HC Deb 31 July 1964 vol 699 cc1997-2012

2.2 p.m.

Mr. James Boyden (Bishop Auckland)

A number of my hon. Friends and myself are grateful to Mr. Speaker for selecting for debate the subject of the shortage of bricks and building materials. I refer particularly to my hon. Friend the Member for Erith and Crayford (Mr. Dodds), my hon. Friend the Member for Faversham (Mr. Boston) and my hon. Friend the Member for Leeds, West (Mr. C. Pannell). We have been trying by Written Answer to get a statement from the Ministry of Public Building and Works concerning the brick shortage and we have been fobbed off by a considerable amount of complacency and vagueness.

On 20th July, I was told, as were some of my hon. Friends, that there is no evidence of any serious or widespread delay to building projects of any kind."—[OFFICIAL REPORT, 20th July, 1964; Vol. 699, c. 10.] This has been repeated only a day or two ago.

If the Parliamentary Secretary will not believe me, perhaps he will believe those who have their grass roots in the building industry. I propose to direct his attention to some of the Press statements which have been made, not only about the shortage of bricks, but concerning the serious effect which the shortage is having on work in the construction industry. As far back as 21st May, the "Building Industry News" said, as a heading: Brick crisis delays jobs". A week later, it had the heading Brick shortage now acute". It went on to say in the article to which that was the heading that the shortage of bricks was the worst for nearly a decade. It quoted house prices as rising from £30 to £130 per house as a result of the shortage and, somewhat strangely, it blamed the Civil Service for meddling. I do not know that Civil Service meddling is responsible for the situation, but, at least, it looked as though all the Minister's smokescreen of committees, reports and the like had not made much progress with the building industry in that it should turn to criticise the Civil Service for what was happening.

On 9th July, the same paper talked about a black market in bricks. It said: … brick shortage gets worse … the black marketeers have moved into the building industry, selling at handsome profit to hard-pressed builders. My hon. Friend the Member for Erith and Crayford is willing that I should state that a neighbour of his, trying to build an extension to his own bungalow, which would not need a great many bricks, has had to go to about 16 different building suppliers before he got his material and that when he did get the bricks, he had to pay twice the market price.

The Minister of Public Building and Works has been warned about this, because in the report of the National Economic Development Council on the construction industry, as long ago as March this year, the N.E.D.C. said that there are already delays in the delivery of certain building materials and the very high rate at which houses were started at the end of 1963 could lead to some shortages of materials during 1964. In the debate on 17th March, the Minister called the N.E.D.C. Report pessimistic and said that its figures were out-of-date. It appears, however, as though the N.E.D.C. was not so much out of touch and that its expectations have been very much fulfilled.

Not only has the building newspaper from which I have quoted increased the tempo of its articles about the shortage of bricks, but local newspapers throughout the country carry headings indicating the desperate shortage of bricks. To quote the Shropshire Express and Star, it said on 8th July that on some sites, not a brick had been laid for days and that firms were prepared to pay three times the normal price. Several local papers in my constituency have spoken in similar terms. Notably, on 2nd July, the Northern Echo referred to the shortage of bricks as being the worst in ten years. This view was based upon the local building people. On 20th July, the Evening Gazette, which circulates in the North-East, quoted the regional director of the Northern Counties Federation of Building Trade Employers as saying that there was a national shortage and that the situation was extremely serious.

The "Cubitt Magazine", which is not particularly given to scaremongering, contained this paragraph in its last issue: Labour is not the only factor of production which is causing concern, for the pressure of demand on building will almost certainly create more material shortages before the year end, in addition to the current difficulties with brick and cement supplies. The nationwide building brick shortage is the severest for almost a decade and is resulting in delays and rising costs. My hon. Friend the Member for Leeds, West has been good enough to give me the results of a circular which was sent out by a leading construction industry trade union asking its district secretaries to report upon the brick shortage. This is the kind of pattern that emerges. In London, it was reported that the Batter-sea Borough Council has had to transfer bricklayers to maintenance. The London Brick Company is quoting delays of nine months in delivery. In South Wales, the shortage of bricks is reported as slowing down work on sites. It is said that this has not resulted in unemployment but that, as in the North-East, it has led to firms not taking on unemployed bricklayers and therefore, not proceeding as fast as they might have done with the jobs in hand. In Yorkshire and the East Midlands, the contractors for the West Burton power station have dismissed bricklayers and at a sub-station at Wilsden, near Bingley, the same sort of thing also happened. In this area the regional employers' secretary circularised members and 90 per cent. replied that they were short of bricks and that delays in the delivery of bricks were up to about six months.

On Merseyside, there are reports of private construction works paying off bricklayers and labourers and work on flats, homes and garages being held up. From specific examples in the North-East, I quote the following. The Sunderland Corporation had to restrict the recruitment of bricklayers and in Sunderland at that time, a few weeks ago, there were 13 bricklayers unemployed. At Houghton-le-Spring Urban, bricklayers were placed on alternative work and at another big private building site where the construction of 1,000 houses was being attempted, only eight bricklayers were employed because of the shortage of bricks.

I quote from this summary of the conclusions. The majority of the building firms appear to be severely hit by the present shortages. Redundancy and uneconomical working are being instanced throughout the divisions. I am most grateful to my hon. Friend the Member for Faversham who in his division conducted a survey of the leading brick manufacturers and gave me the information he obtained and which I shall refer to now. A large firm of brick-makers is not accepting new orders at all for the rest of the year and is telling customers that they can have bricks some time in 1965. Another firm is not taking on any new customers at all and is telling its regular that they will have to wait from eight to ten months. The managing director of that firm says he would like to invest more money in new plant but the firm will not because of the uncertainty of demand. He complains about stop-go in building work and is influenced by this not to set up more kilns. Another firm of brick-makers says: We are dependent upon Government policy. We have repeatedly had stop and go and we do not want to spend any money and then have to stop again. Eighteen months ago we were stocked out with bricks but we are now living from day to day. So the story goes on. Another brick-maker in the Faversham constituency says that What is needed is a little planning. It is idle for the Parliamentary Secretary to say, as I dare say he will, and as his right hon. Friend certainly has been saying, that there is not a crisis. For example, Birmingham City Corporation has been asking him to meet a deputation about the shortage of bricks. It will be most interesting to know whether he is going to receive this deputation and what he will tell them, because the Building Industry News which carries the news item about the deputation sought by Birmingham has this paragraph. Coventry builders are said to be facing the worst brick shortage they have ever experienced. The President of the Coventry F.B.T.E. said that the shortage was causing chaos for contractors, and the future of several small firms was in jeopardy. My hon. Friend the Member for Leeds West gave me today as I came into the House a cutting from the Daily Telegraph and it has the heading Brick shortage causes orders to go abroad". The paper says: Imports from Holland and Belgium are increasing. An architect employed by a building firm said yesterday that his company was being given delivery dates up to 12 months ahead by British suppliers. Deliveries from Holland were being received in four weeks. This all adds up to a very considerable indictment of the Government, who have fallen down on their job because they have not supported what N.E.D.C. was saying about the likelihood of insufficient investment in the brick industry and insufficient investment in the cement industry, and did not take steps even before the end of the interim period to see that stocks of bricks were increasing more than they are and, equally important, their being delivered to the sites.

I quote a further example from the Building Industry News in which a leading article writer says: Two or three years ago we had a serious shortage of bricks. Now we are faced with the same problem again. The situation affects the medium and small builder most of all To have had this happen once is bad enough. To have it happen again really is the limit. I am absolutely unimpressed by brick statistics. If the large brick manufacturers are unable to supply demands they should at least give up pretending that they can. It is up to the Parliamentary Secretary to show today that action is being taken and to show that these difficulties are being smoothed out and that improvement of deliveries and improvement in investment are taking place.

We know very well that his right hon. Friend has laid very great stress indeed on alternative systems of industrialised building. All is not well there. I understand that 467 systems have been introduced into this country but only 64 have made any impact on the building industry. There have been several articles appearing in the building trade Press pointing out the difficulties of some of the industrialised builders and saying quite clearly that there is a need almost for bankruptcies among some of those concerns to get down to the bedrock of efficient system building. It seems a curious way of solving the problems of the building industry, to expect that system builders will go bankrupt, and that as a result of the brick shortage there should be bankruptcies amongst small and medium-sized builders.

We cannot afford the sort of mistakes which the Minister of Housing and Local Government has admitted to—of having in London £8 million worth of offices standing empty. That £8 million worth of offices is the equivalent of about 10,000 houses. If mistakes of that sort are being made in the Ministry of Public Building and Works it is a very serious matter for the country as a whole. We have had examples of small mistakes already and it is quite conceibavle that statistical mistakes and other mistakes of the sort have been made.

I refer to The Builder of 5th June which, referring to Ministry policy, said: It would be very wrong to suggest that no progress has been made, but it must be emphasised that despite many good intentions at all levels, there is a large measure of 'airy-fairy' still pervading the general scene. Moreover, the question of brick supplies is a problem which also applies to some other materials in varying degrees. Copper tube and tanks, sanitary ware, plaster, concrete tiles, roofing slates, steel rods, joists, channels, etc. Then comes this important sentence: Briefly, the country is not yet geared to the present building programme of both traditional and factory methods of building. The lesson to be rammed home is that the necessary adjustments cannot be achieved on a short-term basis. One would wonder whether or not a good many of these committees' reports and so on dealing with the industry are not as much conditioned by the imminence of the General Election as they are influenced by the welfare of building and the building industry.

Whether or not prices are going to rise much more, prices certainly have been rising, and this is bound to have a bad effect on the social programmes of the Government. The right hon. Gentleman the Minister's jolly optimism puts that of Mark Tapley in the shade, because house building prices have been rising steadily. In an answer to me on 13th July the right hon. Gentleman gave the average delivered price of bricks as being up 7 per cent. in May this year compared with the year before. Compared with May, 1960, the rise in the price of bricks has been 18 per cent. It is no wonder then that the price of houses shows a very steep rise indeed.

In an Answer on 14th July by the Minister of Housing and Local Government I was told that the average contract price for a 900 sq. ft. three-bedroomed house in the first quarter of 1964 was £2,810, a rise of £163 on that for the year before, and practically twice what council house prices were in 1951—the year whose prices Members of the party opposite are very keen on referring to. If we look at the prices of privately built houses we find they have been rising. Taking as the index, 138 for the first quarter of 1964, it compares with a figure of 129 for the first quarter of 1963, an increase of 7 per cent., and this was before the brick shortage and the other materials shortages had really got under way.

I quote again from the Northern Dispatch of 22nd July. The heading is: Prices of new houses will continue to rise in Darlington. The news article says that prices have risen by at least 7 per cent. during the current year and, In one case the price of a new house rose by £600 from the time construction was started to the time it was completed. Others have had increases of anything between £100 and £300. The fact is that in this so-called affluent society the Minister's Department has, produced in the brick industry and other supply industries almost a war-time state of crisis. There are shortages and delays, and men unemployed because of the shortages. There are higher prices for bricks and other materials used in house construction. There is a black market, and bankruptcy is on the way for many of the small builders and system producers. The cost of building for the social services is being increased because of the high and increasing costs of actual construction which is going on. It is all very well for the Minister of Public Building and Works to say that there is no crisis. I think that I have demonstrated conclusively, with evidence from a variety of sources, that a lot of people believe that there is a crisis. It therefore behoves the Minister to take note of the situation and offer some constructive remedies.

2.21 p.m.

Mr. Julian Snow (Lichfield and Tamworth)

The House is indebted to my hon. Friend the Member for Bishop Auckland (Mr. Boyden) for having raised this topic. He has given a national survey of the situation. I should like the Minister to know that I have been very concerned about the situation which appears to be developing in the West Midlands. The Government do not appear to have taken sufficient care to co-ordinate services in the West Midlands in connection with the gigantic overspill plan for such constituencies as mine.

The transport problem, which was referred to recently, is a case in point, and I have been receiving reports which indicate great anxiety being felt about the shortage of bricks. My hon. Friend referred to reports which have appeared in Shropshire newspapers. I have seen similar reports in the Wolverhampton Express and Star which have called attention to the same problem.

When it is considered that the scale of building for overspill population both in the private and local authority sectors is extremely substantial, I wonder what plans have been made to see that the level of current production is maintained and what has been done by the appropriate Government Department about the closing of small brickyards. I am aware that the economic situation of some small brickyards may be considered to be doubtful, but reports I have received indicate that there has been unplanned closing of small brickyards by take-over bids which is not in the interest of the West Midlands.

To give an idea of the scale of this problem, in one small parish the building programme for the next three years is at the rate of 750 houses a year, which is quite a substantial number for one parish. According to one report there is a case for asking the industrial authorities concerned to have a look at the pressure sales methods which are being employed by salesmen selling bricks to local authorities and contractors. I am informed that some salesmen have urged contractors to place orders for a long time ahead because of the shortage. This could have a distorting effect which may create an entirely wrong impression.

According to my friends, the national situation is serious enough. I urge the Government to see that the situation affecting the overspill areas of the West Midlands is looked at most carefully in view of reports which have appeared in national and local newspapers and the anxieties among contractors to local authorities.

2.24 p.m.

Mr. Charles Pannell (Leeds, West)

I wish to give the Minister plenty of time to reply to what is a massive indictment. For the past few weeks we have been unable to obtain oral replies to Questions put to the Minister. We do not blame him for that, but it seems to me that the sort of Answers that he has provided would have crumbled had we been able to put supplementary questions to him.

If bricks are in such short supply, and bearing in mind the number of houses which have proliferated on so many sites—one of the alibis in the industry is that too many houses have been started—will the Government reach their much-boasted housing target, or shall we run into a massive mess next September? Shall we see shortages then? One of my friends in the industry suggested that we shall. That would not matter much to the Government if they win the election; it is said that there is no gratitude in public life except for favours to come. But if there is a Labour Government, undoubtedly they would be charged with the shortages which would be discovered.

We do not need to make political points about this matter. We need only refer to the Minister's own statement. He may try to explain the curious discrepancy in the report put out by his Ministry last month and the report this month. Last month, the Minister said that there was a stock of 106 million bricks. I see that according to the report issued a day or two ago, the figure is down to 102 million. This month, the stock of bricks is down to 82 million. It appears to me that we have lost 4 million bricks somewhere on the way, which is to the advantage of the Ministry.

I do not know whether the attention of the Minister has been called to an article which appeared in The Times this morning. I shall not quote what is said there, as the Minister has a copy and I want to be fair to him by not taking up too much time. It would be a bad thing if it were thought that in a matter such as housing for the people—which should not be tied to any political considerations at all—the Minister of Housing and Local Government was bidding up in some sort of auction for houses to a figure which would not materialise, and would prove to be only window dressing. I do not know whether there is anything political in this matter. I can understand the anxieties of hon. Members opposite, but I think that we on this side of the House, and the country, deserve an explanation.

2.27 p.m.

The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Richard Sharples)

I am glad that this subject has been raised, because it gives me an opportunity to put one or two matters into the right perspective. It would be easy for us to talk ourselves into a crisis over building materials, and I am glad of the opportunity to answer some of the points made by the hon. Member for Bishop Auckland (Mr. Boyden). It is important that we should get this matter into the right perspective which is what I hope to do.

The construction industries are being run at just about the limit of their capacity. This is a deliberate policy on the part of the Government and we have two good reasons for doing so. We want all the production that we can obtain from these industries if we are to secure the schools, houses, hospitals, roads and all the other things we need for the modernisation of Britain.

Secondly, we want the industry to adopt new methods and techniques. This we can expect to be done only if the industry is confident of a continuing and expanding load of work. Looking at the results so far achieved from the Government's policy of putting pressure on the industry I think we may claim that it has been successful.

In 1962, the industry turned out slightly more than £3,000 million worth of work. In 1963, when we had the very bad winter, work more or less came to a stop at the beginning of the year. The result was that the output of the industry was limited to about the same figure as in 1962, although there were during that year considerable and in some ways dramatic fluctuations.

In the first quarter of 1964 output has been running at an annual rate of £3,400 million, or in real terms, a rise of 7 per cent. in little more than a year. We accept that this fluctuation and the present high pressure on the industry has resulted in some strain. We have made no secret of it. There have been lengthening delivery dates for some materials. I shall have something to say about bricks later, but the hon. Member also mentioned copper tubing, reinforcing rods, cement, roofing tiles and other materials. During the last six months or a year we have carried out very full investigations into each of these materials and the industry has assured us that it will be able to meet all the requirements of the construction industries in the foreseeable future.

We have been having regular quarterly meetings with the building materials producers at which forward trends in demand have been discussed. Where we have found evidence of particular difficulties we have had what we call "bottleneck parties" where we discuss these things in detail, particularly questions of copper tubing, sanitary ware and reinforcing rods. If there are difficulties in regard to particular materials, we shall get the producers, as in the past, to discuss the position with us.

Let us be quite clear about one thing. There are no steps which any Minister or anyone in the industry, or anywhere else, can take to increase production of any particular product in the short term. What we can do, and have done, is to see that the industry is as fully informed as possible as to what are likely to be the demands in future, to take the industry into our confidence wherever possible, to give it the facts upon which it can base plans for expansion. With our greatly improved statistical organisation we now think that the industry is in a much better position to do that than it has been in the past. I think we can claim fairly, and the industry will not deny it, to have been taking these steps in the past 18 months to two years, or even longer than that. Certainly, since my right hon. Friend and I have been at the Ministry we have taken great trouble to see that this is done.

Mr. C. Pannell

The hon. Gentleman is talking about the fact that he and his right hon. Friend have been in the Department since July, 1962, but what has been done to expand the brick industry? The story in the country is that it is not expanding and refuses to expand because of past experience of stop-go policy.

Mr. Sharples

I wish to devote the bulk of the remainder of my speech to the question of bricks, which is a major question. It is quite true that long delivery dates for bricks have been quoted, particularly for the cheaper kinds and what are called flettons. The hon. Member for Lichfield and Tarn-worth (Mr. Snow) was absolutely right in saying that some of the apparent delay has been caused by duplicated orders. That is why it is important that we should not talk ourselves into a crisis on this matter of materials. By doing that we shall do no service to the industry or to the country or to building the houses we want. Some of the apparent causes have been because of duplicate ordering and sometimes triplicate ordering.

The reasons for delays in brick delivery are perfectly clear, discounting that. In the main, houses in this country are still built of bricks. Two-thirds of the output of the brick factories is used for housing. There is no doubt that the success of my right hon. Friend's housing programme has put an additional strain on brick supplies, as we knew perfectly well it would. In 1962, 320,000 houses were started. In 1963, there were 370,000. In 1964, starts at the moment are running at a rate of 420,000.

Mr. C. Pannell

When will they be finished?

Mr. Sharples

We shall reach our housing target; there is not the slightest doubt about that.

While the dates for brick deliveries have been lengthening there has been no sign whatever, in spite of what the hon. Member for Bishop Auckland said, of any surplus of bricklayers. Taking the country as a whole, there are 471 unemployed bricklayers, but there are 2,345 vacancies for bricklayers. The hon. Member referred to the situation in his part of the country. In the North-East Region as a whole there are 45 unemployed bricklayers and 313 vacancies for bricklayers.

Mr. Boyden

They must all be in my constituency.

Mr. Sharples

That is the position in the North-East as a whole. If it were true, as the hon. Member suggested, that building work was seriously delayed by a shortage of bricks, it is hardly likely that there would still be a shortage of bricklayers.

I turn to the question of the production of bricks. Eighteen months ago brick-makers had a stock of 800 million in hand. That was at the time of the bad winter when construction had virtually stopped. The position was so bad that the brick-makers had nowhere to store bricks. They came to the Ministry on a deputation and saw me and I was able, in March, 1963, to assure them that all the bricks they could produce would be used. Today, the level of stocks is down to 82 million. Production this month is running at a rate approximately equal to demand at present levels. Production in June was at an all-time record level.

Mr. C. Pannell

It has gone down in the last month by about 20 million. Stocks have fallen from 106 million to 82 million. Actually, it is 24 million down. At this rate we shall run out of bricks, even on present production levels, by September.

Mr. Sharples

The hon. Member is wrong. Soon we shall have the period of builders' holidays and brick production will then catch up. I shall explain why, at the moment, production is running at approximately a figure equal to the level of demand.

In the first six months of this year output of bricks was 3,900 million, which is 7 per cent. higher than it was in 1962, the last comparable year because of the bad weather in 1963. This rise in brick production is as large as the rise in the output of the construction industries—7 per cent. In the same period the use of industrialised methods has been increasing, but, on the other hand, one must be fair and say that to some extent this has been countered by the large rise in the demand for housing.

Let us consider what has been done to increase brick production. One of the reasons why one can expect no immediate results, but must look ahead, is that it takes 18 months to build a new kiln and to put it into operation. But the brickmakers have already taken steps this year and last year to increase their-production, and the industry tells us that three new plants are coming into production this year. On present plans brick production should have expanded by 5 per cent. by the end of 1965. The increased capacity should be sufficient to meet the expected increase in demand between 1964 and 1965, and some of the increased production will be coming into production towards the end of this year.

I should like to summarise the position. It is quite true that delivery dates for many materials, particularly for bricks have lengthened. On the other hand, in spite of what has been said this afternoon—and the industry will be able to judge the position for itself—we have no evidence that housing output is being held up to any significant extent by a shortage of building materials, and there has been no sign of unemployment among building workers resulting from a shortage of building materials.

It is difficult to forecast—and one always leaves oneself wide open if one does—but from all the information which I have at my disposal I estimate that we shall get through 1964 without any major crisis in building materials, although there may be some local difficulties, particularly in the supply of bricks.

Looking further ahead to the future, on present plans there will be a large rise in the requirements for construction work and in consequence for building materials of all kinds. The building materials producers know—and we have kept them informed through the machinery which we have—what are likely to be the demands upon them, and already they are taking, or have taken, steps to meet this increasing demand. On the other hand, what we must do is to recognise that the increased demands upon the industry can be met in full only by the greater use of new methods, new techniques and new materials. Industrialised building must fill the gap between the requirements and the output by traditional methods in the coming years.

We have taken steps which will encourage the industry and, what is equally important, will encourage the clients of the industry to make the fullest use of industrialised methods of building. The National Building Agency, which my right hon. Friend set up, will play a big part in this. I believe that, given confidence in a continuing programme for the future, which a Conservative Government will provide, the industry will respond and will provide the goods.

Mr. C. Pannell

Taking all that the hon. Member said at its face value, and bearing in mind that industrialised building represents only 15 per cent. of the industry, he must agree on his own estimate this afternoon that this industry is not big enough in terms of the nation's need and of the demands which will be made upon it.

Mr. Sharples

I do not agree. We have to expand the capacity of the industry. One of our biggest problems in the next five to 10 years will be to expand the capacity of the industry. We cannot do it to a much greater extent by the use of traditional methods. That is why my right hon. Friend has taken steps, wherever he can, to encourage a greater use of industrialised building. The hon. Member gave a figure for the proportion which industrialised building represents in the building industry. It is our task to see that this proportion is expanded as fast as we reasonably can. In that way we shall meet our target.