§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sutcliffe.]
§ 7.2 pm
§ Mr. Henry Bellingham (North-West Norfolk)I should like to thank Mr. Speaker very much indeed for granting this debate on the situation at Fisher Frozen Foods. I raised the matter under Standing Order No. 24 a week ago and asked him for an emergency debate, which was understandably turned down, but I am grateful to him for awarding me this debate. I should also like to thank the Minister for coming here to respond. I point out that the hon. Member for North Norfolk (Norman Lamb) is going to say a few words, which has been cleared with the Minister's office, and the hon. Member for Banff and Buchan (Mr. Salmond) would also like briefly to speak, as his constituency is obviously affected by the receivership of the Albert Fisher Group plc.
It was announced on 23 May that the Albert Fisher Group had collapsed into receivership. KPMG was appointed by the banks with instructions to sell off the various individual plants as going concerns if that were possible. One of the biggest plants was Fisher Frozen Foods on the Hardwick road in my constituency. The factory had been operational since the mid-1960s and employed more than 400 people. Its main business was processing, sorting, packing and freezing various vegetables, but in particular, it dealt with peas, beans, carrots, cauliflowers, rice and French fries. Indeed, one in four of all frozen vegetable packs in UK supermarkets were processed at the plant.
KPMG moved into the factory and gave two weeks to find a buyer for the company as a going concern. In spite of the receiver's efforts, none of the six parties that visited the site came up with a bid for the business as a going concern. On 16 June, KPMG dropped a massive bombshell on King's Lynn and west Norfolk when it announced that the plant would close, with the immediate redundancy of 351 employees at the firm. Frigoscandia, the neighbouring cold store, issued 84 HR1s. The pea crop in East Anglia was imperilled and many experts in the processing and packaging industry said that the knock-on effect in unemployment would be job losses at a 4:1 ratio. We were obviously faced with possible devastation throughout the locality and the prospect of unemployment in my constituency almost doubling.
When I applied for a Standing Order No. 24 debate on Tuesday 10 June. the situation appeared grim. It looked almost inevitable that the plant, equipment and site would be broken up and the factory asset stripped. I am extremely pleased to say that today the receiver, KPMG, announced that a buyer has been found for the site, the plant and the equipment. It is a Belgian company called Pinguin, which is in partnership with Frigoscandia, which owns the plant next door.
The chink of light emerged last Friday, and slightly unexpectedly. At that stage, the hon. Member for North Norfolk and I were fairly depressed. However, an announcement was made today that a deal has been completed. As we speak, Pinguin and Frigoscandia are bringing staff into the plant to start the pea processing campaign tomorrow. This year's pea harvest will be dealt with, and when the six to eight week campaign is over, I hope that the new company will turn its attention to other crops and vegetables.
510 There is every chance that it will be taking on 200 to 250 employees out of the previous 400 or so. It is extremely good news that a dark cloud has been lifted. I take the opportunity to wish Pinguin and Frigoscandia every success in running the plant.
Last week, I was critical of KPMG, the receiver. I said that I felt that it had not given enough time to find a buyer of the business as a going concern. Strong language was used, and I apologise for any offence that was caused. At the time, there was a great deal of emotion in west Norfolk, with 351 people being made redundant at Fisher Frozen Foods, and another 84 next door. It was a bleak time.
I put on record now my gratitude to KPMG. Since the announcement of redundancies was made, it has worked tirelessly to try to find a buyer of the site, the plant and the equipment. The hon. Member for North Norfolk and I had a constructive meeting with KPMG. It made it clear that it would work tirelessly to try to find a solution to the problem, and to find a buyer who would continue production on the site.
I pay particular tribute to the partner in charge, Michael McLoughlin, and to his colleague who was on site conducting negotiations, Murray Stewart.
A complication set in earlier this week. It revolved round an outstanding Anglian Water bill of £228,000. In the words of the receiver two days ago, the bill was a real "deal breaker". Understandably, Anglian Water was insisting that either the receiver or the incoming buyer should clear the bill. It was in a strong position because the incoming buyer would need water to continue to run the business. There were also discharge consent charges.
The hon. Gentleman and I talked to the receiver on that point and on other matters. As a result of negotiations between the receiver and Anglian Water, a deal was done on the bill. I thank him and my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard) and my hon. Friend the Member for North-East Cambridgeshire (Mr. Moss) for discussing the issue with Anglian Water. Initially, it took a legalistic view, but we managed to talk to personnel at the highest level. They understood that it was in their interests to have a thriving business on the site paying water rates and discharge consent fees rather than having no one on the site. It is a good example of a real team effort to resolve a potentially serious obstacle.
Another obstacle has arisen, on which I would like the Minister to comment. I was telephoned this morning by the senior Transport and General Workers Union steward on site, Neville Addison. He is working hard with the new owners of the company to bring in a large number of staff so that the pea campaign can start tomorrow and the business can get under way with processing.
The problem revolves around the Transfer of Undertakings (Protection of Employment) Regulations 1981—the TUPE legislation—because the staff coming in to work for the new company will have TUPE entitlement. This is a problem, because they were made redundant roughly 10 days ago, and the average redundancy payment could he anywhere between £5,000 and—20,000. That redundancy is in respect of Fisher Frozen Foods, and those people feel strongly that they should have that redundancy money because it relates to the employment that they had with that firm. On the other hand, TUPE is giving them the same rights, pay and conditions as they had before, and they will effectively be doing the same job.
511 I would like the Minister to comment on that. The hon. Member for North Norfolk might also have an idea of the answer to this problem, because he is a former employment lawyer. This is a real problem, first, because the company is determined to get as many people in as possible who are experienced and have the appropriate skills; obviously, most of them are former employees. Some, however, are holding back because of the threat to their redundancy payments.
Secondly. the receiver kept 28 employees on at the plant to ensure that—certainly, to begin with—it was kept on a care and maintenance basis. What will happen to them? Will they get extra compensation as well, if the 351—or perhaps 250—people come back into the plant with their TUPE entitlement as well as their redundancy payments? On a further, smaller point, if the redundancy money is not paid and the employees come back into the plant and are entitled to TUPE protection, what will happen in relation to the eight, nine or 10 days during which they were out of work? Will they get jobseeker's allowance?
I would like the Minister to comment briefly on the employees of the company who will probably not be brought back into the operation. There will still be a significant number who, having been made redundant, will probably not have a job, and they are obviously concerned about their jobseeker's allowance entitlement, and about re-skilling and retraining. Perhaps the Minister could tell the House what his Department would recommend to help those employees to get back to work as soon as possible.
The new owners of the company have made an important and significant commitment in terms of cash resources and of the investment that they are going to make for the future. They will undoubtedly be looking at new technology and at various other forms of innovation. Perhaps the Minister could pass on to the Department of Trade and Industry the new owners' concern that they want to hit the ground running, and to find out whether they have any entitlement to Euro-grants, innovation grants or any other form of DTI grant. North-West Norfolk is not an area with any special status, but if there is any possible entitlement, it is important that the company should know about it now. All too often, in my experience of dealing with grants, I have found that if a grant application goes in once an investment has been made, it is almost certainly too late. Perhaps the Minister will comment on that important point.
The Department for Environment, Food and Rural Affairs has also had a watching brief on all this, because when the announcement was made about the closure of the factory and the redundancies, there was a real threat to the entire pea harvest of East Anglia. There was also a serious threat to jobs in agriculture, haulage and contracting. If the factory closure had gone ahead, no bidder had come forward for the plant and equipment, and the pea campaign had not been able to start in the very near future, much of that pea crop—up to 24,000 tonnes, grown over 14,000 or 15,000 acres—would probably have remained in the ground because it would have been uneconomical to harvest.
There was a great deal of national coverage of this issue, but I am afraid that DEFRA was noticeable by its silence on it. There are lessons to be learned here, because 512 there are strategic implications when one crop is controlled by a small number of contractors and totally dependent on one plant, as was the case here. That would have had an impact right across Norfolk, Suffolk and Cambridgeshire. I would have liked to see DEFRA being much more proactive.
I am very pleased to have been able to come to the House for this Adjournment debate with this very good news. There is a huge sense of relief, although I have no illusions about the possible future pitfalls. I shall be particularly pleased if the Minister will be able to talk to other Departments, and to answer some of the specific questions that I have put to him. This has been a very bleak few days for west Norfolk, but a huge cloud has been lifted and we are now much more optimistic, thank goodness.
§ Mr. Alex Salmond (Banff and Buchan)I congratulate the hon. Member for North-West Norfolk (Mr. Bellingham) on securing the debate, and thank him for allowing me to make a necessarily brief contribution to it. I welcome the fact that there is better news from Norfolk for the plants in his constituency.
I want to turn the Minister's attention to the fish division of Fisher Frozen Foods, which consists of the key plants in Fraserburgh and Peterhead in my constituency, as well as some important factories south of the border. It is the largest private sector employer in my constituency: some 700 jobs in a rural community that has experienced a number of closures and setbacks in recent years. The Minister will understand just how vital this subject is for my constituency. We are hopeful that there are buyers for the businesses as going concerns, but no deal has been signed and nothing is guaranteed.
A few weeks ago, when I raised this issue with the Leader of the House, he was kind enough to undertake that Government Departments—presumably the Department for Work and Pensions and the Scottish Executive Departments—would be standing by to ensure that any assistance that could be given would be provided to any new investors in these factories. Have approaches been made, either here or at the Scottish level, and does the undertaking of the Leader of the House still stand good? I hope that the Minister will be able to repeat it now.
The hon. Member for North Norfolk (Norman Lamb) may deal shortly with a receiver's duties and obligations to creditors. As I said, we hope and believe that KPMG is working hard to secure buyers for these plants as going concerns. However, a difficulty may sometimes occur when the receiver's duties are narrowly drawn, so that it has a duty only to creditors as opposed to a wider duty that encompasses the work force, the public interest in terms of the public purse, and the key communities. Will the Minister reflect on that?
I want to make it clear that I make no criticism of KPMG, because I hope and believe that it is as anxious as I and other hon. Members are to ensure that the factories are sold as going concerns. There may be a constraint in its fiduciary duties. Will the Minister make some observation on that, because it is in the interests of everyone, especially the wider social and economic interests of my constituency, that the factories are sold as going concerns and not for their break-up value?
§ Norman Lamb (North Norfolk)I congratulate the hon. Member for North-West Norfolk (Mr. Bellingham) on securing this debate. It is good news that the plant has been rescued. We all thank the various parties who have played a part in making that possible. The hon. Member for North-West Norfolk, other Norfolk Members and I have worked together on a cross-party basis to facilitate a solution to the big threat that has hung over that part of Norfolk in the past couple of weeks. KPMG, the workers, the trade unions, the buyer and Anglian Water have all played their part in making this possible, and our thanks go to all of them. It is important for the economy of this part of Norfolk that the plant survives. This evening, we face the future with more hope than we did last week.
As the hon. Member for Banff and Buchan (Mr. Salmond) said, the duty on the receiver is very narrow: it is a duty to the creditors. The combination of that duty and the practical application of the TUPE regulations means that the interests of the employees and the wider community are not properly taken into account.
There is a problem with the TUPE regulations. Although they are designed to protect the rights of employees, when a company is in receivership they often work perversely in the opposite direction. They encourage potential buyers to hold back and allow the plant to close so that they may be able to buy plant and equipment without taking on responsibility for employees. My reading of the legal position is that, with the plant reopening so soon, it is almost inevitable that the receiver will get legal advice that it is selling the plant as a going concern and that the TUPE regulations should apply. If that is the case, there will be no redundancies and the redundancy pay that those workers are expecting will not be paid.
I should be grateful if the Minister would take away from the debate a plea for the redundancy payments office to make an urgent decision and communicate it to the workers. As I am sure he understands, there is a lot of concern among people who have made applications and are due to receive an invitation to return to work, but do not know whether they will lose payment, in particular for the period between the plant closure and the date on which they returned to work. Reassurance and certainty for those workers is clearly important, but at the moment they are receiving conflicting messages. The legal situation in such circumstances is often complex, as I am sure that the Minister knows, but we need certainty as soon as possible.
I am grateful for the opportunity to speak and thank the hon. Member for North-West Norfolk for giving me the chance to contribute. I should be grateful if the Minister would respond to my concerns.
§ The Parliamentary Under-Secretary of State for Work and Pensions (Malcolm Wicks)I, too, congratulate the hon. Member for North-West Norfolk (Mr. Bellingham) on securing a debate on an issue which is important not only for his own constituency but for those of other hon. Members. I listened carefully to the points that he and other Members have made. Inevitably, I may need to return to some of the more detailed points in writing, or ministerial colleagues may have to respond.
Obviously, we now have better news about the situation in Norfolk, which will be welcomed by the people and communities directly affected. Not many days ago, 514 however, things looked much gloomier. Since the news broke of possible redundancies at the Fisher Foods processing plant in King's Lynn, our local Jobcentre Plus staff have been working closely with the receiver KPMG, the company itself and the regional development agency. Following the announcement of 350 redundancies on 10 June, open days were organised at a local conference centre on 12 and 13 June, which were attended by our Jobcentre Plus staff, local training providers and 18 local employers, as well as about 300 of the people who were made redundant.
The local Jobcentre Plus office reports that the local labour market is buoyant, and it is advertising a large number of vacancies, particularly for people with food-processing skills. Our staff felt that anyone affected by the possible closure of the plant would soon return to the labour market. Indeed, the eastern region has a working-age employment rate well above the United Kingdom average. For example, in the hon. Gentleman's constituency of North-West Norfolk, unemployment has fallen by 57 per cent. and long-term unemployment has fallen by more than 80 per cent.. Moreover, since 1997, every region has experienced falling unemployment and rising employment.
In the past few days, our Jobcentre Plus staff have helped 50 people from the plant to find alternative work, and 50 more people have had job interviews arranged for them, obviously before we had had the better news. However, that shows how quickly our agency could swing into action. Fifty more people are believed to have begun arranging alternative employment themselves, and the remaining employees continue to receive advice and support from Jobcentre Plus.
We acknowledge that the farming industry is going through difficult times. The loss of an important processing outlet would have led to substantial repercussions for local farmers and the economy of which they are part, especially in frozen pea production, where a particularly close relationship between growers and processors is essential. I therefore welcome the announcement by KPMG today that it has succeeded in concluding the sale of that site.
I recognise that there are some remaining uncertainties, which were articulated by the hon. Gentleman and other hon. Members on behalf of their constituents. However, growers now have the assurance that the crop that is about to be harvested can be processed. The future market for peas grown in Norfolk lies in the hands of new owners. We wish them success in securing continuing markets for the product. The important and complex issues surrounding TUPE are not matters for my Department but for the Department of Trade and Industry. However, I will draw the remarks of the hon. Gentleman to the attention of my ministerial colleagues.
§ Mr. BellinghamThe problem that the TGWU senior steward has is that many people are saying to him that they would want to go back to the factory today, tomorrow or the next day to help on the pea campaign, but they do not know whether they can afford to do so if they are going to lose redundancy, so we need a decision on the matter tomorrow if possible, and advice from the DTI.
§ Malcolm WicksI will draw those remarks to the attention of the Department tonight and stress the urgency of clarification on what I know to be an important issue. 515 When it comes to entitlement to social security benefits, particularly the jobseeker's allowance, the fact that my colleagues in Jobcentre Plus are already engaged will enable advice about entitlement, should it still apply—it is a complex period—to be forthcoming from my colleagues.
The hon. Member for Banff and Buchan (Mr. Salmond) raised important points about his constituency. Unfortunately, I did not know that he was going to speak in the debate, so I am not briefed on those issues, but the assurance given to him by the Leader of the House still applies. I will endeavour to ensure that colleagues in different Departments are apprised of the situation and that any help that can be forthcoming—I can give no guarantees of that—will be forthcoming. We all understand that it is always best in these situations if concerns can be solved as ongoing concerns, if at all possible, but obviously that is not a matter for me.
I understand the importance of the points made by the hon. Member for North Norfolk (Norman Lamb) about the complexity that may now surround the issue of redundancy payments. We will obviously want to give that due consideration too.
In such cases where redundancies are large, potentially large, or will have a major impact, we have what we call our rapid response service, which was introduced recently. The service helps the whole community to cope with the impact of significant redundancy by looking at the total picture rather than just at those being made redundant.
The service works closely with key partners such as the regional development agencies, the still fairly new local learning and skills councils—there can be a retraining issue—local authorities and trade unions to co-ordinate an effective response to redundancy.
The exact nature of the help is always tailored to the needs of the individual, the employer, the local economy and the labour market concerned. From April this year, 516 the service has received nationally an additional £6 million over the next two years, in order to strengthen its work.
In the case of the Albert Fisher business, as we have been saying, it now appears that at the King's Lynn site there has been a successful outcome; we certainly hope that that is the case. I also understand that the receivers have had a number of offers for the eight remaining sites of the business and are conducting detailed discussions with all potential buyers.
The successful conclusion of the sale of the King's Lynn plant is in no small part due to the co-operation and co-ordination of the efforts of all parties involved, including the strong interest of local Members of Parliament—hence this debate. In situations such as this, Government Departments are very willing to assist in any way that is valuable or relevant to find alternative buyers or an alternative future for the employees. I acknowledge the work of my colleagues at Jobcentre Plus, who clearly moved quickly and had already found outcomes for employees before we heard the news affecting the plant.
It is important that we do all we can to ensure that firms continue in production if at all possible. In the first instance, that is a matter for the private sector, but we stand ready to assist companies or the work force in any way that we can, should they face redundancy and loss of employment.
In welcoming this debate on an important issue—perhaps nothing is more important for families than the future of work in such areas—I acknowledge that, for various reasons, I have been unable to answer all the detailed questions put by concerned Members. The issue cuts across different UK Departments, and also affects the Government in Scotland. I understand the urgency of these matters, and I will do my best to draw them to the attention of ministerial colleagues as soon as possible.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-nine minutes to Eight o'clock.