining the dole queue alongside former incapacity benefit claimants. That is the reality of what will happen in many parts of the country

The GMB has told us that the majority of Remploy workers who lost their jobs in 2008 are still unemployed, so if the factory closures go ahead by April 2013, the prospect for current Remploy workers is bleak. The Government continue to axe jobs, and their plans for growth are weak. If recovery is choked off, thousands of Remploy workers will be put on the dole alongside other workers so, as hon. Members have said, it is likely that they will claim benefits instead of paying taxes. That forecast is troubling. However, I believe that Remploy

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can have a future, but only if it is allowed to modernise with Government support. If we can offer Remploy more public contracts, we should do so. Above all, the Government should get back round the negotiating table with Remploy workers and trade unions.

As others have said, the Government should explore the use of Article 19 of the EU directive on public sector procurement, which specifies the right of public bodies to reserve some contracts for supported businesses such as Remploy, and I encourage other bodies involved in public procurement to utilise that directive. I have been told that in Blaenau Gwent the local council is doing what it can to boost public procurement and that it wants a meeting with Remploy management and the unions in the new year. I know that other hon. Members want to speak, so I shall draw my comments to a close. In a nutshell, it pays to care and to keep Remploy workers in work and off welfare. I hope the Government will listen today and do everything that they can to secure Remploy employment in the future.

3.47 pm

Ian Lavery (Wansbeck) (Lab): I congratulate my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on the debate. It is extremely important at this time. I place on record my congratulations and thanks to the trade union consortium that has done everything it can with the work force at Remploy to try to ensure that there will be employment in future, and hopefully at Remploy factories. Trade unions are often vilified in the House for many things, but that is a great example of fine trade unionism.

In his lengthy contribution, the hon. Member for Eastbourne (Stephen Lloyd) mentioned George Tomlinson, who was the Member of Parliament for Bolton and set up Remploy shortly after the second world war to look after people who had been disabled in the war. The hon. Gentleman was very selective in his quotations from Mr Tomlinson all those years ago, and I shall be equally selective. He wanted factories that would enable disabled people to live full and ordinary lives. He also wanted secure, open employment. I believe that his objectives all those years ago were the same as the objectives now. Nothing has changed. That is all that disabled people want. They are not asking for the world.

Under the Sayce report, 54 factories nationally are facing closure, and that is an issue for the Government. I hope that debates such as this will convince them that that it is not the right thing to do. Since 2008, there have been between 3,750 and 4,000 voluntary redundancies in Remploy factories. During the same period, there was a huge increase in senior management and a huge decrease—about 50%—in the number of disabled people who were allowed to have employment in Remploy.

I want to mention the Ashington factory in my constituency, but in view of what you said, Mr Havard, I will be as brief as I can. Many people have rightly mentioned their own constituencies, sticking up for their constituents. The Ashington factory makes commercial and garden furniture. As has been mentioned, initiatives are being driven by the workers, who do the printing, produce their own catalogues and deliver leaflets where they can, while senior management at regional level—not local level—are doing absolutely nothing to ensure that people in the Remploy factories are at full production.

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So credit where credit is due to those individuals. All they want to do is work in the factory, but they see senior managers preventing them from doing so. It is a deliberate ploy. We are seeing it in other industries where people are basically strangulated and starved of work, which makes them look inefficient. It is not inefficiency; it is bad management.

The local team was fantastic. I also visited Newcastle Remploy in the constituency of my hon. Friend the Member for North Tyneside (Mrs Glindon). I met every worker and spoke to each individual, and everyone was fantastic. I had a great time. I got a great letter from them—I will not read it out. It was inspiring to be in the Remploy factory speaking to the individuals. Many of them have given a lifetime’s service: 20, 25 or 30 years are not uncommon. They feel as though Remploy is in their blood. They feel they have given a lifetime to Remploy, so they do not want to be kicked in the teeth by the closure of the factory. Remploy has given them self-esteem and, of course, the independence that everybody wants.

I learned that the Ashington factory was bringing in young people from Cleaswell Hill special school in my constituency. They have severe learning disabilities, but it was agreed that for the first time in their lives, those young people could experience employment at Remploy in Ashington. It was a fantastic idea to bring those kids in. I spoke to them on a different occasion; many of them would not even respond when I first spoke to them. They had a tremendous experience. It was the first time that they had had the opportunity of any employment at all, albeit on a trial basis. I hope that Remploy will consider such schemes on a national basis so that we can look after the people who need that sort of work. We want to see such schemes extended. That is what Remploy is for: to look after people who have problems and who might not get work in mainstream employment.

The Sayce report will mean the closure of 54 factories. Up to 3,000 more disabled people will be on the dole, lacking opportunities. In Ashington, 33 or 34 people are applying for every single job. Where will that leave disabled people if they are made unemployed? They will have no chance of any employment whatever. We need to make sure that we look at that. The Remploy trade union consortium’s survey shows that there is very little chance of work. If we look at the survey from 2008 to the present, how many people have been re-employed? It is absolutely alarming. There are 2.65 million unemployed people at present. What will happen in future?

We must listen to the voice of carers and parents of the sons and daughters who have had opportunities in Remploy factories. They are pleading with the Government to keep the Remploy factories open. That will give individuals income, independence, self-respect and self-esteem. It also means that they are not benefit-reliant and are not classed as scroungers.

Evidence shows that unemployment leads to severe depression in many cases. I could go on, but I see Mr Havard is shaking his head, so I will finish by simply saying that there is a case of serious mismanagement in Remploy. The answer is to ensure that management are accountable. They should stop paying themselves average bonuses of £4,600 every year. They should stop taking money from individual factories to pay for grand offices up and down the country. They should invest the money

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in the work force at Remploy. Many things can be done to ensure that we continue to look after the people at Remploy. It is often said that a society can be judged by the way it looks after its most vulnerable people. We must look after the most vulnerable and keep the plants open.

3.55 pm

John McDonnell (Hayes and Harlington) (Lab): The hon. Member for Brecon and Radnorshire (Roger Williams) said that the hon. Member for Eastbourne (Stephen Lloyd) changed the tone of the debate. He did, because he made me bloody—sorry; pardon me, Chair—furious about the discussion. I have worked on this issue since I served on the first Committee on Restrictions against Disabled People when I worked for the TUC in the 1980s. That committee tackled discrimination against people with disabilities. I have met Remploy workers since that time. I have met no Remploy worker who is ashamed of working for Remploy and who feels that he or she is receiving charity. I have met no Remploy worker who has lower ambitions than anyone else in the rest of society. Most of the workers I have met are proud of working for the company, proud of earning a living and proud of supporting their families. It is a disgrace to try to depict them in any other way, as the hon. Member for Eastbourne implied.

The debate around supported employment that I have been involved in over the past 30 years is based on two issues. One concerns the integrationist debate. When I served on CORAD, I was a forceful integrationist, both in terms of employment and education. I was concerned about separate provision. Over time, one becomes a pragmatist. In reality, without the Remploy factories, as we have seen from the redundancies, large numbers of people would be unemployed. The redundancies prove that point: 80% of the 3,000 who have been made redundant in the past three years are now unemployed. They did not find alternative employment, despite all the commitments to identify alternative employment, training and support. As far as I am concerned, there will always be a role for supported employment in some form.

The second issue concerns how we sustain such employment and asks whether supported employment should stand on its own feet, be profit-making and require no support from the state. That will never do. It will always require, at some stage, a subsidy through direct income from the state or through public procurement. That is the reality. Otherwise, it means putting 2,500 people on the dole. Members here today have made very explicit what will happen in their constituencies. With 2.5 million people on the dole, those people will never see work in the lost decade that we face. We must face up to that.

[Mr Joe Benton in the Chair]

Where do we go from here? We simply listen to the workers themselves. It is no use saying that these are hoary old arguments of a decade ago. They are old arguments, because no one listened then about the appalling management that was going on. There have been 40 consultants crawling over the business during the past few years. We think that anything between £5 million and £15 million has been used to employ consultants to come up with ideas, but no one has

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listened to the workers. Phil Davies and Les Woodward have done a fantastic job on behalf of the GMB, as has Jennie Formby on behalf of Unite. They have worked with Remploy workers to bring forward their alternative strategy, which identified a range of issues that Members have raised this afternoon: cut management costs, increase localised marketing, end centralisation, get consultants off people’s backs and let Remploy members make their companies as profitable as they possibly can. That is all they are asking for; it is called worker involvement and worker control. The Government say they may look at mutualisation and co-operatives. I quite like the idea of a co-operative approach, but I do not want it to be used as an excuse for cutting people adrift from public subsidy or the commitment of existing European legislation to encourage public procurement.

My hon. Friend the Member for Swansea West (Geraint Davies) has demonstrated what can be done at local level by touring public agencies and ensuring that contracts are won. It is that simple; it is about listening to Remploy workers, and not patronising them but working with them and getting off their backs.

I am fearful. This debate is not about the theories behind integration and separation; it is a fight for 54 factories that are about to close unless we have a change of attitude from the Government. The Government response to the Sayce report was to go at that report, which effectively means cutting those factories adrift, and if they cannot stand on their own two feet, they wither on the vine. That is the reality of this debate.

I conclude with a quote from a Remploy worker—such quotes are moving statements from people and human lives that have been put at risk. Kevin Davies has cerebral palsy and has worked at a production plant in Baglan for 21 years. He says:

“I have a role to play and I enjoy being here…I am working with nice people and there is an end product to my work. It has given me a quality of life and independence…Without Remploy I would be stuck in the house. Without it, where would I be?”

He would be unemployed and stuck at home like many of our constituents who are experiencing unemployment as a result of the redundancies so far. This is a fight for those factories, and if the workers want to fight with whatever means possible—industrial action; occupation—and we cannot persuade the Government to reconsider, I will be joining them.

4.1 pm

Jim Dobbin (Heywood and Middleton) (Lab/Co-op): I will begin by agreeing with my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins): we are not against change or improvement, but we are against destruction, which is the big danger in this case.

On 1 December, I visited the Remploy e-cycle factory based at the Heywood distribution park, to which it moved from Radcliffe in Bury a couple of years ago. I was invited to celebrate the international day of disabled people and disabled workers and to present certificates to some long-serving employees. I was presented with a baton by the staff, which states:

“Help relay the message. Thousands of disabled people across the country are aiming high, achieving more and fulfilling their ambitions!”

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That is the logo on the baton, which I intend to present to my hon. Friend the Member for Aberdeen South (Dame Anne Begg) who is present in the Chamber today.

That was my second visit to the factory and it was intended to mark the achievements of disabled people in my constituency. The aim was to raise awareness about disability and to promote the fundamental rights of disabled people, so that they can be fully integrated into mainstream workplaces. That must happen, however, only when they feel ready for such as move and through their own choice.

There are 386 Remploy employees working in different factories in the north-west, and they do a fantastic job. The Heywood factory in my constituency repairs, cleans and recycles computers and laptops. E-cycle works closely with some Departments—I think that the Department for Work and Pensions is its largest customer, but there are others—and also with Manchester city council and Bury council, as well as a number of major private sector companies to which it provides electronic waste solutions and IT recycling. May I suggest to the Minister that more Departments provide work for and become customers of Remploy? Such a move would both support the system and be cost-effective.

When my right hon. Friend the Member for Neath (Mr Hain) was Secretary of State for Work and Pensions in 2007, he initiated the modernisation programme, which we are not against, as I have said, and he provided £555 million to sustain it. When the present Government came to power, they invited the chief executive of Radar, Liz Sayce, to assess the situation. I have great respect for Radar and have worked with it on many issues. In this instance, however, I am concerned about the proposals to make the system more independent from the Government. That is similar to what is happening in the public sector across the board and seems to illustrate what the Government are planning in public sector service provision. The trade unions are unhappy with the Sayce report. They see it as a break-up of Remploy that could mean wholesale devastation in the system.

The Disability Alliance supports the Sayce report, which it sees as a way to introduce and integrate skilled disabled people into the workplace and the community, and I accept that. My experience of visiting a local factory, however, demonstrated to me that the present system offers a comfort zone to some vulnerable individuals and groups and that those people work confidently and feel comfortable in such a system. My local factory provides a highly-skilled service and runs a complex system. E-cycling is difficult. Cleaning laptops and refurbishing computers for industry, not only for the UK but for export, is a complex matter.

In my view, the changes envisaged by Sayce are premature and wrong, and they are happening when, as hon. Members have said, unemployment is increasing. Unemployment among disabled people is also rising, and now is the time for consolidation and support for the existing system, albeit an improved existing system.

The Remploy system need strengthening, and as I have already said, it would be good if more Departments, public sector organisations and local authorities put work the way of Remploy. It is important to retain the dignity of every Remploy employee, and to continue supporting them in the workplace. Unemployment is at its highest level for many years, and Remploy factories are threatened with closure at this sensitive time.

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I have a personal interest in disability as I have two grandsons who are wheelchair bound. I want a system that will be there to support them when they reach working age and help them through life—that is not asking an awful lot.

I will conclude by stressing that the high level of support among Members who have Remploy factories in their constituencies and want to see Remploy remain sustainable has been illustrated by some of the strongly worded early-day motions that have been placed in the Table Office over the past few months. I think that Remploy management and the trade unions should be better consulted on the entire issue, because we are about to lose a very worthwhile service.

4.8 pm

Geraint Davies (Swansea West) (Lab/Co-op): I will be brief because other hon. Members wish to speak. I have already said that active intervention locally can make a difference, and in my discussions with the Driver and Vehicle Licensing Agency, the university and the health authority, we transformed the sales of the Swansea factory, quadrupled turnover and increased gross margins by tenfold. That is a case for more localised management and sales support and for removing the cap on overall marketing expenditure, which is less than 1% of turnover. All marketing literature must be checked by civil servants who have no idea about local needs.

My second point is about subsidies. The Sayce report states that the average subsidy is £23,000, but averages can be misleading. We all know that the cost of someone being unemployed is normally about £10,000 in benefits and lost tax. In the case of many of the people who work for Remploy, it would be much more because of the health on-costs. That needs to be properly evaluated financially.

Remploy works across a diverse range of markets. There is a case for focusing on whether there are greater growth opportunities and for examining the different business cases, rather than saying that it is a case of either closing all the factories or keeping them all and having no change. I do not think that anyone is arguing for no change.

There is a case for focusing on people with severe disabilities. Obviously, those with particularly severe disabilities need particular subsidies and support if they have virtually no chance of securing other forms of employment. There is a case for considering specific labour markets. In areas with very high unemployment, it is clear that those people will not get a job. There is a case for considering public procurement, as has been said.

It is also important to consider the specialist opportunities in relation to Remploy. For instance, Swansea Remploy is a specialist provider for young offender institutions in Scotland. It makes furniture that young offenders cannot destroy. They cannot break those things; there are no screws that they can pull out. It also provides furniture for mental institutions so that the residents cannot self-harm. The value is in tailor-made, focused transactions, where delivery is within budget and within the time frame. As I have already mentioned, it is important to ensure that key players and key skills are there to make the factories succeed.

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People have mentioned that the factories provide an opportunity for training. Training is vital in manufacturing if we are to get back into growth and stop focusing completely on cuts. Clearly, if we just sell off the factories, we will see a fire sale of capital assets and the loss of the skills for ever. That is not sound financial management.

My basic theme is this. Let us focus on what works and make it work better. Let us accept that people with disabilities of varying sorts need subsidies. No one is saying that they can go off and succeed without any support. Let us use the levers at our disposal to make that work and stop just thinking about how we go about closing down 54 factories and making 2,500 people redundant. Those people are valuable assets in society, in our economy and in our future. Let us keep them doing that.

4.12 pm

Mrs Mary Glindon (North Tyneside) (Lab): It is an honour to speak under your chairmanship, Mr Benton. I add my congratulations to my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on securing this Back-Bench debate, because for many months workers in the 54 Remploy factories across the country have been waiting for the Government’s decision about their jobs. Given the massive unemployment figures announced this week, I can only imagine that the anxiety felt by those workers has been heightened.

I am proud to say that my own union, the GMB, has been supporting the workers at Remploy and last month handed in a 100,000-name petition at 10 Downing street. Quite rightly, it called on the Government to save Remploy. There is clearly a place for trade unionism in modern Britain when workers face such an unfair fight.

I am speaking in the debate because one of the 54 factories, Remploy Newcastle, is in my constituency, at Benton Square industrial estate in Palmersville, and it has been on that site for the past 32 years. There are 57 full-time employees at the site; 55 of them have disabilities. Those workers produce bedroom furniture, bed bases and mattresses, and assemble and pack cable glands for CMP Products—a locally based company. In recent years, the factory has also provided very successful work placements for more than 100 trainees. In total, 90% of the work undertaken at Remploy Newcastle is for north-east companies. That factory is therefore very much part of our local economy.

Given the threat of the workers at Palmersville losing their jobs, through no fault of their own, I am sure that hon. Members will be able to understand why they are frustrated about the unnecessary redecoration of their factory and the change in Remploy colours, which has resulted in all signage and stationery being changed at the cost of thousands of pounds. They know that they have fantastic skills, including in upholstery, joinery and commercial sewing, but those skills are being wasted as they see their work being deliberately dried up. They and their unions are rightly angry that, during the past five years, more than £15 million has been spent across Remploy on consultants.

On behalf of the Remploy workers and the unions that support them, I ask the Minister to continue to fund Remploy, but instead of taking heed of the recommendations in the Sayce report, which makes no case for the future of Remploy, she should consider the alternative strategy set out by the consortium of trade

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unions. That strategy makes sense. It sets out a complete review of the whole structure of Remploy, which would result in a much more efficient, sustainable organisation.

Does the Minister really want to be responsible for ruining the livelihoods of so many disabled employees? Does she really want to risk her reputation by making her final decision based on the evidence of a report that many consider to be flawed? Does she have the courage to examine a real viable alternative that will not only save jobs, but create a more efficient organisation and support many local economies across the UK? Will she consider the alternative strategy set out by the consortium of trade unions?

4.16 pm

Ian Lucas (Wrexham) (Lab): It is a pleasure to take part in the debate. The hon. Members who are here have displayed a great deal of passion. Much of that passion is due to the fact that we have constituents who work in Remploy factories and that those factories are in our constituencies. When there was a proposal to close Wrexham Remploy, which I know very well, in 2007—a similar situation to that described by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins)—I learned how strongly the work force felt about working in a factory with their colleagues in Wrexham. I also discovered how powerful the support in the Wrexham community is for the factory. A local councillor, David Bithell, led a campaign to keep the factory open, and for a number of weeks in Wrexham town centre a great deal of support was expressed from within the community.

Like my right hon. Friend, we took forward a campaign to get more work for the Wrexham factory, which involved more orders for the furniture being manufactured there. I am pleased to say that that approach has borne fruit, and only yesterday Wrexham council made the decision to take forward the purchase of furniture and equipment from the local Remploy factory. I cannot understand for the life of me why that has not been happening for the past 60 years, and it must be the model that we follow in the future. I am very pleased to see the Minister nodding her head in that respect, because the problem with the Sayce report is that it proposes a model that will take that opportunity away.

None of us wants a situation in which people are forced to work in Remploy factories, a situation in which we create ghettos for disabled people. We want choice for those people. My concern about the Sayce report is its implicit and explicit statements that the opportunity to work in individual factories, supported by the local community, will be taken away. There is a very superficial nod in the report to the possibility of individual factories remaining open. The report talks about how local factories will have the opportunity to survive in the private sector. Let me tell the Minister that many businesses are having a great deal of difficulty surviving in the private sector at present. Local Remploy factories are not being given the information to enable them to prepare to build up a meaningful business case for their own future.

I wrote to the Minister when I saw the proposal in the Sayce report and asked her for the details of the income and expenditure for the Wrexham Remploy factory,

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which is pretty basic in preparing a business plan, but she refused to give that to me. She said:

“Remploy operations continue as normal and it is therefore not appropriate at this stage to make available commercially confidential information on factory operations.”

How on earth can Remploy factories that are facing closure prepare for the future and try to put together meaningful business cases, when the Government, who propose to close them, will not give them the information that they need to take forward business plans? Will the Minister please start to recognise that the people who work in those factories and the communities around those factories feel passionately about them? Will she start to be serious about supporting the factories?

Individuals deserve a choice, but the Sayce report will take that away. The report suggests that there is no future for Remploy factories across Britain, but that is entirely the wrong decision. Will the Minister please ensure that she does not become known as the Minister who destroyed Remploy?

4.20 pm

Nia Griffith (Llanelli) (Lab): I congratulate my right hon. Friend the Member for Cynon Valley (Ann Clwyd) on forcefully making the case to the Backbench Business Committee to secure this debate. The debate has been extremely well attended, particularly by the Opposition, considering the many other distractions on a Thursday afternoon, including an important by-election.

I pay tribute to my hon. Friend the Member for Swansea West (Geraint Davies) for his fantastic work with the Fforestfach factory. He brushes over it lightly, but the work of going out to get all the public procurement, simply from a meeting back in March and in just three months over the summer, to change the situation of having virtually nothing in the order books to having those books absolutely full and going out to big purchasers, such as the national health service and the Driver and Vehicle Licensing Agency, to ensure that there is work for that factory, shows what can be done.

I endorse the comments made by my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), who said that there is no divide between the factories and other schemes to help people get into work, and we need both mechanisms. In theory, nothing stops a worker in a Remploy factory from finding a job elsewhere, but the reality is defined by the shocking unemployment figures—an increase was announced yesterday, and further increases are predicted in the new year. Many Remploy factories are situated in unemployment hot spots. In the constituency of my hon. Friend the Member for Rhondda (Chris Bryant), who was present earlier, 20 people are chasing every single vacancy, and I know that many hon. Members have similar situations in their constituencies.

Remploy workers find themselves competing with a whole range of people who have been made redundant from public sector jobs and private sector companies that rely on securing sales contracts, which have been drastically cut, with the public sector. Many in the private sector are not surviving the economic disasters that we are encountering at the moment. All those people are looking for jobs, and people from Remploy factories find themselves in a difficult position, particularly if a large number of them are made unemployed at the

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same time. I am not patronising Remploy workers, because the same would be true if any other factory in my constituency were to close. If a large number of people with similar skills enter the jobs market together, they will have many difficulties in finding employment.

The key is economic growth. We are currently looking for mechanisms to create more jobs in the private sector, but we have seen little in the way of strategy from this Government. We have not seen an upsurge in the private sector, which is not creating jobs in the way it was supposed to. There do not seem to be any Government strategies for doing so. Where we have Remploy factories, infrastructure, machinery, products and some markets, why are we throwing all that away? It is nonsense. Every individual factory needs to be looked at carefully, and strategies need to be developed for each factory to maximise its potential, so that its products can be marketed properly.

Marketing seems to be key. If the marketing strategy is put right, as seems to be the case in Wythenshawe, Aberdeen and Swansea West, the purchases will come in and the order books will fill up. If we can do that, we can make the factories as viable as possible, and we can help to create jobs. If we do not do that, the on-costs and health costs of people being unemployed will be enormous.

We would do a much better job if we made the factories as viable as possible, while keeping the Government support at a sensible pace. We cannot turn the factories around overnight, but we can make them more economically independent and viable over a period. We would always welcome a mix of workers with disabilities and workers who do not have disabilities. That would bring people together, and we would like to see that mix, which is already happening in many factories. We want viable places, and we want the products that are made to be sold.

That brings me on to public procurement. Assembly Members have a policy by which they purchase their furniture from Remploy factories. I have purchased furniture from Remploy factories for my office. We need much greater awareness. My hon. Friend the Member for Wrexham (Ian Lucas) asked why it has not happened before. Well, it used to happen, when there was a greater coming together of public purchasing. For example, local authorities once purchased everything for their schools together, before they began to have local management of schools and began to buy their own things in different ways. We need to return to the same sort of consortium purchasing, where we look at what is available or to make what is available more obvious. I have learned, even in this afternoon’s debate, of some products I did not know Remploy was involved in producing. There is a lack of awareness, because an awful lot of people just do not know what can be purchased.

Dame Anne Begg: When my Select Committee visited the Neath Port Talbot factory, we discovered that it had had full order books, because it had won a contract for Building Schools for the Future, which was, of course, cancelled by this Government. It was beginning to struggle a bit.

Nia Griffith: Absolutely. Remploy factories, just as many other private firms, have suffered considerably in the cuts to the construction programmes and Building

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Schools for the Future, which have kept much of the private sector going when the construction sector has been in absolutely dire times since 2008. That is an important point.

We need to look at public procurement policies thoroughly. We must encourage every single sector in public procurement to look at the whole range of products available from Remploy and conduct specific marketing on that. I am absolutely convinced that we can make the factories more viable by doing so.

Currently, we need continued support and an individual assessment of each factory to ensure that everything is being done to make each factory the best and most viable business possible. We also need a determined public procurement policy to save our Remploy factories.

4.27 pm

Lindsay Roy (Glenrothes) (Lab): It is a pleasure to serve under your chairmanship, Mr Benton. I add my congratulations to those who have secured today’s debate.

This is a vital time for those facing threats to their supported employment, and indeed to their welfare, well-being, health and self-esteem. I shall curtail my comments because I endorse many of the points that have been made about procurement and management.

Why on earth should we abandon an existing state-funded model purely for ideological reasons when in many factories real dividends are patently being achieved? With modernisation, a lot more could be achieved. In Leven, Fife, in my constituency, Remploy marine division makes high-quality lifejackets and sells them at home and in international markets. It is highly competitive, and its order book is full. Yes, the company receives a Government subsidy for each employee, but as I said, Remploy is highly competitive. Its employees use their initiative and enterprise, and they are well-trained. Remploy remains in the vanguard in the development of a specialist, niche market. The subsidy is really an investment in people, ensuring meaningful work for disabled people in a sheltered environment. It provides decently paid work for thousands of people up and down the country who would find it immensely challenging to find employment elsewhere.

I wrote to the Minister about the Leven factory and asked what the difference would be between having its 29 employees in supported work and paying them unemployment and disability benefits. I find it incredible that she could not tell me. To proceed to factory closure without doing comprehensive homework is, at best, cavalier and I suggest that it is, to a degree, irresponsible, even in relation to that small factory.

The closure of a factory in an area where there is 18% unemployment would not only devastate a viable business but an integrated and mutually supportive community. Let us make no mistake: although the factory requires Government investment in people and in the narrowest definition it may not be financially profitable, in the widest terms its dividends to the community make it a profit-making enterprise. That is the case with many other Remploy factories too.

This Government say that they believe in choice, and the importance of choice is substantiated by a very articulate young man who works at Remploy in Leven. I make no apology for quoting from a letter that he sent to me and indeed to the Minister:

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“Work is seen as being hugely positive for a person, for their social status, their relationships - both in professional and personal terms - and their health and well-being, and also their monetary income. My engagement at Remploy was a deliberate choice - there were other options open to me. My experience at Remploy has facilitated independent living - and I have gained at Remploy things that cannot be bought with wages - but rather earned through my daily relationships at work. I refer to dignity, self-belief, respect, routine and structure - and the qualities that engender self-reliance and unique identity - an identity that is not defined by my condition. They ingrain me with a sense that I am a fully functioning member of society - and it is this human capacity - and the potential removal of high quality work, for ideological reasons, that lies at the heart of the matter.”

That young man is highly critical of Liz Sayce’s branding of Remploy jobs as non-roles and subsequently non-jobs, and her descriptions of Remploy factories as “ghettos”. I challenge the Minister, following her visits to Leven and elsewhere, to dissociate herself from those alleged remarks.

The Minister’s central theme is that resources should be focused on disabled people themselves, rather than on institutions. “Institutions” can be considered in this context as a pejorative term and the description of Remploy factories as “ghettos” is offensive. Remploy factories, which are work organisations where individuals can grow and flourish, must be part of a mixed model of provision to meet the legitimate needs and aspirations of disabled people in our society.

Finally, given the arguments that have been put forward today, I would like an assurance from the Minister that the current Remploy model, with modernisation, will remain part of any future planning for supported employment. I am sure that the quality of output, the sense of pride in a job well done and the business and community spirit witnessed by the Minister in Leven is replicated in many Remploy factories throughout the country. The existing model, with modernisation, makes perfect sense as an option for supported employment. The way that we treat disabled people is a benchmark of a civilised society. I urge the Minister to treat Remploy employees with the dignity, respect and priority that they so richly deserve. They want to continue playing their part in contributing to the economy and wider society, with all the dividends that that brings. If a disabled community in the Remploy factory in Leven can make high-quality life-saving buoyancy jackets that are competitive internationally, surely it is not beyond the wit of Government not only to keep the factory afloat but to strengthen its business stream and extend a further lifeline to its employees.

4.33 pm

Mrs Anne McGuire (Stirling) (Lab): Thank you very much, Mr Benton, for calling me to speak. It is a pleasure to respond to this debate on behalf of the Opposition and to serve under your chairmanship. I also particularly want to thank my right hon. Friend the Member for Cynon Valley (Ann Clwyd) for leading the debate today, and the Backbench Business Committee for allocating time for it. If there is one thing that all of us have learned over many years, it is that Remploy and its future are of abiding interest to many Members from all parts of the House.

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I also want to act slightly at odds with normal parliamentary procedure—since we are not in the main Chamber, I think that I can probably get away with it, subject to your ruling, Mr Benton—by thanking those disabled people from Remploy who have travelled to observe this debate, including members of the trade unions GMB, Unite and Community, who had not been mentioned before in the debate. It is an indication of how the staff at Remploy feel that they have made this journey at this point in the week and at this point in the day to hear this debate. Regardless of the views that have been expressed—there have been some differing views, including some subtly differing views—I hope that those staff will recognise that people in this place take Remploy and the issues affecting disabled people and the future of disabled people very seriously indeed.

I also want to thank my hon. Friends the Members for North Tyneside (Mrs Glindon), for Glenrothes (Lindsay Roy), for Bridgend (Mrs Moon), for Wansbeck (Ian Lavery), for Swansea West (Geraint Davies) for Aberdeen South (Dame Anne Begg), and the hon. Member for Eastbourne (Stephen Lloyd) for their contributions to the debate. I will come back to the points made by the hon. Member for Eastbourne shortly. I am also grateful for the interventions that were made by my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), and the hon. Members for St Ives (Andrew George) and for Brecon and Radnorshire (Roger Williams). I realise that I have missed out my hon. Friend the Member for Hayes and Harlington (John McDonnell) in my list, but I remember his very powerful contribution to the debate.

For very personal and obvious reasons, I congratulate my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins), because he and I had many a long conversation about the Remploy factory in his constituency and the model that it provided; I will discuss that model later. He illustrated today that, where we can galvanise a community and put in energy and commitment, we can make a Remploy factory work. Indeed, that comment was echoed by my hon. Friends the Members for Llanelli (Nia Griffith) and for Wrexham (Ian Lucas), who highlighted that where local leadership is shown, we can make a difference.

Paul Goggins: I pay tribute to the work that my right hon. Friend did as the Minister with responsibility for disabled people when we were in government and I thank her for the encouragement that she gave to me in the days when we were trying to establish the support group for the Remploy factory in my constituency; she has just referred to the conversations that we had about that issue. Does she agree that, as one or two Members have already mentioned, a key group in any area is local councillors? Councillors are community champions who provide links to the local authority and, because of their experience, they can also help to scrutinise some of the development proposals. Indeed, will she join me in paying tribute to the councillors in my area and elsewhere who have done that?

Mrs McGuire: Yes, indeed. We can also look at some of the more successful examples of supported employment, including factories where disabled people work, that have had unstinting support from local authorities. Not all of those factories are Remploy factories. For example,

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the Royal Strathclyde Blindcraft Industries factory in Glasgow has had enormous input and support from the local authority. It has supported the factory through thick and thin, and hopefully now through thick again, but obviously business conditions may change.

As I said earlier, I want to refer to the comments of the hon. Member for Eastbourne. I think that everybody who has spoken in the debate accepts—at least, I hope that can be said of everyone—that there is a change in expectation among most disabled people, and certainly among their spokespersons and the organisations that represent them, and that disabled people want to have a range of choice in employment. Disabled people want the same range of choice that non-disabled people have. Government support is crucial in helping to deliver on those aspirations. I say gently to the hon. Gentleman, who I know has a long and honourable history of working in the disability movement, that we cannot deliver on the aspirations for the majority if we trample over the expectations of the few. In many respects, that is the dilemma that we face in discussing the current issue.

I have heard today from many right hon. and hon. Friends and hon. Members about their own experience of the Remploy factory in their own constituencies. I share their admiration for those factories, because there is a Remploy factory in Stirling. I visited it on the international day of disabled people and took the baton from a young man who works there. As has been said of other Remploy factories, that company of people in that factory in Stirling recognise that Remploy is not only about a job but about a wider network of social support, economic support, health support and all the things that disabled people look for. Indeed, Liz Sayce, in her report, recognised the value of the Remploy environment, and I will read an extract from page 96:

“It was clear from this review that the best factories offer job satisfaction, a supportive and accessible environment and a reasonable income for those they employ. The factories have provided employment opportunities – sometimes for many years – to disabled individuals. They have also provided a sense of community for their employees. Some have pioneered learning and development, often led by Union Learner Representatives, through which individuals have (for instance) learnt to read for the first time, or worked towards qualifications. While some sheltered workshop environments pay staff less than the minimum wage, Remploy factories pay above the minimum wage and offer good terms and conditions.”

I am not going to run away from the fact that, like the Minister, I have wrestled with some of the issues about Remploy. I understand the tensions between wanting to open up everything to disabled people and the fact that some disabled people want to make a different choice, and we have to be careful about how we interpret the perceived settled will of disabled people. We also must recognise the legitimacy of a position that is not the mainstream view of the disability movement—to close sheltered factories—which is that factories should be maintained, to give disabled people a choice. That was always the position, and those of us parliamentarians who are veterans of the Remploy modernisation programme will remember that my right hon. Friend the Member for Neath (Mr Hain) made it very clear that there was still a place within our range of opportunities for supported factory employment.

I want to probe the current consultation with a series of questions to the Minister, which I hope she will be able to answer, if not this afternoon, in the very near

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future. In opposition, the Government supported a five-year modernisation plan, so why did the Minister embark on a review nearly two years before that timetable had been exhausted? I suggest that the five-year plan effectively had only two years to run before there was a general election, so why did the Minister go for the current timetable? With the greatest respect to Liz Sayce, the five-year plan did not come out of a review, in a few short months, but was the result of extensive financial investigations, consultations with the disability lobby before a consultation document was published, and extensive and sometimes very robust discussions with the Remploy board and the trade unions, which some of us here will remember. We felt that there had to be a plan with a time frame that would allow Remploy to turn the business around.

We have heard today that some of the factories are being turned around, that order books are overcrowded and new businesses are coming in. I agree with my right hon. Friend the Member for Wythenshawe and Sale East that there are still some issues about top-heavy management and decentralisation, and we had the five-year time frame so that the issues could be worked through, between the board and the trade unions, with the continued support of Government. I can say this only in the kindest fashion: the current situation has created uncertainty among workers, and indeed among management, about what will happen, and that is stymieing the development of Remploy the business. I have some sympathy with colleagues who suggest that there might be a bit of a withering-on-the-vine strategy behind that.

Given the Minister’s intention to embark on this course of action, what action did she take to involve the board of Remploy and its trade unions in discussions about the issues identified in the Sayce report? What recognition did she give to the trade union analysis of the current operation of Remploy’s enterprises and the questions it raised about the company’s business practices? Did she take any opportunity to discuss some of the issues with the unions? I am not talking about post-consultation discussion, after the paper was published, but about developing the consultation in line with the people who have a strong input into the process. There is a feeling that the consultation is flawed, not least because the Minister perhaps did not appreciate all the implications of the phrase on page 18:

“Government is minded to accept the recommendations of the Sayce Review”.

I do not understand how someone can put out a consultation and then say what they are minded to do before the results have come in.

When the modernisation statement was made to this House on 29 November 2007, the now Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) made the following commitment:

“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.”—[Official Report, 29 November 2007; Vol. 468, c. 451.]

What efforts have the Minister and her ministerial colleague made to fulfil that promise? What discussions has she had with the major procurement Departments, including the Home Office and the Ministry of Defence? Has she looked to ensure that her own Department has considered

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even more ways in which it could open up procurement opportunities for a business in which it has a significant investment? What discussions has she had with colleagues in the Department for Communities and Local Government to encourage local authorities to consider opening up opportunities for individual local factories? What efforts has she made to encourage her colleagues to identify procurement opportunities under article 19? If she is still “minded” after the consultation process closes, what responsibilities will the Government have towards Remploy?

Why is the current pension scheme issue raised in the consultation? Currently the DWP guarantees the company pension scheme, but would it still exist? How would it be managed, and would the DWP have a role in that management? Is the pension fund currently in surplus or deficit, and by how much? If it is in shortfall, what measures will be taken to deal with that? It looks as though the Minister has the figures to hand, but if she does not I would be pleased if she could advise us after the debate. What range of companies does she have in mind that might wish to buy all or some of the Remploy factories? Has she, or have her officials, had any communication with any such interested parties?

The Minister indicates in her consultation that staff might wish to consider acquiring the enterprise businesses, and that they could do so. The consultation also indicates that expert advice would be there to assist, but would any provision be made for a front-loaded capital investment on the part of Government? Would the DWP consider a legacy to those factories, given the deep and extended relationship between Government and Remploy? Those are all unanswered questions in a consultation.

Ian Lucas: My right hon. Friend is making a powerful case. Does she agree that one great weakness of the Sayce report is its complete lack of detail about what alternative model for going forward would be available to individual plants and factories? We are in a state of uncertainty about those individual plants, and they have no real knowledge of what is proposed for their future if the proposals go ahead.

Mrs McGuire: My hon. Friend is correct. I do not blame Liz Sayce for that, as her report dealt with principles and the direction of travel, but we can criticise the consultation for lacking fundamental details on some of the questions affecting the disabled people who currently work for Remploy.

If the businesses are to be transferred, what provision will be made to safeguard terms and conditions? Will they be guaranteed under the Transfer of Undertakings (Protection of Employment) Regulations 2006, or will people be sacked and rehired under inferior terms and conditions? Liz Sayce complimented Remploy on delivering good terms and conditions for its workers, but again, the consultation says nothing about that.

The consultation mentions a comprehensive package of support, which is one of the Sayce recommendations. What does the Minister have in mind? What kind of support will it be? How will it be delivered, and by whom? Has she factored the costs of that support into her budget for the winding-up of Remploy? What assessment has she made of the costs involved in selling

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off the factories and winding up Remploy enterprises, including all the calculations relating to redundancy payments, liabilities and creditors, a point made by my hon. Friend the Member for Glenrothes? How do they relate to the current budget, and how much money will actually be transferred to other Government support programmes after all those issues are taken into account?

Dame Anne Begg: On the Government’s Work programme and their desire to get more disabled people into work, without the factories, there will be fewer opportunities for work experience to give people the skills, expertise and background that will allow them into open employment. We cannot do away with the factories if we are serious about getting people with severe disabilities into open employment. The only employers likely to be able to give them that experience are those such as Remploy factories.

Mrs McGuire: My hon. Friend makes an important point that has been echoed by other colleagues in this debate. The Remploy factories have changed how they operate, including working with local special needs schools. They open up opportunities. She will know that they are not a destination but a stepping stone to the world of work. Disabled people can work in a range of industries and with a range of skills. I support the opening up of opportunities, with the support of trade unions, workers and management, as part of modernisation. At a factory in Causewayhead in my constituency last week, I was told how many people were coming to the factory through the training annexe. Training opportunities were being opened up to a range of disabled and non-disabled people. She makes a good point.

I have left one important issue until the end. Why has the Minister decided effectively to renege on a deal made with people who decided to stay with Remploy under the modernisation programme? I refer her to page 19 of the consultation document, which says:

“The implication of the recommendations in the Sayce Report is that, if accepted”—

she has already said that she is minded to accept them—

“Remploy in its current form would not exist…The Government will therefore not be able to give undertakings that staff”,

who are covered by protection of their working conditions, salaries and pensions,

“will not be made compulsorily redundant as a result of such changes, including the modernisation group.”

Modernisation came about as the result of protracted and difficult discussions. I will be disappointed if the Minister and her Government run away from the decisions and agreements made and accepted by her party when they were in opposition to maintain terms and conditions even for those who chose not to or were not in a position to move into other full-time employment. That was our deal with people who had given a lifetime of service to Remploy. Frankly, if my interpretation of her consultation document is accurate, I am disappointed.

The Minister cannot distance herself from the economic situation in which we find ourselves, a situation underlined by yesterday’s unemployment figures. Does she accept that even if she is minded to make that decision, making it in the current economic environment looks almost like abandoning her duty of care to the disabled employees who have given many years of service to the company that she effectively owns?

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The Minister cannot hide behind the views of the disability lobby to justify her actions. Indeed, one leading disability organisation, Scope, while accepting the principle of closure, says on page 101 of the Sayce review:

“However, given the harsh economic climate, we recognise the need for transitional protection for the 3,000 employees currently located in the Remploy factories and suggest that full closure is deferred until the employment environment has recovered.”

Even one of the organisations supporting the direction of travel says that now is the wrong time to make that decision.

During the past two hours or so, the Minister has heard the passion and commitment expressed by hon. Members from all parties. I hope that she will seriously consider those points of view. I hope that her phrase that the Government are “minded to accept” was an unfortunate slip of the pen and that her mind is still open. Not only do disabled people fear unemployment, they experience fear every day due to negative media headlines about disabled people and their lives in the community. I think that she is an honourable lady, and I hope that as a result of this debate, she will take away some of the points made and see that there is a flexibility of approach and that nobody is tied to a model of Remploy that is stuck in the past. We want a network of supported factories in local communities and linking into local networks that deliver good-quality jobs and experiences for many young people for many years to come.

4.58 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller): It is a great pleasure to serve under your chairmanship, Mr Benton, and under that of Mr Havard, who is no longer in his seat. I congratulate the right hon. Member for Cynon Valley (Ann Clwyd) on securing this debate and right hon. and hon. Members on making a strong case on their constituents’ behalf for the importance of providing the appropriate support for disabled people to get into employment. I, too, note that many people in this room today other than right hon. and hon. Members have an interest in that.

It is also important to note how much time hon. Members have taken to come talk to me. My hon. Friend the Member for Eastbourne (Stephen Lloyd), the hon. Member for Swansea West (Geraint Davies) and the right hon. Members for Wythenshawe and Sale East (Paul Goggins) and for Cynon Valley have all taken a great deal of their own time to ensure that they put their views in a measured and sensible manner, and I thank them all.

It was interesting to follow the right hon. Member for Stirling (Mrs McGuire), who speaks for the Opposition. Having been in my place, she is right to say that we face a dilemma. She stated that she understands the tensions. I have no doubt that she does, having done this job before me, but what was not clear is exactly what the Opposition’s position is. She might feel that she has made her position clear, but it was not clear to me.

Mrs McGuire: I have made it clear that we expected the five-year plan that was in place to run its course. The problem is that it is the Minister who has to wrestle with the decisions, but I have made our position very clear.

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Maria Miller: The right hon. Lady and I are, therefore, absolutely at one. This Government have made it clear that, despite the very difficult financial situation that we have inherited, we will continue to support the modernisation plan. We are in year four of that plan, and it is absolutely right that we should plan for the future. It would be wrong and a dereliction of our duties not to look to the future, particularly given the fact that the modernisation plan has, it pains me to say, struggled to be achieved.

The right hon. Lady and others have asked a lot of detailed questions. I want to answer as many of them as I can, so I hope that hon. Members will forgive me if I keep interventions to a minimum. The first was the right hon. Lady’s question about whether we support the modernisation plan. The answer is absolutely. We are in year four of it. There is great concern about the failure to meet its targets, but we are continuing to make sure that the money is available and that we put in the required effort to see the plan continue.

I discussed both the modernisation plan and the Sayce report with the trade unions and the Remploy board at a recent meeting in Leicester, and my officials will have further meetings with the unions in, I think, the second week of January. The right hon. Lady should be reassured that we are trying to do the same thing as the previous Administration, which is to take something that was created in 1946 to rehabilitate ex-service personnel after the second world war and try to find a sensible and constructive way forward in these difficult times.

The right hon. Lady also talked about a number of issues in relation to terms and conditions for those in the Remploy plan who took redundancy. I am sure that she already knows this, but I wish to clarify that those terms and conditions were for the period of the plan.

The world has changed immeasurably over the 65 years since Remploy was established. Our responsibility as constituency Members of Parliament, Ministers and Opposition Members is to make sure that we look forward to the future and make sure that we have the right support available for disabled people to be able to reach their full potential in life. That is our responsibility and our Government’s focus.

In Britain, our manufacturing industry faces increasingly competitive markets from overseas. The overall development of Remploy over the years has not been focused on the business environment in which it operates. That is a plain fact. Some sectors, such as the automotive sector and CCTV, have been able to develop offerings of higher value-added products and services, but they are the exception, not the rule. The vast majority of the network continues to produce products that, as a nation, we are more used to seeing imported from overseas and, indeed, at lower costs.

Fifty-five per cent. of disabled people in this country work in offices, shops and public services, and—my hon. Friend the Member for Eastbourne has talked eloquently about this—increasingly want to be involved in all aspects of employment and be part of a national work force. When I talk to employers such as BT, Royal Mail and B&Q, I start to feel heartened about a change in attitude among employers towards employing disabled people. That is only a start, and there is still a great deal more to be done. I do not underestimate the challenges that we all face to overturn entrenched attitudes.

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Jim Dobbin: It just so happens that, before I came to this debate, I attended a reception held by the Council for Disabled Children in the Jubilee Room next door. A young man spoke to me about the situation, and I told him about this debate. He told me that he had just lost his job. I asked him why, to which he replied, “Because I am disabled.” I asked him how he was disabled, and he said that he was deaf. He has tried and tried to get re-employed, but he has failed.

Maria Miller: I thank the hon. Gentleman for his intervention. The answer is that there is a great deal of legislation that would support that young man. I hope that the hon. Gentleman’s advice to him was to seek legal redress, although the particular instances of the circumstances would need to be taken into consideration. Our responsibility is to plan for the future and for young men like that who want to be able to work in the same jobs as their peer group in a class, and to make sure that they have the ability to do that, not only through legislation, but through the attitudes of their employers.

Procurement has been mentioned a number of times. Indeed, the right hon. Member for Cynon Valley raised the issue right at the beginning of the debate. It has been suggested that an increase in procurement sales, particularly from local authorities, would resolve Remploy’s current problems. In its briefing for this debate, the GMB initially chose to criticise the support provided by local authorities for Remploy, but, for the record, I want to thank local authorities for their support for Remploy. The hon. Member for Wrexham (Ian Lucas) has talked about his local authority’s work in that regard. Moreover, the local authorities in Blaenau Gwent, Swansea, Merthyr Tydfil and Newcastle already support Remploy. Indeed, my own county council in Hampshire also supports Remploy and is very proud to do so. It is important that we do not underestimate the existing support. We are most grateful and thankful for it.

Ian Lucas: Local authorities cannot support Remploy if Remploy is not there.

Maria Miller: The hon. Gentleman will know that the consultation talks about freeing Remploy from the control of Government and making sure that successful organisations can continue to thrive.

To return to the specific point that Members have addressed at great length, there are examples of local authorities and Remploy working together, but the problems in the factories will not be addressed by that alone. Article 19, to which Members have referred, is clearly a way to help public bodies use supported businesses, but it does not address the issue of value of money that procurement officers always need to consider, nor does it guarantee that Remploy will be given work in competition with other supported businesses.

The issues currently faced by Remploy factories are not new, and concern over the increasing cost, low productivity and sustainable jobs for disabled people has been an issue since the 1990s. The operating loss for the factories has increased into tens of millions of pounds, and the steps taken under the modernisation plan, which was rightly introduced by the previous

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Administration, including closing and merging 29 sites, has simply not addressed the fundamental weakness in the business model.

The right hon. Member for Cynon Valley mentioned my comment that I was minded to accept the consultation’s proposals. I want to make it clear that I have not yet made a final decision about the consultation, but I am persuaded that there is a need for change and that the Sayce review suggests a persuasive model for such change.

Gemma Doyle (West Dunbartonshire) (Lab/Co-op): Is the Minister aware—I believe that she is—of the Blindcraft factory in Glasgow, which is a very successful supported employment workplace? Will she acknowledge that it is the business plan, not the business model, that is failing, as the management themselves acknowledged to her and me earlier this year?

Maria Miller: I thank the hon. Lady for her intervention. We have met on several occasions to discuss the issue. There are examples of areas where there can be success. Indeed, the hon. Member for Swansea West has walked the talk and made sure that the procurement issue has been uppermost in his local authority’s mind, and he has been very successful in that regard. There are opportunities for success, but the problem is that that success is not across the board.

I have already confirmed that the amount of money going into specialist disability employment is not the issue, because we have protected that pot of money. This is about ensuring that that money works hardest for disabled people. This is not about reducing funding; it is about using the money most effectively in whatever way that comes about. We have to consider those alternatives.

I have met Remploy trade union representatives on a number of occasions to discuss the matter. I have visited factories and listened to the views of employees, and I attended one of the consultation events in Reading in September. Let me restate that the Government’s commitment is to the five-year modernisation plan introduced in 2008. We are now in year four of that and those targets are not being met.

Last week, Remploy published independently audited annual reports and financial statements for 2010-11, which revealed that the Department for Work and Pensions spent £68.3 million supporting 2,200 disabled people in Remploy enterprise businesses at an annual cost of £25,000 per person. That is £5 million more than in 2009-10 and is more than 20% of the total budget available to help disabled people into work through the specialist employment budgets. We have to take a long hard look at the situation.

Geraint Davies: Does the Minister accept that there is a case for some job subsidy, even if it is as low as the amount that that person would otherwise be paid for unemployment benefit and health on-costs, or is she going to stick to her guns and say that there should be no subsidy and we should therefore make a loss to the Exchequer?

Maria Miller: The hon. Gentleman asks a very detailed question. He knows that we have not yet made the decision about the way forward. A significant amount of money is available to support disabled people. My hon.

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Friend the Member for Eastbourne talked about the Access to Work programme, which he rightly said is exceptionally effective. The Sayce report clearly says that if decisions are made about the prioritisation of the available money, more money—significant amounts of money—could be yielded to support Access to Work. That could well be the sort of support that the hon. Gentleman’s constituents in Swansea West would want.

John McDonnell: Will the Minister give way?

Maria Miller: Will the hon. Gentleman forgive me if I make some progress? He and others have raised a lot of points, and I want to be able to deal with them.

The chairman’s annual report confirms that, last year, on average, half Remploy’s factory employees had little or no work to do and that the operating results for the factories have been significantly out of line with the modernisation plan. The perception that Remploy has turned work away is, I am afraid, simply unfounded. Some bids have been unsuccessful because they do not have the required capability or capacity in the factories, and sometimes Remploy has been outbid on price.

The right hon. Member for Cynon Valley talked about the order books being strong. The simple truth is that, even at full capacity, the factories are still making large losses, which demonstrates that the business model is wrong. That is why I asked Liz Sayce to review not only Remploy, but the specialist disability employment programmes that we have available.

The annual report also confirmed that Remploy employment services have been able to secure 20,000 job outcomes in the past year at a one-off unit cost of £3,300 per job. We should absolutely applaud that. Remploy employment services have been making great headway for many thousands of disabled people. I should like that to be recognised in this debate.

My hon. Friend the Member for Eastbourne talked about alternative support for disabled people, particularly Access to Work. I absolutely understand his support for that programme, which has great potential if we have the funding available to support it. We should all be pleased that there are opportunities in all our constituencies for Remploy employment services to help disabled people into employment through the work that it does with organisations such as Asda, BT, Marks and Spencer, Sainsbury’s, Tesco, McDonald’s, the Royal Mail and the NHS. That has been its achievement over the past 12 months; indeed, results of a similar magnitude are predicted for the next 12 months.

I shall talk briefly about some of the specific points raised by hon. Members. The hon. Member for North Tyneside (Mrs Glindon) asked whether I would consider the consortium of trade unions plan. Absolutely. I will look at all the plans that have been put to us. I am particularly interested in the trade unions’ approach. The Secretary of State and I have made it very clear that we would be delighted for the trade unions to propose ways that they want to work with us to free the factories from Government control and to ensure that they can have a successful future. We will always be open to thoughts being given to us on that front.