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House of Lords

Thursday, 27th January 2000.

The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by The Lord Bishop of Lincoln): The LORD CHANCELLOR on the Woolsack.


Lord Morris of Manchester asked Her Majesty's Government:

    What representations they have received in relation to job losses at Remploy.

Lord Bach: My Lords, since April 1999, when Remploy's modernisation plans became known, the Government have received 160 letters about them. My honourable friend the Minister for Disabled People has met formally with the Remploy Consortium of Trades Unions, with John Edmonds, the General Secretary of the GMB, and with representatives of the Friends of Remploy Group of Members of Parliament. Contrary to press reports, there have been, and will be, no job losses among disabled factory employees at Remploy.

Lord Morris of Manchester: My Lords, I am grateful to my noble friend for his reply. While I know that there are those in Whitehall who see Remploy as "yesterday's idea"--never having met a single employee--is he aware that protecting jobs there is today's most compelling priority for thousands of severely disabled people? Did he see reports in The Times and the Independent recently that,

    "Ministers privately admit they would like to shut all 87 Remploy factories"?

Can my noble friend now refute that and allay employees' fears by making it absolutely clear that choice for disabled people must include supported employment?

Lord Bach: My Lords, I happily refute the suggestion that my noble friend brings to the attention of the House. It is certainly not the feeling in Whitehall that Remploy's factories are yesterday's jobs. Remploy, which is a non-departmental public body with a grant from the Government, is a commercial enterprise. Therefore, it is clear that demand is needed for its products. We live in a period of rapid industrial change. However, it is the intention that more people will be employed by Remploy by the year 2002. There are about 10,000 employed now both in the factories and in Interwork; that is, mainstream employment. It is hoped that 11,000 will be employed by the year 2002.

Lord Campbell of Croy: My Lords, is the noble Lord aware that I have seen the report that Remploy will continue to employ as many people as before?

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However, has the noble Lord seen reports in the press about Remploy closing several of its factories in different parts of the country? Can the Government reconcile those two reports?

Lord Bach: My Lords, over the past few days I have seen many newspaper articles concerning Remploy, a large number of which lacked the basic ingredient of accuracy. It is certainly not the intention that a number of Remploy factories will be closed down and will not become part of other Remploy factories.

The House should know that on 4th January a new chairman, Mr Alan Pedder, took office at Remploy. He has already begun to consider a scheme for the future operations of Remploy in the year ahead. I am happy to tell the House that, as I understand it, the unions, who of course have an important part to play in this matter, are content to wait to see what Mr Pedder comes up with. So far, the signs are good. I hope that the House will forgive me if I take just a moment or two to describe the key elements in his new plan.

Noble Lords: Oh!

Lord Bach: I shall do that as quickly as I can as it is important. The plan proposes,

    "An emphasis on creating more opportunities for greater numbers of disabled people, including expansion of Interwork and progressions; a much greater emphasis on using the existing Remploy factories to provide training, development and progression for its employees and moves by Remploy to continue to modernise its factories to drive for increased business opportunities".

I hope that gives noble Lords a flavour of the vitality and new ideas that the new chairman has brought to Remploy.

Lord Ashley of Stoke: My Lords, is my noble friend aware that I believe that he has answered many of the anxieties about potential unemployment at Remploy, as publicised widely in the press? Is not the nub of the problem that there has been a significant fall in the demand for Remploy's products, yet none of us wants to see any of these jobs lost? Would not the best way to tackle this matter--in addition to the plans of Remploy--be a short-term increase in Remploy funding to enable the changes to be phased in gradually, and a massive amount of retraining for those workers who want jobs? That, in addition to the pledge of no unemployment, will certainly satisfy many people who I know are concerned with Remploy.

Lord Bach: My Lords, any ideas that my noble friend has in this field will be looked at with considerable care. I shall ensure that Mr Pedder, the new chairman of Remploy, receives a copy of today's Hansard containing the proposal that my noble friend has put forward.

Baroness O'Cathain: My Lords, while I agree absolutely with the Minister and the noble Lord, Lord Ashley, that it is important that Remploy should

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continue, because it is extremely important for disabled people, the replies that the Minister gave contradicted one another. In one reply he said that there was not a demand for the products while in another he talked about the new chairman and his mission statement. However, there was no mention of design, research, market research or marketing. An interested outsider would consider that to be the fundamental problem with Remploy. Will the Minister consider giving a good grant to a good market research agency or a design consultancy to make sure that Remploy produces the right products? Then it would not need continuing subsidies. That would be a good solution.

Lord Bach: My Lords, I hope that my answers were not contradictory. Remploy has to live in the real, commercial world of today. I am sure that the noble Baroness and the House will be pleased to hear that Remploy has already appointed a sales and marketing director in order to consider exactly the kind of problems that the noble Baroness has mentioned. Of course Remploy's factories need to be modern, up to date, and able to sell their goods.

Lord Rix: My Lords, can the Minister assure the House that the new style Remploy will make job opportunities available to people with a learning disability?

Lord Bach: My Lords, I can satisfy the noble Lord on that point. My answer is "yes".

Exchange Rates

3.8 p.m.

Lord Taverne asked Her Majesty's Government:

    Whether they will recommend to the Bank of England the use of a policy of sterilised intervention on the exchange rates in order to reduce the value of the pound.

Lord McIntosh of Haringey: No, my Lords, the best contribution the Government can make to exchange rate stability, consistent with their objective of a stable and competitive pound over the medium term, is to maintain sound public finances and low inflation.

Lord Taverne: My Lords, do not the Government agree that at the moment the pound is uncomfortably high and way above its fundamental equilibrium rate? Do not they accept that, while seeking to maintain the value of the pound against market sentiment is likely to fail, the quite different proposition of buying foreign exchange and selling pounds in order to depress the pound can be much more successful? If the Government are worried about the inflationary consequences, may I refer them to a persuasive paper, written by Peter Bofinger of the European Parliament, which seems to demonstrate that inflationary effects can be contained by the judicious selling of bonds, as

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was practised very successfully by the Bundesbank in 1992 and 1993? Does it not follow inexorably that my request should be seriously considered?

Lord McIntosh of Haringey: My Lords, I am grateful to the noble Lord for attempting to improve my economic education and for his references to the literature. There are different views about the strength of the pound. I am aware that there are views held by manufacturing industry and the TUC which coincide with those of the noble Lord, but they are by no means universally held. As to the original Question about intervention, I remind the noble Lord that our total UK foreign currency assets, held both by the Bank and by the Treasury, are equal to 20 per cent of the daily trading in sterling on international markets. I do not think we will get round that by any of the alternatives proposed by the noble Lord.

Lord Shore of Stepney: My Lords, I am sure that the Minister will agree that this matter requires the most careful and serious consideration. We are doing well economically as a whole, but there is no doubt whatever that our agriculture and manufacturing industries are under great pressure, and have been for some time. They are facing falls in output and, above all, losses in the export markets. It is no good ignoring that; we have to do something. Even accepting the handing over of the Chancellor's former powers of control over interest rates to the Bank of England--I do not wholly agree with that, but having swallowed it--surely it is possible for the Chancellor, with the Governor, to modify the terms of reference so that inflation within the ceiling of 2.5 per cent is not the only consideration taken into account when interest rates are set. To complete the point, does the Minister accept that, above all, the greatest single factor dominating the level of sterling is the differentially high interest rates in London which suck in so much footloose money?

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