§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ashton.]
§ 7.20 p.m.
§ Mr. Keith Speed (Ashford)
I start by declaring an interest in that I am a marketing consultant to a civil engineering group.
Of all the many groups, associations and industries which have suffered under the last three years of Socialism, none has been clobbered more than the building and construction industry and its associated professions. The President of the NFBTE, Mr. Bob Willan, in this month's National Builder magazine, says:The building and construction industry is in a recession of the worst magnitude in living memory.He goes on:The building industry is angry and embittered.That is the employers' view.
The trade union view was given by the General Secretary of UCATT at the Scottish TUC Annual Congress on 19th April, when Mr. George Smith said:The Government's economic policy is a mass of contradictions. The Government criticises British manufacturers for failing to invest in British industry, yet by running down the construction industry, the Government is guilty of the same crime. Construction accounts for over half the national fixed capital investment. Delaying proper production and maintenance of our building stock will make a future crisis inevitable.Thus, both sides of the industry within the last two weeks have condemned this Government's policy in the clearest possible terms—and they have much to condemn.
The House should consider the present state of the industry. Three years ago, in February 1974, there were 99,000 construction 114 workers out of work. Today, the figure is 220,000 which is a massive increase, not only in suffering and the problems which go with unemployment but also in the waste of skilled manpower and resources.
Construction output has plummeted by 30 per cent. since 1973 and is now significantly below the better level for the industry which was set out in the building industry's little Neddy report, published last June. Insolvencies in the industry are now running at about 2,500 a year, while the majority of those still in business find that there is great pressure on their already inadequate profit margins.
The industry's confidence has been knocked for six, and this is not confined to the builders. It extends to the architects, surveyors and engineers. The RIBA has just published figures showing that more than 2,000 architects were laid off in the last 12 months and that nearly 25 per cent. of those in private practice have had either to get new offices or to leave the profession altogether. This again is a waste of resources, skills and training. Some 600 architects at present remain unemployed. These stories can be told right across the associated professions in the construction industry.
The crisis in construction hits the material producers too. One example is the brickmakers. Average brick deliveries over the post-war years have been about 7,200 million per year, yet in the last three years the numbers have been 5,000 million, 5,500 million and 5,400 million. This year, deliveries are likely to be well below 5,000 million and the industry itself is working at only two-thirds capacity, which is most uneconomic. The story could go across the board, with cement and all the other manufacturers.
Although there has recently been a limited increase, as the Minister may be reminding us, in commercial and industrial development from what were the abysmally low levels of the last 18 months, there is little encouragement in 115 that. Nor do I find any encouragement in the Chancellor's recent £100 million injection, over the next two years, which was announced in the Budget. That is equivalent to half a week's work and must be seen against the cut of £57 million in the amount for the Housing Corporation budgets which were cut by the Chancellor last December.
We have the advantage of the latest NFBTE state of trade inquiry, which showed that 81 per cent. of firms are operating at three-quarters capacity or less—a 6 per cent. increase on the January figure—and that 58 per cent. of firms say that they will be employing fewer operatives on average this year than in 1976. The building material producers have forecast that there will be a 7½ per cent. drop in construction output this year and a further 2 per cent. drop in 1978.
The reasons for this deplorable state of affairs lie almost entirely with the Government. Their economic mismanagement, particularly from March 1974 to the summer of 1976, has meant more and tougher public expenditure cuts because they failed to take early and effective action. The cuts have been largely in capital expenditure and have shown the Government's political prejudice and lack of political wisdom.
Thus, we continue to spend over £300 million a year subsidising school meals and tens of millions of pounds on botched-up comprehensive schemes, while our nursery schools are not built, slum schools are not replaced and thousands of teachers remain unemployed. Blanket transport subsidies continue at a high level, while the essential road and rail capital investment is slashed and slashed again. We have heavily subsidised prescription charges for rich and poor alike and deprive the Health Service of tens of millions of pounds by phasing out pay beds while the capital programme for hospitals and clinics is further and further delayed.
Housing subsidies to rich and poor alike have nearly doubled in the last three years, yet public and private housing starts are plummeting and the number of improvement grants is running at much less than half the 1973 figure. These examples show how the Government's 116 distorted priorities have hit the construction industry and precipitated this crisis.
As if that were not bad enough, the industry has hanging over it and its investment plans the sword of Damocles of nationalisation. The Minister has been talking over the last 18 months about national building agencies and the extension of public enterprise. Just a year ago, "Labour's Programme for Britain' was published, which said:We believe that a major public stake must be created within the building and construction industry.In addition, there is the threat, currently quiescent, of the Bill to extend direct labour. It is dead at the moment, because of the present parliamentary situation, but I challenge the Minister—I hope that he will respond—to deny that a major public stake in building and construction and a major extension of direct labour organisations are still part of Labour's long-term programme. The industry would like to know, I should like to know, and no doubt the Liberal Party would like to know, the Government's policies on these two important issues.
My party is against any extension ct direct labour, for reasons which I have advanced from this Box in the past. Equally, the next Conservative Government will insist on proper and fair accounting procedures for direct labour organisations, based on the reports of the Chartered Institute of Public Finance and Accountancy, after discussions with the various local authorities. I hope that the system will be voluntary and brought in by the local authorities themselves, but we shall not hesitate to use legislation if necessary.
What should be done now to put the industry back on the road to growth and stability—something that I hope we all want to see? Clearly, the first essential prerequisite of recovery is that we achieve our own economic revival. Then we must stop the constant capital cuts and using the industry as an economic regulator, as has been done not only by this Government but, to be honest, by previous Governments as well.
Two industries in this country have been used as economic regulators for the last 25 years—the construction industry and the motor industry. It is no coincidence that both are now in a severe crisis.
§ Mr. Speed
I am talking of the entire construction industry; where there is a public sector which has been hit, I am talking of that as well.
I have listed various items where I believe the wrong emphasis has been placed, where, instead of cutting revenue expenditure, the Government have constantly cut capital expenditure and have not had a long hard look at subsidies. This has meant that the industry has been very hard hit.
I am reinforced in that view because, as I may remind the House, the Fourth Report of the Expenditure Committee published just six weeks ago said in Paragraph 10:The Government is thus itself acting like those industrialists it criticises for failing to invest…. It (the Government) appears to be cutting capital expenditure and selling off productive capital assets (e.g. B.P. shares) in order to sustain current expenditure, the classic action of an ailing industrial economy. The results will inevitably be felt in every public service and also particularly in the construction industry upon which unemployment is being differentially imposed".I ask the Minister whether the Government accept that criticism of the Expenditure Committee because it is a criticism that the House ought to take seriously. I am not saying that we can solve all our problems by having no cuts in capital expenditure but that we should have some common sense and that the Government have organised their affairs and priorities so as to hit the construction industry uniquely. If we must have cuts, they should be the more sensible ones that I outlined earlier.
There should be a moratorium and a long hard look at the bureaucratic and vicious operation of the 714 employment certificates—a scheme that we debated recently. There should be a searching examination of the operation of industrial development certificates and office development permits. I suspect that both have largely outlived their usefulness and 118 that they have stopped investment in offices and factories in many areas of high unemployment, particularly London and, to a lesser extent, the West Midlands.
We should repeal the Community Land Act, for which there is no money anyway and on which builders and developers have made many representations to the Government regarding the Act's effect on their industry. I hope that even at this late stage we can take a fresh look at the Dobry planning procedure proposals and have a determined drive to speed up decisions on planning. I also hope that, with the help of local authorities, we can cut out unnecessary duplication and delay. I admit that some of that has arisen as a result of local government reorganisation, but that was three or four years ago and it should now be possible to arrive at a modus vivendi to cut out such duplication and delay.
We should remove the threat of nationalisation once and for all and bring in proper accounting procedures for direct labour organisations. That would do an immense amount for confidence of all involved in the industry. I am sure that the Minister understands that one of the problems is that there must be a time lag of at least 18 months before measures to revitalise the industry can become fully effective. Demand, whether for housing, commercial and industrial development or public works, should keep in step, as far as possible, with the productive capacity of the industry. We do not want a major boom resulting in such problems as overheating and the "lump" that we have seen before, but a sustained and sustainable growth. That has all kinds of implications for economic management and so on.
A strong industry is needed to sustain exports—which are now going well—to provide employment and to soak up the employment of skilled men who will be lost to the industry for ever unless something is done soon. It is needed to provide the best utilisation of men and machines, to provide resources for the research and development that is needed by the industry and its material producers, and for the industry's sustained future growth. To achieve this, we need new directions, new policies and, above all, a new Government.
§ 7.36 p.m.
§ The Minister for Housing and Construction (Mr. Reginald Freeson)
I do not disagree with a great deal of what has been said by the hon. Member for Ashford (Mr. Speed). He was heavy on description but not so heavy on prescription and the right answers. I shall deal as best I can in the course of my remarks. with a number of the points that he has made.
There is no doubt that the construction industry has suffered heavily in the present recession. Since the height of the boom early in 1973 its output has declined from about £6,000 million to £5,000 million a year. Employment in the industry then stood at 1,916,000. Today there are 214,000 unemployed. The general decline is serious. It is not the 30 per cent. to which the hon. Member for Ashford referred but 16 per cent. The situation is serious enough without us making further exaggerated statements on the basis of misunderstandings.
§ Mr. Freeson
I have not studied that speech in detail, but the figure that I have quoted is nevertheless right.
The building industry in Britain is not alone in its present situation. Construction industries throughout the world are suffering the worst recession for 50 years. The general economic recession is not the only cause of the downturn in building in Britain. It is the consequence, too, of the unhealthy over-heating of the industry deliberately stimulated by the last Government during 1971–73.
There are other causes that lie within the industry itself. Many of the closer contacts that I have established with the industry during the past three years have been in order to consider how to cure some of its own inherent weaknesses. These weaknesses have contributed to the difficulties in a generally difficult time.
Traditionally the industry has been plagued with poor industrial relations. This is largely caused by the casual nature of much of the employment and by the feelings of alienation that arise from the law of the jungle that has 120 characterised much of the industry for so long. Our measures to restrict the abuses of the "lump" and proposals that I hope will come from the Construction Industry Manpower Board will reduce some of the problems caused by the system of casual labour.
But it is only a step in the right direction. Efficient working relations will come about ultimately only if workers in the industry have a stake in management and ownership. By that I do not mean nationalisation. There are many ways of mutualising by establishing common interest through partnerships and common holding schemes without going along the road to which the hon. Member for Ashford referred and which has been advocated in some quarters.
One of the major structural weaknesses of the industry has been its chronic under-capitalisation. This has accentuated the pressures caused by the sudden drop in demand. It is a matter which requires the closest study. More needs to be done, but a start has been made.
The problems caused by variations in demand and ways to resolve them are now being studied jointly within the industry. The Building and Civil Engineering Economic Development Councils have tried to establish the implications for the industries of possible levels and patterns of demand in the early 1980s. A report on this was published last year.
The Structural Analysis Committee is now examining the way that industries operate. It will prepare a quantified description of the resources needed by the various sectors of the building and civil engineering industries, assess the ability of the industries to respond to changes in demand, and, based on these analyses, recommend methods to achieve more efficient use of resources. This approach to the difficult but vital subject of demand management will provide an essential basis for trying to stabilise work load, which is so important for the longer-term health of the industry.
The Building Economic Development Council has also established a working party to examine efficiency in the house-building industry. Studies by my Department's Building Research Establishment 121 and by the joint local authority—Department of the Environment Action Group on London Housing have shown the nature of the problems and the side of the potential savings to be made through increased efficiency in the public sector—savings that can be put into investment. Following consultation with me, the local authority associations have set up a working party, in which we are represented, to examine the ways to improve development management.
More generally, I have asked my Department to study how existing information about improving efficiency and value for money in the construction industry—at present scattered around in a dozen studies—could be drawn together to get speedy practical application. I attach much importance to this because savings in this direction provide more resources for investment.
Because of the diffuse nature of our construction industries and some of the other weaknesses that I have mentioned, they have tended to be treated as outside the main stream of industrial development and policy. In the past this has been the attitude of both the Government and the industry. It must no longer be so.
The industries are basic to our economy. They underpin every economic and social activity—factories offices, shops, roads, power stations, reservoirs, oil-rigs, hospitals, schools and homes. The list seems inexhaustible. Nothing that we do would be possible without the industry being involved.
Because of this basic position, the construction industries must be part of the industrial strategy of the Government, TUC and CBI. The industry is being linked to the industrial strategy through the working parties under the NEDC. Each working party has been instructed to define the likely demand for construction as industry is regenerated and the construction EDCs have work in hand to identify the benefits of industrial building for the construction industry and of encouraging orders for construction investment to be brought forward.
Our economy is passing through a great crisis. It will recover and will be reinvigorated as a result of the strategy and programmes to which I have referred. However, none should pretend that the reshaping of our economy is going to be 122 easy and speedy, whatever strategy or formula is advocated. And none should pretend that the reshaping will not leave some big problems still to be resolved. Not the least of these will be future levels and the nature of employment. This will be true of the construction industries, as of others.
The representations that I have received from representatives of the building industries have naturally been concerned with immediate problems of demand, but the present situation should bring into sharp focus the impact of underlying economic changes on our construction industries.
Demand on the industry will undoubtedly rise again, but we should not assume that it will ever reach the level and nature of the boom of 1971 to 1973. Both the scale and the nature of demand and how it is met will be different.
Social, economic and technological factors may point to a different size and shape to the industries in the next 10 years. Needs and resources are changing along with changes in demography, life styles, demands and urbanisation. All these will influence the amount, the nature and the quality of construction likely to be undertaken.
One thing is sure: despite some romantic and reactionary ideas to the contrary that I gather are not held by the hon. Member for Ashford, though they are held by some of his hon. Friends, the industry depends and will continue to depend as much on public investment and its multiplier effects as on the private market for it success.
At least half the industry's basic work is provided by public sector clients—the Government, local authorities, nationalised industries and other statutory bodies. Indeed, Government action in cutting public construction works has worsened the effects of the recession on the industry, particularly in the July and December cuts last year.
§ Mr. Arthur Jones (Daventry)
The right hon. Gentleman is essentially concerned most with the housing programme. I recognise that he has touched on the important question of capital expenditure on housing, but he has painted the scene with a broad brush and I want to get back to the area in which he has particular responsibility.
123 The right hon. Gentleman referred to the fact that the construction industry is dependent upon the capital programme of the Government. It must have been difficult and disappointing for him to see the housing programme substantially cut. Does he agree with my view that this is attributable to the fact that we have had to much expenditure on current account housing instead of on capital account? Does he think that it is now time to review the priorities?
§ Mr. Freeson
I do not intend to go over ground that was discussed at length in the housing debate last week and will no doubt be covered in future debates. I shall be touching on housing matters, but I was not aware that I had so far done so. The hon. Gentleman is jumping ahead. The housing programme is an important element in the scene and I shall be dealing with it later. I have some important points to make about that aspect of construction, both in the private and in the public sectors.
I was referring to the impact of cuts in public investment on housing and the massive dependence of the construction industries on public sector clients. We should accept that fact instead of constantly knocking it. I do not accuse the hon. Member for Ashford of doing that, but his emphasis is rather different from that of his hon. Friends the Members for Henley (Mr. Heseltine) and Hornsey (Mr. Rossi) in these matters.
As part of the arrangements for the IMF loan, the Government had to reduce capital spending last December by £700 million. This was a cut in the real level of spending, following earlier cuts of more than £600 million in prospective future growth. This was the first time that we had cut into the actual level of spending.
This action was considered essential to preserve the economy. Hard though it is for the industry to bear, in time—and perhaps in all but the very short term—the construction industries will benefit from the success of the Government's policies as the national economy—of which the industries are so fundamentally a part—is regenerated.
The Government are under no illusions about the impact that their decisions on public expenditure have had 124 on the industry. While we direct our polices to the future—whatever this may mean in temporary unpopularity—we shall also use every opportunity to re-create resources for construction where they can best meet economic and social priorities and provide work for the industry.
In discussing the relationship between capital and revenue cuts, I am not saying that there are no valid areas for argument or shifts of emphasis here, but we should avoid presenting it as a black and white picture, because revenue cuts also have major employment implications which had to be taken on board by the Government in preparing the balance of the package announced by the Chancellor of the Exchequer in December.
I hope that we may have the support of the Opposition in saying that we need to provide a re-creation of public investment in this field whenever the opportunity presents itself. I gather that we may have the support of the hon. Member for Ashford, but I am afraid that our hope may be vain in the case of his fellow Front Bench speakers and many hon. Members on the Back Benches opposite. They have done little but clamour for more and more massive reductions in public expenditure—without any apparent awareness of the likely consequences for the construction industry.
At a recent conference held by the National Federation of Building Trades Employers, the hon. Member for Henley, who leads for the Opposition on these matters, was reported as saying:The Conservatives do not believe in any increase in public spending.I am informed that the message was repeated by the hon. Member for Hornsey at another gathering more recently.
§ Mr. Hugh Rossi (Hornsey)
On that occasion I made a clear distinction between cuts in capital expenditure and in revenue expenditure. One is investment in our future, but there is no sense in squandering money in places where it could be saved.
§ Mr. Freeson
I shall return to that point. I listened with great care to the hon. Member for Hornsey and I recall his refusal to answer questions on these and related matters in the debate on housing last week and on previous occasions. His intervention today was not 125 warranted. I was not talking about whether the hon. Gentleman favoured this cut or that cut. I was pointing out what was said by the hon. Member for Henley—repeated, I believe, by the hon. Member for Hornsey—
§ Mr. Freeson
I was saying that the Conservatives do not believe in any increase in public spending. Does not the hon. Member for Hornsey agree with his hon. Friend the Member for Henley, who spoke on behalf of the Opposition, indicating what the Conservative Party's future policy for the construction industry would be? I understand that that was the purpose of the meeting with the NFBTE.
§ Mr. Freeson
I shall not read the whole of the speech made by the hon. Member for Henley. I have the documents in this red file here.
§ Mr. Ronald Atkins (Preston, North)
Does my hon. Friend recall the squandering of money by the Opposition in 1972–73, when millions of pounds were spent on the cleaning of buildings? They printed the money, of course.
§ Mr. Freeson
We are still suffering from that today. I can understand the sensitivity of the hon. Member for Hornsey on this matter. He reflects the confusion and uncertainties of the whole Opposition on these matters, as I shall show.
The view that I outlined was the position taken up by the Opposition's leading spokesman, the hon. Member for Henley, which was confirmed by the hon. Gentleman in the House in the debate on the Government's rate support grant proposals, when the hon. Gentleman said that we should reduce public expenditure on a more significant scale.
We are never told clearly what the Opposition have in mind, although we were told slightly more clearly today by the hon. Member for Ashford. Would it be of the order of another £500 million that they want to cut, or £1,000 million? Perhaps this will be clarified during the debate. But I shall gladly give way if the hon. Member for Ashford or the hon. 126 Member for Hornsey would like to enlighten the House on this point, otherwise we shall have to listen carefully to the closing remarks of the hon. Member for Hornsey.
Let me tell the Opposition what would be the result of such a policy if they were to translate it into action or if we were to adopt the policies that they advocate. The result would be to increase unemployment by another 50,000 or more people in the construction industry.
The Opposition's housing policies would seem to indicate a large reduction in public sector house building. They have given the clear impression that they would wind up new house building on any substantial scale by local authorities. When my right hon. Friend the Secretary of State and I invited the hon. Member for Henley and the hon. Member for Hornsey to deny that this was their intention in the debate on housing on 21st April, and on previous occasions, they ostentatiously declined to do so. The construction industry can draw its own conclusion from that.
For every £10 million cut from this sector—that is, investment in housing construction—about 1,100 building workers and 600 others in related industries would lose their jobs. We have been here before. By the end of the Tories' last period of office, private sector housing starts had slumped to the appalling level of 106,000. As a result of a mortgage famine created by a feckless monetary policy, the industry could not even sell those houses it had already built; 56,000 of them were unsold when we came into office in 1974.
It was this Government which rescued the private sector. First, we provided for local authorities to purchase a large number of these unsold homes. Then we stabilised the supply of mortgage funds—first by lending the building societies £500 million to see them through the immediate crisis; then by developing more permanent stabilisation arrangements with the Building Societies Association. Despite difficulties caused by the volatility of interest rates last year, mortgage lending remained fairly steady.
If the laissez-faire policies of the Opposition—repeated even more vigorously in the housing debate last week in regard to the Government's relationship 127 with the Building Societies Association—had prevailed, the private sector would have faced the same sort of slump, as a result of mortgage famine, as it experienced in 1973 and 1974.
§ Mr. Freeson
I know perfectly well that the precise opposite happened. The hon. Member for Hornsey is getting very sensitive this evening. The quality of his interventions does not justify their frequency. When we came into office—and before we came into office—we were challenging the right hon. and learned Member for Hexham (Mr. Rippon) on this point, but we never got satisfactory answers. What was called the Joint Advisory Committee was set up, but it did not produce the stabilisation arrangements nor the £500 million. We inherited the prospect of 13 per cent. mortgages, a prospect that had been hanging around since the previous October, after interest rates had risen from 8 per cent. a short time before. The memory of the hon. Member for Hornsey is inaccurate.
§ Mr. Freeson
Before the hon. Member for Hornsey talks about misleading the House he should study the facts. After we came into office housing starts rose from 106,000 in 1974 to 150,000 in 1975 and 155,000 in 1976. Despite the caution which house builders felt during the brief period of very high interest rates earlier this year—or the changeable interest rates earlier this year—confidence is reviving, and as the latest private enterprise housing inquiry, published by my Department today, shows, private house-builders expect to start 145,000 houses this year. This is a very different prospect from the scaremongering figure of 100,000 or less which some hon. Members opposite were proclaiming in the House at the beginning of the year, with the full support of the hon. Member for Hornsey and others.
128 Public sector house building tells the same story. In 1973 starts were down to 113,000 and, had the Tories stayed in office, were scheduled in their expenditure White Paper to fall below 100,000. The Labour Government have raised that level to about 170,000 in 1975 and in 1976, in co-operation with many very active local authorities throughout the country and the growing housing association movement. This year we have budgeted for about 150,000 new public sector homes. Those are figures for new buildings, apart from any rehabilitated homes. That figure will be achieved only if all authorities observe their duty to provide homes for those in need. But I am afraid that there seem to be a number of Conservative authorities in housing stress and pressure areas planning to cut back or stop their house building programmes. I hope they will think again.
If hon. Members on the Conservative Front Bench are so concerned to maintain a high level of house building, I invite them to advise their colleagues in local government to think again. If they do not, those in housing need and the house building industry will know how to judge their policies.
House building is a very important part of construction activity. It constitutes over 40 per cent. of output by value. This Government's efforts, first to stimulate and then to sustain it, have had an important and beneficial effect on demand in the construction industry.
We have similarly sought to encourage the provision of buildings for industry. New orders in this sector—the hon. Member for Ashford was kind enough to make a brief reference to this—which in recent years had been declining, showed encouraging signs of picking up last year. This trend will soon be shown in the output figures, and the Government's policy, through the industrial strategy, to switch resources into industrial investment will reinforce the growth in construction activity in this important field.
Altogether, nearly £5,000 million of public investment is going into construction work in 1977. That is no mean figure in the middle of a major economic crisis, though it is much lower than is desirable to meet our needs generally, and those of the construction industry in particular.
129 All the more important is it for us, therefore, to take every opportunity within our present constraints to help the industry at its most critical points, to help it to meet the upturn in demand which will accompany our economic recovery. Hence, the series of measures studied and acted upon by the Government.
We have taken measures to ease the most acute pressures of unemployment in the industry. During 1975 and 1976 we provided an extra £110 million to local authorities for renovating substandard homes. In the recent Budget we announced an extra £100 million for construction projects in inner city areas.
We have authorised loan capital of £25 million, which has been negotiated from a bank, to help Housing Corporation work. I expect this figure to be increased to £50 million in the coming months, which will offset the shortfall of which the hon. Member for Ashford complained, coming as a result originally of the cut in public expenditure for housing associations in December.
More recently, my right hon. Friend the Secretary of State for Industry announced a new programme of advance factories costing about £14 million, the eighth such programme in 2½ years, producing starts on nearly 240 factories about the country.
Today, I am pleased to be able to announce that the Government have decided to allocate a further £30 million to local authorities and housing associations for improvement and renovation of substandard housing this year, to reduce unemployment in the construction industry—this being among the most labour-intensive of building work. This has been made possible because, with the fall in interest rates, we are able to budget for a somewhat smaller provision for housing subsidies this year.
We shall be getting in touch at once with the local authorities and the Housing Corporation about the allocation of this provision. We intend to concentrate it as much as possible on basic improvements and in areas where housing conditions are most pressing.
These resources taken together—I have just given a brief summary of them—will provide jobs for about 20,000 people in the construction industry, and somewhat 130 more if one takes in the related industries.
There are other measures which we are actively stimulating which depend upon initiatives from outside as well as inside the Government. I have already mentioned some success in getting capital from financial institutions into housing investment. Our industry is not so well structured for this kind of thing as some of its opposite numbers on the Continent. Nevertheless, there is unused potential to date.
I mention, for example, sponsored down-market owner-occupation. House builders could finance building in conjunction with building societies and local authorities to provide housing on some of the latters' unprogrammed land for local authority nominations. Other schemes could be similarly financed on some housing association land outside stress areas. There may be scope for pension funds to finance some housing on short-term lending.
Developers with resources available might consider carrying out some industrial projects on deferred payment or lease and lease-back arrangements.
Improved efficiency in management and maintenance could provide for more repair work, which is labour-intensive, to be carried out. Both private and public authority landlords could provide for co-partnership arrangements with tenants to enable the latter to invest some of their own resources on a stake-holding basis in their property. Building societies might increase further their lending for home improvements.
Most important, we need to look to greater efficiency ahead of the results of the special studies which the Government have helped to sponsor. There are two fields in both the private and the public sectors which in time could produce several hundred million pounds of savings to go into investment and work.
About £300 million is wasted each year by inefficient site management alone, and about £300 million might be saved by more efficient development management—a total of £600 million or thereabouts which could be going into investment in work and jobs.
Those are an indication of the kind of self-help and partnership between the 131 industry, public agencies and other interested bodies which I consider to be of vital importance during the present crisis and for the future.
There is no short-term palliative which could dramatically increase demand and solve the structural problems of the construction industry any more than there is an easy road to economic regeneration generally in our country. For the Opposition to suggest otherwise this evening or on any other occasion is to offer a false prospectus to the industry, which I trust will not fool anyone.
§ Mr. Deputy Speaker (Mr. Bryant Godman Irvine)
In the previous debate, which also was brief, the restraint shown by the House enabled 12 Back Benchers to speak. I hope that we shall be able to achieve a similar result in this debate.
§ 8.5 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
Your hint is well taken, Mr. Deputy Speaker.
I have spent the whole of my life in the construction industry and, after nearly 18 years in the House during five of which I served as Parliamentary Private Secretary to the Minister of Public Building and Works and the Secretary of State for the Environment, I think that I can claim to have seen the industry in both construction work and house building in most of its phases.
I believe that this is the first debate on the industry that we have ever had, and the speech which we have just had from the Minister for Housing and Construction was the most extraordinary I have ever heard about the building industry. It was full of platitudes and talk of committees. Obviously, the right hon. Gentleman thinks of the construction industry as the building industry, not as the construction industry. As I say, we had platitude after platitude and talk of committee after committee, with, at the end of it all, £30 million produced out of the hat to keep the House of Commons quiet this evening in the hope that it will not vote in favour of adjourning.
After my years in the industry, I feel that a proper description of its record and what Socialist Governments have done would require the writing of a book. However, after your appeal, Mr. Deputy 132 Speaker, I shall content myself with just a few words.
We must first appreciate that the most successful period for the industry was in the years 1962–64, the period at the end of 13 years of Conservative Government, when the industry had reasonable assurance and confidence for the future. That was the situation then, and I recall that in the first hour or so after the Queen's Speech in 1964 I made a speech myself on the subject. I do not suppose that anyone has read it since, but I shall remind the Minister of what I then said.
At that time I pointed out how efficient the industry had become, but I warned that from then on it would deteriorate so long as we had a Socialist Government. It always does, because Socialists always want to introduce more controls and more committees, and they take quite the wrong view of the industry.
It should be remembered that at that time we had had a Minister of Public Building and Works in the Cabinet in the person of my right hon. and learned Friend the Member for Hexham (Mr. Rippon). He was the only Minister of Works that we had ever had in the Cabinet. No one need look surprised at that. The record will show that I am correct.
As time went on, we pointed out what happened over the Land Commission Bill. We pointed out what had happened as a result of controls. Here I must give Lord Pannell, the ex-Minister of Works, credit for what he did. He broke an all-time record. With all the committees and all the planning, he produced the biggest stock of bricks in the history of this country—1,000 million bricks in stock—and the brick makers have never quite recovered from it since.
§ Mr. Costain
It would not surprise me in the slightest. It surprises me, in fact, that the brick industry has the confidence even to make enough bricks with all the Socialist planning that goes on.
But let us be constructive. The Minister said that half the building industry depends on controls and depends on public expenditure. Of course it does, so long as the Government continue pressing 133 the nationalised industries into service. Of course it does, so long as they bring in more controls. The industry cannot stand on its own feet if the Government constantly bring in more controls.
In 1959 I made an offer in the House to the then Labour Opposition that if they would undertake not to bring in more rent control, if ever they had the opportunity, I would undertake, as chairman of a company, to produce 5,000 flats a year, which was what we had been doing. Following that debate I received letters from six or seven company directors who said "Albert, if you do that, by gosh, we would, too". That would have produced about 15,000 flats a year. By now we should have built nearly 1 million flats and the housing problem would have been solved.
We should consider why we now have empty office blocks. It is because controls prevent the industry from developing in the way it wishes. They prevent the industry from building where it wants to build and where the client wants a factory or a house.
The Minister said that he was worried about the inefficiency in site planning. That is the worst sauce that I have ever heard. The Minister does not appear to be listening to me. I hope that he will at least do me the courtesy of listening. Does he realise that public accounts have shown up genuine inefficiencies? Factories and hospitals that were supposed to cost £14 million actually cost £40 million. The main reason for that is that architects have not had proper client instructions. Architects' plans have been ineffective.
The hon. Member for Liverpool, Walton (Mr. Heffer) has an interest and has had a long career in the building industry. If one were to ask him the number of sites on which he has operated where brickwork has been erected only to be knocked down, he would confirm that it is not wrong site management but wrong design and equipment planning that cause the problem. I appeal to the Minister in his calculations and efforts to help the industry to recover—as he says it will one day—to get architects in on the planning. Many architects are out of work.
The Minister and his Department believe that one can turn on the tap 134 in the building industry like a water tap. But it takes about three years from the date of deciding to build to complete a construction. That is why the Minister and all other Socialist Ministers always get the figures wrong. They always say that when the Conservative Party is in power the industry becomes overheated and that when they are in power they get on with the job. They are able to do that because they have a flywheel going and the houses are already planned. [Interruption.] The hon. Member for Houghton-le-Spring (Mr. Urwin) may laugh. In 1964 another hon. Member laughed when I warned what would happen. It has happened.
§ Mr. T. W. Urwin (Houghton-le-Spring)
I apologise for laughing, but the hon. Member is bordering on stupidity when he talks about Governments coming into office and benefiting from the planning of their predecessors. Perhaps in his long, rambling speech, the hon. Member will tell us on an annual basis which Government built most houses between 1964 and 1974.
§ Mr. Costain
If the hon. Member does not know that a house is built three years after it is planned, he can know nothing about the building industry.
§ Mr. Costain
The hon. Member has not learned much if he thinks that a house can be completed within a matter of weeks of being planned.
During my life the industry has lone much towards the development of civil engineering construction work abroad. My company has taken a lead and has made a tremendous contribution to the balance of payments. The Minister must argue in the Cabinet—bored as he looks—that if we want to increase our export potential, we must have a home base—the same applies to the motor car industry. He must also realise that there must be tax concessions for management and workers who go overseas. We have made some progress in that direction, but not enough.
I speak for a company which has developed in about 30 countries. The Minister must recognise and the industry must realise that to start an operation 135 in another country always means a loss. I have never started a development abroad that has not lost at least 10 per cent. on its first contract. One cannot move into another country and know more than the locals. American companies do not have immediate success when they develop in this country.
The Minister must use all his influence with the Foreign Office to achieve better communications between the embassies and his Department. Communications have improved in recent years. For instance, in 1938 I told an ambassador that my company wanted help to build a railway in his country. He told me that we must be fools and that he would not help because it might destroy his reputation.
The Minister must realise that as long as industry is under such control it can work only with Government money and intervention. If the Government were prepared—as they should be—to release controls over the industry, companies could get on with the job and help to bring back high employment.
During the depression of the 1930s my company built a block of flats at Dolphin Square. That has helped to ease the housing shortage. We built it because we knew that we were in a great depression. We had to keep our staff together and be ready for the upsurge. We cannot do that today. Because we were able to build then, we have developed abroad and helped the balance of payments.
§ 8.17 p.m.
§ Mr. R. E. Bean (Rochester and Chatham)
I found the hon. Member's reminiscences interesting, but I am more concerned about the present and future of the construction industry. Many statistics will be bandied about, but we all agree that the industry is suffering one of its most serious recessions this century.
There was a difference of opinion about the contribution of the industry to the gross national product between the hon. Member for Ashford (Mr. Speed) and the Minister. The hon. Member for Ashford quoted Mr. George Smith, the General Secretary of the Union of Construction, Allied Trades and Technicians. Mr. Smith was talking about making forecasts to 1978. By then it is expected that the construction industry's contribution to the 136 GNP will have fallen by about 30 per cent. Another forecast is that there will be about 300,000 building workers out of work. If one adds to that another 40,000 workers employed in the building supply and manufacturing industries, about 22 per cent. of the unemployed will come from the construction industry.
The emphasis of the Government's industrial strategy is on increased production and efficiency. The Building National Economic Development Council, in its report published in June 1976, said that the industry was already operating at a dangerous level. Since then it has declined even further. Although a major emphasis is on export-led growth, we are also concerned about import substitution. If the decline continues, many building manufacturers will go out of business. That will result when the upturn comes in more imports of ironmongery, kitchen equipment and so on, and we shall suffer from more competition from abroad.
Another problem that worries me is that in the past two years some 3,000 building apprentices have lost their jobs. Although the Construction Industry Training Board has made valiant efforts to find jobs for these youngsters, at present some 950 youngsters do not have opportunities to complete their training. Some 301 have already left the industry. That is not good for the future. What is even more disturbing—although I do not have the latest figures—is that the trend is increasing. I suggest that the Government shoud treat this matter as one of urgency, to find how we can keep these youngsters in the building industry, because we shall depend on these young men as the craftsmen of the future.
Mention has already been made of the the fact that 50 per cent. of the work load of the construction industry comes from the public sector. The latest projections show that the public sector borrowing requirement will be nearly £2,000 million less than expected. Surely now is the time for second thoughts about restoring some of the savage cuts in public expenditure that we have seen over the last year or so. If the Government were to take positive steps in this respect, I am sure that that would have immediate effect on housing and the unemployment situation. Such a step would have some influence on the TUC, which is trying to reach agreement with 137 the Government on phase 3 of the incomes policy, and, if the Government are sincere in their efforts, I suggest that solving part of the problem of unemployment is one way of influencing the success of the current negotiations.
Mention has been made tonight of the fact that it takes up to three years after the touch on the brake or on the accelerator for the finance to work through to the building site. The Minister has said that one way of speeding up work on the sites is through rehabilitation of old buildings. I welcome the pledge that he has given tonight that some £30 million will be put into this sector. But it is a drop in the ocean.
I would welcome further investigation into a modern phenomenon. Over the last 15 to 20 years, many multi-storey buildings have been built of concrete. This has caused condensation problems. I have made inquiries of the Building Research Centre and other bodies. I find that this problem applies throughout the country. Councils up and down the country are telling tenants that the only way to overcome the problem of condensation is by increasing heating and ventilation. People are told to increase their heating in this energy-conscious age. That is not the way to treat this problem.
When a person in a multi-storey flat, 10 or 12 storeys off the ground, is told by a council rent collector that he must leave windows open night and day to get rid of the condensation problem, what will mothers think? In my constituency there are several tower blocks, in which all day long mothers keep windows locked and barred for their children's safety. In order to tackle the problem people must have increased insulation together with more efficient ventilation and heating systems. If the Government are serious about trying to get immediate work into the industry, that is another sphere worthy of examination.
The Minister said that rehabilitation is the quickest way of getting results, and it employs about 150 men for every £1 million of capital expenditure. New building, in contrast, employs 100 men for every £1 million of expenditure. However, both are needed if we are to ease the employment situation.
138 I welcome the Minister's pledge that he will be keeping an eye on those councils, especially those in housing stress areas, that do not keep up to their programme. I am sure that he will have the support of the House if he brings in legislation to take away their authority if they are failing to do their duty.
When the Building Economic Development Council met my right hon. Friend the Secretary of State for the Environment recently, a number of proposals were put by the Building NEDC to increase the work load on the construction industry. Some of these proposals were rejected out of hand because of the excessive cost, but I think that others were worthy of further consideration.
If the Government are serious about their industrial strategy, they should give further consideration to the possibility of giving financial help to the building of factories outside the development areas, because in some parts of the country there are high points of unemployment. London, for instance, has unemployment figures way in excess of the national figures. I see no reason why money should not be encouraged into these areas to build these factories ahead of demand.
In my constituency we have a 7 per cent. unemployment rate. That is low, perhaps, as compared with some areas, but, nevertheless, we are above the national average. An engineering factory there is to move half of its work to the North-East. It is doing that because it is getting a firm Government grant. It seems pointless to take this work away from my area, which has a 7 per cent. unemployment rate, to an area where there is a 9 per cent. unemployment rate, when, purely because it is a development area, it is getting the grant when my constituency is not getting it. It does not make sense.
Greater co-operation could be engendered between the Building NEDC and the Government if the Building NEDC were to take cognisance of the Government's policy. Of course, on the rehabilitation of inner city areas, if the Building NEDC came forward with some proposals on how private enterprise could play its part in giving social and economic benefit to the inner cities, it would get greater co-operation from the Minister.
139 The Minister has already mentioned the chronic under-capitalisation that exists within the construction industry. I suggest that this is unique to this country. On the Continent one finds that most large contracting firms are supported by the major financial institutions and banks. This is a great help, because it means that they can have continuity between the booms and slumps that all construction industries experience, and it is particularly useful when it comes to exporting overseas, because it means that our foreign competitors in Europe—France and Germany—do not have the bother that we have of getting performance bonds.
One finds on the Continent that the banks back the companies, whereas in this country there is no contact between the major financial institutions and the major contractors. That is something that perhaps the new committee that has been set up under the chairmanship of my right hon. Friend the Member for Huyton (Sir H. Wilson), which is looking into the functions of financial institutions, could examine, and perhaps we could look at whether the City is supporting the construction industry as it should.
The Government must recognise the contribution that is made by the construction industry to the social and economic life of this country. The Government must also realise their responsibility to the industry. By cutting back public expenditure as they have, they are slowly starving the industry to death.
§ 8.28 p.m.
§ Mr. Walter Clegg (North Fylde)
I enjoyed the contribution that the hon. Member for Rochester and Chatham (Mr. Bean) has just made. It showed his knowledge of the industry and the problems that it faces. In my view, it was much more constructive than the approach of the Minister, whose speech was particularly arid. I am not sure whether my view was not shared by certain Labour Members.
I want to argue on this occasion from the specific to the general and to refer first to the situation in my constituency and in the North-West generally. The building industry is particularly important in my constituency—and the construction industry generally—because it is a 140 source of skilled jobs. Those are rather scarce, especially from young boys leaving school. Any downturn in the industry has, therefore, a very severe effect indeed in my constituency.
The situation now is that at the last count, on 12th April, there were 349 construction workers unemployed in the whole of the Fylde. The job centre tells me that that is an underestimate because the figure does not include those who were construction workers but who have had an intervening job. Thus, the true number of unemployed construction workers in the Fylde at the moment is about 534. On the other side of the picture, on 12th April there were six jobs available in the construction industry.
The hon. Member for Rochester and Chatham stressed the importance of apprentices entering the industry. The latest information I can find for the whole of the Wyre district, which includes all of my constituency, shows that there was one person apprenticed in the period from 1st October 1976 to 31st January this year. In the autumn 600,000 school leavers will come on to the labour market. We can see the tremendous problems these youngsters will face. In the North-West generally—and I know that the hon. Member for Liverpool, Walton (Mr. Heffer) takes a great interest in this area—there were about 29,500 construction workers unemployed in February. This represents about 15 per cent. of the labour force in the industry in the North-West. It has to be remembered that these are skilled jobs.
§ Mr. Carter-Jones
Is the hon. Member aware that many people are concerned about the loss of apprentice opportunities in the construction industry, which is directly related to the growth of the "lump"? Could we have the hon. Member's views on that?
§ Mr. Clegg
I have always taken the point—the hon. Member for Liverpool, Walton has often made it— that one of the drawbacks to the "lump" system is that it does not provide for apprentice training. That is a fair point. The "lump" has suffered equally with other areas of the industry. Certainly it is fail to say that "lump" working does not encourage apprentices. They are the 141 beneficiaries of those firms who take in apprentices and provide skilled work.
Those are the basic statistics of the situation in the North-West. In that area the construction industry has a higher share of skilled jobs than is perhaps the case in other parts of the country. That factor makes it important that we get the skilled men we need in the future. The situation is of interest to firms in the area which are operating overseas projects. Without a sound home base, without the ability to train people to sell their skills abroad, these firms will not be able to keep up their work which they are now winning in competition with other firms overseas.
That is the extent of unemployment. No one can say that there is a magic wand which, when waved, will put things right overnight. That is beyond the bounds of possibility. Even if there were a sudden massive injection of capital it would take time to work its way through.
The Minister criticised Conservative Members for deriding the contribution of the public sector to the construction industry. I would never do that. It has to be accepted that, whether at national or local level, the Government are one of the industry's biggest customers. Certainly any cutback in the rôle of the public sector as a customer would have undesirable effects. I cannot imagine a situation in this country, under whatever system of government, in which the construction industry was not dependent on the public sector for a great part of its work. It is beyond the private sector to do many things which the public sector can do.
One of the greatest stabilising factors—and this does not lie within the power of the Minister's Department—would be the introduction of reasonable and stable interest rates. The Minister said tonight that the £30 million he was able to use for the repair of houses was available because of a reduction in interest rates. A Government policy which could give us stable and reasonable interest rates would have two effects. First, it would help the customer on whom the industry relies. Secondly it would enable the entrepreneurs within the industry to take the risks which will be necessary to get it moving again. I attach high priority to keeping down interest rates ove ra period of time.
§ Mr. Nicholas Winterton (Macclesfield)
A few moments ago my hon. Friend mentioned the public sector. He was right in saying that the public sector awards a great percentage of the contracts won by the construction industry. Is he aware that private enterprise construction firms are often put at a disadvantage because the public sector, for which they do the work, is slow in paying its accounts—I refer to local government and Government Departments—and as a result private firms are being harassed by the Inland Revenue and the Customs and Excise because of late payment of PAYE NIC and VAT?
§ Mr. Clegg
Indeed. I have had similar complaints from the industry.
Much has been said in the debate about the resources available in the public sector. I do not attribute the entire blame to the Labour Government for the consequences of cuts. The same happened under Conservative Governments. When capital cuts are being made there should be some differential between ordinary projects and capital projects sponsored by national or local government which have an industrial base—for example, the building of advance factories, the provision of infrastructure to improve towns and cities, especially in the North, and the building of roads. These projects serve the economy. Cuts related to these projects must be viewed differently from cuts across the board. Capital projects should have preference because they increase industrial efficiency.
The Minister said nothing about the future of the Bill concerning direct labour. The construction industry needs that Bill just as it needs a hole in the head. Such a Bill would merely provide competition for firms which are struggling desperately to survive.
Anybody with knowledge of the system of ECGD guarantees for work done abroad knows only too well that foreign Governments are asking for increasingly heavy guarantees, undertakings and bonds. The industry does not regard the present arrangements as fully satisfactory.
The planning branch of the Department could play a part in helping the construction industry. For a long period the time taken for planning decisions to be made has been almost a scandal. I have protested about delays which have 143 occurred under the Conservative Government and under this Government.
I will give one example which affects my firm. I declare an interest. I am a solicitor. My firm acted in an inquiry. The Minister called in the planning application in February 1974. There was a public inquiry in July 1975. We still have not had a decision. As I am involved in the matter I will say no more about it than that that delay is remarkable in its length.
Long delays in planning matters put out of gear the programmes of contractors. This leads to decasualisation if there is not an even flow of work over the years. The consumer must ultimately shoulder every additional expense in the form of increased charges and interest on money borrowed while the developer is awaiting the result of an inquiry.
I am glad to have had this opportunity to speak in the debate. As I said, there are no magic wands to be waved but there are some practical things to be done. I am not certain that the Government are doing them.
§ 8.39 p.m.
§ Mr. Eric S. Heffer (Liverpool, Walton)
The problems of the industry have been well explained by hon. Members on both sides of the House. I think that we all agree that the immediate, short-term problem is to get the industry back to work. I am therefore disappointed, to say the least, by the campaign being conducted by the National Federation of Building Trades Employers against direct labour when it should be much more concerned with trying to obtain more work for direct labour departments and for its members. The federation is adopting a very short-sighted policy.
I wish first to say a few words about the unemployment situation. Like my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin), I have been an operative in the construction industry. Both of us have experienced unemployment in it. It was something that we took for granted. After one job had finished, we would be out of work until the next came along. Sometimes we were fortunate and obtained a job almost the next day, but usually there was a gap, and even in times of so-called full employment, particularly in areas such as the 144 North-East Coast and Merseyside, we had two, three, or four weeks out of work, whereas workers in London were able to move rapidly from job to job.
Construction workers are not unused to unemployment, but in areas such as mine there are highly skilled tradesmen who have been out of work for 18 months or two years. I am talking not about semi-skilled or unskilled men, but about highly skilled craftsmen who have served apprenticeships for five or seven years but who now have no chance of obtaining jobs in the industry.
They are not likely to be lost to the industry, because there is no work elsewhere for them. This is the tragedy of the situation. They have no other outlet. They are on the dole when they should be putting up buildings and housing in an area that badly needs both. That is the essence of the problem.
My right hon. Friend the Minister for Housing and Construction admitted that the cuts in public expenditure have badly affected the industry. In its economic review, the TUC made it clear thatThe General Council believe that the capital public expenditure cuts have been too severe and that in any expansion of public expenditure the construction industry must be given priority.Similar comment is made in the statement issued by the National Joint Consultative Committee, which is made up of a number of bodies:The Government should not have reduced public sector construction work so drastically when the industry is already experiencing one of the worst recessions known in this century.But they did.
I do not accept the view of hon. Members opposite, which I find somewhat hypocritical. I think that I am entitled to argued against public expenditure cuts, because I have consistently argued against them from the minute that Governments have proposed them. It is a bit off for hon. Members opposite to say "The Government are right to make public expenditure cuts, but they have made the wrong ones" and go on to state that it is all right to cut school meals and other services which hit working people. That is not the answer to this problem.
It is certainly not the answer that I and some of my hon. Friends have. We want to see a restoration of public expenditure cuts. The Government have 145 begun to move. The £100 million spread over two years is not very much, but it is a step in the right direction.
The Secretary of State for the Environment has today given further useful information about the inner cities in an answer to me. That will help develop construction work. But even that is a drop in the ocean. It is right that hon. Members on both sides of the House should constantly press my right hon. Friends to reverse the policy with regard to the construction industry in order to ensure that more public work is available so that we can get these workers back to work in all parts of the British Isles. It is vital that this is done.
The immediate short-term problem is to get the workers back to work. Many suggestions have been made from both sides, with which I agree, and which should be looked at and accepted. But what about the long-term problem? My right hon. Friend said that he would not suggest advocating the nationalisation of the industry, which some people have advocated. I would argue that on a long-term basis public ownership of one form or another is vital for the industry. At this stage I shall not say precisely how it should be done. But it should be done. In the meantime, very important measures can be taken now.
I do not know how many hon. Members—I am sure my building trade colleagues have read "The Ragged Trousered Philanthropist" by Robert Noonan, calling himself Robert Tressel. It is an excellent book. The man is buried in a pauper's grave in my constituency. A headstone, paid for by my union, is to be put on his grave in about two or three weeks' time, and we are having a ceremony and so on.
The important thing is that conditions in the industry have not changed from those described in that book. Of course, there have been improvements. Workers now get paid if there is inclement weather, and there are other benefits, such as holiday payments and so on. But is it not time that we had a scheme of decasualisation in the construction industry?
It is not right that construction workers should have a fall-back position, like the dockers and other workers? It is vital that they have a system of decasualisation. 146 I believe that to be the next step. It is one of the issues about which the trade unions are concerned. It was pressed for as a necessity in the Labour Party-TUC document "The next three years".
If my right hon. Friends were to come forward with proposals like that, they would find a ready response from the trade union movement because of the need to remove from workers in the industry the constant fear that even in good times they could well be out of a job and find themselves one day earning a good wage and the next day being more or less rock-bottom, even with wage-related benefits.
In the long run we have to go much further. Our industry has been chaotic. We have begun to deal with the lump through the tax measures. That is fine. I am in agreement. But sooner or later we shall need legislation to deal with the lump totally and finally.
We shall need more than that. We shall need to plan the resources in our industry. My right hon. Friend talked about imports and import substitution. We could do a great deal now about import substitution. We need to plan resources on the basis of the development and extension of public ownership. That can be done even with the existence of the private sector. Why should not there be competition between the private and public sectors in the industry?
There are several things we must do. We must get the people back to work and ensure that the public expenditure cuts are reversed. We must step up the house-building programme and ensure that there is a policy of public works throughout the country. We must get the jobs out of the pigeon holes and the workers back to work. On a longer-term basis, we must have a rational policy for the industry through the extension and development of public ownership.
§ 8.51 p.m.
§ Mr. Stephen Ross (Isle of Wight)
I very much respect the personal knowledge of the hon. Member for Liverpool, Walton (Mr. Heffer) of the industry for which he speaks. He has been consistent in his opposition to public expenditure cuts.
However, I do not think that the hon. Gentleman would expect me to agree with him about the extension of direct labour 147 at this time, or his ideas for the future nationalisation of the building industry, although I agree that there could be a great deal of modernisation to bring the industry up to date in its industrial attitudes.
I also agree with the Minister to the extent that there is no immediate answer to the present drastic situation affecting the construction industry. I think that those on the Opposition Front Bench would agree that they have no immediate solution either.
I agree with the hon. Member for Ashford (Mr. Speed) about direct labour and that it is time we considered the question of IDCs. If someone wants to run a business in a certain part of the country, it should not matter whether it is in an assistance area. The factory should be built, and he should be able to get on with it. That is the only way in which the country will get out of its economic mess.
I do not go along entirely with those who were so critical about tax exemption certificates and the lump. The cases that I have investigated showed that the Inland Revenue was justified in delaying many decisions. That finding may not apply across the board. Many hon. Members may have different experiences, but what has been going on in the lump deserves much more investigation. It has cost the general public, the person buying a property or having one built, a great deal of money. A gentleman called "Mr Ten per Cent" on the Isle of Wight—I will go no further—has been taking money from every sub-contractor who has come on to a certain site.
The construction industry is in a pretty low state. In some parts of the country its position is nearly disastrous. I am sure that that is so in the North-West, where I believe that 35 per cent. of the employees are out of work, and it is certainly true in the South-West.
I welcome the further £30 million to be concentrated on improvements which the Minister was able to announce tonight. Will he include insulation in the general term "improvement"? I entirely agree with the hon. Member for Rochester and Chatham (Mr. Bean) that that is a means of energy saving and that we could do a great deal more by insulating roof spaces and cavity walls.
148 There have been far too many bankruptcies among big firms in the building industry over the past few years. The Greaves Organisation, Northern Developments and David Charles are a few examples. Unfortunately, we are told that there are likely to be several more yet.
The bankruptcies are disasterous in themselves, but we must also take into account the effect on employees, on those who put up the finance for the companies, on the suppliers, and on the unfortunate purchasers of the properties that the companies may have been building. I am sure that other hon. Members will have had experience of purchasers of private dwelling houses who have been unable to get their deeds in spite of having parted with over three-quarters of the purchase money. There are some terrifying cases that warrant investigation from a legal point of view.
In many cases companies have brought on their own disasters. For example, there have been injudicious land purchases and a willingness to pay ridiculous rates of interest when it was obvious that there was likely to be a cut-back in demand. The rot set in before February 1974.
There are, however, still openings in the private house-building sector, particularly in the lower price range, for schemes that are imaginative. There are still some openings in the commercial sector. Only last week we read the annual report of Federated Land and Building, which seems to have had a fairly successful year in that sector.
Various hon. Members have put forward ideas in suggesting how the Government can help. In the first instance I should like to see them taking action in respect of the Builders EDC reports—many of us went to the conference when it presented its two reports on construction into the early 1980s. There is a feeling that the Government have been dragging their feet in dealing with the reports.
I should like to see the Government giving instructions to local authorities to release more of their land for joint housing schemes on a long leasehold basis. We hear that there are over 10,000 acres in the London area that could be developed. When public money is in short supply it is a nonsense not to make use of the private finance that is available 149 for such development. The local authority will get a return, the builder will get employment and somebody will get a home. We should push on very much faster with joint schemes.
We need a much greater concentration of rehabilitation both in housing and in industry. Public money would be well spent on insulation, for example, and the £30 million could go some way towards that.
I happened to be in Andover on Friday. Some £10 million must be spent there on re-roofing houses that were built only 10 years ago. They were all built with flat roofs due to some ridiculous architect who decided, probably from an office in London, that he wanted flat-roofed houses in Andover. Having inspected some of the houses, I can say that they are obviously inadequate. They are leaking and there is rising damp as a result of defective damp-proof courses. I suspect that it is the design that is at fault, although some bad construction is involved. Perhaps we should consider establishing a disaster fund to help some of the authorities that have to put their houses in good order. The local authority is now putting pitched roofs on some of the houses.
It is disastrous that a development that took place only 10 years ago should present such problems. People have had to move out of their homes already because they are defective. This is an area in which the Government will have to come forward with some financial assistance. I cannot see local authorities—not even the GLC—being able to meet the cost off their own bats.
I should like to see the Government attaching greater importance to the views of the Development Commission regarding aids to industry—for example, the building of advance factories and extending depreciation allowances to commercial buildings, which could give an impetus to the development industry. I have in mind warehouses and similar property.
The hon. Member for Folkestone and Hythe (Mr. Costain) has referred to the problem of the many recently qualified civil engineers who are coming into the industry but who lack practical experience. This is because of the shortage of construction jobs from which they may gain practical experience. When the 150 improvement comes, as undoubtedly it will, there will be a lack of skilled labour to meet the demand that is likely to appear. If we are not careful, we shall be entering a further period of overheating. Many architects are already redundant—though probably some of them should remain redundant. That is not a satisfactory answer and perhaps they could be given constructive work now ready for the improvement which we all hope is not far away.
We should give credit to the big contracting companies, which are doing very well in exports. But they need a sound home base to provide the management experience which their employees require.
Thank goodness, interest rates are coming down. That is something that the Government might say more about in by-elections. They are coming down very fast. This is one of the best things that has happened in recent months. In these circumstances, perhaps it would be possible to make more use of the substantial sums of private money in the institutions—the insurance companies and the banks—and make it available to the construction industry. As I said in the housing debate, that means a more open attitude to the effects of the Rent Acts so that we can get builders starting to build to let again. That would be a major step forward.
The industry seeks a more positive lead from the Government and it deserves to have just that.
§ 9.1 p.m.
§ Mrs. Renée Short (Wolverhampton, North-East)
I shall forbear to answer some of the remarks of the hon. Member for Ashford (Mr. Speed). However, I agree with everything which has been said about the construction industry being used as an economic regulator and the disaster of large numbers of people being unemployed and of young people not having the opportunity to learn building skills. When large numbers are unemployed, the State loses a huge amount in income tax, National Insurance and Health Service contributions, which must be put in the balance against the payment of unemployment benefit.
It is regrettable that when the construction and civil engineering industries are suffering, as they are today, the industries come to a halt. In West Germany, for 151 example, over 66 per cent. of building is Government-financed. Politicians and construction firms in Germany do not whine. They realise that they could not survive without those contracts.
I want to deal with a subject which has not so far been covered in much detail. That is the problem of how to rejuvenate the building and building materials industries by looking to our overseas markets. There is an enormously important rôle there for the industries.
First, we could export a great deal of know-how. Our architects and consultants now earn about £100 million a year in this way. That is a considerable contribution, but a great deal more could be done. Second, they could earn money by carrying out contracts abroad. Unfortunately, our contractors are not doing as well as the German and French contractors.
Third, we have opportunities in the export of materials and products. Some progress has been and is being made here, but we are held up in EEC countries by the approval schemes, which are being operated, I am sorry to say, with the direct intention of preventing imports. The EEC has not produced a common market for the construction industry. Although I have always been an opponent of the Common Market, we are in and we should benefit from any regulations as much as anyone else.
In 1975, the total product of the Construction industry across the frontiers in the Nine was less than 0.3 per cent., and less than 15 per cent. of the total was exported outside the Common Market, There is a great deal to be done.
In this respect, there should first be a considerable export drive to the developing countries, where, to their credit, many of our largest construction firms and most famous consulting engineers are already doing a great deal. They are active in the Middle East, South America, Asia and Africa.
The fastest developing sector of the industry is ready-mixed concrete and this should be actively encouraged by the Government. Firms should be encouraged to expand their activities and exporting know-how—which I have already mentioned—and also to export construction machinery. There is an enormous 152 area here in which we can do a great deal of good for ourselves in exporting all kinds of machinery for the building industry, including trucks and lorries. The Government should take that on board.
Our official representatives at embassies abroad must be mobilised to support engineering and construction firms in searching out markets much more than they do at present. A large number of representations have been made to me by architectural and construction firms, particularly in London, who have found difficulty. They say that our representatives abroad are not really interested in making contacts for representatives of construction firms but are generally more interested in making contacts for industrial manufacturing firms and for companies making industrial machinery. They say that the officials do not consider making contacts for representatives of construction firms with Ministers and officials in other countries and that they do not understand the enormous potential of the construction industry or how much they can help by bringing high level executives into contact with Ministers and officials in those countries.
As for the home market, we urgently need legislation to create an effective type approval and quality control scheme on a mandatory basis—that does not now exist—to ensure that innovations, originating from home or abroad, may be used on building sites only if approved by the appropriate testing authority. Here, I suppose it would be the Agrénent Board. This is essential in order to protect the public, public authorities and building owners, using these materials and methods, from dangerous failures of untested materials and components.
This would mean that we should have to introduce mandatory quality control at production level of both materials and components as is done on a small scale at present by the British Standards Institute with the kite mark. However, the kite marking is not mandatory and it does not cover the construction industry. That is a considerable gap that ought to be filled. It would keep out inferior products from abroad, which would be a jolly good thing, and prevent some of the competition that has no basis on quality of material or the product.
153 For example, it is intolerable that buildings paid for out of public funds should include untested imported steel. Why should this material escape the voluntary controls and standards of home-produced steel? A disaster could occur as a result of that. Some sort of order must be brought into our market for the protection of the consumer and the State. Of course, it will require some expenditure of money, but I suggest that the cost of such an extensive control system—which could be subcontracted out to firms and universities, as is done by the Building Research Establishment, but on a much larger scale—would be offset by the reduction in the risk of a mammoth failure of buildings, because that could cost a fortune to put right. I remind the House of the problem of HAC. We have not yet heard the end of that problem or paid all the bills that will have to be paid to rectify that particular failure.
There has been some publicity recently about calcium chloride having been found in some units even though it is expressly forbidden in the manufacture of pre-stressed concrete units because it can corrode pre-stressed wires and tendons. It has been used by some firms to make more money by reducing the hardening time of pre-stressed units. As with HAC, this may result in our having to find enormous sums for schools and other large buildings. The cost could be astronomic, because we do not yet know the full details.
Some may say that my proposal would be expensive and would mean more controls, but the Germans and the French have had a scheme for component and materials testing for years and the Germans are on the verge of extending their scheme. I recently had the privilege of attending a seminar in West Germany with most of the leading members of the construction industry. The Germans are about to extend their scheme and are doing so with the full approval of the construction industry.
About 2,000 innovations in the building industry receive approval every year under Germany's testing procedure. To their credit, the Germans do not use the scheme to keep out imports—unlike the French who do use their scheme for that purpose.
154 We are the only Community country with a large construction industry—and a potentially even larger industry—that has no such system to protect clients, the public and public expenditure. It is time that we had such a system.
I surge the Minister to take my suggestions on board and to improve the state of our construction industry by developing exports in every direction, by seeing that our representatives in British Embassies are briefed about what use they could be to construction and civil engineering firms that are anxious to pursue activities abroad and thereby bring money to this country, and to see that we get legislation to enable us to set up the machinery to test materials and components and help us to avoid the crises and disasters that have overtaken the industry in recent years.
§ 9.13 p.m.
§ Mr. Michael Morris (Northampton, South)
The speech of the hon. Lady the Member for Wolverhampton, North-East (Mrs. Short) warrants serious attention from the Government and especially from the Secretary of State for Trade. I echo her thoughts about the support that the Industry deserves from the Government, particularly at this time. Judging from my contacts with the industry and the Export Credits Guarantee Department and the British Overseas Trade Board, it seems that the industry is not getting the support it deserves.
I wish to look at some aspects of the action that the Government should be taking to help one of our major industries in its tragic circumstances of supplying one-fifth of our unemployment.
My first plea is to the Secretary of State for the Environment, who has just come into the Chamber, and the Chief Secretary to the Treasury. If the Government wish to make cuts on capital accounts, they should not produce blanket cuts but should give guidance, especially to local authorities, to look more favourably on revenue-raising capital expenditure rather than revenue-using capital expenditure. I am thinking of factories, roads and some areas of housing, rather than those areas, such as social services, that simply eat up revenue. Much work could be done by the Treasury in this area, and I hope that some initiative will be taken.
155 Hon. Members have already mentioned the dissatisfaction felt about the fact that there has been no progress on the relaxation of industrial development certificates. That would help in the short term. How many times have we heard pleas for a speeding-up of the planning process? Improvements are needed, but so far we have seen little progress. I ask the Minister to look at a number of specific areas where we could expect some beneficial results. Will he look at the results of the Community Land Act and be honest enough to accept that the Act is what we have said it was, a disaster? It would be much better for the industry if the Minister said either that he would repeal the Community Land Act or, recognising that it had been a disaster, that the Government would take some other action.
Will the Minister remove the uncertainty surrounding the Housing Finance Review? He should know that the private housing sector is at present held back because of rumours that the Government are proposing to reduce mortgage tax relief.
Thirdly, there have been references to £30 million for improvement grants. I hope that the Minister will indicate that priority will be given to general improvement areas and housing action areas, not just for those in the inner city areas. It was over a year ago that the Government came to the House and changed the basis of rateable value of conversion to flats. Since then we have seen no progress on private owners' improvement grants There has been submission after submission to the Government stating that these need to be revised and brought up to date. There is much room for initiative in this area at relatively minor cost to Government funds. This would have significant benefit for the construction industry.
There has also been too little initiative until recent weeks on the development corporations. The Secretary of State knows, after visiting the development corporations, that they were held up for several months by inaction in his Department. Even now there is a delaying factor in the work of development corporations, which is causing unemployment in the construction industry. Urgent action is needed here.
156 The hon. Member for the Isle of Wight (Mr. Ross) may be happy at the 40,000-odd outstanding 714 certificates, but I do not think that many of us who are close to the industry would be happy with that situation. There may be an element of the matter which it is right for the House to review and investigate in depth, but I find it difficult to believe that the number of cases needing investigation is about 40,000. The tragedy is that the Inland Revenue has probably been unable to cope with the sheer numbers involved.
Within these areas the Minister's Department can take some short-term action to get some movement. There have been numerous reports, and it was over a year ago that the Neddy report was presented. It is not too much to ask that the Department should take some initiative to get things moving. We all recognise just how tragic the situation is.
I draw the Minister's attention to the current issue of "Marketing" containing an article about the building materials supplies industry. The concluding paragraph states:There is also a major problem over new investment.The Government are particularly concerned about investment. The paragraph continues:Materials manufacturers will be very cautious for some time about undertaking new investment.Unless we see urgent action on a range of activities this great industry will be in for a tragic time, and we shall all be the sufferers.
§ 9.19 p.m.
§ Mr. Eddie Loyden (Liverpool, Garston)
The fact that the House is debating the construction industry will be welcomed by the industry with one cheer and possibly two. The debate is long overdue. Perhaps the industry will raise a third cheer if any positive action comes from the debate as a result of the raising of the problems.
The Merseyside area is a microcosm of the general housing problem. I accept fully that the housing problem on Merseyside cannot be seen in isolation from the problems of the construction industry or the economy as a whole. But I believe that the Merseyside situation highlights and brings into sharp relief the problems 157 of the construction industry and the illogicalities—or the apparent illogicalities—that exist, and the great needs that lie behind the requirement for housing and other construction.
The hon. Member for Ashford (Mr. Speed) spoke of the restrictions which apply to the industry. In my view, some of the restrictions are necessary because they are an attempt, however successful or unsuccessful they may be, to channel the resources of the industry into areas of construction where they are needed, and further relaxation of the regulations would, I believe, bring another speculative building bonanza which none of us want to see.
The construction industry in the North-West faces a grave prospect. I remind the House that 50 per cent. of all unemployed construction workers in the North-West are in the Merseyside travel-to-work area. This fact is closely related to the way in which the building industry is connected with or dependent upon the urban renewal which is necessary, and has been necessary for several decades, in cities such as Liverpool and other parts of the North-West as well as elsewhere in the country.
There is an irony here which is felt by all who are involved in this state of affairs. There is a great illogicality in it. During the 1970s, there was, on the one hand, a massive stockpiling of building materials and, on the other, growing unemployment among building workers and a rising waiting list in many of the areas which hon. Members here represent. Although we had that high unemployment among construction workers on Merseyside, and we still have it, there are more than 16,000 identifiable cases on the Liverpool housing committee's waiting list.
Against that background, construction workers cannot accept that there is any logic in the situation, and for that reason I believe that, if some of the points made in this debate are translated into action, the industry will greatly welcome what we have said here today.
The problem with apprentices is not new. I recall the days when I was a member of the Liverpool youth services committee in 1967 and 1968, when approaches were made to the employer's federation about the paucity of apprenticeship 158 places in the construction industry. What was happening then was a clear indication of what the future held for the construction industry.
I do not for a moment believe that any action which can be taken immediately will bring about the economic effects which some people suspect. In my view, there is no question of overheating the economy. As has been said already, most of our building materials are indigenous. The labour is here, the materials are here and the sites are here. All we need is the final ingredient, that is, someone to bring the strands together to reactivate the industry. It is certainly in a serious plight today, and any continuation of the downward trend can only result not only in an immediate worsening of the situation but in an enormous problem for future recovery.
In my view, the TUC document in 1976 was right to argue that we can take action on this problem almost right away. I do not underestimate the difficulties which face the construction industry generally, but I believe that steps could be taken at once to tackle many of its problems by bringing together the resources, the workers and the land to get on with the job of meeting the desperate need for housing and other building of social priority.
My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) spoke of the importing of materials, the testing of materials, quality control and so on. In my view, it is essential for the Department to come to grips with another problem which is general in the construction industry. After going out to tender, local authorities find themselves with problems of defects and omissions after completion, and they have to pay out large sums of money to remedy such defects in houses, flats and other places. This is a substantial problem locally, and in national terms millions of pounds are involved.
There should also be more stringent examinations during the process of building to ensure that those employed and paid to do a job operate in accordance with the amount that they are paid and the building specifications. We should not accept that local authorities have to spend enormous amounts of money on remedial work.
159 I welcome the debate. I hope that we shall see positive action by the Government as a result of it. Like my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), I believe that we can plan the construction industry and its resources only by nationalising the industry. The industry should be planned according to the requirements of the nation. We should not tolerate the speculative building of the early 1970s when buildings such as Centre Point were erected. At that time some of the builders working on it were without homes. I hope that the Minister will not reject the proposal to nationalise the industry.
§ 9.27 p.m.
§ Mr. Kenneth Warren (Hastings)
I shall briefly refer to an aspect which has not been discussed this evening—the training and apprenticeship of building workers through the Construction Industry Training Board. The Board is not directly responsible to the Minister but it is responsible for the training of young people and the retraining of older people who work in the industry. The Minister should get together with the Secretary of State for Education and Science and the Secretary of State for Employment, both of whom have interests in the Board, to examine what is going on and to see how the Board is failing the requirements of the industry.
A small electrical contractor in my constituency cannot get help from the Board because the levy has been raised from £8,000 to £15,000. In that example the head of the firm is the proprietor and has his income deducted from the payroll before qualifying for help. As a director he would not suffer that penalty and would receive help. Out of the 37,000 firms in the industry more than half do not qualify, and yet they need the help most.
Training problems do not relate only to the courses which are arranged and promoted by the Construction Industry Training Board. The Manpower Services Commission and the Training Services Agency are also involved.
Some courses have been suspended because not enough people attend them. In some cases people do not turn up because they can earn more money if they do not attend the courses. There 160 is a sickness in the training sector of the industry which the Minister, with the Secretary of State for Education and Science and the Secretary of State for Employment, should investigate.
The CITB is not a poor organisation. The report that it produced in 1975 was thick and white. Its 1976 report was thin and glossy and is worth investigating. Over the last three years the Board made a profit of over £11 million. Of that sum about £4 million came from its own investment. That is in an industry in which 200,000 people are out of work. That money should be spent on training people now. The rainy day is here: it is not tomorrow.
If one examines the accounts in detail one finds that the figures differ between one year and the next in the section headed "Administrative and Financial Services". No wonder the number of auditors has doubled in the last three years! It is very difficult to find one's way through these accounts. In 1975 it was said that those services cost £1,011,000. In 1976 it is said that they cost £1,078,000 for the previous year. The figures do not tie up between one year and the next. That is not good enough for an industry which is taking so much from the heart of recovery opportunities.
My last point is that the reason that one wants to investigate these figures is not to be just pedantic or to indulge in semantics but that one finds that the CITB itself is taking bankruptcy action against people who cannot afford to pay the levy. The Board has taken out over 300 bankruptcies against small builders who cannot afford to pay the levy, yet the Board has £11 million of its own resources. I plead with the Minister to look at the practical way in which this money has been taken from those who cannot afford to pay and has been used against them frequently to put them out of work.
§ 9.31 p.m.
§ Mr. Hugh Rossi (Hornsey)
During the course of the debate it is significant that both sides have agreed, without any individual Member speaking to the contrary, that the construction industry is now going through one of the most difficult phases it has ever gone through. We have 161 heard figures for the number of unemployed—220,000 and rising. We have heard of the number of bankruptcies among construction firms—2,500 a year. We have heard of the number of architects and civil engineers who are suffering extremely badly because of the drop in their work. We have heard about the fact that 1,800 apprentices were made redundant at the end of February. We have heard of the drop in deliveries of materials, the growth of the brick mountain, and the serious drop in overall production. Therefore, it is not surprising that the National Joint Consultative Committee for Building described the construction industry as now going through the most serious recession of the century.
I was a little surprised to find that the Minister was a little complacent in his attitude towards the construction industry. He did not really seem to appreciate the gravity of the situation. He will recall that at one point he sought to correct my hon. Friend the Member for Ashford (Mr. Speed) as to the degree by which production has fallen. My hon. Friend had said that production had fallen by some 30 per cent., or will have fallen by some 30 per cent. by the end of this year, since 1973. The Minister contradicted that and said "No, the figure is 16 per cent., and nothing like 30 per cent. at all."
I think I know where the Minister got his figure. What the Minister has done is to subtract the amount of capital spending for 1977–78 from the amount of capital spending for 1973–74 in housing alone but treated the result as the difference in capital spending for the whole of the construction industry. In housing the figure was 67.3 per cent. of the total construction spending for 1973–74. Today it is 50.6 per cent. of the capital spending. That, no doubt, is how the Minister has arrived at his 16 per cent.
However, in fact both the unions and the employers' organisation are quite clear that the construction industry's contribution to the gross national product will have fallen by about 30 per cent. since 1973—the gravest recession for a century. The Minister cannot laugh that off in any way at all.
Therefore, when the Minister has clearly under-estimated the gravity of the situation—because, clearly, he has not 162 understood or he has got hold of the wrong figures—it is not surprising to hear him positing as the solution to the construction industry's problems working parties, study groups, consultations, industrial strategy programmes, and the restructuring of the economy. Those are all solutions given by the Minister in his speech. The construction industry does not want any of those things. What it wants is something more simple: it wants work.
§ Mr. Robert Mellish (Bermondsey)
I do not quarrel with the hon. Gentleman's figures, but I ask him a straight question. Let us see whether we shall get a straight answer. This is significant in the economic problems that have been facing this nation for some time. Whenever Government cuts occur, they immediately affect the construction industry, because that is where the Government cut on capital projects. I ask the hon. Gentleman this straight question. How will he argue a case when his own party demands that there should be greater cuts in Government expenditure but at the same time it complains about what the present Government have done?
§ Mr. Rossi
I am sorry that I gave way to the right hon. Gentleman. He has only just come into the Chamber. I gave way in deference to his seniority. That is the last time that I shall give way to anyone, because of the shortage of time.
We have covered this point already, in this debate and the last debate we had on housing. We have explained clearly the distinction in our mind between capital and revenue cuts. There is a world of difference. I shall not waste time by going over the same ground again. The House is familiar with the arguments, which have been adumbrated time and again.
All that the Minister has offered are working parties, strategies, programmes and the rest—but not work. There is one exception, and that is the £30 million for rehabilitation. That is in addition to the £100 million which the Chancellor offered to the inner cities a few weeks ago. That £100 million, spread over two years, was treated with scorn by the industry. The President of the National Federation of Building Trade Employers equated that £50 million a 163 year with a half-day's work for the industry. The additional £30 million will not give very much work to very many people.
The industry is united in its condemnation of the Government's attitude towards it. The Joint National Consultative Committee for Building states:Government action has resulted in the construction industry experiencing one of its worst recessions in the century.The Joint Economic Advisory Panel says:Construction work will suffer proportionately more than 10 times as severely from public expenditure cuts as all the rest of the public sector put together.George Smith of UCATT said:The Government's attitude to the construction industry is painfully clear. It has been singled out, unfairly and unwisely, to bear the brunt of the Government public expenditure cuts.That is the complaint, that the Government have seen it necessary to make such public expenditure cuts in the present situation. They have singled out, "unfairly and unwisely", the construction industry, with disastrous results. They have not made cuts in other areas where the industry indicated cuts could well be made if they had to be made. We have had this policy of penalising the industry, which is extremely short-sighted.
Construction is investment. It is not consumption. If we have to make economies, they should be made in consumption. The cost of unemployment benefits to the 220,000 now out of work in the building industry could build 20,000 new houses. Most important as my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) said, once the construction industry has been cut back, it finds it difficult to recover. There is a three-year time lag between the conception of a building scheme and its completion. As we have seen time and again, when men leave the industry, they do not return.
The Government have been warned by the Economic Development Committee for Building and Civil Engineering that the level now reached is below the danger level for the construction industry. It is a level that will lead to inefficient use of resources, low productivity, short 164 working hours, idle plant, unused material and productive capacity, involving high unit costs. That is the consequence of the Government's short-sighted policy in making such savage cuts in this sector.
We accept that at a time of national crisis there must be some retrenchment all round. I am certain that the construction industry would be prepared to bear a fair share of the total cut-back that must take place. It considers—I think rightly—that it has been treated unfairly.
It has been suggested that a minimum survival production programme could be agreed with the industry—a level beyond which we should not fall, with a view to keeping capacity in hand so that the producers of building materials could gauge the extent to which they could keep their plant in operation, the extent to which they should keep in hand potential for the future against the day when there will be an expansion in the economy. This suggestion has been made by many people in the industry, and I hope that the Minister will treat it seriously.
Hon. Members have referred to the potential of overseas contracts. For the year ending March 1976, £1,400 million worth of contracts throughout the world was won by United Kingdom contractors. That was only a small proportion of the amount of work available. For example, Saudi Arabia has a five-year programme for 1975 to 1980 for the staggering sum of £42,000 million. Abu Dhabi has a programme for £5,000 million for 1977 to 1979. There is fierce competition for that work. We are competing against the United States, Japan and even India. South Korea hopes to win contracts worth £1,700 million in the Middle East this year. That is more than the whole of our overseas contracts throughout the world last year. Our skills and expert knowledge do not compare so unfavourably with those of the South Koreans and our other competitors that we should not be able to secure some of these contracts.
However, there is one great difference. Firms in those competing countries receive more Government support than British firms do. In the Middle East contracting is carried out by the Government—there is a preference for Government-to-Government contracts. There is a limited amount of private work available in 165 Middle East countries for British contractors. As my hon. Friend the Member for North Fylde (Mr. Clegg) said, the Construction Industry Advisory Board, which was set up by the Government to assist British firms, merely advises. Other Governments help firms—
§ Mr. Rossi
No. They help in negotiation. As regards bonding, the Government could give British construction firms much greater help. If we consider it to be in the national interest to secure contracts of this type, we should consider granting tax concessions to consultants who go overseas and earn money for Britain. In that way a distinction could be drawn between overseas earnings and earnings arising in Britain. I am sure that if the Government were prepared, not to laugh and joke about the matter, but to treat these suggestions seriously—because they come from the industry—they would go a long way to helping the industry to get out of the present recession.
Other ways in which the Government could help the construction industry have been referred to by my hon. Friend the Member for Ashford and others. One is the abolition of office development permits and industrial development certificates, particularly in the inner city areas, because they are hindering and hampering development in those areas. We should like the Government to do something about the Dobry recommendations on minimising planning delays. Nothing has been done about them, although the Government have had the Dobry Report for some time.
We ask the Government to abolish the Community Land Act. Local authorities are unable to work it because they do not have the money, and the development land tax is discouraging private developers from bringing forward their land for development. There can be no justification for the tax at its present high level. From a revenue point of view it is a nonsense, because in its first year of operation it has cost £95,000 more to levy than the amount of money it has brought in. In addition, it has resulted in the supply of land drying up.
Having listened to the debate, I am not satisfied that the Government have taken seriously enough the condition of 166 the construction industry or that they have made positive proposals which will help it to solve its difficulties.
§ 9.47 p.m.
§ The Under-Secretary of State for the Environment (Mr. Kenneth Marks)
The hon. Member for Hornsey (Mr. Rossi) started by saying that we all agree that there must be more public support of and public expenditure on the construction industry. The same answer is given in almost every debate. In a debate on education we would be told that we should employ more teachers and should spend more on books. In a debate on social services the same answer would be given by hon. Members on both sides of the House. In a debate on rural transport, there would be demands for more public expenditure on such transport, for which hon. Members opposite have just voted. The hon. Member for Hornsey demanded more Government support of the construction industry. He talked about tax concessions which have already been granted.
This has been a useful debate and many useful suggestions have been made, not only to my Department, but to the Department of Trade and to the Foreign Office. I assure the House that the concern which has been expressed about the problems of the industry is shared by the Government. We are also concerned about the unacceptably high level of unemployment and the loss of capacity, which can well have bad effects later. There have been criticisms of the industry itself, and I hope that the industry will note them.
I congratulate the hon. Member for Ashford (Mr. Speed). He has been much more forthcoming than some of his colleagues in talking about the alternatives to public expenditure. We have heard a great deal from the Opposition about the effect which the cuts in public expenditure are having on the construction industry. It is Conservative policy to reduce public expenditure even further. But, according to the hon. Gentleman, if Conservative policy is carried out, instead of the cuts we have made, parents will face substantial increases in the cost of school meals, there will be substantial increases in bus and rail fares, higher prescription charges and increased rents. The hon. Member for Hornsey mentioned 167 unemployment benefit, though he did not say whether he would cut it.
I do not know whether the Shadow Environment Ministers have a different policy from that of the Leader of the Opposition or from that of the party in the country, but it will be interesting to learn whether Conservative candidates iii the local elections are tonight demanding increases in the cost to parents of school meals and in bus and rail fares, higher prescription charges and increased rents.
The Government very much regretted the necessity for the measures taken last year which reduced public sector construction programmes. In December we needed to reduce the public sector borrowing requirement quickly and convincingly and the ways of doing so were strictly limited. Cuts in social benefits would have been extremely hard on those least able to bear them. They would not help in any future discussions on pay. Other cuts in revenue expenditure would generally have had a greater effect on employment than capital cuts, as well as being slower to take effect.
On balance the Government believe that the package which emerged was the least objectionable way of securing the necessary savings. The cuts that we made were not the first cuts that the construction industry has seen during the past few years. The hon. Member for Folkestone and Hythe (Mr. Costain) talked about the flywheel effect. We had that effect as a result of the cuts made by the Conservative Government in October 1973 of £100 million, £180 million at current prices. Only two months later, in December 1973, there was another cut of £400 million. A 20 per cent. cut in all capital programmes for three years was made. The total cut in capital expenditure was £850 million.
Conservative Members have talked about a time lag of 18 months in the effect of cuts and advances in public expenditure in the construction industry. That has certainly had an effect over a great length of time. It is true that this Government have made cuts in the past few months, but there have also been increases where they were needed. There was recently the £100 million for the inner cities and the £30 million announced by my hon. Friend today.
168 The hon. Member for Folkestone and Hythe talked about the need for us to recognise the construction industry and not simply the building industry. I agree with him. One of the problems in the industry has been the cutback in the roads programme. There we had to find a considerable cut, and what was my own Department had to find that cut. The hon. Gentleman also talked about the constant changes in clients' demands. As a Minister with responsibility for the Property Services Agency, I can echo what he says, but it is not confined only to the public sector.
My hon. Friend the Member for Rochester and Chatham (Mr. Bean) made what was acknowledged from the other side as a most valuable speech. It is one that we shall all study carefully. My hon. Friend had many ideas about how to improve backing for the industry. I accept his point about the need for the industry to be ready for an upturn. He also mentioned the question of apprentices, as did other hon. Members. I want to say that the public sector has a finer apprenticeship record than the private sector.
The hon. Member for North Fylde (Mr. Clegg) said that one apprentice had been employed in the whole of his area during a three-month period. I wondered whether the Wyre District Council had a direct labour organisation because if it had it would have found that the record of direct labour organisations throughout the country in the training of apprentices has been the saving of much of the training scheme. The Government have given a high priority to training. They provided an additional £55 million last year to maintain training in industry despite the recession. More than £6 million was allocated to the construction industry. They have taken a range of measures, including the payment of premium grants to employers who recruit more apprentices than their normal intake, and sponsoring initial training themselves by giving training awards.
Such figures as we have suggest that the intake of trainees is holding up, but there has been a problem of redundant apprentices. Special measures have been taken, and so far nearly half of those declared redundant and notified to the CITB have been found alternative jobs.
169 The hon. Gentleman also mentioned late payments to contractors by public sector clients. In the Property Services Agency we have taken steps to ensure that payments are made promptly, and local authorities have been encouraged to do the same. Quite often the delays are caused by additional claims made by contractors, sometimes not properly substantiated.
My hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and Liverpool, Garston (Mr. Loyden) mentioned the particularly serious situation in Merseyside. I visited Merseyside recently in connection with the work that the Property Services Agency is doing on Civil Service dispersal. There is especially in Merseyside the problem of the unemployed skilled worker. Merseyside has a higher proportion of unemployed in general than the rest of the North-West and a much higher proportion of skilled craft workers. We hope that what the Government have tried to do with their policies on inner cities and dispersal and ending the "lump" has contributed towards dealing with the problem.
The hon. Member for Isle of Wight (Mr. Ross) made some interesting comments on his researches into the tax certificate question. There is no doubt that the certificate will have a good effect in helping to get rid of some of the worst practices in the industry.
§ Mr. Carter-Jones rose—
§ the money is used for insulation in their buildings.
§ My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) and a number of other hon. Members, in eluding the hon. Member for Hornsey, talked about the need for encouragement of overseas markets. We have been giving encouragement. The Construction Exports Advisory Board, for example, reported in January of this year that it had looked at the adequacy of market intelligence made available by the Government to the construction industry. It has brought to the attention of diplomatic posts abroad the need for information about export opportunities to be notified quickly and to be more closely related to the special requirements of construction exporters. I have taken on board all that was said about the need, and I am sure that my right hon. Friend the Secretary of State for Trade will do the same.
§ My hon. Friend also asked about type approval schemes and mandatory controls. I assure her that my right hon. Friend is examining the question of type approval, and we shall take it up when necessary.
§ As a number of hon. Members have said, there is no easy way to solve the industry's problems. There is no panacea. Too sharp an increase in demand would not be in the best interests of the industry or the nation. We saw what happened under the Conservatives, with the escalation of costs and shortages when the industry was over-heated in 1973.
§ The main boost to the construction industry will come from general economic recovery, which is the prime concern of our economic policies. We are concerned to create an economic climate in which all sectors of industry can plan with confidence, and in which interest rates and inflation are kept down.
§ Question put, That this House do now adjourn:—
§ The House divided: Ayes 286, Noes 295.175
|Division No. 117]||AYES||[9.59 p.m.|
|Adley, Robert||Beith, A. J.||Boscawen, Hon Robert|
|Alison, Michael||Bell, Ronald||Bottomley, Peter|
|Amery, Rt Hon Julian||Bennett, Sir Frederic (Torbay)||Bowden, A. (Brighton, Kemptown)|
|Arnold, Tom||Bennett, Dr Reginald (Fareham)||Boyson, Dr Rhodes (Brent)|
|Atkins, Rt Hon H. (Spelthorne)||Benyon, W.||Braine, Sir Bernard|
|Awdry, Daniel||Berry, Hon Anthony||Brittan, Leon|
|Bain, Mrs Margaret||Bitten, John||Brocklebank-Fowler, C.|
|Baker, Kenneth||Biggs-Davison, John||Brooke, Peter|
|Banks, Robert||Body, Richard||Brotherton, Michael|
|Brown, Sir Edward (Bath)||Hawkins, Paul||Oppenheim, Mrs Sally|
|Bryan, Sir Paul||Hayhoe, Barney||Osborn, John|
|Buck, Antony||Heath, Rt Hon Edward||Page, John (Harrow West)|
|Budgen, Nick||Hicks, Robert||Page, Rt Hon R. Graham (Crosby)|
|Bulmer, Esmond||Higgins, Terence L.||Page, Richard (Workington)|
|Burden, F. A.||Hodgson, Robin||Pardoe, John|
|Butler, Adam (Bosworth)||Holland, Philip||Parkinson, Cecil|
|Carlisle, Mark||Hordern, Peter||Pattie, Geoffrey|
|Chalker, Mrs Lynda||Howe, Rt Hon Sir Geoffrey||Penhaligon, David|
|Channon, Paul||Howell, David (Guildford)||Percival, Ian|
|Churchill, W. S.||Howell, Ralph (North Norfolk)||Peyton, Rt Hon John|
|Clark, Alan (Plymouth, Sutton)||Howells, Geraint (Cardigan)||Pink, R. Bonner|
|Clark, William (Croydon S)||Hunt, David (Wirral)||Price, David (Eastleigh)|
|Clarke, Kenneth (Rushcliffe)||Hunt, John (Bromley)||Prior, Rt Hon James|
|Clegg, Walter||Hurd, Douglas||Pym, Rt Hon Francis|
|Cockcroft, John||Hutchison, Michael Clark||Raison, Timothy|
|Cooke, Robert (Bristol W)||Irving, Charles (Cheltenham)||Rathbone, Tim|
|Cope, John||James, David||Rawlinson, Rt Hon Sir Peter|
|Cordle, John H.||Jenkin, Rt Hon P. (Wanst'd & W'df'd)||Rees, Peter (Dover & Deal)|
|Cormack, Patrick||Jessel, Toby||Rees-Davies, W. R.|
|Corrie, John||Johnson Smith, G. (E Grinstead)||Reid, George|
|Costain, A. P.||Jones, Arthur (Daventry)||Renton, Rt Hon Sir D. (Hunts)|
|Crawford, Douglas||Jopling, Michael||Renton, Tim (Mid-Sussex)|
|Critchley, Julian||Joseph, Rt Hon Sir Keith||Rhodes James, R.|
|Crouch, David||Kaberry, Sir Donald||Rhys Williams, Sir Brandon|
|Crowder, F. P.||Kellett-Bowman, Mrs Elaine||Ridley, Hon Nicholas|
|Davies, Rt Hon J. (Knutstord)||Kershaw, Anthony||Ridsdale, Julian|
|Dean, Paul (N Somerset)||Kilfedder, James||Rifkind, Malcolm|
|Dodsworth, Geoffrey||Kimball, Marcus||Rippon, Rt Hon Geoffrey|
|Douglas-Hamilton, Lord James||King, Evelyn (South Dorset)||Roberts, Wyn (Conway)|
|Drayson, Burnaby||King, Tom (Bridgwater)||Rodgers, Sir John (Sevenoaks)|
|du Cann, Rt Hon Edward||Kitson, Sir Timothy||Ross, Stephen (Isle of Wight)|
|Durant, Tony||Knight, Mrs Jill||Rossi, Hugh (Hornsey)|
|Dykes, Hugh||Knox, David||Rost, Peter (SE Derbyshire)|
|Eden, Rt Hon Sir John||Lamont, Norman||Royle, Sir Anthony|
|Edwards, Nicholas (Pembroke)||Langford-Holt, Sir John||Sainsbury, Tim|
|Elliott, Sir William||Latham, Michael (Melton)||Scott, Nicholas|
|Emery, Peter||Lawrence, Ivan||Scott-Hopkins, James|
|Evans, Gwynfor (Carmarthen)||Lawson, Nigel||Shaw, Giles (Pudsey)|
|Ewing, Mrs Winifred (Moray)||Lester, Jim (Beeston)||Shelton, William (Streatham)|
|Eyre, Reginald||Lewis, Kenneth (Rutland)||Shepherd, Colin|
|Fairbairn, Nicholas||Lloyd, Ian||Shersby, Michael|
|Fairgrieve, Russell||Luce, Richard||Silvester, Fred|
|Farr, John||McAdden, Sir Stephen||Sims, Roger|
|Fell, Anthony||MacCormick, Iain||Sinclair, Sir George|
|Finsberg, Geoffrey||McCrindle, Robert||Skeet, T. H. H.|
|Fisher, Sir Nigel||Macfarlane, Neil||Smith, Dudley (Warwick)|
|Fletcher, Alex (Edinburgh N)||MacGregor, John||Smith, Timothy John (Ashfield)|
|Fletcher-Cooke, Charles||Mackay, Andrew James||Speed, Keith|
|Fookes, Miss Janet||Macmillan, Rt Hon M. (Farnham)||Spence, John|
|Forman, Nigel||McNair-Wilson, M. (Newbury)||Spicer, Jim (W Dorset)|
|Fowler, Norman (Sutton C'f'd)||McNair-Wilson, P. (New Forest)||Spicer, Michael (S Worcester)|
|Fox, Marcus||Madel, David||Sproat, Iain|
|Fraser, Rt Hon H. (Stafford & St)||Marshall, Michael (Arundel)||Stainton, Keith|
|Freud, Clement||Marten, Neil||Stanbrook, Ivor|
|Fry, Peter||Mates, Michael||Stanley, John|
|Galbraith, Hon T. G. D.||Mather, Carol||Steel, Rt Hon David|
|Gardiner, George (Reigate)||Maude, Angus||Steen, Anthony (Wavertree)|
|Gardner, Edward (S Fylde)||Maudling, Rt Hon Reginald||Stewart, Ian (Hitchin)|
|Gilmour, Rt Hon Sir Ian (Chesham)||Mawby, Ray||Stokes, John|
|Gilmour, Sir John (East Fife)||Maxwell-Hyslop, Robin||Stradling Thomas, J.|
|Glyn, Dr Alan||Mayhew, Patrick||Tapsell, Peter|
|Godber, Rt Hon Joseph||Meyer, Sir Anthony||Taylor, R. (Croydon NW)|
|Goodhart, Philip||Miller, Hal (Bromsgrove)||Tebbit, Norman|
|Goodhew, Victor||Mills, Peter||Temple-Morris, Peter|
|Goodlad, Alastair||Mitchell, David (Basingstoke)||Thatcher, Rt Hon Margaret|
|Gorst, John||Moate, Roger||Thomas, Dafydd (Merioneth)|
|Gow, Ian (Eastbourne)||Monro, Hector||Thomas, Rt Hon P. (Hendon S)|
|Gower, Sir Raymond (Barry)||Montgomery, Fergus||Thompson, George|
|Grant, Anthony (Harrow C)||Moore, John (Croydon C)||Thorpe, Rt Hon Jeremy (N Devon)|
|Gray, Hamish||More, Jasper (Ludlow)||Townsend, Cyril D.|
|Grieve, Percy||Morgan, Geraint||Trotter, Neville|
|Griffiths, Eldon||Morgan-Giles, Rear-Admiral||van Straubenzee, W. R.|
|Grimond, Rt Hon J.||Morris, Michael (Northampton S)||Vaughan, Dr Gerard|
|Grist, Ian||Morrison, Charles (Devizes)||Wakeham, John|
|Grylls, Michael||Morrison, Hon Peter (Chester)||Walder, David (Clitheroe)|
|Hall, Sir John||Mudd, David||Walker, Rt Hon P. (Worcester)|
|Hall-Davis, A. G. F.||Neave, Airey||Walker-Smith, Rt Hon Sir Derek|
|Hamilton, Michael (Salisbury)||Nelson, Anthony||Wall, Patrick|
|Hampson, Dr Keith||Neubert, Michael||Walters, Dennis|
|Hannam, John||Newton, Tony||Warren, Kenneth|
|Harrison, Col Sir Harwood (Eye)||Normanton, Tom||Watt, Hamish|
|Hastings, Stephen||Nott, John||Weatherill, Bernard|
|Havers, Sir Michael||Onslow, Cranley||Wells, John|
|Whitelaw, Rt Hon William||Wood, Rt Hon Richard||TELLERS FOR THE AYES:|
|Wiggin, Jerry||Young, Sir G. (Ealing, Acton)||Mr. Spencer Le Marchant and|
|Wigley, Dafydd||Younger, Hon George||Mr. Michael Roberts.|
|Abse, Leo||Ellis, Tom (Wrexham)||Loyden, Eddie|
|Allaun, Frank||English, Michael||Luard, Evan|
|Anderson, Donald||Ennals, David||Lyon, Alexander (York)|
|Archer, Peter||Evans, Fred (Caerphilly)||McCartney, Hugh|
|Armstrong, Ernest||Evans, Ioan (Aberdare)||McDonald, Dr Oonagh|
|Ashley, Jack||Evans, John (Newton)||McElhone, Frank|
|Ashton, Joe||Ewing, Harry (Stirling)||MacFarquhar, Roderick|
|Atkins, Ronald (Preston N)||Faulds, Andrew||McGuire, Michael (Ince)|
|Atkinson, Norman||Fernyhough, Rt Hon E.||MacKenzie, Gregor|
|Bagier, Gordon A. T.||Fitch, Alan (Wigan)||Mackintosh John P.|
|Barnett, Guy (Greenwich)||Fitt, Gerard (Belfast W)||McMillan, Tom (Glasgow C)|
|Barnett, Rt Hon Joel (Heywood)||Flannery, Martin||McNamara, Kevin|
|Bates, Alf||Fletcher, Ted (Darlington)||Madden, Max|
|Bean, R. E.||Foot, Rt Hon Michael||Magee, Bryan|
|Benn Rt Hon Anthony Wedgwood||Ford, Ben||Maguire, Frank (Fermanagh)|
|Bennett, Andrew (Stockport N)||Forrester, John||Mahon, Simon|
|Bidwell, Sydney||Fowler, Gerald (The Wrekin)||Mallalieu, J. P. W.|
|Bishop, E. S.||Fraser, John (Lambeth, N'w'd)||Marks, Kenneth|
|Blenkinsop, Arthur||Freeson, Reginald||Marshall, Dr Edmund (Goole)|
|Boardman, H.||Garrett, John (Norwich S)||Marshall, Jim (Leicester S)|
|Booth, Rt Hon Albert||Garrett, W. E. (Wallsend)||Maynard, Miss Joan|
|Boothroyd, Miss Betty||George, Bruce||Meacher, Michael|
|Bottomley, Rt Hon Arthur||Gilbert, Dr John||Mellish, Rt Hon Robert|
|Boyden, James (Bish Auck)||Ginsburg, David||Mendelson, John|
|Bradley, Tom||Golding, John||Mikardo, Ian|
|Bray, Or Jeremy||Gould, Bryan||Millan, Rt Hon Bruce|
|Broughton, Sir Alfred||Gourlay, Harry||Miller, Dr M. S. (E Kilbride)|
|Brown, Hugh D. (Provan)||Graham, Ted||Miller, Mrs Millie (Ilford N)|
|Brown, Robert C. (Newcastle W)||Grant, George (Morpeth)||Mitchell, Austin Vernon (Grimsby)|
|Brown, Ronald (Hackney S)||Grant, John (Islington C)||Mitchell, R. C. (Soton, Itchen)|
|Buchan, Norman||Grocott, Bruce||Molloy, William|
|Buchanan, Richard||Hamilton, W. W. (Central Fife)||Moonman, Eric|
|Butler, Mrs Joyce (Wood Green)||Hardy, Peter||Morris, Alfred (Wythenshawe)|
|Callaghan, Rt Hon J. (Cardiff SE)||Harrison, Walter (Wakefield)||Morris, Charles R. (Openshaw)|
|Callaghan, Jim (Middleton & P)||Hart, Rt Hon Judith||Morris, Rt Hon J. (Aberavon)|
|Campbell, Ian||Hattersley, Rt Hon Roy||Moyle, Roland|
|Canavan, Dennis||Hatton, Frank||Mulley, Rt Hon Frederick|
|Cant, R. B.||Hayman, Mrs Helene||Murray, Rt Hon Ronald King|
|Carmichael, Neil||Healey, Rt Hon Denis||Newens, Stanley|
|Carter, Ray||Heffer, Eric S.||Noble, Mike|
|Carter-Jones, Lewis||Hooley, Frank||Oakes, Gordon|
|Cartwright, John||Horam, John||Ogden, Eric|
|Castle, Rt Hon Barbara||Hoyle, Doug (Nelson)||O'Halloran, Michael|
|Ciemitson, Ivor||Huckfield, Les||Orbach, Maurice|
|Cocks, Rt Hon Michael||Hughes, Rt Hon C. (Anglesey)||Orme, Rt Hon Stanley|
|Cohen, Stanley||Hughes, Mark (Durham)||Ovenden, John|
|Coleman, Donald||Hughes, Robert (Aberdeen N)||Padley, Walter|
|Colquhoun, Ms Maureen||Hughes, Roy (Newport)||Palmer, Arthur|
|Conlan, Bernard||Hunter, Adam||Park, George|
|Cock, Robin F. (Edin C)||Irvine, Rt Hon Sir A. (Edge Hill)||Parker, John|
|Corbett, Robin||Irving, Rt Hon S. (Dartford)||Parry, Robert|
|Cowans, Harry||Jackson, Colin (Brighouse)||Pavitt, Laurie|
|Cox, Thomas (Tooting)||Jackson, Miss Margaret (Lincoln)||Pendry, Tom|
|Craigen, Jim (Maryhill)||Janner, Greville||Perry, Ernest|
|Crawshaw, Richard||Jay, Rt Hon Douglas||Phipps, Dr Colin|
|Cronin, John||Jeger, Mrs Lena||Prescott, John|
|Crowther, Stan (Rotherham)||Jenkins, Hugh (Putney)||Price, C. (Lewisham W)|
|Cryer, Bob||John, Brynmor||Price, William (Rugby)|
|Cunningham, G. (Islington S)||Johnson, James (Hull West)||Radice, Giles|
|Cunningham, Dr J. (Whiteh)||Johnson, Walter (Derby S)||Rees, Rt Hon Merlyn (Leeds S)|
|Davidson, Arthur||Jones, Alec (Rhondda)||Richardson, Miss Jo|
|Davies, Bryan (Enfield N)||Jones, Barry (East Flint)||Roberts, Albert (Normanton)|
|Davies, Denzil (Llanelli)||Jones, Dan (Burnley)||Roberts, Gwilym (Cannock)|
|Davies, Ifor (Gower)||Kaufman, Gerald||Robertson, John (Paisley)|
|Davis, Clinton (Hackney C)||Kelley, Richard||Robinson, Geoffrey|
|Deakins, Eric||Kerr, Russell||Roderick, Caerwyn|
|Dean, Joseph (Leeds West)||Kilroy-Silk, Robert||Rodgers, George (Chorley)|
|de Freitas, Rt Hon Sir Geoffrey||Kinnock, Neil||Rodgers, Rt Hon William (Stockton)|
|Dell, Rt Hon Edmund||Lambie, David||Rooker, J. W.|
|Dempsey, James||Lamborn, Harry||Roper, John|
|Doig, Peter||Lamond, James||Rose, Paul B.|
|Dormand, J. D.||Latham, Arthur (Paddington)||Ross, Rt Hon W. (Kilmarnock)|
|Douglas-Mann, Bruce||Leadbitter, Ted||Rowlands, Ted|
|Dunnett, Jack||Lee, John||Ryman, John|
|Dunwoody, Mrs Gwyneth||Lestor, Miss Joan (Eton and Slough)||Sandelson, Neville|
|Eadie, Alex||Lever, Rt Hon Harold||Sedgemore, Brian|
|Edge, Geoff||Lewis, Ron (Carlisle)||Selby, Harry|
|Edwards, Robert (Wolv SE)||Lipton, Marcus||Shaw, Arnold (Ilford South)|
|Ellis, John (Brigg & Scun)||Lomas, Kenneth||Sheldon, Rt Hon Robert|
|Shore, Rt Hon Peter||Thomas, Mike (Newcastle E)||White, James (Pollok)|
|Short, Mrs Renée (Wolv NE)||Thomas, Ron (Bristol NW)||Whitehead, Phillip|
|Silkin, Rt Hon John (Deptford)||Thorne, Stan (Preston South)||Whitlock, William|
|Silkin, Rt Hon S. C. (Dulwich)||Tierney, Sydney||Willey, Rt Hon Frederick|
|Silverman, Julius||Tinn, James||Williams, Rt Hon Alan (Swansea W)|
|Skinner, Dennis||Tomney, Frank||Williams, Alan Lee (Hornch'ch)|
|Small, William||Torney, Tom||Williams, Rt Hon Shirley (Hertford)|
|Smith, John (N Lanarkshire)||Tuck, Raphael||Williams, Sir Thomas (Warrington)|
|Snape, Peter||Urwin, T. W.||Wilson, Alexander (Hamilton)|
|Spearing, Nigel||Varley, Rt Hon Eric G.||Wilson, Rt Hon Sir Harold (Huyton)|
|Spriggs, Leslie||Wainwright, Edwin (Dearne V)||Wilson, William (Coventry SE)|
|Stallard, A. W.||Walden, Brian (B'ham, L'dyw'd)||Wise, Mrs Audrey|
|Stewart, Rt Hon M. (Fulham)||Walker, Harold (Doncaster)||Woodall, Alec|
|Stoddart, David||Walker, Terry (Kingswood)||Woof, Robert|
|Stott, Roger||Ward, Michael||Wrigglesworth, Ian|
|Strang, Gavin||Watkins, David||Young, David (Bolton E)|
|Strauss, Rt Hon G. R.||Watkinson, John|
|Summerskill, Hon Dr Shirley||Weetch, Ken||TELLERS FOR THE NOES:|
|Swain, Thomas||Weitzman, David||Mr. James Hamilton and|
|Taylor, Mrs Ann (Bolton W)||Wellbeloved, James||Mr. Joseph Harper.|
|Thomas, Jeffrey (Abertillery)||White, Frank R. (Bury)|