What actions is the Welsh Government taking in response to the proposed plans to close the Tesco Customer Engagement Centre in Cardiff? TAQ(5)0191(EI)

Further to discussions and meetings with Tesco and with USDAW, I’m meeting with the Welsh Contact Centre Forum today to explore employment opportunities at other regulated customer service centres in the region. We are also establishing a taskforce to secure the best possible outcome for staff.

Speaking earlier today at the Welsh Retail Consortium event at the Senedd, Cabinet Secretary, you discussed the importance of effective dialogue between Welsh Government and the retail sector. In that context, how surprised—indeed, how angry—were you that Tesco, Wales’s biggest private sector employer, gave you no advance warning whatsoever, as I understand it, about these substantial job losses? What’s the Welsh Government’s position on how their loyal workforce was treated? I have an e-mail in my possession sent by a member of the Tesco senior management staff in September of last year, clearly implying to its workforce that there was no risk to their jobs, despite concerns that were circulating at the time while the building lease was in place until 2020. Now, it’s clear, on that basis, Tesco mislead these workers. Many of them will have made important decisions on their future based on this information. Now, is that behaviour acceptable, in the Welsh Government’s view, from a reputable employer? If it’s not, shouldn’t he be naming and shaming Tesco? Finally, he’s referred, in some of his comments he made immediately following the announcement, to he was going to try and seek an urgent meeting with Tesco to persuade them to think again. Can he say a little more on how those discussions are proceeding? Has the Welsh Government put a counter-proposal to Tesco on the table in partnership with unions and local authorities?

I’d like to thank the Member for the points he raises and the questions as well. I was deeply, deeply disappointed, not just by the decision, but by the way that Welsh Government, and, indeed, many, many workers, came to learn about the proposed closure of the facility. It’s quite apparent now that many employees learned about the decision on social media, which is an entirely unacceptable and not responsible action from any employer. It appears, given today’s news, that Tesco is embarking on a massive cost-cutting exercise with an attempt in mind to cost-cut something in the region of £1.5 billion off their bottom line. There’s been a further announcement today of 1,200 jobs going at their headquarters. I think this demonstrates that Tesco is pursuing a cost-cutting agenda that places profit, sadly, ahead of the workforce.

We’ve had discussions with the company. A meeting took place on Monday. I spoke with the CEO just last week expressing my disappointment, my deep disappointment, at the way that the decision has been reached. I was told again that there was nothing that Welsh Government could have offered or could do to stop what is a purely commercial decision, but I did impress upon the company the need to work with all partners to identify as many opportunities for those affected by the decision to move on to secure and well-paid employment in the sector.

Now, a number of actions are being taken forward as a consequence of the discussions that took place with Tesco just this week. We are calling on Tesco to ensure that any outsourcing of work that takes place considers Wales as an option for employment and for operations. We’re working with a number of interested parties who are looking at potentially using the building as an investment opportunity and an employment opportunity. We’re working with the Welsh Contact Centre Forum, identifying companies that could recruit, and, indeed working with those who have expressed an interest in recruiting. We know that there are at least five significant companies who are looking at taking on those employees who were affected by the decision.

I’m also determined to ensure that the taskforce brings together a number of agencies, including, of course, the contact centre forum, but also Careers Wales and Business Wales and other bodies who are able to assist people in identifying alternative work. It’s worth saying that in spite of what Tesco have decided to do—and they have laid out the reasons why they took the decisions—in spite of that decision, the sector remains in a buoyant position here in Wales. We have many, many immensely skilled people working in the sector. A huge proportion, of course, are employed by Tesco and will be affected by this deeply regrettable decision, but we remain of the view that a significant number will be able to access work opportunities immediately, not just within Tesco, where they could be redeployed, but in those other companies that are looking to recruit very, very soon. We will be working with individuals through the ReAct programme, with businesses, again through the ReAct programme, through the Welsh Contact Centre Forum, and with a number of anchor and regionally important companies, to identify as many job opportunities as possible in what is a buoyant sector.

I couldn’t agree more with some of the sentiments that you’ve expressed today, Cabinet Secretary. These are hugely troubling times for the 1,100 employees at this facility in Cardiff, which has a very good record over 27 years of establishment in the capital city of Wales. The dedication and professionalism of the employees deserve better treatment than they received last week, I have to say. It is regrettable that many of those employees only heard the news through social media and third parties, shall we say.

It is a fact, though, Cabinet Secretary, that these are proposed job losses at the moment. Regrettably, very often they turn into reality, though, at the end of the process. You’ve had a week with your officials to digest the announcement, to liaise with the chief executive and other contacts at the company. In your assessment, is there any hope that some of these jobs might be salvaged within the Tesco family? If that is a possibility, is there any estimation as to the likely number of jobs that might be made available to some of the employees on the site?

Secondly, the importance, obviously, of the package that the Government will put in place cannot be underestimated in a jobs announcement that is the biggest single loss of jobs in 10 years in Wales, and that will put forward huge logistical challenges to the support package you might put in place. Are you confident, on the assessment that you have made, that the package will meet the needs of the employees to find alternative employment and, ultimately, secure the employment that pays the mortgage, puts the food on the table, and puts the shirts on the backs of the kids back at home? Because those are the questions that employees will want to know.

If I may also just press you: given that Tesco is such a key strategic partner in the Welsh economy—19,000 employees across Wales, the biggest single private employer in Wales—it cannot be acceptable that you were blindsided by this announcement. I cannot believe that you do not sit, or your officials do not sit, in forums or meetings where opportunities are discussed, where hurdles are discussed, and what you can do to facilitate overcoming those hurdles. What type of relationship do you actually have with these big employers to make sure that there is genuine trust on both sides of the table when you are discussing putting facilities in place that assist employers to strengthen their position here in Wales, safeguard their position in Wales, and, ultimately, just have a bit of honesty?

Can I thank the Member for his questions and also for agreeing with my sentiments concerning Tesco’s decision? I’ll deal with that final point first, if I may. It wasn’t just the Welsh Government that was not informed in good time about the decision. The UK Government—I think that the Secretary of State is on record as saying that they were not given advance notice either. I think everybody has been critical of the way that Tesco allowed loyal skilled employees to learn first on social media about their fate. The Scottish Government were not given advance notice. There were no discussions with the Scottish Government, and I’m not aware of any discussions that took place with the regional authorities in England concerning today’s announcement either.

Tesco have decided to make these announcements without consulting with any level of government whatsoever. Indeed, our engagement comes primarily through the Welsh Contact Centre Forum, which acts as, as it says, a forum for contact centre businesses. Unfortunately, it appears that engagement by Tesco with the forum itself did not lead to any advance notice of this decision being made. Again, that is deeply regrettable, and I have expressed this to the company—I’ve said it publicly.

It’s important that sector organisations, such as the contact centre forum, are given the trust by those employers who rely on those bodies for advice, for opportunities, and for sharing best practice and sector intelligence. I would invite Tesco, as a major employer in the Welsh economy, to engage more thoroughly with the Welsh Contact Centre Forum, and with retail sector bodies as well, to ensure that, as we move forward, as many job opportunities can be saved, and, indeed, as many of those who may be affected by the decision, if the job losses are indeed implemented, can find alternative work—.

The Member asks a very important question about how many jobs could be salvaged within the Tesco group. This is something that I’ve asked the company in various discussions and meetings. It is likely, we are told, that a number of jobs can be salvaged within the wider Tesco group within this region. Pinning the company down to an exact figure at the moment is not possible, because the company itself is not able to gauge how many opportunities there are across the region. However, it’s clear that it won’t be anywhere near the 1,000 plus jobs that they propose to lose, and for that reason it’s important that we look at bringing forward a number of pipeline projects—inward investment projects—that could be used to absorb a significant number of the job losses that could follow the 45-day consultation.

I’m also working closely with the trade unions and with local Members as well to make sure that there is a co-ordinated response to this across the political spectrum and with our social partners. I’ve spoken with USDAW on numerous occasions, I’ve spoken with the local Members of Parliament who have raised this matter in the Commons and I’ve also spoken with Assembly Members. I think it’s absolutely imperative now that Tesco continue to work with the Wales Contact Centre Forum and, of course, with Welsh Government, and, indeed, with the council here in Cardiff, to identify as many opportunities as possible for the people that have been loyal to them for many years. This is an award-winning facility and the loyal workers who have been employed there deserve every opportunity to get back into employment if they miss out on work after the 45-day consultation period.

It does seem rather curious that, with job losses on this scale, Tesco didn’t give any prior warning to any relevant organisations, such as yourself or the Wales Contact Centre Forum. There is also the issue—well, you mentioned it yourself, actually—regarding information given to the actual employees, because I’ve also been told that the staff that weren’t on shift at the time the job losses were announced weren’t contacted by Tesco, but they did find out either through fellow workers or, unfortunately, through social media, as you pointed out yourself. So, it wasn’t very good practice from Tesco and they do seem to have acted in a rather cavalier fashion altogether with these job losses. So, that is unfortunate, and what can be salvaged from this we don’t know. But I welcome your efforts in trying to alleviate the job losses as far as can possibly be done. Hopefully, people can be redeployed as far as possible, although you now say that it won’t be anywhere near the total number of job losses.

There is a structure in Cardiff in particular with call centres. This has been a growth area in recent years, as you’ve identified. So, hopefully, people can be integrated in the existing call centre network. Of course, conditions do vary across this sector. Tesco, in fact, I believe, was one of the better operations as far as the employees were concerned. So, it’s all the more unfortunate that they’ve now treated the employees rather badly over this.

Of course, if people aren’t going to stay within Tesco, they will be wondering about redundancy packages. But there is probably little that you can say about that. As far as I’m aware, the unions are currently negotiating. I don’t know if there’s anything else you can add to what you’ve said. But thanks for your contribution.

Can I thank the Member for his questions and also agree with his concerns about the way that this announcement was made? It does appear as though news had leaked, and that that news might otherwise have been part of today’s announcement by Tesco of a major restructuring effort in an attempt to cut £1.5 billion from the bottom line as it seeks to become more competitive and achieve higher levels of profits. I think there’s no doubt that demand for skilled people in this sector in this region is still great, and for that reason I am confident that a very significant number of people will be able to secure alternative employment, if those jobs are lost after the 45-day consultation period. The trade union, USDAW, I know, is already very, very active in engaging with employees and with the company, and USDAW are doing a sterling job indeed with consulting and engaging with Government and with Members of Parliament as well.

I’ve estimated, Cabinet Secretary, that there’ll be approximately 100 jobs in Caerphilly affected by this. Last night, I attended a long-arranged consultation meeting with major retailers, which included Morrisons, Asda, Boots and Specsavers, and Tesco were down to attend and they weren’t there. They were notable by their absence, and they were missing again today, as far as I could see, from the Welsh Retail Consortium meeting that Adam Price has referred to. This is simply not good enough, because the appearance is that they’re running scared and that they’re afraid to speak to Assembly Members. I would have sought them out to speak about this. I heard it too from USDAW. It demonstrates the importance of having a strong trade union, and I commend the work that USDAW have done. It appears also that Julie Morgan AM and Anna McMorrin MP have had to force the door down to get to Tesco to talk to workers and to talk to officers at Tesco as well. It’s simply not good enough. So, when you speak to Tesco management, please could you ensure that you impress upon them the importance of talking to elected representatives? Because we heard directly from their workforce. I’ve got stories from their workforce that demonstrate this isn’t good enough. And indeed, I’d add that representatives of other retailers that I’ve spoken to have said this is a textbook example of how not to do employment relations; it’s absolutely appalling.

Can I thank Hefin for the points that he raises? I agree entirely with him; I am concerned that Tesco’s engagement with public servants needs to be improved, and so too Tesco’s engagement and communications with its own employees—the people that generate those profits that they are seeking to increase—need to improve as well. Anna McMorrin and Jo Stevens have fought very hard for those people who face losing their jobs, and I know that they will continue to do so. It’s worth my informing Members today as well that I have asked for work to be conducted concerning skills and emerging trends within this sector, so that we can ensure that the contact centre sector in Wales is at the forefront of emerging digital technologies, and takes every opportunity to upskill the workforce as far as possible.

I think like everyone in the Chamber, I feel very, very bad for the employees who are about to lose their jobs. I know some of them, in fact, that work up there. It’s not new for us to lose jobs in this way through big corporations not really valuing their workforce. The solution really lies in creating new jobs, so would you consider setting an entrepreneurial fund so that people who will be losing their jobs at Tesco could maybe have the opportunity to set up a new business?

I think the Member raises a very important point about the need to ensure that people who face redundancy are given the right support to get back into work or, indeed, to start their own company. ReAct 3 will provide financial support to people who are affected, and also financial support to potential employers of those people who may be affected. But there are also Welsh Government-supported initiatives concerning shared space, incubation hubs and so forth, that also offer bursaries to people who wish to be innovative and entrepreneurial, not just when they start out on their careers—often young people—but also people who have been made redundant but have an idea for a business and need a number of things: one, financial support; two, support from peers; and three, opportunities to break into a certain field. So, that’s in part why the Welsh Government through its programme for government is keen to roll out more shared space and incubation hubs for entrepreneurs.

I think that we should be left in little doubt that the supermarket sector is really a dog-eat-dog, cut-throat-competition business, and I’m afraid, like any unfettered market, it eventually leads to monopoly. I suppose I don’t want to live in some sort of dystopian future where we all have to buy our food from one supermarket. So, there are some concerns here about the way in which the supermarket industry dominates the UK food market and what we can do to regulate it so that they behave a bit better than Tesco has behaved in this case.

What Julie Morgan and Hefin David and I want—and others who have constituents who are affected by this—is to have some sort of clear strategy for the future to ensure that they aren’t being pushed into other jobs that are then going to be eliminated in turn. It seems to me that automation is one of the issues that makes it very challenging for people in the service sector, where people are going to have to be prepared to retrain and change in line with new technologies. So, I wondered if you could say a little bit more on how your thoughts on developing your new economic strategy could be influenced by what has happened in the case of Tesco.

Can I thank Jenny Rathbone for the points that she raises and for her question? I think no matter how competitive a market is, employees shouldn’t be treated with anything other than upmost respect and loyalty by their employers. Of course, shoppers play an important role in influencing corporate behaviour and I’m sure that many shoppers will be somewhat disappointed by the way that those employees have been treated by a company that they may have been loyal to as customers.

I think the issue of automation is really, really significant given that we know that advances in technology are accelerating and we need to be in a position to adapt to what will soon become a new reality and also take advantage of new technologies. That is why I just mentioned that I have commissioned a piece of work that will look at existing studies that have been carried out, particularly by the Wales Contact Centre Forum, but that goes beyond that in looking at how technology and automation could change the sector and what needs to be done to ensure that the right skills are developed within the sector to adapt to that change.

Minister, I think it’s significant that the 1,100 jobs that were taken from Cardiff resulted in just 250 jobs, according to reports, by the time they got to Dundee. So, no doubt there were a range of factors at work, but clearly automation is happening now; rather than being a future prospect, it is live and it’s impacting our communities.

I was pleased to invite you along to a roundtable on Monday with a range of experts in automation, artificial intelligence and robotics to start considering the scale of the impact that this can have on our economy. I’m delighted to hear you’ve commissioned a piece of research on the particular impact on retail and I would urge you to make sure that your economic strategy, when it’s produced, has a specific focus on automation—not simply on the threats but the opportunities too. That was one of the messages from the roundtable on Monday: there are very real advantages to public services, and to all of us as consumers, from automation, but there’s no denying the fact it’s going to change the shape of our workforce and the way that we work and we need to be ready for it.

I thank Lee Waters for the points that he raises. Actually, the discussion that took place on Monday—which he convened, I think—was incredibly informative. It was as a consequence of that meeting that I considered it essential that we move forward with this piece of work concerning specifically contact centres, but that, given the emerging strategy, will be relevant to all sectors right across the economy.

Lee Waters is absolutely right to identify the apparent disparity between the 250 jobs that would be created in Dundee and more than 1,000 that we face losing here in Cardiff. I put that very question about automation to Tesco. I was told that automation is not playing a part in this decision, but I think there is no doubt whatsoever that automation will change the sector and we need to be prepared for it. The Member is absolutely right to say that it’s not just that there will be challenges; there will also be huge opportunities. We know that automation will only go so far, that people will still require a human-to-human point of contact, and that where there is automation, that automation has to be delivered in a way that is advanced on where it is right now. For that reason, we need to be developing the new technology, we need to be the programmers, we need to be the people who deploy that technology.

I thank the Cabinet Secretary.