HC Deb 08 March 1978 vol 945 cc1399-402
1. Mr. Durant

asked the Secretary of State for the Environment what proposal he has to boost construction industry output.

5. Mr. Kenneth Lewis

asked the Secretary of State for the Environment what measures he proposes to increase the confidence of the construction industry.

15. Mr. Costain

asked the Secretary of State for the Environment what measures he proposes to increase the confidence of the construction industry.

17. Mr Michael McNair-Wilson

asked the Secretary of State for the Environment what proposals he has to boost construction industry output.

The Secretary off State for the Environment (Mr. Peter Shore)

The £800 million of additional public expenditure which has been allocated in the past year for the period up to 1980 will provide a stable level of public sector demand for the construction industry. This will certainly assist in restoring the industry's confidence.

Mr. Durant

Is the Minister aware that following a number of bankruptcies in the Berkshire area there is still no confidence in the future of this industry? Therefore, will he take three simple steps to restore confidence? Will he, first, drop the proposals to nationalise this industry; secondly, rescind the Community Land Act; and, thirdly, look at the whole question of planning procedures in order to accelerate them?

Mr. Shore

The first two supplementary points put by the hon. Gentleman are, with respect to him, wholly irrelevant. On his third point, I am only too willing to examine our planning procedures so that we can accelerate them.

Mr. Lewis

Is the Minister aware that the utter depression that exists in this industry will cause more problems in the future in terms of skill, because the young people are not getting the apprenticeships that they ought to get and will be short of skills at a later date?

Mr. Shore

It is a very serious matter. We are very much concerned to encourage industry and the various public sectors of the industry to maintain the right number of people under training for these skills and to encourage the acquisition of skills in the training centres outside the industry.

Mr. Costain

Does the Secretary of State appreciate that if, under his blacklisting scheme, a nominated sub-contractor—that is, a sub-contractor which his Department instructs a main contractor to employ—breaks the Pay Code, the Secretary of State is claiming the right to break the main contract? Is not that absolutely abortive of human rights? Is that the way to bring confidence to the industry?

Mr. Shore

I discussed this matter with representatives of the industry as recently as 28th February. There is a problem in relation to sub-contractors. As the hon. Gentleman knows, these matters are still under discussion between Government Ministers and the CBI.

Mr. McNair-Wilson

Is the Secretary of State aware that the Berkshire branch of the Royal Institute of British Architects believes that the present fiscal arrangements discriminate against the construction industry? What discussions has he had with the Chancellor about applying full depreciation allowances for new industrial and commercial buildings in the same way as plant and equipment are treated?

Mr. Shore

We have to try to get this matter in perspective. It is noticeable that over a number of years the discrimination to which the hon. Gentleman refers has been accepted by successive Governments in favour of the encouragement of investment. The fact is that there is now a 50 per cent. depreciation arrangement in year one for firms engaging in new factory building. This is a matter that we keep under review, and I am in touch with the Chancellor about it.

Mr. Hardy

Does my right hon. Friend agree that it would be rather more seemly and a trifle less contemptible if Conservative Members were to encourage Conservative-controlled local authorities to engage in a higher level of construction activity than the very deplorable level which many of them undertake at present?

Mr. Shore

I entirely agree with my hon. Friend. This is particularly relevant in the whole area of house building, particularly local authority house building. However, as far as I can see, there is a very deliberate discouragement from Conservative Central Office and from Conservative spokesmen for local authorities to build.

Mr. Blenkinsop

I very much welcome what my right hon. Friend the Secretary of State has already done in releasing more resources in this area. Does he agree that a great deal more could be done, above all on house repairs, where a great deal of new employment could be encouraged, with valuable results?

Mr. Shore

That is why we raised the limits and generally made the conditions easier last July. I have reason to believe that there will be an increasing uptake in improvement work during the coming year.

Mr. Heseltine

Does the Secretary of State recognise that, far from the responsibility of the Conservative-controlled local authorities, it is the climate within which those authorities are expected to trade that has created the downturn in construction activity, and that the climate is one for which this Government are responsible? Does he understand that the Labour Party manifesto, on which he was elected, promised a stable work force for the construction industry? Why should his assurance be any more valid today than in 1974?

Mr. Shore

That comes ill from the hon. Gentleman, representing a party whose last major act of the almost forgotten Chancellor—the then Mr. Anthony Barber—was to cut public expenditure by £1,150 million in December 1973, of which over £850 million was in construction. Let us hear no more about stability from the hon. Gentleman.

As for the future and what the hon. Gentleman said about the climate, at least part of the climate of confidence is reflected in industrial investment. In the past year investment by manufacturing industry in new building increased by 18 per cent.

Mr. Madden

Is not the fact of the matter that the fortunes of the construction industry rest to a very large extent on the levels of public expenditure? In that regard, will my right hon. Friend tell us whether a massive programme of improvement and modernisation in both the public and private sectors would not only be socially useful but would help to combat high levels of unemployment among building workers? What is happening in that area?

Mr. Shore

In reply to the original Question, I indicated that we had in fact made a substantial increase in public expenditure to help the construction industry in this coming year—1978–79—and that it would continue at a more stable level into 1979–80 and beyond. I believe that that will help the industry. As my hon. Friend knows, we also wish to see a considerable pick-up in investment in manufacturing industry. The figure that I gave indicates that there are certainly signs of that taking place.