Sir Stephen Timms
MP for East Ham · Labour · United Kingdom
“I agree with the hon. Gentleman. If he would like to send me details of that particular case, I will happily look into it. On the subject of people with hearing impairments, my right hon. Friend the Minister for Women and Equalities and I will be meeting the British Sign Language Advisory Board this afternoon.”
“Better outcomes require early identification and support for girls and young women with special educational needs, including dyslexia. That is the aim of the SEND reforms and the development of national inclusion standards.”
“Autistic people and people with ADHD have been struggling to get the right support at the right time. Recommendations from Professor Karen Guldberg’s neurodivergence task and finish group directly informed the SEND reforms that were published earlier this year.”
“The Equality Act 2010 places a duty on public bodies to make reasonable adjustments, so that disabled people are not put at a disadvantage by accessibility challenges.”
“The hon. Gentleman raises an important point. This benefit is there to contribute to the additional costs of disability. Too often, what has happened—my hon.”
“I think we can take the hon. Member’s question as a tacit recognition that in 14 years the previous Government should have done something to fix these problems. The steering group is clear that the provision of cash to meet the additional costs of disability is vital.”
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“That is a good question. I do not have a proposition to make. I would hope that those who are reflecting on these matters, particularly in the FCA, will be giving that some thought. There is time for it to incorporate something else and to put that second line of defence in its conduct rules. What it would look like, I am not in a position to propose this afternoon, but the need for it is clear. If the hon. Gentleman is about to propose something, I would welcome that.”
“Does he expect that, as he said before, the majority of the regulations will be subject to the negative rather than the affirmative procedure? Will he draw the House’s attention to any exceptions, as he did last time, and point to those that will be subject to the affirmative procedure? I am not going to urge the House to vote against any of the measures before us. I look forward to hearing the hon. Member for Reigate (Crispin Blunt) speak about his amendment. I have to tell the Minister that the House is being placed in a pretty unsatisfactory situation. I hope that even though we have not been able properly to scrutinise these measures because of the lack of information to support that scrutiny, he might encourage us by saying that those in the other place will have a better chance to do so.”
“I think he will accept that it is very difficult for Members to decide whether to support these provisions if the House has not been told the cost for those who have to operate the regulations. Telling Members that the Government have no idea, at this stage, of what the cost of all this will be for everybody makes it impossible for us to do the job that we are required to do in properly scrutinising the costs and benefits that the legislation provides. I was rather down-hearted by the content of the Minister’s previous answer, but I will ask the question again as regards these measures. Does he anticipate bringing forward the regulations on the same sort of time scale as the one he indicated earlier? Is there any prospect at least that draft regulations might be available to Members in the other place when they scrutinise the Bill?”
“The NAPF urges that savers should be able to access a total of £30,000 of defined benefit benefits calculated on a CETV basis, regardless of any additional defined contributions savings that they may have. Will the Minister respond to that point? As with the previous group of amendments, I ask the Minister to set out his intentions on the regulations that are envisaged. He gave a clear and helpful response to my earlier question, but as he is well aware, it is good practice where regulations are referred to in primary legislation for Members who are scrutinising that legislation at least to have a draft in front of them when determining whether they support the provisions. The Minister said that it was not possible to give the costs for trustees because there was not yet a draft of the regulations.”
“There is the potential for a lot of confusion for savers attempting to assess their level of pension wealth. They might not realise that previously crystallised pension assets will be counted towards that threshold. They might find it difficult to assess the current value of such assets. The average person may well not understand—nor should they be expected to understand—that the £30,000 will be measured not by the current CETV system but using the methodology created to measure benefits against the lifetime allowance, information that members are not currently entitled to get from other schemes. As a result, many defined benefit members will not be able to exercise their rights in the way that the Bill intends.”
“It well understands that schemes with guarantees must comply with the funding regime, but it does not understand why they should not be allowed to do draw-down or UFPLS—uncrystallised funds pension lump sum. Perhaps the Minister could comment on that. The Bill requires members of defined benefit schemes to have received independent financial advice before being permitted to transfer into a defined contribution arrangement, unless they have pension wealth amounting to less than £30,000. The NAPF is concerned that that will impose a requirement that it would be very difficult, if not impossible, to meet. People will be required to prove that they do not have pension wealth in excess of £30,000, which will be very difficult for the average saver.”
“The fact that somebody has asked for a CETV in one section of the scheme should not entitle them to benefits in other sections, but that is the way that this provision has been written. Perhaps the Minister could comment on whether that is what he really intends. New clauses 14 to 16 seem to allow the Secretary of State to forbid draw-down from schemes that give members a guaranteed return, because draw-down can only be from money purchase benefits. That seems odd as well. Perhaps the Minister could tell us whether he or his officials discussed that with anybody before producing these new clauses. Certainly, the NAPF tells me that it is not aware of any discussions about that with it, or with anybody else.”
“Instead of just removing the current statutory requirement that all benefits be transferred if a member wants to transfer any benefits, the effect here is to prohibit schemes from having rules that require transfer of other categories of benefits if the member wants to transfer only one category, or that “prevent a member who exercises a right under this Chapter in relation to a category of benefits from accruing rights to benefits in another category.” Again, the NAPF makes the point that that last provision is “incredibly wide”. It points out that schemes do not let members participate in various sections willy-nilly; there are all sorts of rules about who can accrue what sorts of benefits and under what circumstances.”
“There are also transferable benefits, which are benefits “by virtue of which this Chapter applies to the member.” This is all quite complicated stuff. One of the fears is that the changes in terminology, and the reuse of previously familiar terms to mean completely different things, significantly increase the amount of confusion being created.”
“Perhaps the Minister could comment on the alternative wording proposed by the NAPF, which it thinks would make it clearer and would not give the impression that trustees were being called upon to do something that is actually very difficult for them. New schedule 1, as the Minister has told us, deals with the detail of the calculation of the cash equivalent transfer valuation, replacing the current CETV provisions under the 1993 Act. I fear that the tangle gets worse here. The distinction is between money purchase benefits, flexible benefits that are not money purchase benefits—in other words, cash balance benefits—and benefits that are not flexible benefits, previously defined as safeguarded benefits.”
“The National Association of Pension Funds has argued that the statute should state that where the member has requested a transfer of his or her benefits, other than cash balance or other money purchase benefits to a scheme in which they will be paid a cash balance or money purchase benefits, the trustees should require appropriate proof from the member that he or she has received independent financial advice from a person authorised by the Financial Conduct Authority to give such advice. The regulations could define “appropriate financial advice” in that way. The NAPF makes the point that the language in front of us is rather ambiguous about what exactly is envisaged.”
“The use of those terms seems unfortunate, because safeguarded rights has a particular meaning, which was familiar when, admittedly now rather a long time ago, I was in the office that the Minister now holds. In the context of contracting out, safeguarded rights had a particular meaning. That term is now being introduced in the amendments before us to mean something completely different. The term “flexible” also has a specific meaning in pensions tax terms. Again, there is a real risk of confusion in reusing that particular term to mean something very different from the one people familiar with pensions tax arrangements understand it to mean.”
“I want to pick up a number of issues. What exactly are the trustees being required to do? Are they being asked to evaluate the appropriateness of the advice that was given to the scheme member? It does not seem right that they should be called upon to do that. It is quite a big undertaking for them and they are probably not in a position to do it. That wording could be understood to mean that that is what they are being asked to do. I would be grateful if the Minister commented on that. We are seeing the creation of two new categories of benefits—safeguarded benefits and flexible benefits. I gather that the use of these terms is completely new; they are not used elsewhere in the statute. We have three new categories of scheme set out in the Bill, but this is the first time that we have had reference to safeguarded and flexible benefits.”
“I am grateful to the hon. Gentleman. I hope that those who follow these debates will take that as an endorsement of the need for that second line of defence to be devised and put in place. If it was not there, there is a real risk of exposing consumers to risk of a kind that we have all seen before, and which would undermine these important reforms from the outset. As the Minister explained, independent financial advice amendments are set out in new clauses 7 to 13. New clause 7 requires that when a member requests a transfer of safeguarded benefits, which are anything other than the cash balance or other money purchase benefits, with a view to acquiring flexible benefits, which are anything that is not safeguarded, the trustees “must check that the member or survivor has received appropriate independent advice”.”
“I am grateful to the Minister for giving way and for the thorough way in which he is responding. May I take him back to his response to my question on the duties of trustees in an instance where a member wants to switch from DB to DC? The proposition from the NAPF was that the sole responsibility of trustees should be to require adequate proof from the member that they have received independent financial advice from a person authorised by the FCA to give such advice. It sounds to me that the Minister is saying that that is what he intends. Is he happy with that form of wording proposed by the NAPF?”
“Will the Minister accept that it is pretty unsatisfactory for the Bill to go through both Houses with the Members of neither of them having a draft of the regulations to consider so that they can see what exactly the Government have in mind?”
“The right hon. Gentleman is pressing my memory with that, but my understanding of what has generally been regarded as good practice is that there should at least be draft regulations in front of Members. We do not necessarily need every last detail and he is quite right to make the point that there will be further discussions before things are finalised, but for Members of neither House to be able to see even a draft of the regulations is unusual and pretty unsatisfactory.”
“In this case, as far as I can establish, there is no information at all about any of the regulations referred to in the new clauses and amendments. I was disappointed when the Minister said that no such information would be put in front of Members in the other place either.”
“Trying to make these important changes at the same time as enacting the Budget changes is of course making the task more difficult and more risky. A few minutes ago, towards the end of the last debate, the Minister gave a full answer to my question about regulations, for which I was grateful. His answer was a full one, but it was not particularly satisfactory. He pressed me about my experience of taking Bills through the House. My recollection is that if such a Bill had referred to regulations that were going to be introduced, I would at least have expected to put a note in front of members of the Committee explaining what those regulations were going to do. Ideally, there would be draft regulations to put in front of the Committee.”
“We simply cannot afford to have another pensions mis-selling scandal like the one that was presided over by the last Conservative Government, which did a great deal of damage. The Bill contains 55 clauses, which were substantially rewritten in Committee, and the fact that the Government have today added 33 new clauses—over half as many as we started out with at the beginning of the afternoon—and made 77 additional new amendments does not inspire confidence that these complex changes in an area of such immense importance have been properly thought through. This looks rather like a case of legislate in haste, repent at leisure. We can only hope that Members in the other place, among whom there is substantial expertise in this area, can make significant improvements.”
“We are also disappointed that the Government have not been willing to make the changes for which we argued in Committee. We welcome the new pension flexibilities that were announced in the Budget, but we are concerned that Ministers are not yet providing adequate safeguards in the Bill to protect the savings of people who have worked hard all their lives from the risk of excessively high charges. The changes will introduce increased flexibility for savers, and we agree that that is welcome. They will also make the pensions market much more complicated, however, and safeguards need to be put in place to protect savers from being taken advantage of, given the confusion that could arise as the changes bed down.”
“Research by the Institute for Public Policy Research at the end of last year concluded that there was “strong public support” for a collective pension, that it was the most popular of the options it tested and that it appealed across different income levels, life stages and ages. We also support the establishment of shared risk schemes and the rule preventing transfers out of most public service schemes—with some exceptions that the Minister talked about earlier. We support the power to redefine the pension regulator’s powers to appoint or replace trustees and the power that will allow the Secretary of State to make payments into the Remploy pension scheme. We have not opposed the Bill, and we will not do so this afternoon, although there are parts that, in our view, should have been strengthened.”
“The cost of living crisis underlines the need for people in work who are struggling to set money aside for the future to be able to access pension schemes they can trust to give them good value for money and a decent income in retirement. Therefore, we welcome the proposed establishment of collective defined contribution pension schemes, which my hon. Friends called for earlier this year. Those schemes have the potential to provide a more reliable retirement income than individual defined contribution schemes. For that reason, they are to be welcomed. They operate in other countries: the Netherlands, for example. They are potentially better for individuals than individual defined contribution schemes because they can pool risk across and between generations.”
“Resolved , That, for the purposes of any Act resulting from the Local Government (Review of Decisions) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided.— (Kris Hopkins.)”
“Resolved, That, for the purposes of any Act resulting from the Self-build and Custom Housebuilding Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under any other Act out of money so provided. —(Brandon Lewis.) Self-Build and Custom Housebuilding bill (Ways and Means) Resolved, That, for the purposes of any Act resulting from the Self-build and Custom Housebuilding Bill, it is expedient to authorise the charging of fees under the Act. —(Brandon Lewis.) Local government (Review of Decisions) Bill: Money Queen’s Recommendation signified .”
“The Bill is worth while, but a worryingly large amount more still needs to be done. Working people must not become the victims of yet another mis-selling scandal—that has happened too often already. The dangers of ill-thought-out and rushed legislation are all too clear, and doing all this at the same time as the Treasury changes makes the risks much worse. We can only hope that Members in the other place will have the information they need and will be able to deliver some of the scrutiny which Members in this House have not, sadly, been able to provide. Question put and agreed to . Bill accordingly read the Third time and passed. Self-Build and Custom Housebuilding bill (Money) Queen’s recommendation signified.”
“Everybody would agree that the proper deliberation that underpinned it has been an important element in its success, but we are not seeing the same thing with these changes. I fear that nobody can, as yet, feel confident about what is going to emerge. The Minister also knows that we have concerns about the governance of collective defined contribution schemes and about the so called “independent governance committees” proposed for defined contribution schemes; and about the restrictions on the National Employment Savings Trust—NEST—which my colleague who normally speaks on these matters has long argued should be removed and which the Minister said in July last year would be removed “as soon as possible “. In fact, they remain in place, and the opportunity to remove them in this Bill has not been taken.”
“There is serious worry, which we have debated earlier, that the guidance on offer will not be taken up in practice. We will certainly be looking with great interest at what the FCA says—the Minister has assured us that it will be referring to this—about the second line of defence. The TUC has made the point that “half an hour of the best possible advice will not equip people for what could be thirty years of managing their pension pot”. It has argued for the kind of careful consideration of evidence undertaken by the last Government, which has underpinned the success of auto-enrolment—that successful measure was developed over a period, decided on by the previous Government and taken forward by the current Government and, in particular, the Minister on the Bench today.”
“My party has commissioned Professor David Blake of the pensions institute at Cass business school to lead a review of how to support a pensions market that works for all, retaining flexibility and choice on how savings are accessed and drawn down, while ensuring that all savers, including those on low and modest incomes, are protected and are able to secure a decent and reliable retirement income. One question he will consider is whether income draw-down products should be subject to a new charge cap, which could offer some safeguards that are not envisaged at the moment. Widespread concern has been expressed about the crucial guidance provisions. We do not know a great deal yet about how this is all going to work, and it is supposed to be up and running by next April.”
“However, by the time we got to the end of the Committee we were reliably getting, before we debated each clause, some information about the regulations being referred to in it. So I urge him, if he can take even more holiday time away from the lawyers, to look at whether he might be able at least to give their lordships some information about each set of regulations being referred to. In the earlier debate, I mentioned the three tests we have set for the new flexibility, and I am grateful to the Minister for his response to each.”
“That is helpful, and I am grateful to the right hon. Gentleman, but I was making the point that, in my experience as a Minister, I would normally have expected to be able to provide some documentation about each set of regulations referred to in a clause that I was advocating to the House. There is no such information relating to the significant number of the new clauses and amendments that refer to regulations and that now form part of this Bill. The right hon. Gentleman suggested that that was normal, but I do not think it is. I was recalling my experience from the Welfare Reform Bill, on which I led for the Opposition. There was a problem there, because at the outset no information was provided about regulations being referred to in the Bill.”
“I enjoyed reading that article, in which I think the hon. Gentleman described himself as an old-fashioned left winger. I think he would acknowledge that the advantages of an increase in the tax thresholds he describes are significantly undermined for people on the lowest incomes by the fact that tax credits are withdrawn to such a large extent.”
“Member for Warwick and Leamington pointed out that the number of FTSE-accredited employers has risen from four to 18—a dramatic rise—and that has been a striking success. However, the Government also need to address the challenge of low pay. It is not enough for Ministers to sound sympathetic; we need a concerted national effort, with the Government, employers, local authorities and communities working together. In that way we can build an economy that works not just for a few at the top, but for all working families.”
“As we have heard, dozens more authorities are paying the living wage to their employees, or have committed to move towards doing so. We have heard about local authorities in York and Islington organising living wage zones, where people come together to plan strategies to support local private sector employers in the area to move towards a living wage. This week, in a particularly noteworthy move, Brent council became the first council to offer discounts on business rates to firms that commit to paying their employees the living wage. From its roots in east London, the living wage campaign has won impressive support among employees, trade unions, community groups and employers. The Living Wage Foundation—the initiative established by Citizens UK—now accredits more than 1,000 living wage employers. The hon.”
“He calls for the Low Pay Commission to assess annually the effectiveness of enforcement, and rightly calls for local authorities to have enforcement powers for the national minimum wage, alongside HMRC. My local authority—Newham—is among those arguing that pay below the statutory minimum is closely linked to other nuisance activity by non-compliant businesses, and that national minimum wage enforcement powers would sit well alongside other local authority powers. The hon. Member for Warwick and Leamington rightly pointed out the variety of positions taken by local authorities on this matter. Labour councils have been leading the way in supporting and promoting the living wage—28 Labour-led councils have become accredited living wage employers, paying their in-house and subcontracted staff a living wage.”
“Buckle also suggests that all central Government Departments should become accredited living wage employers as a first step towards a requirement to paying the living wage to all staff working on Government contracts, and he tentatively suggests that firms bidding for contracts above a certain size might also be required to pay the living wage. He proposes that the Low Pay Commission be given a broader remit, for example to look at the causes and impacts of low pay, and make recommendations to the Government on how to tackle it. He advocates improving enforcement of the national minimum wage, and estimates that a quarter of a million people are still paid less than that, despite the law.”
“However, Alan Buckle does argue for the Government to support and promote the living wage, recognising not least that the Exchequer gains when pay rises. He supports Labour proposals for the “make work pay” contracts referred to by my hon. Friend the Member for Ynys Môn (Albert Owen) and the hon. Member for Bedford (Richard Fuller), under which companies that sign up to become living wage employers would gain a first-year tax rebate of up to £1,000 for every low-paid worker who gets a rise, effectively repaying to the employer the first-year Exchequer gain in tax take from the increase as an incentive.”
“Friend the Member for Glasgow North East (Mr Bain) to set a target to increase the national minimum wage from 54% to 58% of median earnings by 2020. That is forecast to increase it to £8 an hour by October 2019, which will be a very important step towards the national goal of halving in-work poverty by 2025 and building an economy that works for all. Such a clear, long-term target will give businesses time to plan and adjust. I did not agree with the hon. Member for Arfon (Hywel Williams), although, like other Members, he made a thoughtful speech. He said it would be a good idea to raise the national minimum wage to the level of the living wage, but I think we would lose a large number of jobs if we did that.”
“That is what Labour wants to deliver. Alan Buckle, the former global deputy chair of KPMG, produced his independent report “Low Pay: The nation’s challenge” for the Labour party this May. He called for “a national mission to tackle low pay and build an economy with fewer low skill, low paid jobs and more high skill, high paid jobs.” He set out 10 recommendations for that national mission, including a five-year target to raise the minimum wage to a higher proportion of median earnings and looking at a higher rate for sectors that could afford it. Since then, as we have been reminded, my right hon. Friend the Leader of the Opposition has proposed that the Low Pay Commission be given the forward guidance advocated by my hon.”
“As we have also been reminded, that also piles up costs for the Exchequer, as more people in work have to rely on the social security system to make ends meet. Last month, the Resolution Foundation published its report “Low Pay Britain 2014”, which presents a great deal of information. It points out that “Britain continues to stand out as having one of the highest incidences of low paid work in the OECD”. We define low pay as less than two thirds of the median. Some 21% of full-time employees in the UK are in low-paid work, the highest proportion, jointly with Ireland, in the European Union. The figure is 18% in Germany, 10% in Italy, 9% in Switzerland and 5% in Belgium. This is a big problem and it is getting worse. We need a major change in direction and a concerted national effort to address the challenge of low pay.”
“Adam Marshall of the British Chambers of Commerce and Guy Stallard of KPMG, which has been mentioned a number of times in this debate, have served with the Archbishop of York and the TUC general secretary Frances O’Grady on the Living Wage Commission. The problem of low pay has worsened sharply over the past few years. The value of the national minimum wage has fallen in real terms—the hon. Member for Banff and Buchan (Dr Whiteford) was right to remind us of that—and average annual wages have fallen by more than £1,600 in four years. The number of people paid less than the living wage has gone up, as my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) reminded the House, and low-paid workers, their families and communities are struggling as a result.”
“In the Living Wage Commission’s final report in June, the commission chair and Archbishop of York, John Sentamu, wrote of one young man the commissioners had met that he “and his children could be a family again.” I think it was that potential to support and enable family life that first attracted TELCO members in my constituency and elsewhere in east London to the idea. As we have been reminded by the hon. Members for Hexham (Guy Opperman) and for Newark (Robert Jenrick), employers have found that paying the living wage can make good business sense, generating savings by boosting productivity and improving morale.”
“It recalled the decisive intervention of Cardinal Manning in the London dock strike in 1889. In 2001, TELCO, together with Unison, which has also been mentioned in this debate, established the family budget unit at York university, which calculated the initial level needed for the living wage to support an east London family with an acceptable standard of living—it was £6.30 at the time. In 2004, Ken Livingstone established the living wage unit at City hall and its work has been maintained, I am pleased to say, by the current Mayor. My hon. Friend the Member for Birmingham, Erdington (Jack Dromey) gave some telling examples of the impact on individuals of the adoption of the living wage.”
“We have had a very good debate. Like others, I congratulate the hon. Member for Warwick and Leamington (Chris White) on securing it and thank the Backbench Business Committee for enabling it to take place during this living wage week. In 1996, together with 1,300 other people, I was at the launch in York hall, Bethnal Green of the East London Communities Organisation—TELCO—which has rightly been mentioned a number of times. That was, and is, a coalition of the kinds of groups listed by my right hon. Friend the Member for Tottenham (Mr Lammy)—faith groups, schools, trade union branches, and community groups. Five years after it was established, it took the view—we should point out that it drew on 100 years of Catholic social teaching—that a living wage was the answer to big social problems facing our community in east London.”
“The Chancellor’s promise to eradicate the deficit in this Parliament has long since been abandoned, but with the deficit going up in the first half of this financial year, the scaled-back aim of halving the deficit by the end of this Parliament looks in serious trouble as well. The Chief Secretary has just attacked the unfunded tax cuts that the Chancellor announced. Does the Minister still think that the tax deficit will even be halved by the end of the current financial year?”
“The flagship of welfare reform was supposed to be universal credit. The Secretary of State’s former adviser told Radio 4 last week that the Secretary of State had known that the project was going badly wrong since May 2012, but he continued to tell the House that it was “exactly on track”. The Chair of the Public Accounts Committee expects IT write-offs to exceed half a billion pounds after the election. What is the right hon. Gentleman’s estimate?”
“According to page 34 of the “21st Century Welfare” Green Paper, “The IT changes that would be necessary to deliver” universal credit “would not constitute a major IT project.” Is not the problem—as I pointed out to him at the time—that the Secretary of State failed to grasp the scale of the undertaking at the outset, and that hundreds of millions of pounds have been wasted as a result?”
“Once again, disabled people are being left in limbo.”
“He came to see me before the closure because he was worried that he would end up on the scrapheap. Today, he believes that that is exactly where he is. Promises were made about support, but he has had one trial for a call centre job in the two years since the factory closed down, and it came to nothing. The promises that were made have simply not been kept and help has not materialised, and disabled people have been let down. Earlier this afternoon, I met representatives from the residential training colleges for disabled people and those furthest from the workplace. Between them—there are nine of them—they get hundreds of people into work every year. They have a contract until next August. They have no idea what happens beyond that. They told me that the Minister has repeatedly refused to meet them despite their requests.”
“We have had a wide-ranging debate with thoughtful contributions from hon. Members on both sides of the House about how best to support disabled people. Lord Freud’s words touched a nerve with disabled people around the country because of their experience in the past few years. They felt that, in those words, there was an explanation of what has happened, such as the bedroom tax and the delays with PIP assessments, which we have heard a lot about in the debate. In an excellent speech opening the debate, my hon. Friend the Member for Stretford and Urmston (Kate Green) pointed out that half of former Remploy employees are still out of work. A constituent came to see me yesterday morning. He has cerebral palsy. He worked for 25 years at the local Remploy factory, which closed in 2012.”