HC Deb 19 July 1995 vol 263 cc1648-9
2. Sir Michael Neubert

To ask the Secretary of State for the Environment what is his latest assessment of the prospects for the building and construction industry; and if he will make a statement. [33372]

The Minister for Construction and Planning (Mr. Robert B. Jones)

I commend to my hon. Friend the latest state of the construction industry report, produced jointly by my Department and representatives of the industry, which was published on 13 July. Copies have been placed in the Library.

Sir Michael Neubert

Does my hon. Friend agree that a thriving building and construction industry is usually a great contributor to economic recovery and should be a political imperative for a party that has always championed the idea of a property-owning democracy? Given the present flatness of the housing market, has my hon. Friend any ideas in mind, such as the upgrading of our substandard housing stock, which would revitalise the industry and restore the cachet of home ownership?

Mr. Jones

I agree with my hon. Friend about the importance of the construction industry. Of course we want to encourage it in every way possible to become more efficient and cost-effective so that it will continue to have an important place not only domestically but in terms of exports, which are going well. My hon. Friend should not forget that, despite gloomy pictures on the part of the construction industry, there are some better prospects and, in particular, exports are going well.

Mr. Betts

Does the Minister accept that the prospects for the building and construction industry are extremely gloomy because, in the public sector, the Government will do nothing to release local authorities' capital receipts which could lead to jobs and homes being built and, in the private sector, the Government are impotent and can do nothing because the real problem is the British people's lack of confidence in the Government and in Britain's economic prospects while they remain in power?

Mr. Jones

The hon. Gentleman behaves as though the receipts that accrue to local authorities are sitting under councillors' beds. A proportion is used for housing investment and much is used as a substitute for borrowing or lent on the money market. If that money was spent all at once, it would exert upward pressure on interest rates as well as causing other problems.

Mrs. Ann Winterton

Does my hon. Friend agree with the Prime Minister who, when addressing the Manufacturing and Construction Industries Alliance on Monday this week, said that, with interest rates and inflation under control and with falling unemployment, housing has rarely been more affordable, and that the only stumbling block was lack of confidence? What does my hon. Friend believe he should do to get over that stumbling block in order to encourage the first-time buyer, thereby enhancing the prospects for the construction industry?

Mr. Jones

I read my right hon. Friend's excellent speech and I commend my hon. Friend's husband, the Member for Macclesfield (Mr. Winterton), on his role in that organisation. My hon. Friend refers to the 20-year low in the ratio of prices to incomes and therefore rightly highlights the fact that housing is more affordable. Instead of talking down the housing market, Opposition Members should be emphasising that fact to encourage sales.

Mr. Raynsford

Will the Minister now come clean? In the past week we have seen figures from the National House-Building Council that show that starts in the first six months of this year are 15 per cent. down and figures from the Corporate Estate Agents showing sales down by a similar amount. Everyone in the industry knows that the house-building industry is in difficulty and that confidence has been further weakened by the crass decision to cut the income support safety net. When will the Government face up to their responsibilities? There was nothing in the White Paper to restore confidence in the market. When will the Government come to the help of the hard-pressed house-building industry and the millions of home owners who are in difficulty?

Mr. Jones

No one has any illusions about the fact that the house-building sector is going through a difficult period which will be overcome only as confidence continues to gain strength. That depends on how the economy performs and on how the message—that private sector housing has not been as affordable as it is now for 20 years—is put across.