I am very glad to have this opportunity to raise a matter which has been causing increasing concern among various textile and clothing manufacturers. I should say at this stage that I have some interest in this particular trade and in the manufacturing of protective clothing. I refer in the main to the increasing supply by Her Majesty's prisons of protective clothing—such things as suits, textiles, surgeons' gowns, theatre dresses and materials—to regional hospital boards and hospital management committees throughout the country.
I should like to make it clear from the start that I am not against prisoners doing more constructive work. I believe that a paid element of sensible employment of prisoners is an essential part of trying to make the prisoner into a more useful and responsible citizen. But, clearly, whatever is manufactured in Her Majesty's prisons is bound in one way or another to compete with outside industry and outside workpeople. I am now indulging in special pleading on behalf of the clothing industry. What I am concerned about, however, is that the competition between prisons and private contractors should not only be fair but be seen to be fair. I must confess that I have grave doubts that this is the present situation.
On 5th November, in reply to a Parliamentary Question, the Under-Secretary told us the basis of costing employed by the prisons to enable them to quote for hospital garments and textiles. He said:
The general rule is to quote fair market prices; account is taken of the expenses of production in prison workshops, including the abnormal overheads."—[OFFICIAL REPORT, 5th November, 1970; Vol. 805, c. 409.]
With respect, I thinks that this poses more questions than it answers. First of all, can the Minister tell me what method is employed to determine the market price, and at what stage? For example, hospitals could be requested or directed to obtain supplies from prisons. They could call for tenders from commercial contractors, open them, find the lowest price, and then inform the prisons of the lowest price they would need to quote. Can the Minister give an assurance that this does not and will not take place? Alternatively, the prisons may be submitting tenders forms in competition with outside contractors, but what guarantee can there be that their market price is kept continually up to date?
Let me enlarge upon this point, which is important, at least to my mind. Commercial contractors are expected to quote firm prices for all supplies extending over a period of 12 months. In some cases provision is made for application for increases in prices because of national wage awards, but there are many cases where no price variation whatever is allowed. Before quoting, therefore, market trends, wage rates and other costs have to be carefully assessed over a 12-month period ahead. Do the same disciplines apply to Her Majesty's prisons-When submitting their prices?
The general conditions of contract issued by hospital boards require a contractor to accept a fair wages clause which includes such conditions as:
The contractor shall pay rates of wages and observe hours and conditions of labour not less favourable than those established for the trade or industry in the district where the work is carried out.
It goes on to enlarge on these conditions and includes the obligation of a contractor to allow the workpeople to be members of trade unions.
The failure of a contractor to comply with this fair wages clause may involve penalties as laid down in the Fair Wages Resolution passed by the House in 1946.
What is the position of prison authorities signing this clause? It is difficult to see how they can do so, and yet if they are absolved from compliance with it, surely this in itself is unfair competition. The Minister has told the House that the general rule is for the Prison Department to avoid taking an undue share of the market for any one product. I understand that there is at least one metropolitan regional contract for protective clothing where the Prison Department had 50 per cent. of the contract in 1968–69 and 100 per cent. of the contract in 1969–70, and currently has over 75 per cent. of the contract.
I also understand that the Prison Department has been engaged in the preparation of prototype garments for examination by the working parties set up by the Department of Health and Social Security. This indicates that the Prison Department may have prior knowledge of proposed standards at a time when they are confidential and not available to commercial firms. This would put the Prison Department in a very favourable position both for forward planning and when tenders are invited for the improved garments.
There is substantial evidence that a similar situation is taking place in the operation of prison laundries, which appear to have an unfair advantage over commercial laundries. There have been many cases of laundries losing work to prisons and, indeed, of closures and re-dundancies occurring, although there is little evidence that the prisons have won the work on a fair and true cost-competitive basis.
This whole matter is causing grave concern among many companies and their workpeople, and I hope that my hon. Friend the Under-Secretary can give firm and categorical assurances and answers to the points that I have raised. All I ask is that the Prison Department gets its business on merit by quality and on prices costed on a formula that commercial firms can match in open competition.
I cannot agree with my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Cordle) in his criticism of the Prison Department. Those of us who represent constituencies that have prisons in them will be aware of the very great problems of getting adequate work for prisoners. The total prison population is now about 40,000. The great bulk of prisoners are doing only two or three, or at most 10, hours work a week. Their efforts are spread over a wide sector of industrial activity—printing, metal work, tailoring, clothing manufacture, farming, making vegetable bags, and many other activities I do not know about.
My hon. Friend has expressed fears about possible competition for the textile and laundry industries; but this seems to be tilting at a windmill. Our great national problem is to get work for prisoners. In the past one problem has been the attitude of the unions, but I believe that in recent years there has been a substantial improvement in this respect.
Albeit my hon. Friend disclaimed any special pleading, if we are to have a lobby from textile manufacturers, then laundrymen and who knows what will be next, my hon. Friend the Under-Secretary, who has to run this thankless Department, will never achieve anything worth while.
I am grateful to the hon. Member for Bournemouth, East and Christchurch (Mr. Cordle) for giving me 60 seconds of the time in this debate to raise a constituency point.
I raise the point on behalf of Mr. Eric Whittaker, the Managing Director of the Crompton Manufacturing Company, in Huddersfield. His firm, he tells me, is likely to be affected if this scheme is allowed to go through. There is no objection at all to prisoners doing useful work; we all want that to happen. But that is no reason why the finished product should under-cut firms in the industry. This matter was brought to the attention of the public through the Yorkshire Post and the Huddersfield Examiner as long ago as May this year.
I want to ask the Under-Secretary a number of questions. Will the price charged to customers by Her Majesty's prisons be the same as the price charged by other manufacturers? Could the Minister say by how much the volume of trade in Her Majesty's prisons has increased during the past few years? I am told that it has increased fairly substantially.
We should recognise that in prisons we have captive employees, whereas in industry the people go there to do a certain job of work. There is a fundamental difference. I hope that the Home Office will give very careful consideration to the points which have been raised in this debate by the hon. Member for Bournemouth, East and Christchurch. I hope that these points will get a full investigation and will result in assurances to the trade that competition from the Prison Department will be restricted to a reasonable proportion and that full regard will be paid to current market prices and the average costs with which commercial firms have to contend, certainly in Huddersfield.
We therefore hope that no unfair advantage will be given in the award of contracts to the Prison Department, that the business obtained will be awarded on merit and quality, and that prices will be costed on a formula which commercial firms can match in open competition. That request, coming from this side of the House, may seem strange. I believe that productive work should be done in the prisons, but I do not think it should have an unfair advantage over industry as a whole.
At the time of the Mountbatten Inquiry I visited 14 prisons and penal establishments because I wanted to know what went on in them. I was struck by the need for useful work inside the prisons and to find markets for the products.
I needed some special ironwork made for horticultural purposes. I put the work out to tender with local firms and the prison at Portland, Dorset, the Verne training prison. When I got the prices back I found that the price tendered by Verne was the middle price. It is interesting that its price came out exactly between the two commercial firms' prices. I accepted the cheapest of the three prices, though I am not sure that I was right in so doing because the results were not all that satisfactory. The point is that the prison tendered right in the middle of the two other prices and the prison could not have known what the two other prices were.
I felt that that information might be of some use to my hon. Friend the Under-Secretary as an example of what happens when one asks for tenders. If other hon. Members were here, no doubt we could get other examples which would be equally useful.
I am grateful to my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Cordle) for raising this issue tonight and for the opportunity of this very short debate on a matter which I know is of considerable concern, a concern which he has expressed on previous occasions.
I should like to assure my hon. Friend at the outset that the whole matter of work in prisons, and in particular our desire not to engage in any form of unfair competition with outside industry, is one of concern and importance to the Home Office.
Much of what my hon. Friend has said, and much of what was said by my hon. Friend the Member for Maidstone (Mr. John Wells) relates directly to the problem which is faced by the Prison Service today in carrying out the rôle which is expected of it by society. Before coming to the particular case which my hon. Friend has raised, I wish to put the matter of prison work into perspective. I shall remind the House of the purposes of the prison industries and then narrow the focus specifically to the points raised by my hon. Friend the Member for Bournemouth, East and Christchurch and by the hon. Gentleman the Member for Huddersfield, West (Mr. Lomas).
I need not remind the House that the task of the Prison Service is, broadly speaking, the safe custody and the rehabilitation of offenders. No hon. Member would argue today, I think, that it is sufficient merely to contain offenders, however civilised the conditions in which they are housed, while neglecting their rehabilitation. We must be positive in our approach to the training of those in custody, and, as my hon. Friend has accepted—and as my hon. Friend the Member for Maidstone emphasised—an undeniable duty rests on the Prison Service to seek through the provision of suitable forms of training to assist the people in its custody, with their varying needs, to enable them the better to face up to the demands of modern society after their release.
This means devising ways of enhancing the confidence of prisoners, of instilling habits of work, and, where possible, of imparting skills to enable the released prisoner to find a job. It also means preserving the human personality of the prisoner from the degeneration which might well result from a wholly idle life while in custody.
As my hon. Friend the Member for Bournemouth, East and Christchurch has appreciated, the provision of suitable work makes a valuable contribution to those purposes. In the past, the work has often been of a somewhat purposeless nature. It contributed little to the real needs of those in prison. But we have progressed in recent times, and we now see the provision of work within prisons as a civilising experience for those in need of training. We are, I may say, far from satisfied with what we have achieved, and prison industries all too often continue to operate in unsuitable and inefficient circumstances.
Apart from the physical resources available to the system, there is the whole question of the nature of the work which can be provided. If we are to obtain the greatest benefit from that work, it must be of a suitable type. It must be such as to influence prisoners and trainees in the way I have described. It must be available and capable of being carried out efficiently under the constraints of security which the general prison environment imposes, and it must bear as close a relationship as possible to work in the outside world.
Certain industries lend themselves to those purposes. These lie, in particular, in light engineering, carpentry, metal recovery and in laundry, which has been mentioned, but of more particular relevance to this debate is the whole subject of weaving and garment making. The latter has special value to prison industries, not least in that its demands on space are less than those required by other types of work. My hon. Friend will understand that this is a vital factor in the present circumstances of severe overcrowding. Thus, the clothing and textile field is one on which prison industries must continue to expect to rely.
I accept that the provision of such work raises important questions as to the sale of its products. It is axiomatic that any work done in prison might otherwise have been available to outside industry. But it would frustrate all our purposes if on that account we opted out of it. It is obviously not possible for prison industries to produce anything, even for the Prison Department's own use, that does not impinge to some extent on the interests of outside enterprises. It is a matter of balance. We recognise that our duty to society embraces not only the interest of those in custody but the interests and opportunities for employment of law-abiding members of society.
Much of what we produce goes to the Prison Service. The next biggest outlet is the supply to other Government Departments. Here we tender for orders in the same way as other sheltered workshops, and we rely on the priority supply arrangements that exist between Government Departments. But some of the products, although not a large proportion—I understand that it is well below 20 per cent. of our total production—go to outside bodies. They include some to which my hon. Friend referred.
I can give my hon. Friend two assurances on that part of our production.
First, we do not aim to take a significant share of any one market. Second, we seek to charge what we believe to be a fair market price. We cannot, as industry does, use the cost-plus basis as the sole factor in arriving at our prices. To do so would be unfair not only to the Prison Department but also to our competitors. It would be unfair to ourselves because of the abnormal overheads sometimes involved, dictated by such matters as security. Equally important, it would be unfair to our competitors in dealing with goods where the wage element makes up a significant proportion of the total cost. Therefore, we cannot rely entirely on the cost-plus basis. So we aim to tender at what we believe to be a fair market price.
My right hon. Friend rightly asked how that is arrived at. With regard to protective clothing, we know what the market price is because of the priority supply arrangement for sales to Government Departments and because of the contracts we have for other protective clothing for other Government Departments. Therefore, we know the current market price of comparable products. We know the price of the materials which we have to buy, and we can work out what the conversion cost is to outside industry. In tendering for goods to the hospitals, we know the material cost of those goods. We add to that a conversion cost, and by that means arrive at what we believe to be a fair market price.
My hon. Friend also asked at what stage we arrived at that price, and the answer is that we do so before tendering for any goods.
We are dealing with hospital management committees. These are not Government Departments. The priority supply arrangements whereby we can ask to be allowed a proportion of a contract do not, therefore, apply. I can assure my hon. Friend that the hospital management committees are not directed or requested to obtain supplies from the Prison Department
My hon. Friend also asked whether our tender prices are kept up to date. Again I am able to give him the assurance that they are kept continuously under review. In the last two years we have raised our tender prices to take account of rises in the cost of materials and general market trends. That they are fair and competitive can be seen from the fact that we are both winning and losing contracts, although we are satisfied that we are highly competitive in both quality and delivery. I assure him that the results of our tendering are continuously monitored as to price, quality and delivery.
My hon. Friend's next question was whether the same disciplines apply to the Prison Department when tendering as to outside industries. Again the answer is that they do. Like outside industries—such as the example he referred to—we also quote for a period over 12 months. Sometimes we quote on a firm price basis and sometimes, like other industries, we quote with a break clause in the agreement. Like them, we assess the cost over the 12-month period and are affected by changes in costs, particularly of materials, which may occur during that period.
Whilst it is true that we are not so directly involved as any outside industry would be in wage increases, there have been occasions when we have gone back to the people to whom we are supplying goods and asked for higher prices for the goods on the basis of outside wage increases which have occurred during the period of contract.
My hon. Friend raised a specific question about the fair wages clause. This cannot and does not apply and we strike it out in any contract we sign. In the case he quoted the Prison Department has secured contracts worth nearly £200,000.
I am unable to give the hon. Member for Huddersfield, West an exact answer but I understand that the volume of trade in protective garments has increased during the last few years and certainly at the moment we are in the process of acquiring goods on a three-year basis of a contract entered into in October, 1969.
I turn to our proportion of the market. This represents a barely measurable share of the national market in protective clothing but amounts to a reasonably significant share of this part of the hospital garment market. With regard to the Metropolitan Region contracts, there are 328 hospital management committees and overall we believe that our share is reasonable. It is not easy with the information at our disposal to quantify this with precision but we do not believe our share to be unreasonable, given the obligation we carry to sustain and train prisoners during sentence and to the expectations of society in general.
Despite what my hon. Friend says, I am not convinced that the interests of private industry have been significantly affected. We cannot contemplate withdrawing from this activity but we do not at present expect generally to increase our share of the hospital protective clothing market. I hope that what I have said has satisfied him. Against the background I have described, I assure him I am willing to undertake that, if any evidence can be produced that would indicate that Prison Industries is not quoting fair prices, or that the share of the market it gets is unavoidably threatening established firms and the employment they provide, I will look carefully and sympathetically at the position.
I give my hon. Friend a complete assurance that it is not our wish to place Prison Industries in this situation. We are always ready to review prices or even, where necessary, to consider our level of output to satisfy the basic criteria on which prison industries are run. We are always ready to discuss with manufacturers and their associations specific questions of pricing or markets. But we can do so only in the context of our task and responsibilities as a whole. We aim to get our work on the market by quality and price and, although we do not entirely assess our prices on a cost-plus basis, I believe our prices are ones that can always be matched in open conditions.
I trust my hon. Friend will feel that I have gone as far as I can go in meeting his case. I hope that the House, and my hon. Friend too, will endorse the view that the purposes I have described are right in a just and humane society, and that in pursuit of those purposes it is necessary to develop Prison Industries as an important ingredient of penological treatment in modern conditions.