Remploy

HC Deb 14 June 1995 vol 261 cc707-28

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

10.4 am

Mr. John Hutton (Barrow and Furness)

I shall begin our short debate on the future of Remploy by making what I hope will be regarded as a non-controversial observation. It is that the Government have a special responsibility towards people with disabilities. One aspect of discharging that responsibility is to ensure the provision of worthwhile employment and training opportunities. Remploy has been an essential element in meeting that responsibility for over 50 years. Indeed, 1995 marks the company's golden jubilee.

Remploy was formed 50 years ago to meet the needs of those disabled during the second world war. Naturally, things have changed considerably since then. The company now employs nearly 9,000 people in over 90 factories spread throughout the United Kingdom. Most of those employees suffer from a disability and would be unlikely to obtain employment if it were not for Remploy, or undertake self-employment. The company is, therefore, a vital bridge to the world at work for people with disabilities. With employment comes independence, a sense of self-worth and esteem.

It should be acknowledged at the beginning of the debate that Remploy has been a huge success story since 1945. Sales, for example, increased last year by nearly 2 per cent. to over £126 million. It is forecast that turnover this year will approach £135 million. Perhaps one of the greatest success stories in recent years has been on the export front, where sales have more than doubled from £4.3 million to nearly £10 million. Remploy's staff deserve a big round of applause from us all, both management and staff.

My immediate concern is more about the future of Remploy. I am less concerned about its past. The best way of proceeding in future and guaranteeing job security for all the workers connected with Remploy is for the Government to demonstrate their full commitment to the work force and the company. I hope that the debate, which is the first about Remploy on the Floor of the House for many years, will help to focus attention on precious jobs and on the important role that the company fulfils in helping to meet the needs of people with disabilities.

Mr. David Harris (St. Ives)

Like all right hon. and hon. Members, I am most grateful to the hon. Gentleman for initiating the debate. Does he accept that apart from the disability factor, Remploy performs a particularly useful function in areas such as the one which I represent, which are far away from main centres of employment? These are areas where people with disabilities would have no chance of getting a job. The Remploy factory at Penzance does marvellous work. The House is indebted to the hon. Gentleman for introducing the debate.

Mr. Hutton

I thank the hon. Gentleman for his comments. I am bound to agree with everything that he said. If we examine the history of Remploy and how its factories were located throughout the United Kingdom, it is clear that the siting of the company's workplaces had as much to do with social considerations as economic ones. We should not lose sight of that when we consider the future of the company.

If the company is to continue to meet the needs of people with disabilities, it must have the fullest possible support from Government. Many people, both within and outside Remploy, believe that that support has not been forthcoming in recent years. I share their concern.

In the short time that is available to us this morning, I shall focus my comments on Remploy in the north-west, and especially on the future of the textile group and the operation of the new interwork scheme. I know that many other hon. Members want to speak, and I am sure that they will raise other issues with the Minister. I am delighted to say that there are many representatives in the Gallery today from the work force of Remploy, and many of them have come down from my constituency. Most of them are members of the GMB. From my constituency, there are members of the Barrow Five branch of the GMB, my own branch.

In the north-west, there are 13 Remploy factories, employing more than 1,000 people with disabilities. Remploy's Barrow factory has 44 employees. Six of the factories in the north-west are in the textiles group, including the factory in my constituency. The major customer of the textiles group is the Ministry of Defence, which accounts for two thirds of the group's work load.

The Government's decision last August to scrap the priority suppliers scheme and to replace it with the special contracts arrangement is causing a major problem, for the textiles group and other parts of Remploy as well. The whole episode surrounding the scrapping of the priority suppliers scheme has demonstrated a degree of incompetence and indifference on the part of the Government towards the employment of people with disabilities. There remains the very strong impression that the Employment Secretary used the new European directive on public procurement as an excuse to scrap the priority suppliers scheme. It was the public outcry, which resulted from the Government's action to scrap the scheme, that forced Ministers to devise a replacement scheme, the so-called "special contracts arrangement".

The new directive on public procurement practices should have included a similar provision to article 25(4) of the original 1977 directive. That would have protected the continued operation of the priority suppliers scheme. Apparently, according to the European Commission, no such request was made by the British Government during the renegotiation of the supplies directive. I believe that, in that respect, the Government handled the negotiations negligently.

The limits that apply to the new preferential arrangements are simply inadequate and will, as a result, exempt many Government contracts from their scope. Most MOD contracts will exceed the limits set by the special contracts arrangement scheme, and Remploy will therefore have no opportunity to match the lowest tender being submitted by other companies that employ able-bodied workers.

Mr. Oliver Heald (Hertfordshire, North)

I understand the fear that the hon. Gentleman is expressing, but the actualité has been rather different. As he will know, the findings of the Employment Select Committee's report on this issue were that Remploy has won contracts since the introduction of the special contracts scheme, above the threshold, with the Ministry of Defence, and that quite a number of those contracts are very substantial indeed.

Mr. Hutton

I thank the hon. Gentleman for those comments, but I think that he should speak to the people in Remploy, who would give him a different view about what the future holds under the special contracts arrangement scheme. The reality, if I can press him on this point, is slightly different. I believe that the changes will mean that Remploy's textiles business in particular, which is already competing with imports from the far east, will not have priority in bidding for the large contracts that it needs to survive. Business for the textiles division is drying up, and some factories are getting close to the point where they are running out of work.

That is not—I need to make this clear—the result of any peace dividend. The MOD budget, to 1988, amounts to more than £100 million for textile-related business. The bulk of the contracts, however, are now going to the far east, to purchase clothing produced by cheap labour. That affects the job security and employment of severely disabled workers.

Recently, because of the lack of textile contracts, Remploy made a commercial decision to close the Alfreton factory, which, I believe, is in the constituency of the Under-Secretary of State, and the work force was shifted to a new location. I am aware that the work force at Alfreton was offered alternative employment at Mansfield. For able-bodied people, the extra time involved in travelling to work in a new location may be an inconvenience, but for severely disabled people with special needs it can be uncomfortable and distressing.

I believe that the Government's whole handling of the issue has been abysmal. The consequences for Remploy, and the textiles group in particular, could be very serious indeed. The consolidated supplies directive, which has been used as, the excuse for scrapping the priority suppliers scheme, could not have been intended to have had that effect on companies such as Remploy, which is fulfilling a social need of employing people with special disabilities. I believe that the case for the Government to rethink their whole strategy in this area is very persuasive.

Before I leave the point about the textiles group and its future in the north-west, I bring to the attention of the Minister an issue that deserves consideration by the Government. If MOD contracts that previously went to Remploy factories in the UK are going to the far east, I would draw the Minister's attention to the work that was done by Remploy at Barrow during the Gulf war, when the Army and the other services desperately needed new and additional equipment: uniforms for the desert, and special biological and protective suits.

During the Gulf crisis, the work force at Barrow worked long overtime hours, throughout the weekends, to produce the equipment that the armed services needed to discharge their responsibilities. If an increasing volume of that business goes to the far east, to countries outside the United Kingdom, there can be no guarantee that such an opportunity for the MOD will be available in times of crisis. The MOD has always said how satisfied it is with the work that comes from Remploy. If we push those contracts abroad to the far east and take them away from Remploy, there is a strategic implication that the Government need to take on board.

I shall now say a few words about the interwork scheme. Concern has been expressed about recent statements made by the company about the size and shape of the Remploy work force and the implementation of the interwork scheme, under which Remploy workers are being encouraged to move out of supported workplaces and into supported placements in open employment. The chief executive of Remploy has said that he hopes to expand the interwork scheme from the present figure of 1,700 to nearly 5,000. He also said, in the company's golden jubilee pamphlet: What I see for our future is far fewer products being produced … leading to fewer factories and fewer people. I believe that Remploy workers have genuine concerns about a move to low-skilled jobs with poor training and less security, in inaccessible workplaces. There is some evidence of a failure to observe the basic requirement: an employer under the interwork scheme must not pay less than the Remploy rate for the job. There are also fears that interwork will result in the creaming off of the less disabled, leaving those with the greatest disability in the factories to compete for what contract work becomes available. I believe that that would be totally unacceptable.

It would be helpful if the Minister would provide details to the House today of the type of work being undertaken under the interwork scheme, and the extent of the protections that exist against abuse.

I shall end my remarks now, as other hon. Members want to speak. I shall end on a positive note. Labour Members believe that the case for supported employment for people with disabilities is as strong today as it was in 1945 when Ernie Bevin, as Minister for Labour, set up Remploy.

I hope that the Minister will be able to give a firm promise to support Remploy and its work force into the future and to ensure that it is still able to celebrate many more anniversaries over the next few years.

10.17 am

Mr. Peter Thurnham (Bolton, North-East)

I congratulate the hon. Member for Barrow and Furness (Mr. Hutton) on his success in obtaining the debate. I had a letter on my desk, addressed to you, Madam Speaker, asking for a debate on Remploy, because I believed that there would be strong interest in it on both sides of the House, and that is very evident today.

I am personally aware of the concerns in Barrow. A petition was presented to me when I was in Barrow last summer to carry out an opening ceremony for a new bungalow, at "The Croft", of which the hon. Member will be aware. The new bungalow was called "Peace" and I was delighted to be there. The Barrow and District Spastics and Handicapped Society does excellent work. I am glad to say that my son is very happily settled there. He did come from Barrow originally, so it is fitting that he should be back there. I cannot speak too highly of the work done by Dennis Rose and the whole team at "The Croft", including his daughter, Jacqui Rose, who gives such personal care to the people there.

I know that the hon. Member for Monklands, West (Mr. Clarke) visited Barrow a little while ago. I hope that he might have an opportunity to come to Barrow again and to visit "The Croft", as I am sure that he would be delighted to see the excellent work that is done there in view of his own interests in that sphere. Stephen is too physically and mentally handicapped to be able to take advantage of the sort of work that Remploy does, but I am very aware of the importance for Remploy, not only in Barrow but in my own constituency and elsewhere. Although the factory in Bolton is just outside my constituency, it employs many of my constituents. It is also in the textiles group and so shares the concerns that the hon. Member for Barrow and Furness mentioned.

We also have a local authority workshop in Bolton, which carries out work for the Post Office. The Remploy factory in Bolton makes lots of trousers for the Post Office, so the Post Office is an important customer. The Bolmoor workshop has been successful in developing new products, especially the bags—they should also be useful for postmen—that it makes for newspaper groups and others. That workshop employs about 25 people at an average subsidy of £5,600 per head, which is much less than the cost of subsidising employment in Remploy.

I have been interested in the employment of the disabled for many years. When I first entered the House I was on the Employment Select Committee, and I was parliamentary private secretary to the Secretary of State for Employment from 1987 to 1990 and for two other Ministers in the Department of Employment until 1992. So I have long been aware of the concerns.

The problem is that the costs of subsidising employment at Remploy are so high compared with those elsewhere. The figure works out at almost £10,000 per employee; the cost of Remploy's subsidy is higher than its total wages bill, so in strict cash terms it would be cheaper for people to have the money and stay at home—although I appreciate the fact that Remploy carries out many other functions, and that it is important for people with disabilities to have the opportunity to be employed and to be integrated as closely as possible with society as a whole.

There are about 20,000 people in supported employment. Last night a reception was organised in the Palace of Westminster by the Shaw Trust, which has been remarkably successful in placing more than 2,000 people in employment throughout the country. It has existed for only about 10 years, and works with a subsidy of £4,420 per employee, through a Government grant of £8.5 million. So the Shaw Trust is more than twice as effective as Remploy in terms of the number of disabled people whom it can help for the same money. The total Government subsidy for such work is £153 million, of which about £94 million goes to Remploy. We must accept the fact whom resources are limited, and if we want to help as many disabled people as possible we must carefully examine the costs in Remploy.

Remploy has been given targets, but I believe that it has had difficulty in meeting them. It is nice for Remploy, like any other nationalised industry, to sit back and be comfortable with the taxpayer's support, rather than facing the need to consider the picture more widely. One target was for the organisation to increase the number of disabled people employed from 8,600 to 8,900, at an average cost of £9,650. Another was to increase the number of people employed through the interwork scheme from 1,230 to 1,450. I am certainly not aware of a target of 5,000; I believe that that would mean looking a long way ahead.

The average cost of the interwork scheme is £4,420 per employee, and my figures suggest that the target is to increase employment in factories from 7,370 to 7,450. No figure is given for the cost of employment in those factories, so I should be grateful if when he replies the Minister would confirm my calculations, which suggest that each factory job costs £10,668. That figure is two and a half times the cost of the Shaw Trust's placements, so within a given budget five jobs could be organised through the Shaw Trust compared with two through Remploy in the factories. It is important that we know these figures, and that we think about what could be done.

The hon. Member for Barrow and Furness said that there should be a rethink of Remploy's whole strategy. I agree, and I shall say more about that later. Remploy now has 95 factories in the United Kingdom, although if Alfreton closes there will be only 94.

As is obvious, the organisation is competing in an increasingly global marketplace. So many international businesses now make different products in different places that it is almost impossible to say exactly where anything is made. The other day there was a proposal for a new car factory to be built in south Wales by a conglomerate of Asian car manufacturers using Mercedes-Benz engines. I do not know what we should call the product that comes out of that factory. No doubt the Welsh would like to call it a Welsh car, the Germans will call it a German car and the Asians will call it an Asian car. It is now impossible to locate the manufacture of a product in a country as we once could.

One of the surprising facts about Remploy is that while the Government have been in office we have nationalised the eight private companies that have been brought into Remploy. I do not believe that that was the right strategy, and I should be surprised if we were to continue to nationalise private companies in Remploy, against the trend according to which the Government have privatised so many former nationalised industries, because those industries now run so much better as private sector companies.

I hope that the GMB will adopt a positive attitude towards the future options for Remploy factories. It is important that the factories should be in full use and employ people as fully as possible-not only the disabled but the abled, in as integrated a way as possible.

About 40 per cent. of Remploy's work is dependent on the Government, so it is obvious that the Government are involved not only as the provider of the subsidy but as a major customer. Remploy's failure to meet targets in the past has left the Government with the problem of what to do about that. The business is in a difficult position, with a £126 million turnover and a deficit of £83 million, which, as I have already said, exceeds the £79 million wage bill.

We already know about difficulties in the textiles division. In evidence to the Employment Select Committee's inquiry, it was named as the one of six divisions in which there were immediate problems. I believe that when Ernie Bevin originally set up Remploy it was viewed as a staging post, but it is not easy to see how it can now perform that function; currently only 0.4 per cent. of employees move on to other employment. Of course, many employees have been with the organisation for years, and would not take easily to the idea of moving on.

We should consider the experience of other countries. Sweden, with the Samhall organisation, employs about 29,000 people; Australia has 11,700 in 282 separate workshops; and the United States has 250,000 disabled people in workshops. There is a strong message that those other countries are seeking alternatives to sheltered workshops, so I agreed with the hon. Member for Barrow and Furness when he said that a new strategy was needed. After the Alfreton closure it will be possible to offer the workers alternative employment in the nearby Mansfield factory, but that would not necessarily happen with other factories, so we must consider the alternatives carefully.

We should start by discovering what the wishes of disabled people are. I ask my hon. Friend the Minister to carry out an opinion survey among disabled jobseekers in general, as well as among employees of Remploy and other sheltered workshops, to find out exactly what they would like. We have heard some ideas from the hon. Member for Barrow and Furness today, and many of his constituents are in the Strangers Gallery. They can give their views as existing employees, but we should also seek the opinions of as wide a range of people as possible.

For instance, the Shaw Trust has told me that its disabled employees welcome the fact that the way in which they work is integrated with the rest of society. Indeed, the trend is now for disabled people to be integrated as fully as possible into society and to avoid segregated ghettos, which may have been necessary in the 1940s but which no longer represent our vision of the best possibilities now.

We should find out the opinions of the placement, assessment and counselling teams—the PACTs—and the disability employment advisers, so that when we consider new strategies we know more exactly what disabled people need.

It has been suggested to me that Remploy could be transformed into an employee-owned trust. The hon. Member for Edinburgh, Central (Mr. Darling), the Opposition spokesman on finance and City affairs, spoke at the launch of the new Employee Share Ownership Trust, so there is interest on both sides of the House in considering a possible different structure for Remploy as an employee-owned trust.

However Remploy is owned, I believe that the factories' future must depend on their entering into partnership agreements with private sector organisations that can help with the management. Interesting ideas have been suggested to me by the managing director of the Baxi partnership in Preston, Mr. Bryan Gray, and I have incorporated those thoughts into a paper. I gave a copy to the hon. Member for Monklands, West last night, and showed a copy to my hon. Friend the Minister, and I hope that he will consider the proposals in it.

It is essential that we look to the private sector to help find a solution to the future of Remploy. There is no doubt that the Government are committed to the interests of disabled people and to providing funds to help with employment. A massive subsidy is going into Remploy, but that subsidy should go not just into bricks and mortar to keep open factories that may or may not be fully utilised, but to providing the best and widest opportunities for disabled people so that they can look forward to the future with some confidence.

Mr. Tom Clarke (Monklands, West)

I do not want to take up more time than I need, but I have read the hon. Gentleman's paper carefully and we shall consider it carefully. I hope that he will not think that I am misleading him, however, if I say that I did not expect his preamble. No one in the Tomlinson committee report accepted that this was just a matter of dealing with problems that arose from the war. Going back even to the American civil war, it was expected that one would deal with war veterans but, thereafter, with people who were still disabled.

Mr. Thurnham

I am grateful to the hon. Gentleman for pointing that out. Obviously, we must consider the matter in the fullest and widest context and I am grateful for his undertaking to consider the proposals that I have put to him.

Forgive me, Madam Speaker, if I have taken more time than I had intended, but I should like to welcome today's fall in unemployment. The fall in Bolton, to a figure of 8,665, is welcome. We should not forget that, when the Labour party was in power, unemployment in Bolton trebled from 2,102 to 6,521. The figure is now coming down. [HON. MEMBERS: "What is it now?"] The May figure is 8,665 and it is coming down at a rate that suggests to me that it will not be very long before it is below the figure when the Labour party was in power. The figures show that unemployment trebles when Labour party policies are in place. When this Government's policies are being implemented, however, we can look to a fall in unemployment, better employment opportunities for able-bodied people, and much better employment opportunities for disabled people, which I want to see occurring.

10.31 am

Mr. Alfred Morris (Manchester, Wythenshawe)

I am delighted that my hon. Friend the Member for Barrow and Furness (Mr. Hutton) had the good fortune to secure this debate and congratulate him most warmly on his opening speech. The debate is one I find moving as a parliamentary occasion that affects the hopes and very real fears of thousands of working people, a great many of them severely disabled working people. It is a debate of short duration and I shall speak only briefly, more especially since my support for Remploy's employees over more than 30 years here, both as a Minister and from these Benches, is well documented.

My purpose in speaking is simply to underline the importance of a clear ministerial response today to the questions Remploy's employees and their representatives are asking, often in anguish and sometimes now in anger, about the future of an enterprise that has transformed a huge number of disabled people from tax users into tax payers. They want a clear statement from the Government today that disabled people will not be exploited by interwork, to which my hon. Friend referred in his speech. They insist that the host company should pay at least the Remploy basic rate of £126 a week.

Remploy's disabled employees ask whether the cost of employing non-disabled administrative staff, which was £28 million in the last financial year, has got out of control. They point out that the current pay of the chief executive at £87,600 has increased from £74,000 in 1991 and that this represents four times the percentage increase of hourly-paid disabled employees in the same period. Does that have the Minister's approval?

Disabled employees see the Government's Disability Discrimination Bill as being likely to reduce sheltered employment. What guarantee can the Minister give this House today that there will be no reduction in sheltered employment in the UK? The Government's Bill proposes to abolish the register, but they have not said what they intend to put in its place. They promised to consult about a new system with employers, but not with disabled employees or their unions. Is that not totally unacceptable to both sides of the House and will the Minister now explain what is to be put in place of the green card system?

There is concern as well that the Government are not doing enough to try to alter European law and directives that deal with unfair competition and an insistence that sheltered employment should be exempted from their effect. Does the Minister agree that Government Departments such as the Ministry of Defence should be allowed to place orders with British companies such as Remploy without interference?

In the Golden Jubilee issue of Remploy News, under the headline, "My Dream", an article by the chief executive said, quite amazingly, of Britain's political parties: They all have the same policy towards disability". That must really have startled the Secretary of State for Employment.

Remploy's chief executive also foresaw in his article fewer Remploy factories and fewer people. While there are Members of Parliament in all parties who work in close harmony to improve the well-being and enhance the status of disabled people, the chief executive's first statement is plainly wrong as he would discover by spending no more than a day or two here; and the second is deeply worrying to Remploy's employees, not least those who are severely disabled.

This debate provides the opportunity to clear the air about Remploy's future and I ask the Minister to play his part by providing straight answers to the questions I and others want answered before this debate concludes.

Finally, I want to pay well-justified tribute to Phil Davies, trade union side secretary, whose industry and concern have done so much to keep Members of Parliament abreast of developments at Remploy. His commitment and constancy in promoting the interests of its employees are highly valued by those whom Phil and his colleagues work so hard to help and what they have achieved is rightly and widely admired.

10.36 am

Mr. Oliver Heald (Hertfordshire, North)

I also congratulate the hon. Member for Barrow and Furness (Mr. Hutton) on instigating today's debate on this important company. I should like to congratulate it on its 50 years of achievement in helping to provide employment opportunities for some of the most severely disabled people in society.

It is easy to forget that the landmark legislation of 1944 was introduced against a background of war, when the country needed to maximise the potential, skills and contribution of all its people to defeat the enemy of Nazism.

When I was in the United States of America with the Select Committee on Employment to consider the Americans With Disabilities Act, one of the things that struck me was the loss of economic activity that resulted from disabled people being physically unable to attend work through lack of access or training, a point that was made repeatedly. The loss amounts to about £1 billion every year. In total, the American economy could lose as much as £100 billion a year from not maximising the skills and potential of disabled people.

We should consider this as an issue not only of social policy, but of Britain and the British economy. We should have the benefit of the talents and contributions of disabled people for our country to flourish economically. Although Remploy is often characterised as a company that provided disabled people with dignity and, in a sense, a land fit for heroes—many of the people who worked for Remploy immediately after the war were heroes—it is in the direct economic interests of our country.

Times have changed since the war and the revolution that has brought us new technology has helped the disabled in two ways. First, it enables those who, for purely physical reasons, were unable to work to do so with the help of modern aids. In America, that process is even more advanced than it is in Britain.

Secondly, the nature of the work that is now available for employees generally is such that people have to climb the ladder of technology. Physical work is, of itself, less important and disabled people can climb that ladder. In terms of technology, therefore, events are moving in favour of disabled people in the work force, and it is right that Remploy should direct itself in a way that meets, and works with, that tide.

When Remploy was first set up, its employees generally manufactured furniture. It is right that it should move on and look at other work—at the work of the future, as the right hon. Member for Manchester, Wythenshawe (Mr. Morris) said—rather than at the work of the past. The Edinburgh factory has been doing exactly that. It started as a furniture manufacturer and moved into packaging, but for the past three years it has been a subcontractor in the electronics industry making quite a wide range of fairly sophisticated electronic products. That business is competing successfully, and in the past year alone the number of employees has gone up from 40 to 63.

I do not entirely agree with my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) about the purchase of other businesses. Although my instincts are always in favour of private enterprise, if it is possible to purchase a business in an area of modern business endeavour and help disabled people to use their talents, I would not criticise such a move. Remploy was right to purchase the Silhouette lingerie line and to use that facility. It was right to undertake the making of life jackets, which is a fairly sophisticated process, and right to streamline the operating divisions.

The right hon. Member for Wythenshawe criticised Mr. Withey and the amount that he is paid, but Mr. Withey has done a good deal to make the business more efficient. The interwork scheme is working with the grain of Remploy's original intentions. In a way, it was a staging post to enable people to move into placements in open employment. I am glad to see that that is expanding.

The hon. Member for Barrow and Furness spoke about the priority suppliers scheme. That scheme had to be abandoned by the Government because the European Commission made it clear that it was illegal. The Labour party is committed to European measures in every direction and says that it will always be at the centre of Europe and never stand up against it in any way, but it is saying that it would go ahead with an illegal scheme. We all know that it would not. The Government moved swiftly, in discussions with the Commission, to introduce a scheme that provides at least some of the protection that had previously been available.

The Select Committee on Employment looked at the issue. Page xv of its report states that the new arrangements enabled Remploy to win contracts, some of them large ones from the Ministry of Defence over the public procurement threshold, and that more were being considered. It would be wrong to say that the new scheme had been a failure. Certainly at this stage it looks as if there are some promising developments.

We must not forget that Remploy has to sell its products. There is increasing competition from suppliers of textiles and clothing sourced from low-wage economies in the far east. There is also a decline in work from the Ministry of Defence. No political party or hon. Member would say that the Ministry of Defence should order more than it needs so as to support Remploy. It is right that it should be a competitive business and become even more competitive. That is the chief executive's approach. He has said: It has meant that we have to be very commercially minded. No one will pay us more or accept lower quality goods or late deliveries just because we are Remploy. The modern structure and modern products and methods are the way forward.

I support the idea of my hon. Friend the Member for Bolton, North-East of a partnership with the private sector. There are two reasons for maintaining Remploy. One is the social reason—providing employment and opportunities for disabled people. The other concerns the importance to our economy of using people who have talents and skills and a contribution to make. We should not always concentrate on the social argument—it is important to Britain to get it right.

10.44 am

Mr. David Clelland (Tyne Bridge)

I congratulate my hon. Friend the Member for Barrow and Furness (Mr. Hutton) on taking the opportunity to raise this important issue. I recently visited the Remploy factory in my constituency on the Team Valley trading estate where work is carried out with great skill and commitment. The workers there are concerned about the future of Remploy and especially about the future of the factory and their jobs. We have been able to reassure them about the next three years, but there is a question mark about the situation after that.

Remploy workers have become the victims of the Government's short-termism, as have many other people. The Remploy workers discussed with me two areas of concern, both of which have been mentioned. The first is the special contracts arrangement. I draw the attention of the House to early-day motion 859 which stands in my name and those of 82 of my hon. Friends. It draws attention to the shortcomings of the new arrangements that replaced the priority suppliers scheme. That replacement was one of the first acts of the Secretary of State for Employment, and although the hon. Member for Hertfordshire, North (Mr. Heald) drew attention to European rules, it seems to me and to the Remploy workers that the Government's enthusiasm for Europe waxes and wanes according to the issue of the day.

The Secretary of State seemed only too eager to adopt the European rules because of the effect that they would have on the disabled, which is detrimental. It is somewhat ironic that one of the first Remploy factories to suffer after the Secretary of State took up his appointment was the one in Alfreton in the constituency of the Under-Secretary of State for Employment, the hon. Member for Amber Valley (Mr. Oppenheim), who is to reply to the debate. I wrote to him offering my support for the efforts that I knew he would want to make to ensure that the factory did not close. I got a polite reply, or at least one that was as polite as the hon. Gentleman can be on such occasions, turning down my offer of support, and the factory closed. Perhaps there is a lesson there for the Under-Secretary.

It has been said that the workers can be redeployed to another factory in Mansfield, which is nine miles away. I suppose that is welcome, but it is not necessarily an easy option for disabled people, particularly for those who wish to maintain some independence and make their own travel arrangements. Nine miles can be a long way and the Under-Secretary should have taken more note of that when dealing with the factory in his constituency.

The second issue that the Remploy employees in my constituency raised is the interwork scheme. There is some concern about exploitation—that workers are being given menial tasks under the scheme to the benefit of employers. The Under-Secretary should have looked at that. If he has, I hope that he will give us the results of his inquiries; if he has not, I hope that he will do so because we do not want disabled people being exploited and being unable to use their undoubted skills to their full capacity. I look forward to receiving such assurances from the Minister.

10.48 am

Mr. Peter Hain (Neath)

I, too, congratulate my hon. Friend the Member for Barrow and Furness (Mr. Hutton) on securing this debate. It will be welcomed in Wales and especially in south Wales which has a higher proportion of disabled workers than anywhere else in Britain. I am proud to be a member of the GMB union. I speak on behalf of several hundred of my constituents who are employed in the Remploy factories in Neath, Ystradgynlais and Brynamman. Those people are highly skilled and proud of their work. Because my communities have a tradition of coal mining and heavy industry, the people there suffer a high ratio of disability. As a result, the Remploy factories are crucial local employers.

I wish to correct the myth, perpetrated to some extent by the hon. Member for Bolton, North-East (Mr. Thurnham), that the Government are being charitable in supporting Remploy through a £94.2 million subsidy. If the Remploy workers who enjoy that subsidy were on the dole, it would cost the Exchequer more than £81 million, so it is not a generous charitable subsidy: the difference between the two figures is only about £13 million. It is important to put that into perspective, especially as the Government have been successively undermining the position of disabled workers employed by Remploy.

Hon. Members have referred to the special contracts arrangement scheme which has replaced the priority suppliers scheme. The hon. Member for Hertfordshire, North (Mr. Heald) said that that was inevitable and that the Government had to do it, but the picture is not quite as he paints it. The Secretary of State for Employment responded with remarkable alacrity to the European directive, even though he champions himself as a bulldog figure. On that occasion, he behaved more like a poodle. He did not seriously challenge the European Commission and negotiate a sensible response to its directive: he simply accepted it. It is interesting that when it comes to unfettered market forces and commercial interests, the Secretary of State for Employment—the great Euro-sceptic—simply rolls over in front of the European Commission and lies down. We ought to note that.

The change in policy has contributed to a severe reduction in orders from the Ministry of Defence. The work that Remploy performs for the Ministry of Defence is worth about £10 million, a decline from £17.5 million. That severe drop is affecting Remploy extremely seriously and bearing down on the earnings of very low-paid workers. Average earnings at Remploy are £150.83 for a 37.5-hour week. That is barely £4 an hour, on which it is almost impossible to subsist.

Mr. Heald

When there are fewer soldiers, fewer uniforms are required. How would the hon. Gentleman deal with that situation?

Mr. Hain

The hon. Gentleman is surely not suggesting that orders to Remploy have fallen by 50 per cent. because the Ministry of Defence budget has almost halved or that the number of soldiers has halved. I am sure that he would not pretend that that is the case. Remploy has been directly affected by a punitive change in policy forced on it by the Government.

There is a very strong feeling among Remploy workers in my constituency that the company, under pressure from the Government, has lost its way. Many feel extremely bitter. I was pleased to attend the recent celebration of the Neath Remploy factory's 50th anniversary. The local manager is widely respected, but there is a feeling elsewhere in the company that its whole nature is being transformed and that senior managers are behaving rather like senior managers elsewhere in industry—taking a lot of the loot and behaving like yuppie managers instead of responsible managers supporting a crucial and distinct local industry. In short, the nature of Remploy is changing under direct pressure from the Government.

One example of such change, to which my hon. Friends have referred, is the interwork scheme. The recruitment policy has completely changed. Under instruction from the Employment Service, the company has stopped all recruitment of disabled people to Remploy factories and introduced a scheme called interwork, which is agency based and through which an employee with a disability is given work outside Remploy.

Most of the 1,700 disabled employees on interwork are paid at below Remploy rates of pay and I understand that most people stay on the interwork scheme for an average of only six months. Little or no training is given, most workers are denied the basic right to join a trade union and many are not aware of the Remploy wage agreement, which was signed by the trade unions and the company and was supposed to protect everyone on interwork by maintaining conditions. But the company has not honoured that agreement and more recently—I understand—has completely departed from it.

Mr. Jim Cousins (Newcastle upon Tyne, Central)

I declare an interest in that my trade union, the Manufacturing, Science and Finance Union, recruits the managers of Remploy. In their defence, will my hon. Friend recognise the courage of some of Remploy's senior managers in striking a very firm position in front of the Employment Select Committee in favour of a levy grant scheme, which would benefit good employers and penalise bad employers through the imposition of a levy and would enable Remploy to be free of Government control? In striking such a position, the managers of Remploy have spoken not only for themselves and the company, but for all disabled people.

Mr. Hain

My hon. Friend makes a fair point and I am grateful for his correction. I was talking more about senior managers. Many of the local managers, especially those with whom I deal in my constituency, have an honourable record, alongside their workers, in defending the interests and tradition of Remploy. Largely as a result of interwork and other pressures, the standard of living of people with disabilities is declining. The average pay of interwork employees is very low—in some cases about £100 for a 37.5-hour week, which is even lower than the basic Remploy pay of £126 per week.

Instead of giving disabled people in Remploy the dignity of work, I charge the Government with pushing them down the road of exploitation. A total change of policy at Government level is needed to remedy the situation.

10.56 am

Mr. Dennis Skinner (Bolsover)

First, on the priority suppliers scheme and in view of what was said earlier, I should put it on record that some of us Opposition Members—I know that there are also some on the Conservative Benches—take the view that directives from the Common Market should be totally ignored.

I am staggered at the Secretary of State for Employment, who is supposed to have some anti-market tinge—I am not sure about it as he voted for the single European market on a guillotine along with Lady Thatcher and all the rest—and who tries to create the image that somehow all that comes out of the Common Market is had. Despite that image, he seemed to be tumbling over himself to get the directive affecting Remploy through.

Let me make it plain that when we get the next Labour Government, very shortly, some of us will be standing up against the Common Market just as fiercely as I have done over many years. If the Common Market affects disabled workers such as those at Remploy, my efforts will be redoubled. I want to place that on the record now so that my hon. Friends on the Front Bench can understand exactly the intentions of some of us. We are fed up to the back teeth with bureaucrats in the Common Market and others who profess to be parliamentarians and politicians telling us what to do.

This debate has shown us precisely what can happen under the treaty of Rome: free movement of capital and labour. I emphasise that fact for my hon. Friends. That is what the Rome treaty is all about. We shall get more such directives, freeing up the market, and so on. If we are to defend and support workers like the 9,000 to whom my hon. Friend the Member for Barrow and Furness (Mr. Hutton) referred under a future Labour Government, we have to subsidise them. It is impossible in this day and age to run Remploy factories for disabled people on the basis that somehow they will be able to compete with the Pacific rim and other slave labour economies. Some people on the Tory Front Bench would love that situation—that is why they are going down that road—but that is not a job for people here. It is not a job for socialists, as some us still proudly call ourselves. The strong helping the weak is what Remploy is all about. It is about people who have been crippled in all kinds of ways needing help from the strong.

What is wrong with subsidies anyway? Not one Member of Parliament would he in this Chamber this morning, or trotting around outside, if we were not subsidised by the taxpayer—and not at £10,000 per annum as the hon. Member for Bolton, North-East (Mr. Thurnham) suggested, but at £33,000 apiece. So let us get things into proper perspective. Plenty of people in Britain get subsidies. What about farmers? Every family in Britain pays £28 a week to subsidise farmers under the common agricultural policy. Are we saying that we could get rid of all that subsidy, when we import about 60 per cent. of our food? That is mainly, but not entirely, the reason why the subsidies are paid. Are we going to say that we are not going to allow them to provide that food? That is a nonsense.

The defence industry is subsidised to the tune of God knows how many billions of pounds every year. Nissan came to Britain with a £300 million subsidy to set up a factory in the north-east.

Mr. Cousins

Not true.

Mr. Skinner

The truth is that Nissan had a £300 million donation from the British taxpayer when it set up its factory in the north-east to provide non-union labour, which is what most of it is.

Subsidies extend far and wide. Employers who pay poverty-stricken workers £2 an hour or less while the families get family credit are being subsidised to the tune of £2.4 billion per annum to provide that slave labour. The list is endless. What about Lloyd's? The fact that Lloyd's names have been subsidised to the tune of £2.8 billion in tax relief has just come out into the open. That is an extremely significant sum compared with the amount going to disabled people in Remploy factories. The top four clearing banks have had a £5 billion subsidy in writing off tax against their so-called irrecoverable debts.

That is why I took part in a campaign to try to save the Alfreton factory from closure. I raised the matter on the Floor of the House on 5 April and asked the Under-Secretary of State for Employment, who represents the constituency involved and is a Minister in the appropriate Department, to intervene. We had a massive rally at Alfreton. It was one of the proudest days of my life. People carne from all parts of the country, including the constituency of my hon. Friend the Member for Barrow and Furness, from Northern Ireland and from all parts of Britain, in the pouring rain. Apart from all the others, 400 or 500 people in wheelchairs took part in a march through Alfreton to save a factory which employed 74 people—who were to be shunted to other jobs in other factories, if they could move.

It is a sad day when people can talk about subsidies for disabled people, giving the impression that we live in a world in which one can provide work for such people without subsidies. We should be proud of the fact that we are helping to keep people in employment at a time when medical science has ensured that the disabled live longer. If we had been debating the subject 50 years go, many of them would not have been able to work in a factory. Because of the national health service, they are now able to go to work and we should be proud that many of them do.

We should be doubling the number of Remploy and similar factories, instead of closing them as the factory at Alfreton was closed. Notwithstanding the Government's position on market forces, the Minister, on their behalf, should understand that if we are to help disabled people to have some dignity and to go to work, we should not only be ensuring their employment but doubling their wages as well.

11.4 am

Mr. Jim Cousins (Newcastle upon Tyne, Central)

It has always been my political misfortune to be the straight man in the double act, but I never anticipated that I would have to follow my hon. Friend the Member for Bolsover (Mr. Skinner). I must inform him, the Minister and the House that, if we had a proper scheme for funding these facilities, schemes and resources, the word subsidy—both as my hon. Friend and as the hon. Member for Bolton, North-East (Mr. Thurnham) used it—need never be used again.

If we had a levy grant scheme, which is what the managers of Remploy have been trying to persuade the Government and the Select Committee on Employment to accept and which would deal honourably and fairly with people with disabilities and good employers in all sectors of British enterprise who deal fairly with people with disabilities, it could be financed by a levy on those employers across the spectrum of British enterprise who do not deal fairly and sensibly with such people. For many years, it has been Remploy's desire to escape the iron hand of Ministers and to put itself and organisations such as the Shaw Trust on a proper basis—one in which they would not be dependent on Government grants and handouts and flows of money that could be represented as subsidies.

If we had such a self-financing scheme, such orgsanisations would be free of all that and could build more facilities, employ more people, supervise the interwork scheme and make it meaningful, and operate their own variations of the priority suppliers scheme. They would not be dependent on Government handouts.

If we had such a scheme, what a signal it would give to good employers in all sectors, who would be set a target that they could meet and could, individually, do right by people with disabilities. Employers who did not meet the targets would be penalised through a levy, which would work automatically, free of Government, and would provide the resources to promote further employment for people with disabilities. That is the way forward, not through increasing subsidies or the argument about what one would call a subsidy, but through a fair system that would work automatically, independent of Government and would produce the resources to keep Remploy in business, enable it to acquire more businesses and expand its enterprises, and help organisations like the Shaw Trust to be free for ever from all this talk of subsidy. Such talk is so wrong in the context of people who want to be in the world of work and to be there honourably.

That is the way forward and I hope that the Minister will give us a clear signal this morning that that is the way in which the Government will go. Let us shift the argument away from subsidy to a levy grant scheme that will be fair to all enterprises and employers and will place the economics of Remploy on a sound basis.

11.8 am

Mr. Tom Clarke (Monklands, West)

I am very glad that this interesting debate has been introduced by my hon. Friend the Member for Barrow and Furness (Mr. Hutton). From my recent visit—to which the hon. Member for Bolton, North-East (Mr. Thurnham) referred—I know that my hon. Friend is held in the highest regard, not least because of his commitment to these important matters.

The future of Remploy is of great importance to hon. Members from both sides of the House who have Remploy factories within their constituencies. Such factories are based in one in seven of all constituencies in the country. I welcome the speeches by all my hon. Friends, but particularly that of my hon. Friend the Member for Bolsover (Mr. Skinner). He spoke—if I may say so—very much like my father, who died at the fairly young age of 53 from pneumoconiosis. My father was employed in the mining industry and, if circumstances had been different at the time, he may well have made a contribution to Remploy.

The numbers of people involved in Remploy are relatively small, but they are not insignificant. More than 8,000 people with varying degrees of disability are employed by Remploy. Tony Withey, the company's chief executive—who is following our proceedings—talked of increasing that figure to about 15,000. Such an increase would be most welcome, with the important proviso that the quantity of employment should not be at the expense of the quality of training and work experience.

Many of those who work in Remploy factories have severe disabilities. Many know that they would have great difficulty in finding employment in the open market. That fact will not be changed by the legislation that is currently being considered in another place, as my right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) reminded us. For many more, Remploy can provide a halfway house and a means of obtaining the necessary training, work experience and self-esteem—that is very important—to enable them to go out into the job marketplace to earn a living on the basis of their skills alone. We welcome the fact that Remploy is talking of adding to that side of its work, and I have no doubt that the Minister will refer to that.

We recognise that the best thing which supported employment can do for many disabled people is to equip them with the skills to allow them to work in unsupported employment. In that context, the expansion of the interwork initiative and placement by Remploy with other companies is a positive gain which should not be seen as anything else. But we would not welcome—we would resolutely oppose—any idea that an increase in out-placements for disabled Remploy workers should be substituted for the provision of supported employment in-house. That is why we are most unhappy with the idea of the Employment Service setting targets for reductions in the size of Remploy's factory work force.

By all means, increase the number of Remploy workers who are placed with firms. But do so only on the ground that that particular worker has achieved the levels of competence and confidence to allow him or her to do so on a par with other workers. We must certainly encourage disabled workers to take up opportunities to work elsewhere, but we must make sure that his or her job is filled in the Remploy factory by another disabled person, who is thereby freed from dependence on state benefits and gains the dignity of labour and a fair day's pay for a fair day's work.

We should help to match the needs of good employers with the abilities of those who are able to do the job, but we must make sure above all that the pay and conditions which that person receives in open employment are in no way inferior to the standards set by Remploy itself. We must never forget that the excellent quality of the work produced is welcomed by many consumers, and I believe that it should be welcomed by the House.

The chief executive of Remploy has spoken of the factories as halfway houses to jobs in other companies". For many people, that will be the right course. For others, it may not be. But a Remploy factory is a halfway house only if it recruits and trains disabled workers. It is hard to see how the idea of a halfway house is compatible with recruiting direct from the register.

A halfway house is different from a placement agency, which seems to have been advocated by some Conservative Members. The reduction of Remploy to merely agency status would be an entirely different matter. As my hon. Friends have said, needless difficulties have been quite deliberately thrown in the way of Remploy in winning Government contracts. That has been done, we have been told most unconvincingly, with the support of the European Union.

We have seen the closure of a Remploy factory this year, and we do not want to see any more closures. Why should we? The majority of the factories were opened during the term of the first majority Labour Government between 1945 and 1951. But in spite of that, we do not claim exclusive credit for the provision of manufacturing jobs for severely disabled people. Ministers should remember that the Conservative party also had a role. Winston Churchill was Prime Minister when the principle of supported employment backed by public funds was first established under the terms of the Tomlinson report of 1943. That report was a landmark, not just because it laid the foundations for Remploy but because it was the first official recognition that the whole community had an interest in, and a responsibility for, the full participation of disabled people in society.

It would be a great pity if the Government were to desert the principle of supported employment in the same year as they have recognised for the first time that discrimination against disabled people is a problem which requires tackling. It is now more than six months since Ministers said at the Dispatch Box that they would consult those involved in supported employment about what should happen.

It is more than six months since the Disability Discrimination Bill was published. Ministers have made public their intention to provide funding to profit-making private employers directly, rather than through Remploy itself. Yet I have been reliably informed that, as of Monday this week, no discussions have been held between Ministers and senior managers of Remploy on either of the main issues. Neither have discussions taken place with the trade unions. That seems to me to be both surprising and completely unacceptable.

We need to know, and Remploy needs to know, just what the Minister's intentions are. Why do Ministers see the need to provide funding directly to private companies—a perfectly reasonable question asked by my hon. Friend the Member for Neath (Mr. Hain)? Is the interwork initiative which Remploy has undertaken not sufficient? What purpose is served by dividing and diverting resources away from the one agency with a proven track record in enabling disabled people to take up work in-house or elsewhere?

We also need to know what the Government intend to do about the green card system. That too has worked well in the field of supported employment, if not in the wider field of achieving the 3 per cent. target quota for disabled people in all jobs in the employment market. The scheme should not be abolished by the passage of the current legislation before the process of consultation on what is to take its place has even begun.

Opposition Members consider that now is the time for Ministers to indicate their intentions as to the future of Remploy. We want an assurance about the short-term future of the existing Remploy staff, and about current levels of funding. But such assurances are not enough. We also want assurances about the long-term future of factory jobs in Remploy, and we are entitled to know about that.

The next generation of severely disabled people should enjoy the same opportunities to work as their predecessors have had for the past 50 years. My hon. Friend the Member for Barrow and Furness has done the House and those employed in Remploy a great service by drawing these important matters to our attention at this vital time and I trust that the Minister's response will be just as positive.

11.19 am

The Parliamentary Under-Secretary of State for Employment (Mr. Phillip Oppenheim)

I am grateful for the opportunity to respond to this debate, which has ranged over a number of interesting and important areas. I shall do my best to respond to the points that have been made in the short time that remains.

I entirely agree with the hon. Member for Barrow and Furness (Mr. Hutton) and my hon. Friend the Member for St. Ives (Mr. Harris) that the Government have a special and important responsibility in this area. I shall return later to some of the specific comments made by the hon. Member for Barrow and Furness. I also welcome the comments made by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham), who speaks with a special knowledge and sensitivity on this subject. He has just written a helpful and challenging paper on the issue.

It is clear that, to continue to provide meaningful and worthwhile work, Remploy cannot afford to stand still as a business. Like any other business, it must evolve and adapt if it is to keep pace with the needs of its customers. It is to Remploy's credit that it has maintained and increased its customer base over the past 50 years. The Remploy of today is known for quality and attention to detail, not just in its products and services but in its processes and work practices. Remploy wins awards and customers because it is alive to the needs of the market as well as to the needs of its work force. This is why, when one walks down most high streets today, one finds Remploy products on the shelves of all the most reputable shops.

The hon. Member for Barrow and Furness and others argued that Remploy has run into difficulties because of the withdrawal of the priority supply scheme. That is not so. The main problem facing Remploy is caused by companies that decide to subcontract some of their work to low-cost countries outside the EC. I wish to make it crystal clear that, contrary to what the hon. Member for Barrow and Furness said, the priority supply scheme had to be withdrawn because it was incompatible with EC law. That conclusion was not only confirmed by the European Commission but was based on a judgment by the European Court.

We moved rapidly to replace the scheme with a special contracts arrangement, which will give welcome help to Remploy and other supported employment providers. I understand that Remploy has already won extra business on the strength of that arrangement. I also wish to make it clear that the withdrawal of the scheme has not had, and will not have, any effect on the Government's continuing commitment to fund supported employment through a variety of grants.

It is easy for Opposition Members to say that we should have negotiated better terms. That is a good cop-out. But because of the European Court's judgment, the scheme was illegal. If the Opposition spokesman is saying that, despite it being illegal, a Labour Government would ignore the European Court's ruling, he should put that clearly on the record. I should be amazed if the Leader of the Opposition, that well-known Johnny-come-lately, that new-found singing and dancing Euro-fanatic, would break European law.

Mr. Tom Clarke

The Minister says that the scheme was illegal. Who advised the Government that it was illegal, and why did not other European Governments take the same view?

Mr. Oppenheim

Both Government lawyers and the European Commission advised us that it was illegal. I have no information that other European countries have not had to take the same action. [Interruption.] If the hon. Gentleman thinks otherwise, perhaps he would supply evidence. If he now says that it would be Labour policy to break European Court of Justice rulings, I should be interested to know. It is absolutely clear that there are divisions in the Labour party on that issue.

I enjoyed the eloquent attack by the hon. Member for Bolsover (Mr. Skinner) on the attitude not only of his current leader but of his former leader, who is now a European Commissioner. It is nice to see that divisions on this issue are fairly widespread and not confined to the Conservative party.

I was less keen on the comments by the hon. Member for Bolsover about Alfreton. He spoke to me at length on this issue in a helpful way before the closure, but may I try to set the matter straight? As the Alfreton factory was in my constituency, I made it my business to look into the merger in great detail. I sought and received personal assurances from Remploy management about a variety of issues, including the new travel arrangements, and in April I met a number of those affected with their union representatives. Not a single disabled employee from Alfreton was made redundant as a result of the merger. Moreover, I am confident that Remploy dealt sympathetically with all the employees affected. Every disabled employee was offered the chance of relocation to a factory that was fairly nearby and, where appropriate, help with transport arrangements and costs.

All those affected were offered counselling to discuss the options and any individual problems that arose. They were also given a trial period of 13 weeks to help them decide whether they wanted to move, and a generous relocation package. That package included additional travel costs to be paid by the company; maintenance of all previous job grades for at least six months; bonuses to be paid at the employee's average for the first three months; and an ex-gratia disturbance allowance of £450.

Mr. Skinner

Will the Minister give way?

Mr. Oppenheim

I hope that the hon. Gentleman will forgive me, but I have limited time and must deal with a number of other issues.

May I say to the hon. Member for Bolsover and others that people in Amber Valley are not slow to lift their pens and write to me about issues that concern them. I receive a huge volume of correspondence but I did not receive a single letter from constituents before the factory closure, and I received only one letter from someone who was at the union meeting that I attended. The hon. Gentleman's description of a mass rally in protest of Alfreton's closure does not comply with newspaper reports—[Interruption.] All right, the reporters were wrong and the hon. Member for Bolsover got it right.

Mr. Skinner

rose—

Mr. Oppenheim

I shall move on to other important issues.

May I say to Opposition Members and Remploy employees that if we are to guarantee the continuance of Remploy and jobs for Remploy employees, we must ensure that Remploy is competitive. There may well be occasions when Remploy management takes the view—it is best placed to know—that factories must merge. If the Opposition say that they would give a clear commitment that a future Labour Government, if there is one, would not allow Remploy to merge factories, they should make that commitment here and now. It is clear that the Opposition spokesman is not prepared to make that commitment and that the Opposition will not commit themselves to preventing Remploy from merging factories.

If and when Remploy merges its factories, as it did at Alfreton, the House—the Government and we as constituency Members of Parliament—must ensure that the terms and conditions of employees who move to merged factories are dealt with sensitively, that they are treated properly and that their needs are taken care of. I am confident that that is what happened in the case of Alfreton.

May I reply to the right hon. Member for Manchester, Wythenshawe (Mr. Morris) on the green card? All groups with an interest in supported employment, including Remploy, are to be consulted on the new criteria for determining entry to the supported employment programme. A consultative document will be issued shortly but I assure the right hon. Gentleman that we have no plans to change the broad criteria or scale of the programme.

The right hon. Gentleman rightly raised the general commitment to Remploy and sheltered employment. May I make it clear to him that our commitment is solid and wholehearted? Remploy is an integral part of supported employment provision in the United Kingdom. It receives a substantial amount of Government funding each year. The supported employment programme, of which Remploy is just one part, is designed to supply work for severely disabled people who have little chance of getting or retaining work in open employment.

In total, 22,000 people were helped by the programme last year, at a cost of £150 million. That included 8,900 severely disabled people in Remploy, at a cost of £92 million. The average Government subsidy per Remploy worker was £10,212 for the financial year just ended. That represents £11,395 for each Remploy factory worker, and £4,320 for every disabled person on the interwork scheme.

Overall, the numbers of people in Remploy have increased since 1979 and have increased in the past four years. That is a measure of our firm commitment to Remploy, which will be a continuing commitment.

In responding to the arguments expressed this morning, I fully recognise the concern and sincerity of every hon. Member on both sides of the House who has contributed to the debate. Remploy has had a long and honourable history since its establishment in 1944. It is a highly worthwhile organisation, which rightly arouses great feelings of warmth and affection. However, it would be wrong if we allowed that affection to get in the way of Remploy's need to be dynamic as a business. Remploy—

Madam Deputy Speaker (Dame Janet Fookes)

Order. We must move to the next topic, which is Cyprus.