UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 281-xv

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS COMMITTEE

globalisation and its impact on wales

Tuesday 3 July 2007

MR MARK SPRAGG and MR PADRAIG McCARTHY

Evidence heard in Public Questions 1080 - 1215

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 3 July 2007

Members present

Dr Hywel Francis, in the Chair

Mrs Siān C James

Mr David Jones

Mr Martyn Jones

Albert Owen

________________

Memorandum submitted by Dawn Pac and CSA Service Group

Examination of Witnesses

Witnesses: Mr Padraig McCarthy, Head of Strategic Development, Dawn Pac, and Mr Mark Spragg, Business Development Manager, CSA Service Group, gave evidence.

Q1080 Chairman: Good morning and welcome to the Welsh Affairs Committee. For the record, could you please introduce yourselves.

Mr Spragg: My name is Mr Mark Spragg. I am the Business Development Manager of CSA Service Group.

Mr McCarthy: I am Padraig McCarthy, Head of Strategic Development for the UK group of Dawn Meats Group.

Q1081 Chairman: Could I begin with a question to you, Mr Spragg. Could you outline for the Committee briefly the work undertaken by the CSA Service Group in Wales.

Mr Spragg: The group consists of a number of different divisions and companies within. We have an onsite security company called Securicall which operates throughout South Wales. We have a permanent recruitment division, labour force office. We have CSA onsite services to provide plant hire and a number of other onsite services, but the main stay of the company and the core activity is a company called Labour Force Solutions, which is a division of labour which is primarily Polish in source.

Q1082 Chairman: Could you briefly tell us what impact positively or negatively globalisation has had on the work of your operations?

Mr Spragg: From a positive point of view, since Poland became an accession state and we were able to source labour from that country, that has enabled us to provide an effective, efficient workforce, with a strong work ethic, that we are able to deploy within South Wales - and in some contracts outside of South Wales as well, but the majority of the clients that we have are in South Wales - that is welcomed by those client companies and has improved, we believe strongly, their businesses.

Q1083 Chairman: Are there negative points?

Mr Spragg: The negative aspects of globalisation more recently have become less and less in our opinion. Obviously, like most companies operating in this area of labour providing, sourcing from Eastern Europe, we have learned as we have gone along. Systems have been tightened up and changed for the better, but we did find there was a certain amount of opposition from certain quarters, the press, basically, where people were under the impression, perhaps, that these individuals were coming from outside of the economic area and taking jobs that should have been taken by locals. That appears now to be not the case, in terms of the perception. That particular negative aspect was there, perhaps, from 2004 for a couple of years or so. Now, we believe, as a company, it is not the case, and we work in close cooperation with organisations such as the Welsh-Polish Association, local authorities, and those elements of the authorities within the area realise that there are so many more positive aspects than negative.

Q1084 Chairman: You note in your memorandum that you were the first employment agency in Wales to be licensed by the Gangmasters Licensing Authority. Could you outline to the Committee the nature of the relationship with the GLA and the implications of that for your work?

Mr Spragg: We have to have a relationship with the GLA because we are licensed by them. The GLA will revoke a licence of any company such as ours if we breach any of those regulations. We are now under a remit, as outlined by the Association of Labour Providers, an organisation of which the Committee is probably aware, to identify the unregulated parts of our industry which are breaching those regulations. Those of us who are not providing gangs do not particularly like the term "gangmaster", we prefer "labour providers"; however, if the GLA had more resources they would be able to look more towards those parts of the industry that are not adhering to the regulations as we are. They do as much as they can with the resources they have available to them and they do revoke licences. According to the ALP, in the last few months there have been 22 licences revoked by the Gangmasters Licensing Authority - and quite rightly so, because there are elements of the black economy in this industry of which we are part that are giving the rest a bad name, and the press will obviously pick up on that. Our relationship, through the ALP, with the Gangmasters Licensing Authority is absolutely critical, because without it we just could not operate.

Q1085 Chairman: To sum up: it is a rather benign relationship but, nevertheless, an exacting one and a demanding one of you.

Mr Spragg: Absolutely. We were subject to an audit in February and we were found to have achieved the gold standard. No problems could be found at all associated with our operation and our systems, whether it be from the systems of procedure, standards of accommodation or the way in which we approach our business. However, there are many, many companies within the industry which are not licensed by the GLA and which are still operating. They are the ones perhaps which need to be addressed more by the GLA, if they had the resources to do so.

Q1086 Albert Owen: Good morning. Mr McCarthy, could you outline for the Committee the work that Dawn Pac does in Wales, please?

Mr McCarthy: Dawn Pac is a historical name by which the business was known. It has recently been renamed Dawn Group Crosshands. There is no significance in that really, in terms of what the business does in Wales. We are a retail packing facility, primarily packing fresh meat for the UK multiple supermarket industry. In terms of the history in the business, we have been based in Wales for about 15 years. In 2002 we had a rather serious fire in our original premises in Crosshands. Following that fire, with the assistance of the WDA at the time, the Welsh Assembly Government and the local Carmarthenshire Authority, we took the opportunity to consolidate the operations of four factories that we then had in the UK on to the site in Crosshands. It is now a much larger business, in terms of both factory size and throughput, and our business still continues to be supplying the UK multiple industry.

Q1087 Albert Owen: Although your headquarters is based in Waterford in Ireland and you have outlets throughout Europe, you have concentrated your UK efforts in Wales for economies of scale predominantly or you took advantage of that system after the fire. Is there any other significant factor why you wanted to centralise your work in the UK in Wales?

Mr McCarthy: In terms of the Dawn Group, there are probably two aspects to our operations. The first is primary processing, which is the slaughter and de-boning of animals. We have three abattoir sites in the UK and a number of others in Ireland. In terms of the site in Crosshands, that is largely engaged in, let us say, further processing or value-added processing, where we package particular meat cuts into consumer packs and then ship them on to our retail customers.

Q1088 Albert Owen: Did you relocate the skills from your other outlets to Wales at that time, 2002?

Mr McCarthy: I suppose part of the reason why we located in Wales originally was the availability of a local labour force. In 1992 there was high unemployment in the area, so labour was readily available. When we came to construct the new facility in 2003, we had an existing labour force, obviously, who had acquired a high level of skills at that point of time so we chose to build on those skill levels. There was a certain number of staff relocated from the other facilities but, by and large, we chose to augment or tried to augment the labour force locally. When we were building the site in 2003, the previous workforce was in the order of 400 people.

Q1089 Albert Owen: Throughout the UK?

Mr McCarthy: No, in Crosshands prior to the fire. We worked with the local employment agencies and so on at the time. There was one interesting point, when we spoke to those agencies at the time, in Llanelli, for example, which is the nearest largest town to Crosshands, we were told there were something in the order of 1200 people who were deemed economically inactive, therefore there was a readily available labour force. I am not up to date with those numbers but I think there are still in the order of 1200 people. In one sense that says to us that there is a lack of available labour in the area, in terms of people with the necessary skills and people who want to work. As a consequence of that, we have seen a change in the profile of our workforce over the last number of years, and that workforce has largely been augmented by that labour. That change has come about necessarily due, I suppose, to the lack of an available workforce locally. In that regard, it has affected the necessary development from our point of view.

Q1090 Albert Owen: How important was grant aid to your original decision in 1992 to come to Wales?

Mr McCarthy: It was obviously one of the factors that we considered at the time. There were probably three main factors One was the location on the route, the sea transport link, from Rosslare to Fishguard. At the time we were looking to grow our business with the UK multiple retailers, so it was an obvious location. We did not have primary processing services in the UK at the time. That obviously has changed in the meantime. Location, coupled with labour availability, coupled with grant aid were the primary reasons why we established day one.

Q1091 Mr David Jones: Mr Spragg, could you outline for the Committee the make-up of CSA's pool of employees. For example, could you indicate the proportion which is full-time or part-time and the proportion which is temporary or permanent. Also, could you give an indication of the nationality of your employees.

Mr Spragg: We have approximately 1100 people in our managed workforce group, the majority of who are Polish. Of that, about 20% will be permanent; that is, people with a contract with the employer over three months. Basically, all our employees are under something that we call an industry standard contract for services. That means that we are under a remit in order to provide them with work. They have the option within that to reject that work if necessary, but we contract to provide them. Those people who are deemed, whether it be by the client or ourselves, to be almost worth of a reward, we will then offer them a permanent contract. Usually those are people who have been as employees of the company for over 12 months. They will be offered a permanent contract, and, as I say, that amounts to about 20%.

Q1092 Mr David Jones: You do not offer a permanent contract until they have been with you for 12 months. Is that correct, as a matter of practice?

Mr Spragg: Yes, it can, unless there is a specific skill set, for instance. Let us say we have people who are in short supply, such as welders, we could offer somebody a permanent contract then because there is always a shortage of those.

Q1093 Mr David Jones: But the standard contract that you would offer a worker when you took that worker on would be for how long?

Mr Spragg: For three months.

Q1094 Mr David Jones: Is that contract concluded in Poland?

Mr Spragg: It is concluded in the UK. It is initiated in Poland. We have our own recruitment division within Poland, so that we can then identify suitable labour. Basically, unlike a number of labour providers who will identify and bring people over from Poland and then try to find them positions, we will do it the other way round. We think that is the ethical way to do it.

Q1095 Mr David Jones: Could you explain your process of recruitment in Poland?

Mr Spragg: We have a recruitment division sitting in Warsaw. We are approached, for instance, by a client company that there is a requirement for a certain number of people with certain skill sets. We will then identify, first of all, to see whether there are people within our existing labour pool, the majority of which, the vast majority of which will be in work. They may well be coming to the end of a particular contract with that client and we can then offer that particular role to them. We also advertise in the local job market, so that any opportunities that we do have will apply as equally to local labour. If those skill sets or the number of people required do not exist, we then inform our branch in Poland, who will the look for the required number of people with those required skill sets, and we will then initiate bringing them across to the United Kingdom and putting them through the process.

Q1096 Mr David Jones: When you say they will look for them, do they advertise in Poland?

Mr Spragg: Yes. Or they will have people who have registered with them, as with any other employment agency.

Q1097 Mr David Jones: How many administrative staff do you have in Poland?

Mr Spragg: Approximately 12.

Q1098 Mr David Jones: Where are they based, Warsaw?

Mr Spragg: Warsaw, of which the majority are bilingual: 70% of our staff are bilingual.

Q1099 Mr David Jones: Are they British staff or Polish?

Mr Spragg: Polish.

Q1100 Mr David Jones: You mentioned the question of transport in your memorandum. That tends to indicate that your workers have to travel some distance to work, obviously depending on where they are working. What is the approximate cost that your workers face in terms of transportation?

Mr Spragg: Seven pounds per return journey.

Q1101 Mr David Jones: Irrespective of the length of the journey?

Mr Spragg: Yes.

Q1102 Mr David Jones: What sort of distance have they travelled to get to work?

Mr Spragg: It varies.

Q1103 Mr David Jones: Could you give an indication of the brackets involved?

Mr Spragg: In the case of Dawn Pac, it would be somewhere in the region of a six to seven mile one-way journey.

Q1104 Mr David Jones: They live reasonably locally.

Mr Spragg: Yes. Also in there, it needs to be mentioned that we have the capacity, if we have 1100 people in our managed workforce, for about 180 people to be transported at any one time. Obviously there are shift patterns. Obviously we could not lift everybody at any one time. After a relatively short amount of time, the majority of our workforce will club together, three or four people, let us say, and purchase a car, to give them a certain amount of independence in terms of transport, but, initially, because they do not have the money to buy a car, they utilise our transport. The transport is available there. We would very much like to be in a position where we give encouragement to use public transport, but the public transport is not available.

Q1105 Mr David Jones: What sort of transport do you provide? Minibus?

Mr Spragg: Minibus and larger buses where appropriate, as well, if there is a larger number of people.

Q1106 Mr David Jones: Do you provide those both for local and migrant workers?

Mr Spragg: Yes. They would be available for all. We have pick-up points, so literally it is door-to-door.

Q1107 Mrs James: You mentioned the option to reject and one of the things that most concerns people who are aware of the facts of the industry is that they are on zero hours contracts: if they do not work, they do not get paid. Am I correct in that assumption?

Mr Spragg: Yes.

Q1108 Mrs James: If they turn down work in one of the places where you have the contract and there is no other option for them, what happens?

Mr Spragg: We will continue to be successful or disappear very rapidly if we do not manage the workforce. We like to provide our client companies with a happy, contented, efficient workforce, as I mentioned earlier on. We will have identified within the system people who we believe will want to work, because we will give them the nature of the job. Whether it be from working on a production line, in a company such as Dawn Pac, or operating in a technically skilled area, they will know what they are coming to, but they are not bonded to us. If somebody, for whatever reason, rejects that particular role, we will try to find another role for them, but you are never going to please everybody all the time. They are not bonded to us at all. It is the same with accommodation. If at all possible, we would like people to give us at least seven days' notice before they disappear. We are aware that with some labour providers people are into a six-month contract for accommodation, for instance. We do not do that, for the simple reason that it is unethical and we like to set ourselves apart as doing things differently. Going back to the contract of employment, these people have volunteered to come over to this country to work. They are aware of the nature of the work they are coming to do and if they wish to withdraw from that and return to Poland then we make that as easy for them as possible.

Q1109 Mrs James: What if it is an option that they do not particularly want that job but they would like you to place them somewhere else.

Mr Spragg: We will try to accommodate them.

Q1110 Mrs James: You would always do that.

Mr Spragg: Yes.

Q1111 Mrs James: If people are getting to the point where they would have no income, you would always try to relocate them.

Mr Spragg: Yes. If people have no income, from a commercial point of view that is no good for us. From a commercial point of view, we want people who are going to be producing and in employment because that is what we do.

Q1112 Mr David Jones: What impact do you think it will have upon your business when Germany opens its doors to Polish migrants?

Mr Spragg: My gut reaction is I do not know, but, from my relatively brief experience with the company and my knowledge of the Poles that we have working for us, and certainly that we have working in administrative roles within the company, they enjoy being in the United Kingdom, they enjoy being in Wales. The vast majority like the Welsh people. There is a basic historical link with the United Kingdom and particularly Wales. There is an existing Polish community here as well. There will be a certain amount of impact, but the fact is that the people we have enjoy being here, and there is that basic historical link, so I do not see any reason why that should not continue.

Q1113 Mr Martyn Jones: Without breaching commercial confidentiality, where do you make your money: from the employees or from the companies which employ them?

Mr Spragg: We make money from our client companies.

Q1114 Mr Martyn Jones: They get paid a particular rate and you get paid something on top.

Mr Spragg: Yes. The rates are set down by the Gangmasters Licensing Authority. We do not make any money on transport - in fact, we lose money on that. Certainly I was at the Associated Labour Providers annual general meeting two months ago, and, with regard to accommodation, the majority of labour force providers do not now provide accommodation, because, at £29.05 a week excluding bills, you cannot really provide much. However, we do for a lot of our employees because we feel that basically gives us more of a stable workforce when they initially arrive here. Also, I do not know whether the Committee is aware that for those people who are resident in the accommodation that we provide, that accommodation is regularly audited and checked, not only by the local authority but also by the GLA. We can only charge a certain amount, whereas, if they go privately, that landlord can charge whatever he wants and also the standard can be to whatever.

Q1115 Mr Martyn Jones: Mr McCarthy, could you outline the profile of the workforce that you have at the moment, in terms of age, nationality, permanent versus temporary and that kind of thing. Perhaps you could tell us how that has changed over the last few years.

Mr McCarthy: Obviously the overall labour force as grown substantially over the years. We currently employ directly ourselves approximately 600 members of staff. That obviously has grown from zero on 1992. In addition to that, we also engage approximately 400 agency staff. In terms of directly employed staff, they would range from unskilled operators to skilled operators to supervisory, management and engineering staff. In terms of the profile, that would not have changed dramatically over the years. One thing that has maybe changed is that there is increased automation within the business, so there is probably more of a requirement for skilled engineering staff than there was at the start date, but it is still very much a labour intensive business. In terms of the age profile, I suppose the employees that have been with us for a long time have got older, but, in terms of people coming into the business, that would tend to be more migrant workers than local workers. That is not necessarily something that we have orchestrated. It has effectively evolved, I suppose, due to increased economic activity levels within the general area. People have more options in terms of where they can get work but we still obviously employ a very large number of people.

Q1116 Mr Martyn Jones: On a given cutting line, do you find you employ more migrant workers than you employed indigenous staff before? I am thinking about skill levels. Would you need more people?

Mr McCarthy: I would say as a general comment that the skill levels of the migrant workers tends to be good. They tend to have higher levels of basic education. That is probably part of the reason that attracts them to the UK in the first place.

Q1117 Mr Martyn Jones: You do not have to employ more to keep your production up?

Mr McCarthy: They would be equally skilled. If the question is: Are they less skilled? certainly not.

Q1118 Mr Martyn Jones: What role do you think trade unions should have in supporting and representing migrant labour?

Mr McCarthy: I suppose that any opinion I would have would be a personal opinion, but, in terms of our business in Crosshands, we have a very active works council that meets regularly, at least monthly. The council is represented above the staff, in terms of it is an elected body, so we do not have a recognition agreement in place currently but we find that the works council works extremely well. In fact, we had a recent audit from the SEDEX organisation who complimented the way in which that council operated. We engage actively with our workforce. There is also migrant worker representation on that council. The minutes of the meetings are communicated within 48 hours of the meeting to the entire workforce and translated where necessary.

Q1119 Mr Martyn Jones: But you do not have a trade union recognised at the moment. Do you have any trade union membership?

Mr McCarthy: I am sure we do.

Q1120 Mr Martyn Jones: But you do not negotiate with them.

Mr McCarthy: Not currently, no.

Mr Spragg: We have no issue at all with people becoming members of trade unions, no.

Q1121 Chairman: Specifically on the question, do you see that trade unions have a role in supporting migrant labour? It is not a personal question; it is an observation. Do you see that trade unions have a role in supporting such workers?

Mr Spragg: Like with any employee, the trade unions have a role in supporting employees.

Q1122 Chairman: Do you welcome that?

Mr Spragg: Any organisation that will support employees, we as a company would welcome. We would not encourage or discourage but we would welcome it, as we welcome the Welsh-Polish Association operating and supporting our employees.

Q1123 Chairman: You would welcome trade union representatives of this Committee to visit Dawn Pac or to visit any company with which you have an association.

Mr Spragg: With the compliance of the company, yes. We would not have any issue but obviously it would be with the compliance of that particular client company.

Q1124 Chairman: We met with representatives of Solidarnosc in Warsaw and they were concerned genuinely about their own members working in the UK. Would you welcome Solidarnosc visiting your plant?

Mr McCarthy: We engage actively with numerous organisations. If our workers deemed it necessary for such a meeting to take place, we would not have an issue per se.

Q1125 Chairman: And you would not have an issue with this Committee visiting your plant either then?

Mr McCarthy: This Committee, absolutely not. No.

Chairman: We will take that as an invitation.

Q1126 Albert Owen: Picking up on the remarks that you would welcome any group that supports employees but it would be up to the company: are you saying that if the company had a recognition with a trade union you would be quite happy for that to go ahead and that you would comply with their rules and you would negotiate with them on terms and rates of pay?

Mr Spragg: Yes.

Q1127 Albert Owen: Why do you not actively encourage that to happen?

Mr Spragg: We do not discourage it. We make people aware of all manner of organisations that are out there.

Q1128 Albert Owen: How.

Mr Spragg: We do.

Q1129 Albert Owen: How?

Mr Spragg: They get briefed. As I keep mentioning, as an ethical employer, everything that takes place or everything that people sign is bilingual. Any documentation or any contract that they sign is in their native tongue. Likewise, we make people aware of any organisation, whether it be a trade union or something like the Welsh-Polish Association that is there, language training that is there. We do.

Q1130 Albert Owen: If trade unions are offering that in the locality, you would encourage them to go the trade union and to get that support.

Mr Spragg: We would make people aware of it, yes.

Q1131 Albert Owen: Mr McCarthy, you mentioned the works council in your plant. Is that why you do not think it is necessary to have a trade union. You think the works council are already doing a similar role.

Mr McCarthy: The situation regarding trade unions is that that is up to the workforce, as to whether they require unions to represent them. In terms of how the relationship has developed and evolved over the period that we have been in Wales, workers have not demanded that they be represented by trade unions. We have actively worked with our workers and the works council has evolved over a period of time and it is very much an open forum. It is the way in which both our workers and we as a business choose to engage with each other and it works very effectively. In fact, as I mentioned earlier, the work of that council was praised in a recent SEDEX audit.

Q1132 Albert Owen: To push the remark that the Chairman made with regard to people visiting your plants: if a trade union wanted to meet with the workforce, you would allow them to come to the premises to distribute leaflets and to tell them exactly what a trade union stands for and what it does for workers in Wales.

Mr McCarthy: If that was requested by the workers, I am sure it is something we would consider. But trade unions are actively seeking membership from migrant labour particularly at the moment. Again, as a personal observation, I would see that as the unions have experienced declining membership over the last number of years and obviously they see this as an opportunity of increasing their membership in the future.

Q1133 Albert Owen: If a member of a trade union approached one of your senior managers and said, "We want to talk with the staff," you would not see any problem with that?

Mr McCarthy: In terms of how that relationship might come about, we would see that as coming via the workers, as opposed to a direct approach.

Q1134 Albert Owen: I do not understand that. If you are relaxed about trade unions per se and you have works councils dealing with the issue, then why would you be hostile towards the trade unions coming in?

Mr McCarthy: For example, if we were approached by a significant number of different organisations.

Q1135 Albert Owen: I understand that.

Mr McCarthy: In terms of the development of that relationship, that would be very difficult, if we had to try to manage a myriad of relationships. As it currently stands, there is one interface and it is a very open forum. If the council, through their members, as it were, or employees want the situation to change, then that is something we will consider.

Q1136 Mr Martyn Jones: In your memorandum, Mr Spragg, you mention that you turned to Eastern Europe to recruit because of the "difficulty of supplying a quality of service" to clients. What factors lay behind this deficit in quality or numbers of recruits?

Mr Spragg: I think that is something that the whole of the UK, certainly the Welsh economy, is encountering at present. I think it as an aside in a sort of Cardiff breakfast club meeting a year or so ago, where it was mentioned that somewhere in the valleys, certainly in part of the valleys, we are talking of third generation economically inactive at present, from grandfather who was made redundant in the late 1970s and now his son/daughter has not worked. We are certainly aware of cases where a particular company - which may or may not be under a certain amount of commercial pressure in order to decamp from South Wales and move elsewhere, perhaps within the EU - because they cannot source the labour required from local sources, whether that be through the labour not being there or the right skill sets or the right work ethic, is augmenting the workforce by migrant labour. Thereby, that particular company is remaining within South Wales and, thereby, the presence of migrant labour is indirectly meaning that that company can continue to employ the certain number of local personnel.

Q1137 Mr Martyn Jones: Poland is the answer particularly for what reason?

Mr Spragg: As in response to a previous question, there is a historical link with South Wales. The work ethic is incredibly strong. We do find - and this will probably be reinforced by my colleague Mr McCarthy - that some of the issues with some of the employees we have is stopping them working? They will turn up half an hour before their shift, they will continue to work until long after their shift has finished. The work ethic is strong. That is one thing that we have found throughout. That is a reason why not only us but other labour force providers throughout the United Kingdom are sourcing from Poland as opposed to perhaps some other country.

Q1138 Mr David Jones: Could you expand a bit on your comments about the three generations being economically inactive. Is this something that you noticed first hand?

Mr Spragg: Not first hand; it is third hand. It was stated by the speaker at a Cardiff business club. I had not realised it and a number of businessmen there did not realise it. Sometime, let us say, in the late 1970s, grandfather was made unemployed, in his mid to late forties, perhaps, and subsequently never worked; his son, let us say - who for whatever reason decided not to move from that particular locality - has never worked and is now in a position whereby, at his age, it would be difficult for him to get employment; and the grandson, who is now approaching employment age, perhaps, as there is not a work ethic then existing within the family -----

Q1139 Mr David Jones: You are suggesting that the problem of the poor work ethic is a serious one in some parts of South Wales.

Mr Spragg: I think that is the case.

Q1140 Mr David Jones: You employ local workers too.

Mr Spragg: Yes.

Q1141 Mr David Jones: So presumably there are large numbers who do not have this problem.

Mr Spragg: Yes.

Q1142 Mr David Jones: Are you able to identify which parts of South Wales we are talking about here?

Mr Spragg: No, I do not think so, not specifically. I think it is general throughout the South Wales valleys.

Q1143 Mr David Jones: Your comments are based on anecdote, is that correct?

Mr Spragg: Yes, it was an anecdote, but it was not specifically identified to one specific valley, for instance, within South Wales.

Q1144 Mr David Jones: You do not think this is an urban myth that is growing up about the work-shy qualities of people from some parts of South Wales?

Mr Spragg: There are undoubtedly certain work-shy people within South Wales, as there are undoubtedly work-shy people throughout the United Kingdom, but there are also a great number of people who have a tremendous work ethic.

Q1145 Mr David Jones: Our concern is that this may well be an urban myth which may be doing no good at all for the reputation of the workforce of South Wales.

Mr Spragg: If that is the case, but it is something which is circulating within the business community of South Wales, as it is throughout the United Kingdom.

Q1146 Albert Owen: Do you not see yourself as having a responsibility either to dispel that myth, to put up your workforce to say they are good workers, et cetera, and they have come from the locality, or to help to retrain some of them in the area?

Mr Spragg: On your latter point, first of all, we do not have the capability of retraining. We can train to a certain extent and we do have access to training facilities. Every one of our jobs, as I mentioned earlier on, we offer to a local workforce.

Q1147 Albert Owen: The point I was making is: do you attend forums with other employers so that you have a skills audit, rather than just relying on a speech at a breakfast club?

Mr Spragg: Yes, we do.

Q1148 Albert Owen: Can you not counter that with your experiences and that of other employers?

Mr Spragg: Yes, we do, and I do.

Q1149 Albert Owen: I am surprised that you raise it, with respect.

Mr Spragg: Because it is something which is raised on a regular basis, as the tremendous work ethic within parts of South Wales ----

Q1150 Albert Owen: Had my colleague not challenged it, I think you would have put that on the record as a matter of fact.

Mr Spragg: I did mention that it was not a matter of fact, it was an anecdote. But it is a fact that there are three generations of economically inactive personnel within South Wales.

Q1151 Albert Owen: But it is not the norm.

Mr Spragg: It is not the norm.

Q1152 Mrs James: You have already mentioned a contradiction in your evidence and I wanted to turn to a few specific questions now. Are you able to tell the Committee what proportion of your workers live in CSA accommodation and would you outline the types and standards of accommodation provided by the company?

Mr Spragg: First of all, with regard to the actual proportion I do not have the exact figures and that would be something I could submit to the Committee in due course. With regard to the standards, because we are a GLA regulated company our standards are those as set down by the GLA and the local authority, which have been identified, as with our recent audit in February, as reaching, if not exceeding in the majority of cases, that standard.

Q1153 Mrs James: Do you have copies of those standards you could submit to the Committee?

Mr Spragg: Yes, I have. But the GLA will have those standards, so they are in the public domain already.

Q1154 Mrs James: It would be useful if you could furnish us with them. How do you currently set and collect your accommodation charges? You note in your memorandum that the fees for accommodation charged to migrant workers could be better regulated centrally. Could you give us a bit more information on that, please?

Mr Spragg: The figure is set down nationally as £29.05. That is a national figure. I think it is indicative of the fact that, because in South Wales our rental charges and our accommodation charges and leasing charges are less perhaps than they would be in other parts of the United Kingdom, we can provide that accommodation, whereas the majority of the labour force providers now do not because they cannot do it for that.

Q1155 Mrs James: What is the maximum number of people you would have in a property?

Mr Spragg: In any one property? The minimum for one person is 75 square feet per person. It is 120 square feet for two people.

Q1156 Mrs James: The maximum would depend upon the size of the house.

Mr Spragg: It would depend on the size of the house - and with all the necessary facilities, as required, as set down by the GLA standards. Those standards adhere to local authorities as well. Talking as a committee member of the ALP, certainly it is the opinion of the ALP, and as represented to the Gangmasters Licensing Authority, that the level of accommodation charges should be set locally because that would make life a lot easier.

Q1157 Mrs James: One of the concerns that I have and some of the problems that have occurred to me is about being good neighbours. I know there will be some questions later on about social cohesion and things like that, but do you consider that your role is to be good neighbours as well, because you are bringing lots of people into a new situation. There is a new lifestyle and a new community and respecting the community that is already in existence there, like their next door neighbours.

Mr Spragg: Yes, of course. It is something of which we make our employees aware, especially those who live within our accommodation and those who are in private accommodation as well. We liaise on this on a regular basis with the police, with the local authorities as well, that, if any issue is raised, we will approach that issue and not just sweep it under the carpet. As an ethical employer, especially where we have people who we have brought into a new culture, we see it as part of our role to educate them in the ways of that particular culture. This is specifically relevant where we have people who are perhaps employed with various shift patterns, because we might well be requiring them to leave their accommodation in the small hours. We stress to those individuals that they do have a responsibility for being good neighbours, as you say.

Q1158 Albert Owen: On that issue with regards to integrating into the local community, which you say you encourage, what active steps do you take? Do you give them lists of what is available in the area?

Mr Spragg: Yes.

Q1159 Albert Owen: Are they encouraged to join clubs?

Mr Spragg: In Llanelli, where the majority of our workforce is accommodated, there is a very active Welsh-Polish Association. They are made aware, they are told about it, whether it be for language training or for clubs. Full integration into the local community through the medium of people who are Polish and have been in that community for a while, is the best way to do it. We know that in Llanelli there is a committee, which meets on a bi-monthly basis, consisting of local authorities, police and others, and quite a number of Poles have joined local football clubs - they seem to be better at football than a lot of the locals and the mainstay of a number of clubs, for instance. There are always going to be a number of people who have difficulty integrating into a local community but, from our experience, the majority enjoy it. I go back to the historical basis of the relationships between Wales and Poland.

Q1160 Albert Owen: I appreciate that. I am pleased to hear that you are encouraging them. The church obviously has a role in various things. Is that the first port of call? Would you get the local priest in?

Mr Spragg: We are beginning to realise this. A lot of the Roman Catholic churches are bursting at the seams. They have never been so busy: they are having to buy extra chairs. Obviously the role now of the Roman Catholic church is absolutely critical, not just in South Wales but for the rest of the United Kingdom. In every one of these forums now, we are beginning to see the local Roman Catholic priest is an essential part, because the church is a key interface.

Q1161 Albert Owen: You have said you predominantly work with Polish people but are there instances where you get migrant workers from three or four different countries? Would you segregate them or would you put them into the same property?

Mr Spragg: Initially, in the early stages, there would be a certain amount of natural segregation going on, but, from what we can see, especially if you have, let us say, three or four different nationalities working for the same company, where they have a common point of reference, that segregation would start to become blurred quite quickly.

Q1162 Albert Owen: The reason I mention it is because there was a case in my constituency of a fatality. People from different cultures were put into a property and it was overcrowded. You have said that it depends on the size of the house but this was a three-bedroom house. How many migrant workers do you think could sleep comfortably in a three-bedroom house?

Mr Spragg: It depends how many rooms you have.

Q1163 Albert Owen: Three bedrooms.

Mr Spragg: I am sorry.

Q1164 Albert Owen: Do you have any standards? I am not trying to trip you up.

Mr Spragg: There are standards but I do not have them here at the moment. As I said, one figure is 75 square feet per person, so whatever that equates to.

Q1165 Albert Owen: You would use the local authority guidelines for multiple occupancy.

Mr Spragg: Yes. We do not "hot bed", for instance, which is something that was mentioned that we did.

Q1166 Albert Owen: Mr McCarthy, how big an issue is accommodation and relocation for you as a company? Are you buying more houses in the locality to accommodate migrant workers, for instance?

Mr McCarthy: Our business is not housing; it is food processing. Obviously we take an active interest in terms of how our migrant colleagues are being treated in relation to facilities, et cetera. For example, in the case of CSA, as was mentioned earlier, they are very tightly regulated now in terms of the GLA standards.

Q1167 Albert Owen: Is that something you welcome?

Mr McCarthy: Absolutely. Yes. In addition to the GLA standards, we also, as an ethical employer, are subject to our own imposed and voluntary standards. For example, we would ensure from a due diligence point of view that the appropriate standards are being maintained through our own auditing process.

Q1168 Albert Owen: How does that work? Say I had an agreement, as a migrant worker, that there would be a facility within your company where I could go and talk to somebody if I had problems with my transport or accommodation.

Mr McCarthy: As I mentioned earlier, there is a forum. If people have specific issues, we have an HR department within the business that will deal with specific issues, or if there are issues that workers feel need representation at a formal group level there is also a forum for that. We do come across issues from time to time and we do try to ensure that they are resolved as amicably as possible. It is interesting, as an employer, that there is a very strong focus - and a necessarily strong focus - on the treatment of migrant workers that does not, let us say, apply to the non-migrant workers. There is an extra level of bureaucracy and regulation for that category of worker that does not apply to, let us say, somebody whom we would employ directly. For example, we would not go to the house of one our employees and ask to see what their accommodation standards were, but that does happen for migrant workers.

Q1169 Albert Owen: Does your HR facility allow for people with different languages?

Mr McCarthy: Absolutely. Yes.

Q1170 Albert Owen: And to understand the cultures?

Mr McCarthy: Absolutely. Yes. Communication is obviously a vital part of what we do. We actively encourage employees. We put a facility in place for language training, for example. In addition to that, all of our employment contracts will be written in the first language of each employee. If it is Polish, for example, there is a facility there. We have used both our internal and external resources for translation, et cetera. The minutes of the works council meeting are translated into three different languages.

Q1171 Albert Owen: What are those languages?

Mr McCarthy: English, Welsh and Polish.

Q1172 Albert Owen: That is what I want to hear! The other thing I wanted to ask you about is the effect on the employee. The local workforce is obviously feeling threatened about the fact that more and more migrant workers are coming into the area. How do you deal with that side of it? How do you keep morale up? Are there bonus schemes? How do you value the local employees against the threat of migrant workers?

Mr McCarthy: We do not see migrant workers as a threat.

Q1173 Albert Owen: But they might be.

Mr Spragg: In terms of local workers, we treat all our workers equally. For example, we do not differentiate in terms of pay rates, et cetera. If there is a threat there, it is certainly not something that is generated from within our business. Unless there is harmony within the workforce we are not going to operate effectively.

Q1174 Albert Owen: So you manage the discontent?

Mr McCarthy: To be perfectly frank, we do not come across a lot of discontent. The migrant and non-migrant workers seem to work together very effectively and efficiently.

Q1175 Albert Owen: If a local employee had a grievance, say he was a boner and he was working all hours and he felt that that was enough, would the agency not say, "We can get somebody who can do that for longer hours than that"?

Mr McCarthy: Absolutely not.

Q1176 Albert Owen: Does that not exist?

Mr McCarthy: Absolutely not.

Q1177 Mr David Jones: Mr Spragg, is it the case that some of your employees, for example, would share bedrooms?

Mr Spragg: Yes, but the size of bedroom would be as per the regulations laid down by the GLA.

Q1178 Mr David Jones: You have made that point and said it was 75 square feet.

Mr Spragg: That is per person. It is 120 square feet for two people.

Q1179 Mr David Jones: Is there a maximum on the number of people who share rooms under your own company's guidelines?

Mr Spragg: Yes there is, but I have not got those figures to hand.

Q1180 Mr David Jones: So there may be more than two people sharing a bedroom?

Mr Spragg: I am pretty certain that there are not, but I can clarify that.

Q1181 Mr David Jones: Could you write to the Committee with that information?

Mr Spragg: Yes.

Mr David Jones: Thank you.

Q1182 Mrs James: You have stated categorically that there is no 'hot bedding'. One of the things that I have been concerned about is privacy for women, eg locks on doors, et cetera. Do you make efforts to ensure that people have individual space? My point carries on from Mr Jones' question about people having the ability to keep themselves safe, particularly women.

Mr Spragg: Yes.

Q1183 Mrs James: So you cover all of that?

Mr Spragg: Yes. There are two elements to our business. First of all, we have to keep our companies happy and the other people who work for us as employees. If they are unhappy they will disappear. We do not bond them to us. Keeping people in the job that they do, in addition to the way in which they are looked after and the way in which they are content in the home life that they have, is critical to us and we see that as an essential element in that.

Q1184 Mrs James: You say in your memorandum that there is a large degree of misinformation surrounding the impact of migrant workers in the local area. Could you outline to the Committee what the CSA is doing to counter that misinformation?

Mr Spragg: There is very little that we can do. If there are articles in the press, which there were towards the end of last year, stating that there are certain social problems occurring as a result of CSA employees within the local community that originated from a number of different sources, then in the various forums that we attend with local authorities and the police we can address any such issues that have presented themselves. People do approach us and say there is a particular problem and we do our utmost to try and correct that problem. We would not look to write counter-arguments other than the fact that we would, through the normal means, set ourselves out as best we can to be an ethical employer. It seems to be the case that these particular stories that did appear are now subsiding. Anything which comes out without foundation is normally found out to be without foundation.

Q1185 Mrs James: So you are confident in that?

Mr Spragg: Yes.

Q1186 Mrs James: Is language a barrier to integration? We have taken evidence in the Committee from representatives of North Wales police who said that they are very fortunate in that some of their police officers can speak Polish or have been working in Poland to build up a relationship. Are you aware of that in South Wales or in the areas that you work?

Mr Spragg: The majority of people who are part of our workforce seem to go out of their way to attempt to learn the language. Some people are picking up Welsh as well as English. Every contract that people sign obviously is in Polish. We always translate health and safety documentation into Polish and people are always briefed on that. We provide a full translation service. With regard to social cohesion, the majority of those people who are going to remain in the United Kingdom do endeavour to learn some of the language.

Q1187 Mrs James: Do you support them in that? Do you provide lessons?

Mr Spragg: We do not provide lessons but we tell them where they can go to get those lessons. This is done almost without our input because we introduce people to the Welsh Polish Association and they assist. The local authorities in Llanelli go out of their way to encourage people to integrate as fully as possible and language is the first means of doing that.

Q1188 Mrs James: Do you support that financially? Do you encourage it in any way?

Mr Spragg: We encourage it. We do not support it financially.

Q1189 Mr David Jones: Mr Spragg, could you expand on the involvement of the Welsh Polish Association in helping to achieve a degree of social inclusion for your employees?

Mr Spragg: I think the most important thing is the fact they exist and their dynamic nature in highlighting the various problems that people coming into an area such as South Wales will encounter. The Welsh Polish Association informs people coming into the area about various elements, whether it is cultural, sporting, governmental or local authority. They are people who have lived in the South Wales community, who are of that particular nationality and they are able to highlight the things that are going to help people integrate into the society. That is in short what they do. The fact that they exist is the most important thing. They are an essential element of the system.

Q1190 Mr David Jones: And your company has good relations with the Association?

Mr Spragg: Yes.

Q1191 Mr David Jones: Mr McCarthy, could you outline for the Committee what policies your company pursues to improve the level of social cohesion between the migrant workers and the indigenous community?

Mr McCarthy: In terms of a policy as such, I do not believe there is a written policy that applies in terms of social cohesion.

Q1192 Mr David Jones: Do you have any practical policies that you pursue?

Mr McCarthy: Practically speaking, there is only a certain amount that we can do as an employer. Obviously we encourage people to learn English, for example, and we provide facilities for that to happen.

Q1193 Mr David Jones: You provide your own English language teaching facilities, do you?

Mr McCarthy: We do not provide them directly but we organise classes for people.

Q1194 Mr David Jones: Is there anything else that you do to help these people fit in more easily with the local community?

Mr McCarthy: For example, if a specific employee has an issue, we will do what we can to help that issue be resolved. As a business we are active in the community in terms of providing a lot of spin-off for other local businesses which encourages further economic activity. Our primary function in life is that we are an economic organisation. We will encourage integration as actively and as best we can and we engage with the local authorities in terms of the local council and local employment agencies. It would be through those channels that we would tend to interact with the community.

Q1195 Mr David Jones: Is it fair to say that, other than facilitating the learning of the English language, your company has no formal policies in terms of encouraging their social cohesion? Is that fair?

Mr McCarthy: In terms of a formal policy, no. We are active in the local community with local organisations from an economic point of view.

Q1196 Chairman: In terms of the provision of the Welsh Language Act, would you encourage your employees, for the purposes of social cohesion, to learn Welsh, given how important the Welsh language is in an area like Cross Hands in the Gwendraeth Valley?

Mr McCarthy: The main language of our business is English. We engage principally with customers who would have English as their first language. We do a certain amount to encourage Welsh, but we would not see that as our primary responsibility within the community. There are other organisations which are a lot more qualified to do that than we are. Obviously we will play our part where necessary but it is not our primary role in life.

Q1197 Chairman: In answer to an earlier question you referred to the role of the Catholic Church in contributing to social cohesion in a very positive way. This is a serious question and it is anecdotal but it is based on fact. Mr McCarthy, what would happen if you were presented with a situation where, as a good Catholic, the Catholic priest locally was also the Secretary of the Transport and General Workers' Union and he introduced himself to you both as the priest and as the union representative? Would you have any difficulty in having a discussion with him on trade union matters?

Mr McCarthy: On trade union matters?

Q1198 Chairman: Would you see his role as looking after the spiritual and the daily lives of his flock?

Mr McCarthy: I am unclear on the question you are asking me.

Q1199 Chairman: If he was a priest and he was also Secretary of the TGWU, would you have difficulty in dealing with him?

Mr McCarthy: Personally, I do not have difficulty in dealing with anybody. In terms of union representation, that is entirely a matter for the workforce. If they choose to be represented by a particular organisation, we would not have an issue with that as an employer.

Q1200 Chairman: The Irish community is well integrated into Welsh society in many parts of Wales. There are many Irish men and women who have played a prominent role in trade union life and who have made a major contribution to Welsh life. I am sure you would welcome that and endorse that. Equally, I am sure you would welcome Polish workers who would be in the same category of being good upstanding trade unionists as well.

Mr McCarthy: If it was not for our migrant workforce we would not be able to do what we are doing at the moment, so we are very grateful for the opportunity to work with migrant workers.

Q1201 Mr Martyn Jones: Mr McCarthy, to what extent do Dawn Pac's operations influence the economic area of Cross Hands? I think I know the answer. Is it a major employer?

Mr McCarthy: We are a significant employer in the area. In terms of payroll/wage roll, annually we would contribute directly approximately £20 million to the local economy. Obviously there are other local services and suppliers that we use for various things, such as transport, warehousing, the supply of materials, et cetera, which would extend to a sum in excess of £10 million in addition to that. I am not too sure what the current formula that is used by the likes of the development agencies is, but in the past I am told that, in terms of the generation of economic activity, a factor of seven or eight is used.

Q1202 Mr Martyn Jones: That would indicate a significant input to the local economy.

Mr McCarthy: Absolutely, yes.

Q1203 Mr Martyn Jones: How do you think that inward and outward migration has affected the prosperity of the area?

Mr McCarthy: It has only influenced the prosperity of the area in a positive way. In terms of economic activity levels, it is fair to say that the vast majority of migrant workers that have come to the UK are economically active. They are not, for example, reliant on social welfare for their existence. They are contributing very positively to the economic activity of the whole of the UK and other parts of Western Europe. My personal concern would be that, given the increasing age profile of the indigenous UK population, unless there continues to be some injection of younger people and younger workers into the economy over time, one has to have concerns about the continued prosperity of the UK economy.

Q1204 Mr Martyn Jones: I think the evidence we have had is that they are entirely a benefit to our society economically.

Mr McCarthy: Absolutely, yes and culturally. When asked what we are doing in terms of social cohesion, et cetera, it is probably only when it comes to the second and third generation of migrant workers that you see a level of integration, eg when children of migrant workers start entering the education system. Obviously that leads to further integration and acceptance and it increases the cultural diversity and exposure of the general population.

Q1205 Mrs James: Mr Spragg, you note in your memorandum that local economic prosperity has been adversely affected by a lack of "local candidates in possession of the right skills and competence" for available positions. To what extent do you think that inward migration is a sustainable answer to the skills shortage?

Mr Spragg: It is a short-term answer in effect. It would be great if we had the required skill sets here and the right work ethic in order to provide the workforce. However, that is not the need. We are a diverse culture, mirroring what Mr McCarthy was just saying. Everyone talks about the US being the melting pot, whereas over the last 1,000 years England has been more of a melting pot than any country in the world. As a qualified trainer myself, training is absolutely essential from the cradle to the grave. It is something that we need to devote as much resources to as we possibly can. Businesses exist in order to make money and improve the wellbeing of the economy and in order to do that they need workers with specific skills. If those skills are not readily available locally, they have to be sourced from somewhere and in this particular case migrant labour provides the particular skill set. We are noticing that the make up of the candidates that we are obtaining from Poland is subtlety changing. Perhaps in the early stages it was very much at the lower end of the unskilled element of labour, but we are now noticing a higher proportion of technically adept and certainly linguistically adept people are coming forward and we are able to place those in permanent positions from a recruitment point of view as well as a managed workforce.

Q1206 Albert Owen: You have said that you welcome the fact that outside organisations like the Welsh Polish Association is helping with that. You have talked about training, you have said you are an ethical company and yet I do not see much social responsibility coming from yourselves. You do not contribute to any association in any financial way. The training is only short term. What are you doing for the long term? Whose responsibility do you think it is in the community? Do you think it is the Government's all the time? You tell this Committee that you are an ethical company. Do you not think you have those social responsibilities?

Mr Spragg: We are an ethical company insofar as we look after our workforce.

Q1207 Albert Owen: Upskilling is something that would be of benefit to them as well as your company.

Mr Spragg: It certainly would be. To a certain extent we are still in the very early days of this particular industry. Part of the industry has not been open that long. We are beginning to learn and address issues as they become apparent. That is certainly one thing we will address as a company in due course, but we cannot do everything at the same time.

Q1208 Albert Owen: I am not suggesting you do everything. I am listening to your answers. When you were asked about social cohesion you said that the papers got it wrong and you said everybody is doing a good job. I do not see you taking any major role in your local community, which I think companies should.

Mr Spragg: Absolutely, and it is something that we are beginning to address. We do take part in as many forums as we possibly can in order to increase that social cohesion. That is something that in due course, as the Business Development Manager, I will be addressing, amongst a number of different issues, such as supporting local charities and all sorts of different things that we try and do to make the life of not only the company but also the people who work for us as effective and as easy as possible.

Q1209 Albert Owen: There are certain groups that perpetuate the line that migrant workers are taking our jobs and our houses and the companies are encouraging them. I am suggesting to you, as a company, that to counter that then you could give more back to the community yourselves or encourage open days so that people see what your company does and what Mr McCarthy's does in the community. Do you not see that as part of your responsibility?

Mr Spragg: It is, and it is something that we will address and do to support the local economy.

Q1210 Albert Owen: Which is what, just providing income?

Mr Spragg: We provide income and we support the local economy by providing effective workers.

Q1211 Albert Owen: Whilst I accept the business is there to make money and in today's world it does have a social responsibility, I am suggesting to you that you are not doing enough at this moment in time.

Mr Spragg: We need to do more and we will endeavour to do so.

Q1212 Chairman: Could I end this very illuminating session by asking you how you educate yourself in terms of the local economy? You mentioned the Cardiff Business Breakfast. How do you get an understanding of the challenges of economic inactivity in that area other than that remark that you made?

Mr Spragg: I mentioned that particular forum because that was where that particular anecdote was mentioned. We are members of West Wales Chamber of Commerce, Cardiff Chamber of Commerce, the CBI, IoD and we are a company existing and living in the community.

Q1213 Chairman: You are obviously aware of the fact that the area you referred to, the Valleys, has the highest incidence of ill health, disability and the highest incidence of carers in the whole of the UK. Would you not have considered that to be a factor in explaining economic inactivity rather than that kind of throwaway remark you made about some sense of a lack of a work ethic?

Mr Spragg: I did not make any judgment as to the fact that there is a certain amount of economic inactivity. There are a number of factors. It is not just a case of people not wishing to work.

Q1214 Chairman: How do you and your colleagues inform yourselves of the nature of this Polish migrant workforce? What are their aspirations? What are their experiences? For example, are you familiar with the bestselling novelist Marina Lewycka and her two novels, "A Short History of Tractors in Ukrainian" and "Two Caravans"?

Mr Spragg: Me personally? No sir. It will be on my reading list as soon as I get back to South Wales!

Q1215 Chairman: I will send you the reference. One of them is dedicated to the Morecambe Bay cockle pickers. Thank you very much. As I said, it has been an illuminating session. If you feel that there are additional matters that you want to add, we would be very pleased to receive a memorandum from you. Mr McCarthy, thank you for your very kind invitation to visit your plant in Cross Hands. We look forward to it.

Mr McCarthy: Perhaps I could make one comment before we end. Obviously the issue of migrant workers is just one of the many issues that we face. In terms of the globalisation issues that are affecting our business, I did submit a memorandum outlining some of the other issues that we face as a business, including matters such as energy costs, packaging, et cetera. I am not too sure whether that is within the brief of the Committee. Certainly, migrant labour is obviously a very important issue for us, but it is just one of the few issues that we face as a business.

Chairman: Thank you very much.