CONSTRUCTION INDUSTRY

HC Deb 12 June 1980 vol 986 cc883-950

Mr. Deputy Speaker (Mr. Bryant Godman Irvine)

Mr. Speaker has selected the amendment in the name of the Prime Minister.

7.15 pm

Mr. Roy Hattersley (Birmingham, Sparkbrook)

I beg to move, That this House condemns the policies of Her Majesty's Government which have led to a widespread and accelerating decline in the building industry, and have resulted in the number of unemployed building workers rising to over 200,000 ; deplores the massive cuts in council house building planned by the Government for the current year and future years, the proposed reductions in public sector capital works and the intended reduction in publicly-financed civil engineering projects which have created the worst prospects for the building industry and its employees since the previous depression of the 1930s ; and calls upon the Government to introduce and implement policies which will protect the industry from imminent collapse. The building industry is facing its worst crisis since the slump of the 1930s. Not even the Secretary of State for the Environment, whose passion for providing clear and accurate information to the House he is normally able to keep well under control, will be able to juggle the figures tonight to suggest otherwise.

I notice that the amendment does not attempt to argue with the premise on which our complaint is based. It is an amalgamation of ritual abuse and shallow thinking. I can only assume that the Secretary of State wrote it himself.

In case the right hon. Gentleman is tempted to argue that the deterioration in the building industry, and the contraction industry in general, is not as disastrous and potentially disastrous as I insist, let me begin by reminding him of the construction industry's recession as defined by the National Federation of Building Trade Employers and the Federation of Civil Engineering Contractors, two bodies not notorious for their support of the Labour Party. In the bulletin that they provided especially for today's debate, they make two points : The civil engineering industry…is continuing to decline to an all time low—all time lows in order books, in employment and in plant utilisation. Their second point is equally gloomy : The building industry has turned sharply downwards after two years of modest recovery … and unprecedented reversal in the space of six months". I suspect that both federations are beginning to wonder whether all the money that they spent on securing a Tory victory was a wise investment.

The gloom expressed by those two federations is echoed, and in a sense preceded by and given an authoritative voice, by the National Economic Development Office, whose figures are clear, and describe the most serious crisis facing the industry. It makes the point beyond doubt that conditions in the building industry are bad, likely to get worse and eventually much worse. Providing the statistics at 1975 prices, NEDO tells us that in 1982 construction output will be around £10,755 million. In the last year of the Labour Government, on comparable figures, output was £1,200 million more. If one compares the NEDO figures of what is at the end of the road followed by the Government with what was there when they came into office, thre can be no argument that by 1982 planned output in the construction industry will be 5 per cent. worse than at any time during the previous 15 years.

All reports from the industry—and I shall be interested in the Secretary of State's comments—suggest that as a result of the sudden decline, there are, or shortly will be, about 200,000 unemployed building workers. That is certainly the estimate of two employers' federations and of the trade union. The Employment Gazette states that the interpretation of employment and unemployment figures in the building and construction industry is notoriously difficult. I hope that the Secretary of State will attempt an estimate so that we can see whether the employers and unions are right when they say that we face having 200,000 or more unemployed building workers-Mr. Michael Morris (Northampton, South): Will the right hon. Gentleman be covering in his speech the fact that in February 1977 there were 227,000 unemployed workers in the construction industry?

Mr. Hattersley

I am tempted to say "wait and see", but in order to gratify the hon. Gentleman, let me assure him that I shall be referring to that. It is no part of my argument to suggest that there was not a decline in the building industry during the five years of Labour government. However, I shall be interested to hear the Secretary of State's usual justification, which goes something like this : since there was a small decline in the previous five years, that is an absolute justification for a massive decline now. That is a point of logic which I am sure the right hon. Gentleman will develop, and no doubt the hon. Member for Northampton, South (Mr. Morris) will want to join him in making that fatuous point.

I return to the question of unemployed building workers. There are 200,000 or more men who could and should be building houses, hospitals and schools and doing all the things that the country desperately needs.

Much of that unemployment and all the reduction in output between 1978 and 1982 is the result of wilful and intentional Government policy. The construction industry suffers grievously from two Government decisions—the deliberate creation of a slump as an alternative to a genuine economic policy and the co-ordinated attack on public expenditure which is a product of the Government's manic preoccupation with money supply and the public sector borrowing requirement.

As the Government have remorselessly depressed the economy, the building industry has increasingly become a sort of economic regulator, deliberately forced into decline to slow down the pace of the rest of manufacturing industry and to help limit output throughout the economy as a whole.

No sector of the economy suffers more damage from what passes in Government circles for economic management—uniquely high interest rates, an overvalued pound and, above all, accelerating inflation rates. I am sure that the Secretary of State agrees that those factors, particularly accelerating inflation rates and the level of interest rates, have a most malign, indeed disastrous, influence on the building industry.

When the construction industry was last debated in the House, the right hon. Gentleman was precise about the problem. He said that the industry was suffering from a rate of inflation that is incompatible with the survival of our nation and the existence of a free society ".—[Official Report, 26 November 1976 ; Vol. 921 c. 366.] The inflation rate that the right hon. Gentleman was referring to was 15 per cent—about two-thirds of the rate that the Government have managed over the past year.

The right hon. Gentleman went on to dilate more about the problems of the building industry by saying : in Britain, virtually alone of the the world's major countries, it now costs almost 18 per cent. to borrow money to build houses. Those were the days. I hope that the Secretary of State will tell us what has gone wrong since then. [HON. MEMBERS : "Clegg ".] Perhaps the right hon. Gentleman will also comment on the third point of his speech and perhaps he will have an answer as incisive and intel-lecutal as "Clegg" for that as well. He said : few people…can face the consequences of an over 12 per cent. mortgage interest rate."—[Official Report, 26 November 1976 ; Vol. 921, c. 366–367.] It was, he said, no wonder that fewer houses were being built. How many home-buyers does the right hon. Gentleman think can afford the consequences of the mortgage rate that his Government have managed over the past six months? More important, how long does he think that that rate will continue?

I was going to say—I confess that it is in my notes—that I hoped that the Secretary of State would spare us the bald assertion that no economic policy other than that managed by the Government would see us through these difficult days. But it is all too clear from his sedentary interventions up to now that he intends to make exactly that point.

The idea that the Government have somehow found the magic secret of economic success grows less plausible and more ridiculous every day, as every economic indicator turns in the wrong direction. The Government are also losing friends on the economic front with every day that passes.

The London Business School, once the fount of all Tory economic wisdom, tells the Government that they are wrong. Conservative Back Benchers are falling over themselves to write articles for serious newspapers telling the Chancellor of the Exchequer how he could put things right. The Guardian recorded three such articles on a single day this week. What is more, half of the Cabinet no longer believe that the sole reliance on monetary policy and reductions in public expenditure will see the economy through its present difficulties.

I hope that, when the U-turn comes, the Secretary of State will not be the last boy standing on the burning deck. That is not a role which any of us would have anticipated his taking up ; and I do not think that he would carry out that function with great grace or familiarity.

Mr. Dennis Skinner (Bolsover)

My right hon. Friend talked about the Cabinet being in disarray. The Secretary of State is known as Tarzan to some because it was claimed that he was strong and was as committed to Tory policy as the Iron Lady. However, the Prime Minister found out that he was not that committed and had not been attacking local authorities as much as she wished. She sent him a note a couple of days ago——

Mr. Deputy Speaker

Order. Interventions should be brief.

Mr. Skinner

The Prime Minister said in that note that while she was away in Venice going around in gondolas and living in a place that costs £100 a night—with the British taxpayer picking up the bill—the Secretary of State had to make sure that he cut back even more than he has cut back.

Mr. Hattersley

I am not privy to those secrets, and if what my hon. Friend says is true I do not want to intrude into private grief. However, I am not sure that my hon. Friend is not making a point with which I disagree, even though that is an extraordinary state of affairs.

I read with interest the Prime Minister's statement yesterday that she would keep right on to the end of the road. It seemed to me that that statement was made with all the frenzy of a woman who was about to change her mind. I hope that when the Secretary of State makes the bald assertion that the Government's economic policy is right in every detail, he will bear that point in mind.

The building industry is being damaged for the sake of a discredited economic policy. The NFBTE said : The Government squeeze on public construction expenditure is planting the seeds of destruction for its own counter-inflation and economic policies. I do not believe that any sensible economic commentator would not agree with that view. When the Secretary of State has told us, as I am sure he will, that the Government's economic policy is moving in the right direction and that any disturbing of it would jeopardise the great successes that the Government have had over inflation exports, investment or employment, I have no doubt that he will turn to the point that does not run hand in hand with that, namely, that the situation cannot be so bad because something similar happened under the Labour Government between 1974 and 1979.

Let me repeat what I said to the hon. Member for Northampton, South. It is no part of my case to say that there was not a reduction in the activity of the construction industry over those five years, though, as all the figures show and as all the commentators agree, there was a substantial upturn during the final 18 months.

However, I do not understand the argument that, since there was once a cut, it is an excuse or a justification for cumulative cuts which pile upon the original reduction. The Opposition argue that a sector that has previously been reduced ought to be protected in the future, because otherwise one cut piles on another.

Our complaint against the Government is that, the country having lived through five years in which activity in the building industry reduced by about 2 per cent. per annum, they are trying to use that as a justification for cutting at rather more than twice the rate. That is the figure which appears in their White Paper and which is forecast by NEDO.

This is a short debate and many of my hon. Friends wish to speak. I wish to deal in the few minutes that I shall allow myself with some specific areas—[Interruption.] If the hon. Member for Northampton, South wishes to try to do better this time than he did last time, I shall willingly give way.

Mr. Michael Morris

I shall make my contribution in a minute.

Mr. Hattersley

We look forward to that with eager anticipation.

I wish to turn to specific areas that have caused the decline in the industry. They are, in part, the result of overall economic policy but also the result of the attack on public expenditure, particularly capital expenditure, enshrined in the White Paper published in March this year. Particular to all those reductions—there is a reduction across the board for all capital works—is the reduction in housing expenditure. Will the Secretary of State tell us one or two things about which he has previously been coy concerning housing expenditure over the next three years?

The right hon. Gentleman will recall that the White Paper tells us nothing about housing forecasts. It has blank columns where the forecasts ought to be found. The right hon. Gentleman has refused point blank to give estimates for new starts, new building and capital work in the years that lie ahead. I am not surprised that he has refused. I am not surprised that he is denying the House information to which it is entitled. The record as well as the prospect would be so awful that I understand exactly why the Secretary of State does not want to reveal the information.

Mr. Michael Latham (Melton)

Before the right hon. Gentleman asks too many questions, will he answer one, if only for the benefit of the hon. Member for Liverpool, Walton (Mr. Heffer)? Does "Building Britain's Future" remain Labour Party policy?

Mr. Hattersley

If the hon. Gentleman is asking me whether I believe that the public sector of the building industry should be increased, the answer is that of course I do. I had the pleasure of serving with the hon. Gentleman on 47 sittings of the Committee. He persists in asiking easy questions in a tone that implies that they are dicult to answer. Of course, I believe that there should be an extension of the public sector building industry. If he wishes, he can tell that to his friends in the building industry, together with the answer he got from me on the public ownership of land. The hon. Gentleman can keep a compendium of my sayings which I will sign and which he can pass around.

In the meantime, I wish to ask the Secretary of State some questions about housing. I understand why he will be reluctant to answer, because of the grief among Tory Members about his record. I had the privilege of appearing on a television programme with the hon. Member for Reading, North (Mr. Durant), who, I understand, is chairman of the Back Bench housing committee. The hon. Gentleman made what I regard as a definitive, as well as a most poignant, comment about the Government's housing record. He said : I am not sitting here saying I am proud of what they have done. I was so astounded by the hon. Gentleman's remarks that I checked with the BBC to make sure that those were his actual words. They were. I understand why he is not proud. I understand why that absence of pride in him produces a reticence about the figures in his right hon. Friend.

Mr. Tony Durant (Reading, North)

The right hon. Gentleman, as usual, has taken the remarks out of context. I said that, although I was not proud of the record, it is a necessary step at the present time.

Mr. Hattersley

I assure the hon. Gentleman that that is not what he said. I shall be glad to give him a transcript, if he so wishes. The absence of pride in the hon. Gentleman is worth noting. It accounts for the Secretary of State's reluctance to provide the House with details of how many houses he expects to be built over the next two years and what is the likely effect on the construction industry.

The overwhelming evidence—his right hon. Gentleman's Department's press notices, the forecasts by NEDO and the estimates of the employers—is that house building will decline in the public sector this year to new starts that barely total 40,000 or 45,000. Everyone else is prepared to make an estimate. The only absence of estimates is the Secretary of State's. The right hon. Gentleman has a special obligation. This matter affects not only the welfare and happiness of many thousands of families but an industry crucial to our future. It is an industry in which bankruptcy and unemployment increase every day.

The right hon. Gentleman has an obligation to inform the House of what he believes will be the capital allocation for public sector housing over the next two years. He has a special obligation because of events during the last 24 hours. The first was the publication on the front page of a respected and authoritative newspaper—the Financial Times—of the statement that the Government were contemplating giving up public sector building altogether. The second is the manner in which the Home Secretary floundered in his attempts to answer that question, when pressed, during the Prime Minister's Question Time today. The third is the statement that I understand was made at 10 Downing Street, during this morning's Lobby briefing, that a total moratorium on council house building is one of the matters being considered by the Government.

In the light of those three facts, the Secretary of State owes it to the House to say what are his intentions in this crucial area—an area that affects the welfare of thousands of families who need and want another house but also an area that is at the core of the stimulus that should be provided for the building industry.

It is the view of my right hon. and hon. Friend's that the controlled expansion that is possible in this country if the economy is to be run sensibly should begin with a stimulation of economic activity through wise public investment in a number of industries. First among them ought to be construction. I do not expect the Secretary of State to accept that view of the economy. I do expect him to fulfil some of his obligations to the industry, to the House and to the country by telling us what he believes to be the future of the industry. I expect that for two reasons. First, it is his duty. Secondly, I do not believe that any self-respecting Secretary of State would remain in office during a period in which council house building had been brought to a complete halt. While that would not happen to a self-respecting Secretary of State, I would not be at all surprised if it happened to this one. I share the view of the Federation of Associations of Specialists and Sub-Contractors, one of the contributing members to CABIN, which puts so much money where its mouth no longer is, in supporting the Conservative Party, in its judgment of the Secretary of State's stewardship of the building industry. It says Michael Heseltine apparently does not care about the construction industry…He does not even answer our letters…The Secretary of State only seems willing to talk to a select group of his cronies from the establishment big business end of the industry. That does not surprise me. Our view is that the small end of the industry should be expanded and helped. There should be an interest rate that enables them to succeed and survive. There should be some pump priming to provide work for both building and civil engineering. Because that is not happening and because the position is bound to deteriorate, I move this resolution.

7.37 pm

The Secretary of State for the Environment (Mr. Michael Heseltine)

I beg to move, to leave out from "That" to the end of the Question and to add instead thereof this House, recognising that a vigorous and profitable construction industry can only grow from a prosperous economy, rejects the failed and discredited prescriptions of the Opposition and supports the Government in its policies to provide a sound basis for the prosperity of the construction industry.". I thank the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) for giving the House the opportunity to discuss the construction industry. He has rightly reminded us that it is some time since we held a debate on this subject. As he recalls, I took part in that debate. There is no doubt that the construction industry is extremely diversified and has an immense influence within the economy, whether in manufacturing industry, transport, commercial property, schools or housing. It is at the heart of the economic fabric of the nation.

I have looked to see where I can agree with the right hon. Gentleman. I have great sympathy with the argument developed by parts of the construction industry over recent years that it has been too easy an option, taken by the Government in times of economic pressure, to cut new capital expenditure when they should have been pursuing policies to control excessive current expenditure.

The House will, I am sure, agree that that has been a constant element in the depressing economic record of the nation since the war. For five years the Government of whom the right hon. Gentleman was so prominent a member, pursued policies to achieve exactly that result. My discussions with many people in the building industry in recent months convince me that they understand, even if they regret the pressures that flow as a consequence and the need for a change of direction, which present economic measures are part of ensuring, if we are not to continue the downward spiral to which the hon. Member for Blackburn (Mr. Straw) contributed so conspicuously as an adviser to the last Labour Government.

We are not in dispute about whether the hon. Gentleman advised the Government, but he must be depressed that the Government that he advised managed to reduce expenditure on goods and services in their five years in office. The only reason why the Labour Government managed to put up public expenditure figures is that they borrowed so much in their five years in office that the mounting annual debt interest forced public expenditure to totally unsustainable levels. They based future growth on unrealistic assumptions.

If the Labour Party had won the last election, a Labour Government would have had to make another round of announcements of the type that they made when faced with the logic of their failed economic policies. They were totally unable to deliver the promises that now flow from their lips in Opposition. Any dispassionate analysis of what the right hon. Member for Sparkbrook says must take into account the total failure for which his Government were responsible. We are determined to break out of the vicious circle of decline.

The right hon. Gentleman might giggle now that he has no responsibility, but he should examine the record. In 1974 the output of the construction industry fell by 10 per cent. from the previous year. A year later it fell by a further 6 per cent. In several months of 1976, 1977 and 1978 unemployment in the industry was estimated to be over 220,000. A month ago it was about 190,000.

For all the language used by the right hon. Gentleman, the horror that he portrays and the shock that he suggests, he was happy for year after year to be a member of a Government who were responsible for unemployment levels in the construction industry higher than those about which he now complains. Perhaps the House should be reminded of some of the more unpalatable consequences o1 the last five years.

In 1976, the point at which the unsustainable nature of the policies that we inherited had to be recognised when the IMF was established at the Treasury, there was a cut of £2 billion in pubic expenditure. That was announced by the Government of the day and supported by the majority of Labour Members. Where did they find the £2 billion?

Mr. Hattersley

Not from the construction industry.

Mr. Heseltine

The right hon. Gentleman is in difficulty. He is new to the job. It is true that £2 billion was not lound in that way. Just £1.4 billion of the cuts fell on capital programmes.

I remind the right hon. Gentleman of the circular that my predecessor, the Secretary of State in the Labour Government, sent to local authorities explaining the policies that were necessary as a result of the early years of Labour government. It stated : The Government's aim has been to ensure, as far as possible, that the measures proposed do not have an adverse effect on employment. With the exception of certain cuts in education, the proposed reduction in expenditure affects capital rather than current expenditure figures. I am at a loss to understand what the right hon. Gentleman is trying to achieve. Is he arguing that we should cut capital spending more, so that current expenditure is higher? I gained the impression that he was criticising us for allowing capital cuts, but that was what he suggested protected employment when his Government were in power. I know that the right hon. Gentleman does not wish to weary himself with such historic facts. Before he tries to wipe the slate clean his legitimate responsibility is to check what solutions were available to him and his colleagues and which were chosen.

Mr. Haitersley

I hope that the right hon. Gentleman, in his benevolent mood, will assist further in my education in the subject on which he is an expert. One of the figures that he omitted was the difference in output between the two years—the crisis years about which he talked— 1976 and 1977. They are important.

Mr. Heseltine

That depends on whether one takes what is actually spent or the programme figures of the last Government. If the right hon. Gentleman has the figures, it would be helpful if he put them before the House. The only figures that are crucial in this respect are the overall reductions in all public expenditure programmes which the last Government's policies forced upon that Government. When they had to make reductions, they made them largely in capital programmes. No matter what they may say, or may have wanted to believe, they were forced down the spiral of disinvestment. They know that as well as I.

Mr. Durant

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) mentioned a television programme on which I appeared. He apologised on that same programme for the Labour Government's record and said that he was not very proud of it.

Mr. Heseltine

We have established that the programme was compulsive viewing. If the right hon. Gentleman apologised, that is to the good.

I was asked about a moratorium on on capital spending, particularly on local authority housing. I was asked whether the Government had considered that. Of course, the Government have considered it, for an obvious reason. When we examined the present levels of overspending in local authority budgets and considered the range of options, we were advised that in identical circumstances the last Labour Government had imposed a moratorium on capital programmes.

Mr. Jack Straw (Blackburn)

Not on council house building.

Mr. Heseltine

I did not say on council building. I said that they imposed a moratorium on capital programmes. When this Government considered the options, they were bound to consider the actions pursued by the previous Government. However, there is no question of my announcing tomorrow a capital moratorium on local government programmes. I shall send out a circular tomorrow explaining the Government's views about the projected overspend by local authorities. I shall not announce a capital moratorium tomorrow.

Mr. Straw

As the Secretary of State is not to announce a moratorium tomorrow, will he tell the House how many council houses he expects to be built in the next year?

Mr. Heseltine

That was the point that the hon. Gentleman and his right hon. Friend raised with me. He has asked me many times to give figures for the projected building of local authority houses. I have explained to the House why I will not do that, and I shall explain again. For two or three years I was the official spokesman for the Tory Opposition when my predecessor was involved in producing figures indicating what the outturns were likely to be in this circumstance. Those figures were always wrong. The reason why they were always wrong was that the only way my Department could know them was if it relied upon the details submitted by 400 local authorities.

As we are affording a degree of discretion to those authorities about how they allocate their resources, and as they will not, in many cases—particularly in the next financial year—have made up their minds about where they will allocate resources, it is ludicrous for me to go down the road which so obsessed the then Government, despite the fact that they got the figures wrong year after year.

What Opposition members cannot understand is that they continued to produce White Papers containing precise figures for the level of public expenditure in housing—divided into blocks—and when I took over responsibility for the Department of the Environment one of the first things that I found was that the level of spending on the construction of new houses by local authorities was hundreds of millions of pounds below the figure published in the White Paper. That was because local authorities took no notice of the projections in the White Paper. They made up their own minds. The Government were therefore always a long way behind the movement of opinion in local government.

It is one of the great illusions of the Labour Party that, somehow or other, that was something to do with the change of political control from Labour to Conservative in the late 1970s. The reality is that the cuts in capital programmes by Labour-controlled authorities were within one percentage point of the average cuts in Conservative-controlled authorities on housing expenditure.

I shall tell the House in the frankest language that I can use how I see the situation, because it is better to avoid producing spurious figures for the sake of answering questions to which there is genuinely no answer than to produce figures which, on any historical determination, will prove to be invalid.

I say to the right hon. Member for Sparkbrook that of course there are reductions in local authority housing expenditure programmes. That is a phenomenon that has characterised recent years. Like any Minister responsible for a spending programme, I would obviously like to have more resources to spend, but, faced with the realities of the economic situation, one must—as the Labour Party did—judge priorities. We have had to make reductions just as the previous Labour Government did.

The question with which the House and the construction industry should be pre-occupied is whether there is a way in which the industry can attain the lasting economic upturn that we seek unless we are able to create an economic climate in which there is a lasting long-term future. There is no conceivable way in which the high levels of public expenditure that have characterised recent years, together with high levels of inflation during those years, can, in the long term, do anything other than work against the best interests of the construction industry. We are determined, and we shall pursue our determination, to see through the policies which could not by now have been expected to work but which we believe will, in the medium and longer term, deliver the results that we have in mind.

Mr. Allan Roberts (Bootle)

The Secretary of State says that he will not tomorrow announce a moratorium on council house building under local authority capital programmes. Will he say that he has also ruled out the possibility of making such an announcement in the foreseeable future?

Mr. Heseltine

I shall send out a circular.

Mr. Hattersley

Answer the question.

Mr. Heseltine

I shall answer.

Mr. Gerald Kaufman (Manchester, Ardwick)

"Yes" or "No. ".

Mr. Heseltine

I need the opportunity to get out a few words in order to answer the question. I shall make clear in my circular the Government's views about the budgeted overspend by local authorities. I shall explain that when they can see what the revisions of those budgets are the Government will, in the light of circumstances, have to consider what, if anything, they should do.

Mr. Allan Roberts rose——

Mr. Heseltine

No, I shall not give way. The hon. Member for Bootle (Mr. Roberts) will understand, because his party when in government had to understand against its best wishes, though without choice, that any Government faced with the public expenditure problems that we now experience must keep the options as open as circumstances demand. It is no use Labour Members pretending that, somehow or other, they would not have done the same. They not only had to do it ; they had to do it time and time again.

I believe that the House, the country and the construction industry will understand that this is a much wider issue than that on which the debate is focused tonight. The issue is wider than the specific, though important, problem of the construction industry.

Mr. Robert Parry (Liverpool, Scotland Exchange) rose——

Mr. Heseltine

No, I really cannot give way. This is a short debate. I nearly always give way, but that means that I speak for a longer time. That does not serve the interests of right hon. and hon. Members who wish to speak. If I may be forgiven, I should like to make another important point.

If we accept, as the previous Government were forced to accept—and this Government willingly accept—that there is a need to establish a sympathetic economic climate, we must work for it. There are many things that the Government can do—and I believe that they are doing them—to ensure that when the climate improves a great range of those inhibitions which currently surround the construction industry—and did so previously—will be removed. I believe that the record of this Government will be seen to have been a good one in tackling some of the logjam that we have encountered too often in the past.

Mr. Robert Adley (Christchurch and Lymington)

I hope that my right hon. Friend will not think it impertinent of be if I intervene. He may not be aware that there are companies that have sufficient faith in the future, as a result of Government policies, to invest their money in work that is bringing considerable benefit to the construction industry. If I am allowed to quote a company with which I am connected—Commonwealth Holiday Inns of Canada—we are now investing £1 million a month in new construction in the United Kingdom. That is a mark of our faith in the future of the economy.

Mr. Heseltine

The welcome that I give to the helpful intervention of my hon. Friend the Member for Christchurch, and Lymington (Mr. Adley) is exceeded only by the disdain that I feel for Opposition Members who laugh at the idea of new investment taking place in Britain. That laughter is characteristic of hon. Members. Good news of more investment is a subject of derision to the Opposition. They will have to explain that derision on a wider stage than this.

In sector after sector the Government are tackling many of the constraints which characteristically, held back the construction industry. For the first time we are tackling the problems of unused and under-used land in our major cities. We shall have registers shortly in 21 of our largest cities, where there are opportunities not only for environmental improvement but for construction industry jobs that will follow the release of land.

We are rationalising the problems of the two-tier system in the planning machinery. We have made great changes to the industrial building allowance for premises, and we have announced proposals for enterprise zones and urban development corporations. We are rationalising and streamlining planning procedures, and we are publishing statistics which show how long it takes planning authorities to reach decisions and how long it takes my Department to reach decisions on appeal.

We are examining building controls, and we have abolished office development permits. We have greatly reduced the need for industrial development certificates, and we have just reached a voluntary agreement on the time taken by statutory undertakers to reach their conclusions with local planning authorities.

There is a whole range of activity in which the Government have acted to remove the irritants which I believe will frustrate the advance of this industry when the economic climate is right. We are reviewing the general development order, thus releasing certain small developments from the need for planning permission.

I now announce an extension of a major area of my responsibility. I should like to explain that I have now set in hand major improvements in the way in which the planning appeals system works. As from next month, planning inspectors will be able to give instant decisions in appropriate cases. When the parties ask for such a procedure and the case falls within appropriate guidelines, the inspector will give an indication of his decision right after the inquiry. This will enable the appellant and the local authority to know where they stand weeks before they otherwise would. I believe that these arrangements will apply ultimately in a large number of cases.

There are no easy solutions. I am not pretending that we have a palliative for the construction industry or the economy at large. However, I profoundly believe, as the Labour Government found, that the need to pursue economic policies that are designed to cure inflation and reduce the pre-emption of resources to the public sector are an indispensable part of returning strength to the national economy.

I believe that we shall be seen as a Government who tackled many of the administrative and legislative hurdles that obstruct the expansion of the construction industry. But I believe that we would be doing the industry the greatest possible harm if we gave the impression that within a year of coming into office we would give in and implement the temporising and ill-considered, short-term judgments which characterised the Labour Government and which have now so obviously become central to the Labour Party's new economic direction.

8.1 pm

Mr. Eric S. Heffer (Liverpool, Walton)

From listening to the Secretary of State, one would almost imagine that we were at an Oxford Union debate. One would not realise that we are talking about the lives of thousands of people, whether they are people looking for council houses, people looking for work in the industry, or people connected with the building materials industry.

I do not defend the record of my Government on housing and construction. I did not defend it when my Government were in office, and I do not so now. When my party was in Government I probably made more Back-Bench speeches about the construction industry than anyone else. I did so because I was and am a member of UCAT. I worked almost all my life in the construction industry before coming into the House, with the exception of a few years spent in the Royal Air Force during the war.

I am concerned tonight about the people in the industry, about their lives, their future and about what will happen to their families. I am not interested in a debate conducted in the way that the Secretary of State has conducted it up to now. I do not want phoney statistics thrown across the Floor of the Chamber, and neither do the people outside. They want to know precisely what the future holds for their industry.

One Conservative Member said that the employers seemed to understand what was happening and were quite happy with it. Is that true? If it is, why have the National Federation of Building Trade Employers and the Federation of Civil Engineering Contractors sent a brief to Members of Parliament putting forward four points about the recession in the industry? Those bodies say :

1. "(i) the civil engineering industry, which has no private sector alternative to its predominantly public investment clients, is continuing its decline to all-time lows in order-books, employment, plant utilisation, etc ;
2. (ii) the building industry has turned sharply downwards after two years' modest recovery and the measure of enquiries for new work has switched from 2 to 1 in favour of an improvement to 1 to 3 on the negative side—an unprecedented reversal in the space of six months ;
3. (iii) the NEDO Forecast anticipates a decline in total output by 1982 to a level almost 902 5 per cent. below the trough of the previous post-1974 recession ;
4. (iv) the bulk of this decline is likely to occur, and be led, in the public sector, and to be exacerbated by the inability of the private sector in the short term to make good the fallback,"

So where is the NFBTE showing an understanding of the Government's policy? Where are all those employers who say that what the Government are doing is a fine thing, bearing in mind that in the brief to hon. Members they are saying that the industry has never been in a worse position? I do not defend what my Government did, but what is happening now to the industry is far worse.

The Secretary of State cannot slide out of this by making phoney debating points across the Floor of the House. He and his hon. Friends had better understand that the people in the construction industry—whether they are on my side in the unions or on the employers' side— are fed up with what the Government are doing to the industry.

It is worth referring here to figures contained in Cmnd 7841 in relation to the housing position. The figures are for total public expenditure by programme. For 1979–80 it gives a figure of £5,372 million. For 1980–81 the figure is £4,700 million; for 1981–82, £3,840 million ; for 1982–83, £3,250 million ; and for 1983–84, £2,790 million. Those figures show clearly the constant reduction in housing programme expenditure that the Government are putting forward as a positive policy. Those are not my figures. They are the Secretary of State's figures, and he cannot get out of that. They can mean only a worse decline for the industry, because over 50 per cent. of its work is for the public sector.

Mr. Den Dover (Chorley)

So far.

Mr. Heffer

Yes, so far. The figure was 50 per cent., but with this lot in power it will be reduced to about 10 per cent. But of course, if there is a moratorium for about nine months nothing will be done in the construction industry. The Secretary of State cannot get away with saying that he is not announcing the halt tomorrow. We understand that, but what about next week, the week after, next month, or the month after that? It is quite clear from what the Secretary of State said that the Government will announce it and that they have made up their mind.

The Government had better repudiate what the extremely important article in the Financial Times says today. I want the Secretary of State to say that there is not a word of truth in that article. He has not said that in the House tonight. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) pointed out, he said quite the opposite.

Mr. Allan Roberts

Will my hon. Friend give way?

Mr. Helfer

Not just at the moment.

Mr. Michael Morris

The hon. Member for Bootle (Mr. Roberts) is never much help.

Mr. Heffer

I usually give way to my hon. Friends, but that distracts me from my argument. This is no joking matter. I can tell the hon. Member for Northampton, South (Mr. Morris) that the construction industry and those who work in it do not regard this as a laughing matter. I do not think that my colleagues—building workers who are unemployed—will see anything funny in it. There is nothing funny about the 91,000 unemployed in Liverpool, a great many of them building workers. The Conservatives; should understand that it is time that we in this House discussed these matters seriously and concerned ourselves with the real issues.

There is another important point in the Financial Times today on page 6. It states : The continuing gloomy outlook for almost all areas was reflected in the latest workload survey, conducted by the Royal Institute of British Architects, which provides a guide to future building levels. Architects' workloads have fallen for the third successive quarter. Value of new commissions at constant prices was 25.3 per cent. lower in the first quarter than at the same stage a year ago. There is nothing laughable about that. Conservative Members should not make glib, phoney speeches and think that they can get away with it. They cannot get away with it.

We face the problems of a declining housing industry, and a civil engineering industry that will go out of existence unless there is a fundamental change in public expenditure. All other aspects of the industry, even private building, are badly affected by the Government's policy, especially high interest rates. It is a disastrous position. The Secretary of State and his colleagues approach the problem in a doctrinaire manner. They also adopt a doctrinaire attitude towards direct labour organisations.

It is essential that we introduce a policy of decasualisation. That is essential. Perhaps the Secretary of State has no experience of the casual nature of the construction industry. Construction workers constantly wonder where their next jobs will be when their present contract has finshed. Unemployment is not unknown to them—it is part of their lives. That is why they have to travel all over the country to seek employment. I did not hear one word from the Secretary of State about the Government's attitude towards create apprenticeships in the industry. Yet at the same time the Government are abolishing the Construction Industry Manpower Board, which should have been responsible for creating apprenticeships. The Government's policies are disastrous.

I should have liked to speak at much greater length, and to have outlined the alternatives that the Labour Party has set out in the publication "Building Britain's Future". I see that the Secretary of State is nodding his head. He thinks that the document refers mainly to public ownership. That proves, as usual, his ignorance on the matter. The only proposals on public ownership contained in the document are first, that we should establish a national building corporation that could compete with major companies, secondly, that we should develop direct labour organisations as municipal enterprises, and thirdly, that we should help to organise co-operatives at the bottom level. Those are our proposals. They are only one small part of the document, which deals with all other aspects such as decasualisation and programming in the industry. We would like to see a rolling programme to give continuity of employment. The Secretary of State does not care about that. He does not believe in that system.

Mr. Parry

My hon. Friend raised the question of direct labour organisations. My hon. Friends are aware that the Liberal-controlled city council in Liverpool, with the support of the Tory Party, is introducing further spending cuts which threaten more than 600 workers in the direct labour organisation. That means also the virtual non-building of council houses in Liverpool, which has a long waiting list. In addition, Liverpool probably has the highest level of unemployment in Britain.

Mr. Heffer

I welcome my hon. Friend's remarks. He made a valuable and important point about the direct labour organisation in Liverpool.

I wish to quote from "Building Brief 1", issued by the National Federation of Building Trades Employers : What the Government must do in the future. If the lifeblood of the industry is not to be drained away by more short-term cuts at the expense of the long-term health of the economy, Government will have to reverse the effect of 15 years of misplaced economic opportunism during which the proportion of total public expenditure allocated to capital works has been allowed to fall from 23 per cent. in 1973/74 to only 13 per cent. in 1979/ 80. In spite of Public Expenditure White Papers produced in 1979 by both Labour and Conservative Governments, recognising the importance of maintaining stability and capital spending on construction, and although the present Government has said that it believes public expenditure cuts should fall elsewhere in the economy, a stampede back to the bad old ways seems to be starting. Already, massive cuts of up to £1 billion in public housebuilding in 1980/81 will, if fully implemented, cause further disruption to an industry on whose performance the nation depends. I am not a supporter of the National Federation of Building Trades Employers, but I agree with that statement. On that issue, the unions are in line with the employers in fighting for work both for the workers and for the industry. I passionately believe in the construction industry. If the Government continue in the way that they are going, with the dismissive attitude adopted by the Secretary of State, the industry will head for disaster. If the Government continue in that way, there will be no industry left.

8.17 pm

Mr. Edward du Cann (Taunton)

Politically I differ fundamentally from the hon. Member for Liverpool, Walton (Mr. Heffer), and no doubt I shall always do so. None the less, I respect him, and share his anxiety. I hope that in my speech I shall echo both the seriousness of his approach to the subject and his obvious sincerity, which impressed us all.

The title of the debate on the Order Paper is the "Construction Industry". I shall not concentrate on so narrow a subject. As my right hon. Friend the Secretary of State seemed to imply, it would be better if we were to debate the whole subject of public capital investment rather than a single industry whose health and prosperity is crucially dependent upon its building level. I believe that both the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the hon. Member for Walton thought that it would be better to widen the debate.

I can put my point in a few sentences. We all know that, comparatively speaking, our nation is in an economic decline. We are in the early stages of an economic recession. It is a most serious matter, which grows worse weekly and monthly. I do not believe that it is inevitable. I am sure that it is within the capacity of the Government markedly to improve the position. Certain of the priorities that we have set for ourselves—some by design and some more by inadvertence or carelessness—are wrong and must be changed. I hope that they will be changed sooner rather than later.

We should be wiser to spend a little less effort trying to stop inflation and more time trying to increase production. I make no secret of my anxiety that we seem to be in some measure still perpetuating—in spite of the redoubtable efforts of my right hon. Friends—the errors of the past. I make no bones of my concern about the way in which Government policies are impinging so much upon the private sector, not least the manufacturing industry.

I believe that we have the capacity substantially to increase the wealth of the nation, and thus the happiness and welfare of the people. We have the capital and technology—and certainly the human resources, which we are at present tragically wasting on a growing scale—to achieve real material progress.

I should like to give just one example of the change that I seek—indeed, that I am determined upon. It is one example of the past and current failure to which I have already referred. It seems to me that we continually give too high a priority to consumption and too little to wealth creation. I am sure that the House will agree that in any modern society, directly or indirectly, Governments provide the country's basic infrastructure requirements.

The two sides of the House may differ about the degree, but not about the fact. Roads, airports, communications of all kinds, the water supply, sewage disposal, the ports, atomic energy, and so on, are vital in today's context. But more needs to be said. Without their continual modernisation and expansion, industry and commerce cannot expand, the services which industry and commerce provide will be more costly and our nation will be deprived of the physical base on which it can and must thrive.

We all know that the Government exercise a close control on capital expenditure. No one knows that better than my right hon. Friend, with the huge responsibilities with which he and his colleagues grapple in their enormous Department, but experience indicates to me that the more carefully one examines the habits of government the clearer it becomes that the control over capital expenditure is much tighter than control over current expenditure. To some extent, my right hon. Friend touched on that point.

Let us examine the record to which the right hon. Member for Sparkbrook fairly referred. Between 1972 and 1978—I deliberately choose a period to cover Governments of both political persuasions—general Government expenditure, in cash terms, rose by 80 per cent., but capital expenditure rose by only 37 per cent. In real terms, general expenditure rose by 15J per cent., whereas over those six years capital expenditure fell by 33 per cent. Wages and salaries rose by 85 per cent., and were never less than 53 per cent. of total current expenditure. In effect, that has been the continuous failure of Governments ever since the war. There have been too many people, too much administration, and not enough practical constructive work.

Let me make that point a little more clearly, if it is necessary. Between 1961 and 1968, employment in the public sector rose by l½ million. The number of those employed in health, education and social services doubled. I cannot believe that they were all doing jobs that were truly necessary, particularly when one bears in mind that in health the number of beds available to the public fell by no less than 14 per cent. over the same period. That is why I strongly support the Prime Minister, following the announcement that she made the other day about the size of the Civil Service. I believe that that is only a beginning. That is why, in evidence to the Select Committee on the Treasury and Civil Service the other day, I was delighted to hear that my right hon. Friend the Secretary of State is taking a keen personal interest in these matters within his own Department.

However, there are bad individual examples within the general picture. Between 1974–75 and 1980–81, public construction expenditure will have fallen by 21 per cent. The roads component will have fallen by 37 per cent., and 55,000 jobs will have been lost in the industry. Trunk road construction is now half the level that it was in 1975, and a mere one-third of the level that it was in 1970.

If those bald facts are not enough to shock, let us compare our situation with Europe. The United Kingdom undoubtedly under-invests seriously in its industrial infrastructure in comparison with some of our European friends. In Germany, 1.2 per cent. of GDP goes to road construction. In France, it is almost 1 per cent. But in the United Kingdom it is a mere 0.5 per cent. of a lower GDP.

I hope I carry the House with me when I say that the provision of an adequate road network is a prime requirement of an industrial society". Those are not my words ; they are words from the latest Government White Paper, which was published just a week ago. My complaint is that for too long, whatever the political complexion of the Government, there has been too much talk and too little action. We have been wafflers rather than doers. The right hon. Member for Sparkbrook and the hon. Member for Walton made the point that the trend is long established and that the record is simply appalling. Over many years, Ministers who have exhorted the private sector industries in particular to invest with phrases such as "Investment is the seed corn of Britain's prosperity in the future"—we have heard it a million times—have failed to practise what they have preached, and have thereby failed the nation.

If only public sector capital investment had matched the private sector, which has increased substantially over the period! I agree with what was said about the report in today's newspaper. I read it with great concern. Anyone who read it must have done so. What must be said is that the consequences of the failure and neglect over the years, which we must not perpetuate, is that large parts of the nation's vital capital structure are ageing and deteriorating, and are not being built or enlarged. The longer that work is delayed, the more expensive it will surely become.

As someone prominent in the industry remarked the other day, "So long as the Government fail to meet their obligations to the community in regard to public capital investment, large sectors of British industry, and especially the civil engineering and construction industries, will continue to shed their work forces, discard their technological skills and become uncompetitive in overseas markets, and when the upturn finally comes they will be unable to respond to it."

If as a result of this debate the House recognises that the balance between capital and current expenditure is wrong, that for far too long it has been tilted in favour of the latter, that that process must be reversed, that a little courage of the sort displayed by my right hon. Friend is needed, that a little clarity in establishing priorities, as well as good management, is required, and if we, who are the commanders in truth, insist upon it and monitor its progress, we can look forward to sustained economic growth—perhaps a period of sustained technological innovation—and, certainly, thereafter a sustained improvement in the standard of living for every sector of the community. The alternative is disaster. It is time for a change, and I have every confidence that my right hon. Friend will measure up to the needs of the moment.

8.30 pm

Mr. J. D. Concannon (Mansfield)

This is a short debate, and I shall try to keep my speech as brief as possible because I know that many of my hon. Friends also wish to speak. I am grateful to the right hon. Member for Taunton (Mr. du Cann) for his appreciation of the problem and for the figures that he gave. As he and my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said, it is to be hoped that the Minister takes cognisance of what has been said today, and that he takes this debate more seriously. I have listened to the Secretary of State treating the debate as some sort of Oxford union debate, instead of thinking about the thousands of people who are involved, not only in the industry, but who are involved because of lack of housing, office space, and so on.

Labour Members are now receiving letters from firms and associations that must find it difficult and embarrassing to send briefs to Labour Members only a year after they voted a Conservative Government into office. They must wonder what on earth they did, and why they did not read the small print in the Tory Party manifesto. I received a letter today dated 11 June—that is not a bad advertisement for the Post Office—from the chairman of the Royal Institute of British Architects, in which he said : So great is my concern with what is happening to the industry that I would ask if you could make a special effort to attend to this debate and, if given the opportunity, raise some of the critical issues which I have noted on the enclosed addendum. Associations such as the Royal Institute of British Architects must find it difficult to write such letters appealing for help. They used to have direct access to Ministers. I have said previously that councils have written to Labour Members saying that they do not now have access to Ministers. The Government should take note of that.

Associations such as the RIBA send lists of matters that are worrying them. They complain about investment within the industry. They complain about the Royal Commission's report which states that about 10 per cent. of the total NHS expenditure is inadequate to prevent deterioration of existing buildings, and they point out that that is to be cut to 5 per cent. They state that the consideration of special housing needs will be impossible if present "work in progress" is to be completed. They say that adequate arrangements will be impossible and that deterioration of the housing stock will be inevitable.

The cuts will fall on local firms and local councils. I do not think that the Minister will need a moratorium, because council house building will cease, anyway, in a few years, because local authorities will have no money to spend on building. I shudder to think what will happen then, especially if waiting lists grow—as they will grow. I am not against the sale of council houses. I am against the Government dictating to councils about what they should or should not do with their housing stocks. They should leave it to the individual councils to decide. I would also be against my party dictating to local councils in such a manner.

The whole situation is becoming farcical. Rents are becoming chaotic and people are virtually being priced out of the market in council houses. My local council is getting into a mess in regard to rents. This has been caused basically by the circular sent to local councils.

If these cuts are made, the direct labour forces in areas such as these will find themselves on the dole and having to be kept by another Government Department. This will hit local firms as well. A year ago many of these firms were possibly the only places in which I could find Tory posters on their little wooden sheds. I suspect that at the next election—I do not say this with glee—there will not be as many Tory posters on as many wooden sheds. Already local firms are feeling the pinch. There will not be as many firms in my constituency with premises on which to stick such posters.

The same people are talking to me now, in the quiet of the evening, wondering where they went wrong and why they backed the present Government. However, they have done it, and the writing is on the wall for them.

The managing director of a firm of nationally known contractors has said : Unless the decline in the building industry is halted, even firms such as ours "— this emphasises the point made by the right hon. Member for Taunton— will be unable to retain that nucleus of skilled craftsmen which is the very basis of the industry. The Government amendment states : this House…supports the Government in its policies to provide a sound basis for the prosperity of the construction industry. My fear is that by the time that a sound basis is reached, there will be no construction industry left. The Government will have to examine this matter very seriously.

The Minister ought to consider seriously the regional aspect and not look at just London and the London area. From the figures being bandied about, some of the regions have been hit much more than anywhere else. The Government must consider the local effects. In the Midlands and the South-East the value of new work has decreased by 6.6 per cent. I think that that is more than the national average. The value of work at the production drawing stage has decreased by 7.5 per cent., compared with 2.5 per cent. over the whole country. There is a regional problem as well.

The Minister ought to take cognisance of the fact that the abolition of regional joint committees precludes any liaison between the regions and the Development of the Environment. The Government ought to concern themselves more with regional problems and ought to open up the Department to regional bodies.

I promised to be as quick and as concise as possible. In conclusion, therefore, I believe that the Minister and the Department ought to take cognisance of what is being said this evening. That is being said not only on the Opposition Benches but by Conservative Members as well. If the Government are not very worthy in deed, they will have no construction industry to look after, and the moratorium on local authority construction work about which they are talking will not be necessary because they will find it impossible to carry on anyway.

8.38 pm

Mr. John Ward (Poole)

I declare an interest as a director of a construction company.

The needs of the industry are precisely those of the rest of the country. We must control inflation. We have to live within our means. We have to improve efficiency and to earn any wage increases. The construction industry cannot simply ask to be exempted from the problems of the country as a whole.

We know that the industry supplies one-eighth of this country's productivity. It employs 2½ million people, and its record since the war consists of about 10 million new homes, perhaps 20,000 miles of new roads, together with hospitals, schools, power stations and so on. However, because the industry has always been used by Governments of both major parties as a regulator in times of economic difficulty, it is beginning to learn—perhaps is has learnt—to bounce back.

I shall make my remarks under two headings. The first concerns the 70,000 firms which employ fewer than 25 people, and the 5,000 firms which employ fewer than 114 people. Their problems are different from those of the big international companies. Although they have a common need—continuity of work at the right price—a small firm's ability to react to a given situation is often dictated by size. The small to medium-sized building firm is affected by high interest rates. Contracts can take months or years and the builder is often left to finance part of the contract until completion.

At present public contracts take inflation into account only if they last for more than 12 months. It would be a great help to smaller builders if that period could be reduced to six months. One cannot expect the estimating team of a small builder to be able to predict inflation for the coming year. We shall all welcome the day when interest rates come down. In the Budget, my right hon. and learned Friend the Chancellor of the Exchequer gave a certain amount of help to small businesses. The new workshop scheme, the raising of the VAT threshold and the simplification of the 714 certificate scheme will all help small builders.

Although larger firms are beset by many of the problems that affect their smaller brethren, they can sometimes respond to those problems with considerable success. They have concentrated on the development of new markets, and have invested heavily in research and development. They have aimed for more intensive utilisation of plant and resources. They have developed new skills overseas and brought back some of those methods to the United Kingdom. They have improved their design and management techniques. Some firms have entered new areas of construction such as property development, plant and equipment hire, and material supplies. Some have gone into the energy sector. Many companies have dramatically increased their overseas workload.

Hon. Members may have seen the exhibition that the Association of Consult ing Engineers has mounted in the Upper Waiting Hall. They will have seen that consulting engineers have increased their workload from £23 million in 1968 to £375 million in 1978. That represents a return in overseas earnings of over £20,000 per annum for every technical member of staff. During the same period, contractors increased their earnings from £578 million to £5,423 million.

Some of our largest contractors have opened offices in places such as Houston, Texas and Calgary. Both of those towns are in the centre of oil development areas. Other contractors are opening and building estates in places such as California and Australia. One company has turned a section of swamp in Florida into a thriving community, with some of the best amenities in the State. One of the most surprising developments is that British contractors have built on 38 years' experience of open-cast coal mining in this country and are now mining coal in East Kentucky and West Virginia, in competition with Americans.

Other companies are opening up the Third world with jute mills and spinning mills from Vietnam to Bolivia, and from West Africa to Russia. The construction industry often acts as a pioneer for other exporters. The development of the construction industry in the Middle East—which has given a lot of work to designers and construction men—is there for the record. I am reminded of the old suq in Bahrain. It was a pretty insanitary place. However, it has been replaced with a building the size of five football pitches by a British contractor. The mass transit passenger system in Hong Kong is another product of British engineering design. There is no corner of the world that has not been touched by the construction industry seeking markets for its goods. I hope that the House will agree that such enterprise deserves support at home.

Many people will be unaware of the work of the construction industry in oil and gas. Many of the production platforms are built by the construction industry. Many contracting firms are engaged in drilling and offshire servicing of structures. Many of the less glamorous parts of the servicing of oil rigs are carried out by people who previously worked onshore in the construction industry.

There is much of which the industry can be proud, and I believe that it will be as resilient as it has been in the past. It ill becomes the Opposition to criticise this Government and their policies for the construction industry. During the previous Labour Government's term of office they dealt the industry one savage blow after another. They were half-hearted, to say the least, in their attempts to control the excesses of certain direct labour organisations. We attempted, as did the previous Government, to make those organisations more accountable to the ratepayers. The inefficiencies of certain direct labour organisations are on the record.

Much of the waste that direct labour departments have been able to conceal in the past will be open to public scrutiny once the Local Government Planning and Land (No. 2) Bill becomes law. These departments need to tender in competition, with true overheads included in their costs. That would go some way towards preventing the scandulous waste of public money.

I am sure that all the past abuses mean that we still need to be vigilant. For example, there is that hotbed of democracy in South Yorkshire where a £1.5 million road contract has just been placed with the authority's direct labour organisation without seeking tenders from the private sector. The council went through the process of advertising as required under the EEC directive for public works contracts. But anyone who was foolish enough to try to obtain the documents was told that the contract had already been let.

Again in Glasgow, which is not exactly noted for the efficiency of its direct labour organisation, the council proposed to place a contract for £300,000 with its direct labour organisation, although its price was 8½ per cent. higher than a tender from the private sector. I am glad to say that the Scottish Development Council scotched that one. In general the output from the private sector is 15 to 20 per cent. above that of any direct labour organisation.

Perhaps my biggest criticism of the Labour Party's attitude to the construction industry can be found by reading the booklet about which we have heard much tonight. It was published when naked greed got the better of Labour's political expediency and the party revealed its plans for nationalising the construction industry. During the election Labour candidates went around, waffled and hedged their bets. They suddenly realised that there were 2½ million votes on the line.

Mr. Heffer

Quote the document.

Mr. Ward

I have done even better than that. I have done the hon. Member the courtesy of reading the booklet from cover to cover and I am disgusted by what I read. The industry's response was forceful and typical. An organisation called CABIN was formed to fight off that State grab. In the process the organisation exposed the true merits of the then Labour Government. [Interruption.]—It is all right for the hon. Member for Liverpool, Walton (Mr. Heffer) to make loud noises. We have heard a lot about his care for the construction industry. I care as deeply as he does, but the differenc is that I have been working with the men in the industry on the ground for the past 25 years. We all know that the construction industry is going through a difficult period, but so is the rest of the country. We all know that both the country and the construction industry need stability and prosperity.

I referred earlier to the introduction of proper accounting procedures for direct labour organisations. I also referred to the new workshop scheme. The enterprise zones and the urban development corporations that were announced by the Government will give a new and exciting area of activity for the construction industry to work in. The repeal of the Community Land Act 1975 will do much to release land for the housebuilder in the private sector.

Mr. Allan Roberts

Rubbish.

Mr. Ward

I understand that the hon. Gentleman and other Labour Members do not wish the private sector to succeed. I am proud to say that I do and that it will. The simplification of the certificate 714 procedure will allow men to get on with their jobs and not worry about bureaucratic form filling. That will also be an improvement. My right hon. Friend's announcement of the simplification of planning procedures will be welcomed by everybody in the industry who cares for its future.

I ask my right hon. and hon. Friends on the Treasury Bench to give a little further help. I support entirely what my right hon. Friend the Member for Taunton (Mr. du Cann) said about the need not to cut capital expenditure and to cut current expenditure. High current expenditure is another way of describing masses of people sitting in offices telling others what they should be doing.

The industry needs a stable and high workload. It needs continuing freedom from excessive bureaucracy. It needs lower interest rates. The construction industry, as the Labour Party found out to its cost, is a collection of individuals. Those individuals cannot be regimented and nor will they be. If the construction industry is to succeed, it needs the success of the Government's policies.

8.52 pm

Mr. Allan Roberts (Bootle)

The hon. Member for Poole (Mr. Ward)—I think that that is his constituency, but it may be Bahrein or the Middle East—attacked direct labour and defended the construction industry, especially the employers. I suggest that he reads the brief given to hon. Members by building industry employers. If he does, he will know the true views of the employers and not merely the views of a construction industry tycoon who happens to sit on the Government Benches and feels obliged to say things that will please his right hon. and hon. Friends.

Mr. Ward

I always understood the Labour Party to believe in promotion from the factory floor. My first job in the construction industry was that of a concrete labourer. I worked on every job on the site and I became a director. I feel that I have nothing of which I should be ashamed. I have done my work in the construction industry in Britain and overseas.

Mr. Roberts

Some of the worst and most difficult employers are those who have worked themselves up from the factory floor and who find it difficult to accept that other workers are not quite as able as themselves in certain circumstances.

The hon. Gentleman gave the impression that nothing was wrong with the construction industry. He seemed to be suggesting that the construction industry was in perfect health, that it was thriving, and that there was no exploitation of lump labour. He said that when Labour Members advocated public ownership of the building industry, they were not told that there was no industry to take into public ownership apart from the large international firms. He spoke of small companies that hired plant and hired and fired labour as and when the workload demanded. He said that such firms were impossible to take into public ownership by their very nature and that there was nothing in that sector to nationalise.

That says a great deal about what is wrong with the industry. It explains how labour can still be exploited. It tells us why we have too few building apprentices and why national statistics indicate that thousands of building workers are unemployed when we have an economic recession, and that when we have a Government-created boom reputable companies are often unable to recruit the skilled tradesmen that they need.

The nation needs a stronger and better organised building industry. However, the industry is dependent upon government, both national and local, for its survival. It is perhaps more dependent on government than any other industry. It can survive only if it is ensured continuity of work, and that can be ensured only by the Government.

The industry needs continuity to enable it to plan for the future, to expand and to have the confidence to invest in essential apprenticeships. The Government's policies of cuts in public expenditure and deflation of the economy have denied the building industry the continuity that it needs.

One of the reasons, also, for the shortage of skilled craftsmen was the attempt by the building industry and, indeed, by local government and central Government, in the mid-1960s, to engage in industrialised building, particularly in housing. I remember at the age of 16, in my school lessons, being given a vision of houses produced in factories and slotted together on the site, reducing both costs and building times. That vision soon turned into a nightmare, as the deck access houses of the mid-1960s, which were expensive to build and maintain, were finally rejected by the families for whom they were intended.

Traditional craftsmen are needed more than ever now. Nothing has been produced that can beat the traditional low-rise, brick-built house. The building industry also has a responsibility towards Governments and the community, as well as the other way round—particularly towards local government. During the boom times, for example in the early 1970s, because more profitable business was available in the private sector, very few companies tendered for public sector house building projects. For instance, in the city of Manchester at that time we were able to maintain our house building programme only by virtue of our own direct labour department, which tendered and continued to tender, with the odd exception, on occasions, when Wimpey tendered as well, trying to maintain some continuity.

Companies came running back to the public sector when the bubble burst and they are now crying out for public sector work when there is deflation in the economy and not much work in the private sector.

1 hope that when we get the next Labour Government, and there is expenditure in the public sector and the economy starts to pick up again, the construction industry accepts its responsibility to the public sector and local government.

The industry also often turns its back on more difficult and more labour-intensive repair and improvement work, which is essential in improvement areas and to older housing in our inner city areas. A scheme to modernise a few hundred purpose-built council homes that are standardised is easy meat, but trying to let a contract for about 100 houses, acquired in the private sector, that are pepper potted about is not so easy, because even the big builders will not tackle that job. Unless the building industry can face the task of organising this kind of work effectively, and at not too exorbitant a cost, the return of the bulldozer is inevitable. It is interesting to note that few Conservative councils hive off to the private sector the maintenance and repair work that is done by direct labour departments. They hive off the more profitable capital construction and leave the local authority direct labour department with the more difficult and much less profitable loss leader.

Many myths exist throughout the building industry. One, which has been propounded tonight by Government supporters, is that acres and acres of building land are being hoarded by local authorities—land that they are not using but that if released would allow the building industry to build houses for sale. Nothing could be further from the truth.

Perhaps in Liverpool there is derelict land—that in the ownership of the local authority—land that should have been built on but has not been built on because there is no council house building programme, owing to the political stalemate in that city.

In most parts of the country—in the city of Manchester, for example—local authorities are constantly seeking to acquire more housing land in order to maintain a municipal house building programme. Lack of land inhibits that programme. The truth is that the private developers have themselves failed to buy land in the inner city. Land has been available, but they have not bought it. The big private builders are still insisting on subsidised land if they are to risk building in inner cities.

Another myth is that council housing is not built as attractively as speculative housing because of standardisation. We often hear the words "They all look the same". But so does every Wimpey and Barra" home. The truth is that in either sector houses at a price that ordinary people can afford can be produced only by standardisation. The challenge to builders, architects and planners is to produce interest and variety on an estate where standardised components and house types are necessary. The major difference between low-rise council housing and a speculative estate for owner-occupation is density. The public sector has had to build to a much higher density because of absurd yardsticks related to densities. Lower-density council housing in inner areas would produce estates even more attractive than the average speculative estate.

I am also against the Government's decision to abolish Parker Morris standards. If anything, they need improving on. A house without full central heating or kitchen space for a deep-freeze will be unnacceptable in the not too distant future.—[Interruption.] Conservative Members murmur. I bet that they have deep-freezes.

People's expectations will continue to rise. That is to be welcomed. If they did not, we should still be living in caves. The Government claim that we have broken the back of the nation's housing crisis—a statement with which I do not agree. It is ironic that they advocate reductions in house building standards, when this is the time to increase and not reduce standards.

Builders should be practical. They have a lot to offer the nation. Architects and planners often have flights of fancy. The practical advice of builders should be available to all policy makers deciding on schemes for houses, schools, offices or factories. Every local council committee should have access to that advice. That is a further reason why direct labour departments should be expanded and developed.

9 pm

Mr. Sydney Chapman (Chipping Barnet)

We are all concerned about the future of the construction industry, which is the greatest industry in the country, whether measured by output or manpower. We have had speeches of passion and conviction. I want to follow the hon. Member for Liverpool, Walton (Mr. Heffer), who has a deep interest in the industry. I have only one word of criticism. The hon. Gentleman accuses us of a doctrinaire attitude to certain matters in the industry. We feel that the Labour Party's policy is in some respects doctrinaire. It must seem a pity to people outside the House that we do not have a more bi-partisan policy to try to rid our country of unsatisfactory building conditions, whether in the commercial or residential sector.

By any yardstick it is an insecure and high-risk industry. Statistics have been bandied around about the levels of unemployment. The industry's level of unemployment has for many years been three to four times the national average. It fluctuates widely. In 1973, fewer than 100,000 construction workers were registered as unemployed. Within three years the figure rose to over 200,000. Today it has again almost reached that figure. A further problem is the traditionally high number of bankruptcies because of the lack of liquidity. These problems are inherent in the industry and demand special consideration.

The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) spoke eloquently of the fall in the industry's output since 1979. However, a massive fall has taken place since 1973 under successive Governments. We now regard 1973 as a somewhat golden year. Due to inflation the value of the industry's output has risen consistently. At the start of the 1970s the historic figure showed that output was about £5 billion. Last year it was an estimated £19 billion. However, those figures conceal a modest rise until 1973, and sharp declines, sometimes fluctuating, in the past six years.

The hon. Member for Walton points out that, roughly speaking, the industry's output is divided equally between the public and private sectors. There is no doubt that the most significant factor that will affect work in the private sector is the level of interest rates. Naturally we all hope that they will come down, but they are not the only factor. I pay tribute to the Government for taking action in the fiscal sense on development land tax, which is now on a fair basis and which I hope will receive bi-partisan support, and on industrial building allowances, help for small firms, the new workshop scheme, and so on.

I also welcome the Government's actions and intentions, which I believe to be sincere, to try to reduce unnecessary bureaucracy through the elimination of office development permits, which I believe were unnecessary in the light of our development control system, the partial, if not total, removal of industrial development certificates, and speedier planning decisions and appeals.

The most difficult objective to achieve will be the simplification of building regulations, whch are far too complex and comprehensive and have almost become self-defeating. I believe that they can be unified throughout the country and simplified without compromising proper safety factors and conditions.

The debate is particularly concerned with the public sector. The right hon. Member for Mansfield (Mr. Concannon) said that his local architects had written to him. I declare an interest as a non-practising architect. For years the hon. Member for Walton and I have been telling the industry that it should use the political clout which it has in theory but which it never seems to exercise in practice. I have been advising architects to write to their local Members to let them know of the problems that they are facing.

The Government are the industry's largest client, and because of the special difficulties of the industry it is not too much to ask the Government to try to guarantee a reasonable minimum and smooth level of work so that it can plan its long-term programmes. After all, it is, by its very nature, a long-term investment industry.

I appreciate why the Government thought it prudent in the public expenditure White Paper to publish public sector construction industry figures for next year only and not up to 1983–84, but I hope that they will commit themselves in the next White Paper, in line with the precedent set by the recent roads White Paper. We shall need new sewers, buildings, including prisons, roads and other infrastructure if we are to bring about more speedily the economic regeneration of this country.

The tragedy of the 1970s, which has been pointed out by hon. Members on both sides, and particularly by my right hon. Friend the Member for Taunton (Mr. du Cann), is that successive Governments, faced with the need to rein in public expenditure, have found it easier to chop or delay capital expenditure programmes rather than current programmes.

To take an extreme, but a correct, example, which politician would dare to say to his electorate that it was more important to build a road to the ports than to increase the retirement pension? Any politician who said that on the hustings would probably lose his deposit, let alone his seat. But any Government must have courage.

It is always easier to temporise and stress the importance of the old-age pension or the myriad of benefits and allowances which, once given, are expected, as a right, to be updated, taking inflation into account. Until a sufficient number of politicians stand up and proclaim that the infrastructure must also be provided, I do not believe that we are facing honestly what the construction industry has had to suffer. I hope that this does not sound too party political. We can criticise all Governments. Until we face the fact that the capital expenditure programme is a sound investment programme and should not be the first to suffer when we have to rein back on public expenditure, we shall not begin to tackle the deep-rooted problems that face the greatest industry in this country.

Mr. Deputy Speaker (Mr. Richard Crawshaw)

Order. Before calling the next hon. Member, I remind the House that half an hour remains until the Front Bench speakers hope to reply. Six hon. Members wish to speak. I hope that hon. Members will use their arithmetic to help their colleagues.

9.11 pm

Mr. Roy Hughes (Newport)

The Government's amendment is irrelevant to the present difficult situation facing the construction industry. The same description could be applied to the Tweedledee and Tweedledum contribution of the Secretary of State. This great industry is in a parlous condition. I know this only too well from my own trade union, the Transport and General Workers Union, which has a huge membership in the building and construction industry. If I had not been aware of that fact through my own trade union, I was certainly made aware of it by local leaders of the industry in South Wales.

Many of the difficulties are the direct result of the dogma of the Government. Reference has been made several times to the article in the Financial Times this morning. There is every indication that the article was based on a Treasury leak. The Secretary of State should not have glossed over the matter as he did. The article sets out an alarming position. According to the article, a moratorium could face the industry in the not-too-distant future and could well result in the Secretary of State being overruled.

It appears that the Government regard public expenditure as essentially evil. I know from my own experience in Wales that the region requires public expenditure now like it has never required it before. Nationally, we have the absurd position of over 200,000 construction workers on the dole, when they should be doing useful work. Interest rates are at a phohibitive level. The Government's action in cutting public expenditure, plus the high level of interest rates, means that mobility in housing has been virtually halted.

A council tenant thinking of taking out a mortgage on a semi-detached property looks at the interest rates and is put off. In the same way, a person living in a semi-detached property, who may be thinking of moving to a detached house, is also put off. Our council house waiting lists are getting longer. Young couples are suffering. They have to live with in-laws, with all the marital stress that is involved.

This overall gloomy picture is borne out by the forecasts this month of the joint forecasting committee of the building and civil engineering EDCs. Reduc-forecast until 1982. Many schools are relics of a bygone age. Others are conglomerations of nissen huts. Many of our hospitals are nothing more than Victorian workhouses. Their facilities are dreadfully inadequate and waiting lists are soaring.

The right hon. Member for Taunton (Mr. du Cann) referred to the White Paper on roads. It contains proposals for shelving or holding up no less than £750 million worth of road schemes, yet our roads are deteriorating because of lack of maintenance. New roads are required to promote industrial efficiency. Bypasses are needed not only to preserve many of our ancient buildings but for safety. Heavy lorries carry chemicals. An incident in Wales this week could have led to a disaster. Such vehicles should be taken out of our towns. Bypasses are necessary because, without them, one day there will be a major tragedy.

Perhaps the greatest crisis of all faces our sewerage services. The Federation of Civil Engineering Contractors gave a clear warning in February to the parliamentary Sub-Committee on Public Expenditure. It said that millions of pounds had to be spent on sewerage services. Mr. George Henderson of the building trades section of the Transport and General Workers Union estimates that about £400 million a year needs to be spent over 20 years to bring our sewerage services up to an adequate standard.

An article in The Times of 16 November by Peter Hennessy states : Sewage in the streets is a politician's nightmare. It is the ultimate sign that Government authority has broken down. A few weeks ago that is what happened just outside Blackburn. The old sewerage system literally gave out. There were rats and excreta in the streets. If such warnings are not heeded we shall be turned into an effluent society.

Over 200,000 construction workers are in the dole queue. The joint forecasting committee of the building and civil engineering EDCs, on page 4 of its document, states : No significant constraints are likely to arise from shortage of labour or materials. The situation is a classic one of capitalism. The materials are available, yet the work people languish in the dole queue. There is no movement, yet essential work is waiting to be done. It is time that the Government realised the folly of their economic policies. There is a need to change course, and that need is urgent.

9.20 pm

Mr. Den Dover (Chorley)

I declare an interest as the parliamentary consultant for the firm of George Wimpey.

During the debate we have heard of the various aspects of the construction industry. We must not simply describe the activity of the industry as housing or describe it merely as the building industry. It is a wide-ranging industry which is involved in construction overseas and at home. Design features and mechanical, heating, ventilating and plumbing functions are all part of the industry.

The industry is flexible and versatile. If a firm is large it can turn its hand to other activities where there is a growth area. If a firm is small it can change, perhaps, from new building work to modernisation and rehabilitation. Therein lies the strength of the industry and that is why I do not agree with the Opposition motion but support the Government amendment.

It is extremely important that the House should realise that the industry is still behind the Government. I am in touch with many people in the industry who conducted a marvellous campaign against nationalisation. They even now regard the Government as their Government. They do not see the Government as having destroyed their livelihood or as having got rid of their workload.

Today Lord Scanlon opened a huge lorry production plant in my constituency. It cost £32 million and is manufacturing dozens of lorries a week. Eventually it produce over 400 lorries a week. Lord Scanlon said that we should realise that if we want schools, hospitals and roads we must earn them. He pointed out that we must continue manufacturing and establish such enterprises as the lorry plant that he opened in Leyland.

That is where the future of the construction industry lies. Its future does not lie in building unwanted, unnecessary council houses. We have seen the folly of those ways. What we need is private investment, housing for sale and manufacturing facilities. Perhaps in that regard the Government should bring down interest rates sooner rather than later. That would ensure the recovery of the country more quickly.

However, the industry does not expect miracles overnight. It is in for a tricky period and it was not helped by the threat of nationalisation by the previous Government. Neither was it helped by vast increases in central and local government manning levels and by the creation of such bodies as the road construction units which, I am delighted to say are to be wound up. The industry does not want those things.

The construction industry is an industry of private enterprise. It realises that there is much work to be done in order to put this country back on its feet and is ready and waiting in the wings.

In the meantime the industry is reorientating itself and getting ready for the day when expansion takes place. The industry realises that it is necessary to cut public expenditure good and hard now ready for the day of recovery.

9.23 pm

Mrs. Renée Short (Wolverhampton, North-East)

I found the contribution of the hon. Member for Chorley (Mr. Dover) extraordinary. The building industry is concerned about the cuts in public expenditure. As one of the hon. Gentlemen's hon. Friends pointed out, it relies considerably on expenditure in the public sector for the major jobs that it undertakes.

There are many facets to this problem and, in spite of the many contacts that have been made by sections of the industry abroad, the British construction industry appears to be lagging well behind its Continental competitors.

The need for a technology-based industry with high standards of design for the creation of exciting architecture seems not to be understood by many British firms—not all of them—I am sorry to say. The manufacture of many components seems to be, all too often, much less exciting and imaginative than those produced by our foreign rivals. I am concerned about that because it affects the export potential of British manufacturers which I shall speak about in a few moments. Many of our British firms would do well to emulate some of their foreign counterparts which are able to compete in this country with great success.

The Government's shocking attitude to the industry is well known, and Conservative Members have commented on that in powerful speeches. The Government are so besotted with monetarist ideas and the overwhelming commitment to save money in certain areas—in some areas Government expenditure has been allowed to increase—that fewer houses are being built and fewer old houses are being modernised. The need for local authority houses is far from being satisfied, with thousands of applicants on many local authority waiting lists.

The onus is placed on local authorities to cut back public expenditure, but the real cuts are falling on public sector capital spending which will hit the construction industry very badly. It looks as though within two or three years no local authority houses will be built. Rents are going through the roof nevertheless. Road programmes are being cut back. As the right hon. Member for Taunton (Mr. du Cann) pointed out, expenditure in that sector is 37 per cent. down on last year. The effect will be even more serious on the construction industry generally with more bankruptcies, more unemployment and, sadly, the disbandment of more and more design teams. These teams take a long time to get together and keep in effective employment. Instead of the long-term planning for capital projects that is needed, whenever there is a crisis building projects are slashed and the same dreary cycle persists.

I am very concerned about the low levels of exports by the building materials industry and the building industry generally. The expansion in the supply to the EEC of British services and building materials, of components, of the knowledge of new methods of producing building materials—for example, aerated concrete—has been considerably hampered by the use by EEC countries of their official technical approvals agencies to restrict imports from Britain of materials and know-how.

In Germany and France a foreign firm wishing to export a new material, component or method of construction must first obtain approval from an official approvals agency. It is impossible to export to those countries without that. The approval is based on tests carried out in the importing country's testing laboratories. That can take up to two years and sometimes longer. Without that approval the goods cannot be accepted on site.

Firms wanting to export have to pay at least £20,000 in each case, and perhaps much more. The delay and expense means that in many cases both the British firm and its German importer give up in desperation. This is a great disadvantage to our companies which lose many trade opportunities in this way. To counteract that it has been proposed that the necessary technical approval tests should be carried out in this country in compliance with the standards and technical requirements of the country to which the goods are to be exported. If we were to export to Germany, therefore, we would carry out tests to satisfy the German importers.

Unfortunately, the British negotiators seeking to establish this system were at a considerable disadvantage because no similar approvals system exists here. There is, however, the Agrément Board which comes within the responsibility of the Department of the Environment. The board is not all that powerful, but it could be made more so if it were to be given the statutory powers that it needs. It is the only organisation which could deal on behalf of British firms. Successive Governments have treated it in a most niggardly, unrealistic way. It has never been adequately funded. My right hon. Friend who was the Secretary of State in the last Government did very little to help it.

British negotiators are in a weak position when attempting to negotiate bilateral agreements which involve loss of business by German and French testing organisations. A proper system of technical approvals could provide some quid pro quo and if such organisations became difficult it would be easy to exclude their exports to Britain. If we are seriously concerned about imports in any sphere of industry, that is the way to deal with it.

Products should be tested for strength, stability and design, or whatever criteria are laid down. That would control the quality of goods being brought into Britain. It would not be a financial burden because the would-be importer would have to pay for the cost of testing. It would give us some control over imports. Foreign competitors could not complain because they are operating precisely the same control over British imports.

I hope that the Secretary of State will consider that proposal because it could give a great fillip to the manufacturers of British components and exporters of British know-how who are trying hard to export their goods and services. My proposal should give some fillip to that area of the construction industry.

9.33 pm

Mr. David Alton (Liverpool, Edge Hill)

I shall try to be brief, because I understand that another hon. Member wishes to speak. I wish to point out some of the inconsistencies between the debate today and a debate held in 1977. Although I was not a Member of Parliament at that time, I took the trouble to read the speeches made in that debate. The hon. Member for Liverpool, Walton (Mr. Heffer) is probably one of the few who can claim to be consistent, comparing his speech today with his speech in 1977. I congratulate him on his honesty.

The issue is a political football that is kicked around from Government to Government. Each time there is a change of Government, the arguments change from side to side. It is ironic that the hon. Member for Ashford (Mr. Speed), when his party was in opposition, said : Two industries in this country have been used as economic regulators for the past 25 years—the construction industry and the motor industry. Also in that debate, he said : 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. Quoting the President of the National Federation of Building Trades Employers, he said : The building and construction industry is in a recession of the worst magnitude in living memory…the building industry is angry and embittered."—[Official Report, 2 May 1977; Vol. 931, c. 113–6.] I realise that it is impossible for a Government automatically to offer economic cure-alls and automatically to turn round the policies of the past. The Government have done little since they took office to ease the problems in the construction industry. Crude dilemmas have been given to local authorities. The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) said that in Liverpool the local authority had to choose between its direct works department and jobs in the private sector of the construction industry. On the basis that 200 more jobs could be provided in the private sector, it decided to opt for that instead of the direct works department. That decision was not taken easily, and it was not a decision that it wished to take. No doubt that is part of the discretion being given to local authorities to which the Secretary of State referred earlier.

Such crude choices have led to housing associations cutting back their programmes. I shall quote one figure that eloquently demonstrates the way in which those at the sharp end of the housing queues receive the worst treatment as a result of the cuts. In the first quarter of this year, housing associations will provide a total of only 72 homes for the disabled or invalids. During last year they provided about 1,400. That demonstrates the way in which housing is being bitten into, and how those at the sharp end are receiving a poor deal.

Housing expenditure this year will fall from £5.372 million by a total of 48 per cent. until 1984. It means that fewer homes will be built, that private house building will slump, that homelessness will steadily increase, that lettings will decrease, and that in many parts of the country there will be no more rehousing from waiting lists. Many housing revenue accounts will be driven into the red, and unemployment among construction workers and architects will undoubtedly reach record levels, as hon. Members have already said.

Confronted with that, we are faced with a motion which talks about unemployment in the construction industry rising to more than 200,000. But that is not the case at present. It is deplorably high—189,000 people are out of work in that industry. However, there have been occasions in the past when more than 200,000 have been unemployed in the construction industry—there were 205,000 in February 1979 and 221,000 in February 1978. Therefore, it is difficult for Liberal Members to go along with the crocodile tears that seem to be cried in the motion.

I must also tell Conservative Members that it is difficult to accept that Liberals should have some sort of blind commitment to an economic policy—which is all that the Government amendment offers—which has given us inflation raging at more than 20 per cent., the minimum lending rate running at 17 per cent. and a mortgage rate of 15 per cent. All of them in their own way ensure that people either cannot afford to buy homes or that small businesses go bankrupt—businesses such as Loughton Construction, in Liverpool, which went bankrupt a few weeks ago, leaving half-completed council homes empty as a result. Raging inflation has also led to many firms, be they big or small, being faced with the prospect of closing down, thus putting more people on the dole queue.

I remind the Secretary of State of what I said to him on Third Reading of the Housing Bill. I referred to his firm. He has managed to turn it into a profitable enterprise, and all credit to him for doing so. That firm made a profit of £3.7 million in 1978. One-third of that was ploughed back into the business and only £230,000 was given to the shareholders.

The right hon. Gentleman should adopt the same sort of maxims in public housing. He should put more money back into public housing by providing improvement grants and new house building grants, and by giving construction workers the chance to participate in their industry.

I am sorry, Mr. Speaker, if I have outlived my welcome.

Mr. Speaker

I am much obliged to the hon. Gentleman.

9.37 pm

Mr. Michael Morris (Northampton, South)

The hon. Member for Liverpool, Edge Hill (Mr. Alton) should not be surprised at the parlous state of this industry, when it is recognised that the country has faced seven years of stagnation, and when we all know that this industry is highly dependent on public expenditure.

Conservative Members who have congratulated the Government on their progress in the last year have been right to do so, because despite the difficult situation, there has been real progress. There has been progress on planning delays, and the announcement this evening by the Secretary of State should be greatly welcomed. There has been progress in getting rid of Parker Morris, and crocodile tears are indeed the just reward of Parker Morris. There has also been progress in simplifying building controls and the whittling out of publicly-held assets. At last there has been some realism in public sector housing. There has also been an attack on the houses of direct labour. Not least, there has been the releasing of council tenants from the bondage of council housing as a way of life, and they have now been given the opportunity to buy their own homes.

It is particularly apt that the right hon. Member for Manchester, Ardwick (Mr. Kaufman) is to sum up the debate for the Opposition. It was he who, when Under-Secretary of State for the Environment in 1974–75, laid down the foundations for the biggest crash that this industry has ever seen. He was part of the team that master-minded the Community Land Act—that wonderful strategy that was designed to bring forward land for development, but which produced only 153 acres in its first two years of existence. It was he who helped his hon. Friend the Member for Liverpool, Walton (Mr. Heffer) to write "Building Britain's Future ", which represented the virtual nationalisation of the building industry and—the hon. Gentleman always forgets to say this—the building material producers as well. That is why they rose up in revolt.

It was the right hon. Gentleman who, in the Queen's Speech of 1977–78, helped to mastermind the call for further direct labour operations. It was only because of the Lib-Lab pact that it collapsed. It is right, therefore, that we should hear the offerings of the Opposition for this great industry. It is little wonder that my hon. Friends who work in this industry and who have supported it for so many years should say that the industry, even in these difficult times, is very much beind the present Government, as I am, too.

9.40 pm

Mr. Gerald Kaufman (Manchester, Arwick)

The Secretary of State told the House tonight, that he will not make a statement tomorrow announcing a moratorium on council house building. However, it is alleged that he will hold a press conference tomorrow to make certain important announcements. I should like to make it clear that if the Secretary of State is to make such a statement, we expect it to be made in the House, to Parliament, and not to a press conference outside the House, where the Opposition do not have the right to question it. We shall insist on a statement in the House if the Secretary of State holds such a press conference tomorrow.

This debate coincides with an anniversary. It is exactly a year ago today that the minimum lending rate was raised to 14 per cent. We all know that a 14 per cent. minimum lending rate holds a special place in the Prime Minister's heart. She proclaimed to the House last year that an increase in interest rates to 14 per cent. is a potential disaster for home buyers…it is the home buyer and the small business who are having to pay the price for the Government's economic failure."—[Official Report, 8 February 1979, Vol. 962, c. 550.] Not long after that minimum lending rate went up to 17 per cent., and it has remained at that figure for seven months. The potential disaster about which the Prime Minister spoke, has now become an actual disaster, and the causes of it are clear. They are an intolerably high minimum lending rate, coupled with the Government's spending cuts. Day by day evidence piles up of the ruin that is being caused by these two blunt instruments. The number of mortgages is falling precipitously. This year they are likely to drop to their lowest level since the Conservative Party was last in office. The number of new council house starts is plunging so fast that the Secretary of State is scared to offer any estimate.

Last year, in his first flush of office, the Secretary of State derided the Labour Government. He claimed that they had managed to reduce the entire new house building programme to the levels last seen in Britain 30 years ago. If that was true then, it is true no longer. Under the Secretary of State's supervission, the house building programme is now at its lowest for nearly 40 years. It may get worse, because tonight the Secretary of State, in a remarkable and disturbing statement, significantly and ominously shrank from denying that the Government might impose a freeze on all council house building.

It is not only house building that is suffering. The National Economic Development Office last week issued a devastating series of forecasts covering the entire construction industry. It said that repairs and improvements would fall, that there would be less road building and fewer new schools, that water programmes would be reduced, and that fewer new factories would be built.

Those grim warnings are confirmed by the Government Front Bench. The Prime Minister and the Secretary of State have a powerful characteristic in common—in addition, of course, to their loathing of each other and their apparent patronage of the same hairdresser, both privileges regrettably denied to myself. They both have an uncontrollable tendency to blurt out the awkward truth in unguarded moments.

Last week the Secretary of State admitted to the House that far fewer public sector houses are being built. Speaking about housing to the Select Committee on the Environment, he confessed that the public and private sectors are collapsing. He was as frank on the subject of roads. He said that fewer roads are being designed. Only a week ago the Prime Minister coyly amplified that confession when she said that the road programme has been reduced. There is not much scope for it being reduced further."—[Official Report, 5 June 1980, Vol. 985. c. 1674.] The Secretary of State claims that these trends began under the Labour Government and that he is simply continuing them. It must be said that he has an unfortunate addiction to treating facts that do not suit his case as inconveniences, to be manipulated until they fit his rewriting of the truth. The Secretary of State is the Demon Barber of Marsham Street. He treats statistics in the way that Sweeney Todd treated his customers. First he slits their throats and then he cooks them. Nowhere is this culinary butchery more blatant than in his version of the record on house building. Again and again, the Secretary of State claims that, under Labour, public sector house building fell year by year and that he is only continuing what we began. He was at it again last week, when he said The number of public sector houses has been reduced every year for the last four years. Let us examine how the Secretary of State bakes this unsavoury meat pie. First, he starts with an untruth, because in the period that he cites, in 1976, public sector housing starts rose above those in 1975, just as in 1975 they rose above those in 1974.

Secondly, the Secretary of State compounds this untruth by deliberately starting his chosen period with a year when housing starts were at their highest for nearly a decade, directly because of the incoming Labour Government's decision to increase the house building programme. The Secretary of State is well aware of this because he has generously accused me of responsibility for it when I was at the Department of the Environment—although he calls it irresponsibility. The devastating charge that he made about me was that I was encouraging local authorities dramatically to increase their housing programmes. Guilty, m'Lud.

It is certainly true that there was a serious decline from the high level of starts in the early years of the previous Labour Government—a decline for which we on the Opposition Benches do not offer excuses. But the fact is that even the worst Labour year was better than the level of public sector building starts that we inherited from the previous Tory Government. It is the Secretary of State who bears a unique responsibility for destroying the house building programme. When he took office, he said : our economic policies in general will create conditions in which it will be possible for more and better-quality homes to be provided ".—[Official Report, 17 May 1979 ; Vol. 967, c. 407]. In little over a year he has cynically betrayed that promise.

Not only is the Secretary of State attacking those who depend on the construction industry's products ; he is attacking those who depend on it for their livelihood. Nowhere is this attack more vicious than in his assault on the direct labour organisations of local authorities. Any industry depends on new blood coming in to revitalise it. It is the DLOs that are providing the construction industry with its trainees. [Interruption.] DLOs have only 23 per cent. of the building workers in the industry, but they provide 46 per cent. of the trainees. The Secretary of State's attack on the DLOs is an attack on the future of the industry, an industry which has the country's largest output—£19 billion ; one-eighth of the gross national product.

One cannot have a healthy economy without a healthy construction industry. Yet the present Government are sapping the industry's strength away. There is a decline of more than 10 per cent. in capital expenditure on construction work for this year, compared with the last full year of the Labour Government. The decline will be even steeper if one group of organisations were not planning dramatic increases in their building programmes. Those organisations are the nationalised industries—electricity, railways, gas, coal, and British Leyland.

It is an ironic fact that the Tory Government are relying on the nationalised industries, which they hate so much, to rescue the construction industry from the worst consequences of Tory policy. But even this rescue plan has a snag, because, as the National Federation of Building Trades Employers points out, what the Government are doing is saying that the nationalised industries' investment can take place only if they generate the funds internally, and that means by raising their prices so that the Government can fiddle the public sector borrowing requirement.

This week the Prime Minister spoke of her determination to squeeze inflation out of the economy. The Government's crazy policy is squeezing inflation into the economy. The Conservative Party has accumulated an amazing record. A Government who seek to roll back the frontiers of the State are pathetically depending on nationalised industries to bail them out of their failures. A Government who promised to reduce inflation by controlling the public sector borrowing requirement are using it to increase inflation. Two years ago the construction industry was far healthier than it is now. At that time the Secretary of State, then an Opposition spokesman, spoke about the previous Labour Government and said : by…their policy initiatives, their objectives and their administrative decisions, they have demoralised the construction industry, witnessed a dramatic increase in unemployment in the industry, and managed an inadequate programme of housing. On any of those grounds they would deserve criticism, but on the combinations of all of them, they cannot resist censure."—[Official Report, 21 June 1980 ; Vol. 952, c. 486.] It is precisely for those reasons that we censure the Government tonight.

9.50 pm

The Minister for Housing and Construction (Mr. John Stanley)

This has been an important debate on an important industry. Economic policy has played an essential part, particularly the level of public expenditure. Underlying Opposition speeches has been the familiar argument that the key to prosperity in the construction industry is more public expenditure and greater public indebtedness.

No period demonstrates more clearly that that argument is false than the period of the previous Labour Government. If there should have been a period when the construction industry boomed as never before and when output increased every year it should have been during the last five years. A British Government have never been so completely addicted to public expenditure as the previous Labour Government. No other British Government have put the country into debt so fast or so furiously. They borrowed £40,000 million. The national debt was doubled. Interest on the national debt trebled. What happened to the construction industry? Far from enjoying its greatest boom, it enjoyed a sustained recession.

In real terms capital expenditure on roads decreased by one-third. Capital spending on schools was halved. Net capital expenditure on housing was also halved. The previous Labour Government conclusively showed that prosperity for the construction industry and for the national economy cannot be achieved by piling up more debts. My right hon. Friend the Member for Taunton (Mr. du Cann) and my hon. Friends the Members for Poole (Mr. Ward) and for Chipping Barnet (Mr. Chapman) rightly pointed out that prosperity must be built on real economic growth if the construction industry and this country are to get the necessary level of capital investment. That economic growth cannot be built on the illusory prosperity of mountains of debt. That is all that the Labour Party can offer.

When the Labour Party was in office it was more realistic than it is tonight. Nothing makes more interesting reading than the speech of the right hon. Member for Brent, East (Mr. Freeson) when he spoke two years ago in the last debate on the construction industry. He wore the coarsest of hair shirts He tried to defend the 1976 expenditure cuts with all the economic rectitude of a man from the IMF. He said : This action was considered essential to preserve the economy… There is no short-term palliative which could dramatically increase demand and solve the structural problems of the construction industry any more that there is an easy road to economic regeneration generally in our country."—[Official Report, 2 May 1977 ; Vol. 931, c. 123–31.] Those were the admirable words of the right hon. Member for Brent, East. No one will be fooled by the short-term palliatives of more public expenditure.

If hon. Members have listened to Opposition speeches, they may be forgiven for thinking that the construction industry has more or less collapsed during the past twelve months. I do not underestimate the difficulties. However, as my hon. Friends the Members for Christchurch and Lymington (Mr. Adley) and for Chorley (Mr. Dover) made clear, the picture painted by the Opposition is unrepresentative. What about the value of construction output on maintenance and repair during the past twelve months? It may be said that that value has decreased. However, the value of maintenance and repair work during the past year was higher in real terms than in any 12 months since the Second World War. If one looks at new orders for comer cial construction in the private sector one sees that during our first year in office they were higher than in all but one year of the previous Government. The same is true of the total value of orders from the private sector. In the last 12 months they have also been higher than in every year of the previous Government except one.

Before the Labour Party gets too carried away with talk about the collapse of the construction industry, it might care to reflect that the value of construction output fell in every year except one while the Labour Government were in office. During the lifetime of the previous Government the numbers of unemployed in the construction industry reached the highest levels ever recorded since the statistics were first collected in 1948. Therefore, it ill-behoves Labour Members to introduce motions about the imminent collapse of the construction industry when their Government put the industry into a state of near collapse for the best part of five years.

We have taken a series of far-reaching steps during the last 12 months to create a fundamentally sounder base from which the construction industry can operate. Instead of hoarding every possible scrap of unused development land in the public sector, we have released it, and there is a great deal of public sector land which can be released. Since we came into office, more than 1,400 acres of development land have been sold by the new town development corporations, by the Commission for the New Towns and by the Housing Corporation. A substantial proportion of more than 3,000 acres of non-agricultural land disposed of by the PSA is capable of development. We are making certain that surplus land is not offered all round the public sector but is released straight away. We are getting rid of the Community Land Act, we have made development land tax fairer and less of a deterrent to construction, we have increased the IDC threshold, we have abolished ODPs and the enterprise zones and the two urban development corporations will create major opportunities for the construction industry.

We have also provided vastly greater statutory scope for housing authorities to promote low-cost home ownership than ever before. The response that we have had from local authorities to our low-cost home ownership programme has been very encouraging. A total of 90 English authorities have told us that they are promoting various types of "starter hom" schemes. Our low-cost home ownership programme is getting through in some remarkable quarters. The hon. Member for Salford, East (Mr. Allaun) is not here at present, but I have listened to many of his speeches in recent months and I have the firm impression that his vision of the Elysian fields was a Salford in which every private landlord had bitten the dust and every homeowner had been municipalised so that Salford was a 100 per cent. proof council estate. Perhaps I am doing the hon. Member an injustice, because the other day I picked up a copy of the Manchester Evening News and I saw an arresting headline "Private Homes Plan by Labour Council". I found that the council in question was none other that Salford.

What alternative policies are the Oppo-tion offering for the construction industry? I was interested to read the Labour Party's most recent policy statement

which is entitled "Peace, Jobs, Freedom—How to stop the drift to catastrophe". I have never read any document more certain to generate that catastrophe. That is true about the section on the construction industry. This is what it says : We will also extend public enterprise to ensure a significant public stake—and a degree of control—in each important industrial sector ; and this will include companies in such sectors as pharmaceuticals, medical equipment, microelectronics, construction and building materials. And so, once again, it is the age-old policy. The Labour Party is back again on nationalisation of the construction industry. That is the one and only policy that they have. Their economic policy is one of higher and higher public indebtedness, which can only lead to high inflation, high taxation and high bankruptcies. That will be no good for the construction industry. For that reason I ask the House to vote against the motion.

Question put, That the original words stand part of the Question :—

The House divided: Ayes 213, Noes 294.

McDonald, Dr Oonagh	Prescott, John	Summerskill, Hon Dr Shirley
McKay, Allen (Penistone)	Race, Reg	Taylor, Mrs Ann (Bolton West)
Maclennan, Robert	Radice, Giles	Thomas, Jeffrey (Abertillery)
McNamara, Kevin	Rees, Rt Hon Merlyn (Leeds South)	Thomas, Mike (Newcastle East)
Magee, Bryan	Roberts, Albert (Normanton)	Thomas, Dr Roger (Carmarthen)
Marks, Kenneth	Roberts, Allan (Bootle)	Tilley, John
Marshall, Jim (Leicester South)	Roberts, Ernest (Hackney North)	Tinn, James
Maxlon, John	Roberts, Gwilym (Cannock)	Torney, Tom
Meacher, Michael	Robinson, Geoffrey (Coventry NW)	Varley, Rt Hon Eric G.
Mellish, Rt Hon Robert	Rodgers, Rt Hon William	Walker, Rt Hon Harold (Doncaster)
Millan, Rt Hon Bruce	Rooker, J. W.	Watkins, David
Miller, Dr M. S. (East Kilbride)	Ross, Ernest (Dundee West)	Weetch, Ken
Mitchell, Austin (Grimsby)	Ryman, John	Wellbeloved, James
Mitchell, R. C. (Soton, Itchen)	Sandelson, Neville	Welsh, Michael
Morris, Rt Hon Alfred (Wythenshawe)	Sever, John	White, Frank R. (Bury & Radcliffe)
Morris, Rt Hon Charles (Openshaw)	Sheerman, Barry	Whitehead, Phillip
Morris, Rt Hon John (Aberavon)	Sheldon, Rt Hon Robert (A'lon-u-L)	Whitlock, William
Moyle, Rt Hon Roland	Shore, Rt Hon Peter (Step and Pop)	Willey, Rt Hon Frederick
Newens, Stanley	Short, Mrs Renée	Williams, Rt Hon Alan (Swansea W)
Oakes, Rt Hon Gordon	Silkin, Rt Hon John (Deptford)	Wilson, Gordon (Dundee East)
Ogden, Eric	Silkin, Rt Hon S. C. (Dulwlch)	Wilson, William (Coventry SE)
O'Halloran, Michael	Silverman, Julius	Winnick, David
O'Neill, Martin	Skinner, Dennis	Woodall, Alec
Orme, Rt Hon Stanley	Smith, Rt Hon J. (North Lanarkshire)	Woolmer, Kenneth
Palmer, Arthur	Snape, Peter	Wrigglesworth, Ian
Park, George	Soley, Clive	Wright, Sheila
Parker, John	Spearing, Nigel	Young, David (Bolton East)
Parry, Robert	Spriggs, Leslie
Pavitt, Laurie	Stewart, Rt Hon Donald (W Isles)	TELLERS FOR THE AYES :
Pendry, Tom	Stott, Roger	Mr. Joseph Dean and
Powell, Raymond (Ogmore)	Straw, Jack	Mr. George Morton.

NOES
Adley, Roben	Chapman, Sydney	Gray, Hamish
Aitken, Jonathan	Churchill, W. S.	Greenway, Harry
Alison, Michael	Clark, Hon Alan (Plymouth, Sutton)	Grieve, Percy
Alton, David	Clark, Sir William (Croydon South)	Griffiths, Eldon (Bury St Edmunds)
Amery, Rt Hon Julian	Clarke, Kenneth (Rushcliffe)	Griffiths, Peter (Portsmouth N)
Ancram, Michael	Clegg, Sir Walter	Grimond, Rt Hon J.
Arnold, Tom	Cockeram, Eric	Grist, Ian
Aspinwall, Jack	Colvin, Michael	Grylls, Michael
Atkins, Robert (Preston North)	Cope, John	Gummer, John Selwyn
Atkinson, David (B'mouth, East)	Cormack, Patrick	Hamilton, Hon Archie (Eps'm&Ew'll)
Baker, Kenneth (St. Marylebone)	Costain, A. P.	Hamilton, Michael (Salisbury)
Baker, Nicholas (North Dorset)	Critchley, Julian	Hampson, Dr Keith
Beaumont-Dark, Anthony	Dean, Paul (North Somerset)	Hannam, John
Beith, A. J	Dodsworth, Geoffrey	Haselhurst, Alan
Bell, Sir Ronald	Dorrell, Stephen	Hastings, Stephen
Bendall, Vivian	Douglas-Hamilton, Lord James	Hawksley, Warren
Bennett, Sir Frederic (Torbay)	Dover, Denshore	Hayhoe, Barney
Benyon, Thomas (Abingdon)	du Cann, Rt Hon Edward	Heddle, John
Best, Keith	Dunn, Robert (Dartford)	Henderson, Barry
Bevan, David Gilroy	Durant, Tony	Heseltine, Rt Hon Michael
Biffen, Rt Hon John	Dykes, Hugh	Higgins, Rt Hon Terence L.
Biggs-Davison, John	Eden, Rt Hon Sir John	Hill, James
Blackburn, John	Eggar, Timothy	Holland, Philip (Carlton)
Blaker, Peter	Elliott, Sir William	Hooson, Tom
Bonsor, Sir Nicholas	Emery, Peter	Hordern, Peter
Boscawen, Hon Robert	Eyre, Reginald	Howe, Rt Hon Sir Geoffrey
Bottomley, Peter (Woolwich West)	Fairbairn, Nicholas	Howell, Rt Hon David (Guildford)
Bowden, Andrew	Fairgrieve, Russell	Howell, Ralph (North Norfolk)
Braine, Sir Bernard	Faith, Mrs Sheila	Hunt, David (Wirral)
Bright, Graham	Farr, John	Hunt, John (Ravensbourne)
Brinton, Tim	Finsberg, Geoffrey	Hurd, Hon Douglas
Brittan, Leon	Fisher, Sir Nigel	Irving, Charles (Cheltenham)
Brocklebank-Fowler, Christopher	Fletcher, Alexander (Edinburgh N)	Jenkin, Rt Hon Patrick
Brooke, Hon Peter	Fletcher-Cooke, Charles	Jessel, Toby
Brown, Michael (Brigg & Sc'thorpe)	Fookes, Miss Janet	Johnson Smith, Geoffrey
Browne, John (Winchester)	Fowler, Rt Hon Norman	Johnston, Russell (Inverness)
Bruce-Gardyne, John	Fox, Marcus	Jopling, Rt Hon Michael
Bryan, Sir Paul	Fraser, Rt Hon H. (Stafford & St)	Joseph, Rt Hon Sir Keith
Buchanan-Smith, Hon Alick	Fraser, Peter (South Angus)	Kaberry, Sir Donald
Buck, Antony	Freud, Clement	Kershaw, Anthony
Budgen, Nick	Fry, Peter	Kilfedder, James A.
Bulmer, Esmond	Gardiner, George (Reigate)	King, Rt Hon Tom
Burden, F. A.	Gardner, Edward (South Fylde)	Kitson, Sir Timothy
Butcher, John	Garel-Jones, Tristan	Knox, David
Butler, Hon Adam	Glyn, Dr Alan	Lamont, Norman
Cadbury, Jocelyn	Goodhart, Philip	Lang, Ian
Carlisle, John (Luton West)	Goodhew, Victor	Langford-Holt, Sir John
Carlisle, Kenneth (Lincoln)	Goodlad, Alastair	Latham, Michael
Carlisle, Rt Hon Mark (Runcorn)	Gow, Ian	Lawrence, Ivan
Chalker, Mrs Lynda	Gower, Sir Raymond	Lawson, Nigel
Channen, Paul	Grant, Anthony (Harrow C)	Lee, John

Lennox-Boyd, Hon Mark	Page, John (Harrow West)	Stanley, John
Lewis, Kenneth (Rutland)	Page, Rt Hon Sir R. Graham	Steen, Anthony
Lloyd, Peter (Fareham)	Page, Richard (SW Hertfordshire)	Stevens, Martin
Loveridge, John	Parkinson, Cecil	Stewart, Ian (Hitchin)
Lyell, Nicholas	Parris, Matthew	Stewart, John (East Renfrewshire)
McCrindle, Robert	Pattern, Christopher (Bath)	Stokee, John
Macfarlane, Neil	Patten, John (Oxford)	Stradling Thomas, J.
MacGregor, John	Pattie, Geoffrey	Tapsell, Peter
MacKay, John (Argyll)	Pawsey, James	Taylor, Teddy (Southend East)
McNair-Wilson, Michael (Newbury)	Penhaligon, David	Temple-Morris, Peter
McNair-Wilson, Patrick (New Forest)	Percival, Sir Ian	Thomas, Rt Hon Peter (Hendon S)
McQuarrie, Albert	Peyton, Rt Hon John	Thompson, Donald
Major, John	Pink, R. Bonner	Thome, Neil (llford South)
Marland, Paul	Pollock, Alexander	Thornton, Malcolm
Marlow, Tony	Porter, George	Townsend, Cyril D. (Bexleyhealh)
Marshall, Michael (Arundel)	Prentice, Rt Hon Reg	Trlppier, David
Marten, Neil (Banbury)	Price, David (Eastleigh)	Trotter, Neville
Mates, Michael	Proctor, K. Harvey	van Straubenzee, W. R.
Mather, Carol	Pym, Rt Hon Francis	Vaughan, Dr Gerard
Maude, Rt Hon Angus	Raison, Timothy	Viggers, Peter
Mawby, Ray	Rathbone, Tim	Waddington, David
Mawhinney, Or Brian	Rees, Peter (Dover and Deal)	Wainwright, Richard (Colne Valley)
Maxwell-Hyslop, Robin	Rees-Davies, W. R.	Wakeham, John
Mayhew, Patrick	Renton, Tim	Waldegrave, Hon William
Mellor, David	Rhodes James, Robert	Walker, Rt Hon Peter (Worcester)
Meyer, Sir Anthony	Rhys Williams, Sir Brandon	Walker, Bill (Perth & E Perthshire)
Miller, Hal (Bromsgrove & Reddltch)	Ridley, Hon Nicholas	Walker-Smith, Rt Hon Sir Derek
Mills, lain (Merlden)	Ridsdale, Julian	Wall, Patrick
Mills, Peter (West Devon)	REfkind, Malcolm	Waller, Gary
Mfscampbell, Norman	Roberts, Michael (Cardiff NWI	Walters, Dennis
Mitchell, David (Basingstoke)	Roberts, Wyn (Conway)	Ward, John
Moate, Roger	Rossi, Hugh	Warren, Kenneth
Montgomery, Fergus	Salnsbury, Hon Timothy	Wells, John (Maidstone)
Moore, John	Scott, Nicholas	Wells, Bowen (Hert'rd & Stev'nage)
Morris, Michael (Northampton, Sth)	Shaw, Michael (Scarborough)	Wheeler, John
Morrison, Hon Charles (Devizes)	Shelton, William (Streatham)	Whitelaw, Rt Hon William
Morrison, Hon Peter (City ol Chester)	Shepherd, Colin (Hereford)	Whitney, Raymond
Mudd, David	Shepherd, Richard(Aldridge-Br'hills)	Wickenden, Keith
Murphy, Christopher	Silvester, Fred	Wilkinson, John
Myles, David	Sims, Roger	Williams, Delwyn (Montgomery)
Neale, Gerrard	Skeet, T. H. H.	Winterton, Nicholas
Needham, Richard	Speed, Keith	Wolfson, Mark
Nelson, Anthony	Speller, Tony	Young, Sir George (Acton)
Neubert, Michael	Spence, John	Younger, Rt Hon George
Newton, Tony	Spicer, Jim (West Dorset)
Normanton, Tom	Splcer, Michael (S Worcestershire)	TELLERS FOR THE NOES
Nott, Rt Hon John	Squire, Robin	Mr. Spencer le Marchant anil
Onslow, Cranley	Stanbrook, Ivor	Mr. Anthony tlcrry.
Oppenheim, Rt Hon Mrs Sally

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to

Division No. 3631	AYES	[10.13 pm
Adley, Robert	Buchanan-Smith, Hon Alick	Eden, Rt Hon Sir John
Aitken, Jonathan	Buck, Antony	Eggar, Timothy
Alison, Michael	Budgen, Nick	Elliott, Sir William
Amery, Rt Hon Julian	Butcher, John	Emery, Peter
Ancram, Michael	Butler, Hon Adam	Eyre, Reginald
Asplnwall, Jack	Cadbury, Jocelyn	Fairbairn, Nicholas
Atkins, Robert (Preston North)	Carlisle, John (Luton West)	Faith, Mrs Sheila
Atkinson, David (B'mouth, East)	Carlisle, Kenneth (Lincoln)	Farr, John
Baker, Kenneth (St. Marylebone)	Carlisle, Rt Hon Mark (Runcorn)	Finsberg, Geoffrey
Baker, Nicholas (North Dorset)	Chalker, Mrs Lynda	Fletcher, Alexander (Edinburgh N)
Bendall, Vivian	Channon, Paul	Fookes, Misa Janet
Benyon, Thomas (Abingdon)	Chapman, Sydney	Fowler, Rt Hon Norman
Best, Keith	Churchill, W. S.	Fox, Marcus
Sevan, David Gllroy	Clark, Sir William (Croydon South)	Fraser, Peter (South Angus)
Bitten, Rt Hon John	Clarke, Kenneth (Rushcllffe)	Gardiner, George (Reigate)
Biggs-Davlson, John	Clegg, Sir Waiter	Gardner, Edward (South Fylde)
Blackburn, John	Colvin, Michael	Glyn, Dr Alan
Boscawen, Hon Robert	Cope, John	Goodlad, Alastair
Bottomley, Peter (Woolwich West)	Cormack, Patrick	Gower, Sir Raymond
Braine, Sir Bernard	Costaln, A. P.	Grant, Anthony (Harrow C)
Brinton, Tim	Dean, Paul (North Somerset)	Gray, Hamish
Brittan, Leon	Douglas-Hamilton, Lord James	Greenway, Harry
Brocklebank-Fowler, Christopher	Dover, Denshore	Grieve, Percy
Brooke, Hon Peter	du Cann, Rt Hon Edward	Griffiths, Eldon (Bury St Edmund")
Browne, John (Winchester)	Dunn, Robert (Dartford)	Grist, Ian
Bruce-Gardyne, John	Durant, Tony	Grylls, Michael
Bryan, Sir Paul	Dykes, Hugh	Gummer, John Selwyn

Standing Order No. 32 (Questions on amendments) :—

The House divided : Ayes 218, Noes 8.

Hannam, John	Mellor, David	Sainsbury, Hon Timothy
Haselhurst, Alan	Miller, Hal (Bromsgrove & Redditch)	Shaw, Michael (Scarborough)
Hawksley, Warren	Mill", lain (Meriden)	Shepherd, Colin (Hereford)
Heddle, John	Mills, Peter (West Devon)	Shepherd, Richard (Aldridge-Br'hllls)
Henderson, Barry	Mitchell, David (Basingstoke)	Silvester, Fred
Heseltine, Rt Hon Michael	Moate, Roger	Sims, Roger
Higgins, Rt Hon Terence L.	Montgomery, Fergus	Skeet, T. H. H.
Hill, James	Moore, John	Speed, Keith
Holland, Philip (Carltont	Morris, Michael (Northampton, Sth)	Spicer, Jim (West Dorset)
Hooson, Tom	Morrison, Hon Charles (Devizes)	Squire, Robin
Howe, Rt Hon Sir Geoffrey	Morrison, Hon Peler (City of Chester)	Stanbrook, Ivor
Hunt, David (Wirral)	Murphy, Christopher	Stanley, John
Irving, Charles (Cheltenham)	Myles, David	Steen, Anthony
Jenkin, Rt Hon Patrick	Needham, Richard	Stevens, Martin
Jesse!, Toby	Nelson, Anthony	Stewart, Ian (Hitchin)
Johnson Smith, Geoffrey	Neubert, Michael	Stewart, John (East Renfrewshire)
Jopling, Rt Hon Michael	Newton, Tony	Stradllng Thomas, J.
Joseph, Rl Hon Sir Keith	Normanton, Tom	Tapsell, Peter
Kershaw, Anthony	Nott, Rt Hon John	Temple-Morris, Peter
King, Rt Hon Tom	Page, John (Harrow West)	Thomas, Rt Hon Peter (Hendon S)
Kitson, Sir Timothy	Page, Rt Hon Sir R. Graham	Thompson, Donald
Knox, David	Page, Richard (SW Hertfordshire)	Thome, Neil (llford South)
Lamont, Norman	Parkinson, Cecil	Trippier, David
Lang, Ian	Parris, Matthew	Trotter, Neville
Langford-Holt, Sir John	Pattern, Christopher (Bath)	van Straubenzee, W. R.
Lawrence, Ivan	Patten, John (Oxford)	Viggers, Peter
Lawson, Nigel	Pattie, Geoffrey	Waddlngton, David
Lee, John	Pawsey, James	Wakeham, John
Lennox-Boyd, Hon Mark	Percival, Sir Ian	Walker, Rt Hon Peter (Worcester)
Lewis, Kenneth (Rutland)	Peyton, Rt Hon John	Walker-Smith, Rt Hon Sir Derek
Lloyd, Peter (Fareham)	Pollock, Alexander	Wall, Patrick
Lyell, Nicholas	Porter, George	Waller, Gary
McCrindle, Robert	Prentice, Rt Hon Reg	Ward, John
Maclarlane, Neil	Price, David (Eastleigh)	Warren, Kenneth
MacGregor, John	Proctor, K. Harvey	Wells, Bowen (Hert'rd & Stev'nage)
MacKay, John (Argyll)	Pym, Rt Hon Francis	Wheeler, John
McNair-Wilson, Michael (Newbury)	Rathbone, Tim	Whitney, Raymond
McQuarrie, Albert	Rees, Peter (Dover and Deal)	Wickenden, Keith
Major, John	Rees-Davies, W. R.	Wilkinson, John
Marland, Paul	Renton, Tim	Williams, Delwyn (Montgomery)
Marlow, Tony	Rhodes James, Robert	Winterton, Nicholas
Marshall, Michael (Arundel)	Rhys Williams, Sir Brandon	Wolfson, Mark
Marten, Neil (Banbury)	Ridley, Hon Nicholas	Younger, Rt Hon George
Mates, Michael	Ridsdale, Julian
Mather, Carol	Rlfklnd, Malcolm	TELLERS FOR THE AYES
Mawby, Ray	Roberts, Michael (Cardiff NW)	Mr. Spencer Le Marchant an"
Mayhew, Patrick	Roberts, Wyn (Conway)	Mr. Anthony Berry.

NOES
Alton, David	Kilfedder, James A.	TELLERS FOR THE NOES :
Grimond, Rt Hon J.	Stewart, Rt Hon Donald (W Isles)	Mr. A. J. Beith and Mr. David Penhaligon.
Home Robertson, John	Wainwright, Richard (Colne Valley)
Johnston, Russell (Inverness)	Wilson, Gordon (Dundee East)

Question accordingly agreed to.

Mr. SPEAKER forthwith declared the main Question, as amended, to be agreed to, pursuant to Standing Order No. 18 (Business of Supply).

Resolved,

That this House, recognising that a vigorous and profitable construction industry can only grow from a prosperous economy, rejects the failed and discredited prescription of the Opposition and supports the Government in its polices to provide a sound basis for the prosperity of the construction industry.