Construction Industry (Hansard, 29 June 1977)

§ 3. Mr. Raphael Tuck
asked the Secretary of State for the Environment which part of his Department is responsible for assistance to the construction industry; and what are his plans for further help to the industry.

§ Mr. Shore
My Department has a general responsibility for the construction industry. We have already this year allocated an extra £144 million for construction work in the inner cities in housing improvement and through provision of advance factories. As the economic situation improves I shall be seeking further ways of assisting this hard-pressed industry.

§ Mr. Tuck
Is my right hon. Friend aware that since 1974 cuts in public expenditure on construction have reached the enormous figure of about £2,000 million while Government help to the construction industry has been only one-tenth of that figure—a very small amount indeed? Does my right hon. Friend not realise the parlous state of the construction industry?

§ Mr. Shore
I realise the very great difficulties facing the construction industry. These arise, in part, not only from the need to restrain public expenditure but from the substantial fall-back in private investment in housing and private industrial building. The building industry has been very seriously affected by the general state of the economy. I am aware of this fact and I have had a number of discussions with the industry. I shall be looking for ways to help, to the best of my ability, as our economic situation improves.

§ Mr. Adley
Is the right hon. Gentleman aware that the development land tax remains a deterrent to new construc- 408 tion and particularly to the extension of existing buildings, and that this has an inevitable effect on the construction industry? Is he prepared to recognise this fact and to do something about it?

§ Mr. Shore
I should want a great deal of evidence to support that view. There are many factors involved, but the major one affecting industrial building has been the turndown in the economy and the stagnation in investment in recent years. I now see some more hopeful signs, and the indications are that there will be a substantial increase in industrial investment and factory building this year, with a further and larger increase in 1978.

§ Mr. Madden
As there are 13 unemployed skilled building craftsmen chasing every vacancy, does my right hon. Friend agree that a major way of assisting the situation would be to enable public authorities to undertake more improvement and renovation work and to give them greater opportunities to make mortgage allocations, particularly to first-time buyers?

§ Mr. Shore
My hon. Friend's first point was put by representatives of the construction industry when they met the Prime Minister and myself a short time ago. Their view was that considerable gains could be made in the use of labour by putting more resources into improvement and renovation. My reply is that this is very much part of the general thrust of our policy.
We believe that more resources should go to renovation and improvement in our urban centres, and my hon. Friend will know that the arrangements that we have made for virement will enable local authorities which wish to do so to put more money into this form of labour-intensive activity.

§ Mr. Heseltine
As the general state of the economy was perfectly clear in October 1974, does not the present level of unemployment in the construction industry, which is the worst since 1931, make a mockery of the Government's claim in their last General Election manifesto that they would create a permanent and stable work force? Does the right hon. Gentleman really believe that the measures to which he has referred will achieve a lower level of unemployment 409 in the construction industry by, say, December?

§ Mr. Shore
I cannot anticipate the pace or rate of pick-up by the industry. Although the situation for private house building in particular has greatly improved, the question is one of timing and how long it will be before this improvement comes into effect. I believe that we shall see significant improvements next year—

§ Mr. Heseltine
It could not be worse.

§ Mr. Shore
Next year is often a good deal better than last year, and this has been the case even under Conservative Governments. It does not lie in the hon. Gentleman's mouth to blame us for the state of the construction industry, in the light of the general collapse in house building in 1973-74, when we took over, and the Opposition's insistence on cutting public expenditure programmes.