HC Deb 21 July 1982 vol 28 cc393-5
18. Mr. Guy Barnett

asked the Secretary of State for the Environment if the most recent information he has on the construction industry's prospects indicate any improvement in orders during the current year.

Mr. Stanley

I am glad to say that the latest construction new order figures published this afternoon show a number of improvements. In the past three months total construction orders were 11 per cent. higher in real terms than a year ago. Commercial orders were 10 per cent. higher, and so far this year have been at a higher level in real terms than in any year since 1973. In addition, in the past three months private housing orders were 41 per cent. higher in real terms than a year ago and public housing new orders were 46 per cent. higher.

Mr. Barnett

While welcoming signs of improvement—and slight ones at that—of the appalling situation that this country faces, will the Minister bear in mind that thousands of construction workers are out of work all over the country and that there is an appalling situation in many constituencies, for example in my constituency, with regard to the size of housing waiting lists? Is there not a need for a massive increase in the work of the construction industry? If the Government take seriously the unemployment figures that were announced yesterday, will they take into account the fact that the construction industry is labour-intensive? That is the way in which we need to get people back to work.

Mr. Stanley

The hon. Gentleman does not seem to take into account the fact that in the financial year that has just been completed local authorities underspent by more than £400 million on the capital allocations that were made available to them. This year the increased provision that we have made permits an increase in cash spend on capital for housing by one-third. I hope that we shall have the support of the hon. Gentleman in asking all local authorities to make the fullest possible use of the increased provision that has been made on the housing side, reinforced by what my right hon. and learned Friend the Chancellor of the Exchequer did in his Budget.

Mr. Nicholas Winterton

I welcome the encouraging answer that has been given by my hon. Friend. Does he not agree that capital investment would be of tremendous benefit to the construction industry and a way of reducing unemployment? Will he therefore encourage my right hon. and learned Friend the Chancellor of the Exchequer to consider the introduction of index-linked construction bonds as a way of encouraging private capital into the provision of construction projects to improve our infrastructure?

Mr. Stanley

My right hon. Friends regularly consider proposals for private financing of construction work. With regard to the public sector, we must take into account what is the most economic way of debt financing for construction work. I share my hon. Friend's sentiments. It is very much the Government's wish, within the overall public expenditure constraints, to make the greatest possible provision for capital expenditure, bearing in mind the benefits of employment in the construction industry.

Mr. Alton

Does the Minister agree that while the construction industry is used as an economic barometer, it would be impossible for local authorities to gear their programmes to their capital allocations? Does he further agree that while 400,000 building workers are out of work, it is a downright scandal that 500,000 British people are in homes without inside toilets, running hot water or bathrooms?

Mr. Stanley

I do not agree with the hon. Gentleman that it is impossible for local authorities to gear their programmes to the capital allocation system. About one-fifth of all authorities last year spent 90 per cent. or more of their capital allocations plus their capital receipts. With regard to the other point, we have made an increased provision for home improvement grants. I am glad to say that in the last quarter the number of home improvement grants was at its highest for more than six years.

Sir William Clark

If my hon. Friend speaks to my right hon. and learned Friend the Chancellor of the Exchequer about more capital for the construction industry, will he tell him that to issue index-linked bonds for construction is merely putting off the evil day, and that future taxpayers will have to pick up the bill?

Mr. Nicholas Winterton

Absolute nonsense.

Mr. Stanley

As I said in reply to my hon. Friend the Member for Macclesfield (Mr. Winterton), in all forms of public debt financing we must look at the most economic way of providing debt financing for construction in the public sector.

Mr. Kaufman

After the Government's unprecedented attack on the construction industry, is it not unseemly for the Minister to rejoice on finding a few twitches of life in the body of his victim? If the Government persist in passing the phoney debating point about underspend or capital receipts across the Floor of the House will the Minister agree, as he is concerned about capital spending, to increase the housing investment programme allocation of any local authority that tells him that it wants to spend more so that we can get rid of the 30 per cent. unemployment in the building industry which the Minister has created?

Mr. Stanley

There is nothing phoney about hundreds of millions of pounds of genuine cash receipts going to local authorities, which this Government alone made it possible for them to spend. One gets the impression from the right hon. Gentleman that anything is phoney if it does not reinforce his prejudices. The right hon. Gentleman talked about damage to the construction industry. I see that the Labour Party is now committed to the establishment of a national construction corporation based on the acquisition of one or more contractors, the extension of the activities of local authority direct labour organisations and the establishment of a building materials corporation. In terms of damage to the construction industry, that programme of nationalisation and municipalisation would be the greatest single disaster for it.