HC Deb 26 July 1972 vol 841 cc1807-9
20. Mr. James Lamond

asked the Secretary of State for the Environment if he will consider introducing legislation to control profit margins in the house building industry.

Mr. Amery

No, Sir.

Mr. Lamond

Is the right hon. Gentleman aware that in a house costing £16,000 the various elements are: labour and materials £8,000, cost of land £5,000; and the builders are in the habit of adding to these two costs almost 25 per cent., that is, £3,000, bringing the cost of the house up to £16,000? That 25 per cent. profit is not a reasonable profit but is calculated on the basis of the maximum exploitation which can be had of the poor young couples who are trying to buy their homes. Is it not time that the Government took a grip of some of these things?

Mr. Amery

I must in honesty tell the House that the losses suffered by the building industry, and the number of bankruptcies incurred, in the last three years of the previous Government show that, even if I believed in statutory control of profits, I should not be justified in introducing it at this stage. Indeed, I have to say that, although the increase in house building has been quite dramatic since we came into office, the reason it has not been better is the damage inflicted on the industry by the Labour Party.

Mr. Tugendhat

Does my right hon. Friend agree that the Question is misdirected and does not go to the important element of the problem, since much the more important aspect of it—certainly in the South East—is that there is disturbing evidence to suggest that the number of planning permissions given greatly exceeds the number of housing starts and completions? Is it not of the utmost importance to ensure that planning permissions given are acted upon and that strong measures are taken against those who, so it seems from the evidence at present available, are hoarding permissions to some extent?

Mr. Amery

My hon. Friend will realise that my right hon. Friend the Secretary of State has been taking active steps to streamline and increase the speed of planning permissions and to tighten them up. This will help to produce the result at which we allaim. It is worth remembering in this connection that the previous Government never thought it possible to regulate dividends in the housing company world because of the complexity of the market.

Mr. Paget

That is not the point. Will the Minister do something to prevent the hoarding of planning permissions which is going on because, having got a planning permission, if one delays using it one makes a large capital profit? That is the evil which we are asking the right hon. Gentleman to tackle.

Mr. Amery

All the evidence available to us suggests that, in the present state of the market, builders want to use their land as fast as they can. Our real problem is that there is a shortage of land, and my right hon. Friend has been taking steps to make sure that more land becomes available to developers in the immediate future.

Mr. Allason

Did my right hon. Friend notice from a recent independent survey made by a firm employed by the National House-Builders' Registration Council which considered this problem in Hertfordshire that 238 acres of land were being withheld from the market and that just on 200 of them were in the possession of local authorities?

Mr. Amery

I observed that it gave Hertfordshire a better bill than some other parts of the country, but I take my hon. Friend's point.

Mr. Freeson

Is the Minister aware of a report just produced in that part of the country suffering the greatest pressure, the South East, by the Technical Panel of the Standing Conference on regional planning in London and the South-East which clearly shows that the main problem is failure to take up planning potential of land already made available by planning authorities and that of 120,000 potential planning permissions for dwellings only 95,000 have been taken up?

Mr. Amery

The hon. Gentleman seems to be straying rather wide of the Question, which asked whether I would limit the profits of the building industry.

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