The Construction Industry: Stimulus (Hansard, 6 May 1982)

§ Lord Gainford
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)
My Lords, we have taken a great number of measures to assist the construction industry, particularly in the fields of planning, land, taxation and low cost home ownership, and in his Budget statement on 9th March, which was well received by the industry, my right honourable and learned friend the Chancellor of the Exchequer announced a £240 million package of measures specifically aimed at stimulating construction activity. Those included an extra £100 million for home improvement grants and home insulation, a substantial increase in the level of stamp duty thresholds, and a brand new capital allowance for houses built under the assured tenancies scheme. He also announced on that occasion the Government's plans to spend £10.3 billion on construction in the public sector in 1982–83, which represents a 14 per cent. cash increase on what was spent last year.

§ Lord Gainford
My Lords, I thank my noble friend for that very encouraging reply. Is he able to give any information on the figures of housing starts, which I understand are being published today?

§ Lord Bellwin
My Lords, in the first quarter of 1982, total starts, on a seasonally adjusted basis, were up 45 per cent. on the fourth quarter of 1981 and 33 per cent. higher than the first quarter of 1981. In the public sector, making similar comparisons, starts were up 40 per cent. on the previous quarter and 67 per cent. higher than a year ago. Private sector starts were up 47 per cent. on the previous quarter and 24 per cent. higher than a year earlier. I hope my noble friend and the House will be as pleased with that news as I am.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that the greatest stimulant would be a reduction of interest rates? Is he further aware that if some of the schemes, which sounded very attractive as he presented them, have the effect of increasing inflation and not encouraging a reduction of interest rates, that might have the opposite effect? The priority should be that if we want to stimulate the construction industry or indeed any other industry.

§ Lord Bellwin
My Lords, a key part of the thrust of Government policies is indeed towards seeing that interest rates come down, so I certainly take the point my noble friend makes.

§ Lord Cledwyn of Penrhos
While welcoming that information, my Lords, may I ask whether the Minister can confirm that the starts are evenly spread throughout the country? Can he give the House an estimate of the additional number of men who will be employed in the building industry as a result of the acceleration in building?

§ Lord Bellwin
I do not have those details today, my Lords—the statement has only just been released—but I gladly undertake to obtain it and write to the noble Lord. As for the way in which it is spread throughout the country, again, it is hard to say. I am not sure whether that information will be so readily available but I shall endeavour to ascertain it and send it to the noble Lord.

§ Lord Cledwyn of Penrhos
My Lords, the Minister will agree that that information is important. Does he agree that it is vital that there should be an even spread, otherwise the increases in building are likely to be in the more prosperous parts of the country, whereas those areas which really need new housing and jobs will not be able to benefit?

§ Lord Bellwin
Yes, my Lords, and I would in no way quarrel with that. It is just a question of my getting the information so that I am able to give it to the noble Lord, and that I undertake to do.

§ Lord Orr-Ewing
My Lords, would my noble friend make arrangements to appear on television to give that excellent news on a very special day for most voters?

§ Lord Bellwin
I fear that that is not within my gift to do, my Lords.

§ Baroness David
My Lords, may I ask the Minister whether, in the statement, are given the number of houses as well as the percentage increase? If, for example, it is twice as many as one, it does not make all that much difference.

§ Lord Bellwin
The noble Baroness makes a fair point, my Lords, and of course the numbers are important. Any information which is not in the statement would readily be available to her if she wished to press for it.

§ Viscount Eccles
My Lords, could the Minister give any information about do-it-yourself building? Is that increasing and do the Government favour it?

§ Lord Bellwin
My Lords, I touched on that when answering a Question yesterday. I assume by his supplementary that my noble friend is referring to homesteading. We are doing everything we can to encourage it. There are some encouraging signs and I hope that all local authorities—because it is, after all, they who have to make the decisions about it—will 1257 look at some of the houses that are empty and require work of that kind and will perhaps make them available, on any kind of price basis, to people who are willing to do what my noble friend calls do-it-yourself building: "homesteading" is the term we use and we want very much to encourage it.

§ Lord Bowden
My Lords, as there are nearly half a million unemployed workers in the structural and civil engineering industry, may I ask whether the figures which the Minister gave for total expenditure have made appropriate allowance for the savings which would flow were those people no longer on the dole but properly in work? It seems to me that if the figures were so adjusted, they would dramatically decline. Secondly, the Minister will recall the last time I discussed in this House the question of the main sewage system, in fact the whole infrastructure, of the city of Manchester, which is fast decaying. He may recall that when I told him of the enormous expense, he said it was a mind-boggling situation. Does he not realise that to the average motorist—

Several noble Lords
Speech!

§ Lord Bowden
I was about to ask the noble Lord—

Several noble Lords
Order!

§ The Lord Privy Seal (Baroness Young)
My Lords, would the noble Lord be good enough to ask a question and not make a short statement about a former speech of his?

§ Lord Bowden
I was just coming to the question, my Lords. Does the noble Lord realise that to the average motorist the thought that the Minister's mind has been boggled is, of itself, of no very great importance?

§ Lord Bellwin
My Lords, I can make no comment on what motorists think of my statements. I understand very much what the noble Lord is saying and his concern, which we share. In fact, we are specifically making available a figure of, coincidentally, some £240 million, for the kind of work to which he referred, because there is undoubtedly a problem in terms of what is under the surface as well as what is above it. As to his point about workers on the dole perhaps doing some of the work, I understand the short-term attraction of the option, but the fact is that the average wage of a construction worker is, as he will know, substantially higher than the level of unemployment benefit, and the difference becomes even greater when non-wage factors are brought into account. Thus, the extra borrowing that would then be involved would, in the longer term, lead to higher inflation, higher interest rates and higher taxes, and that is a direction away from which we want to go.

§ Lord Glenamara
My Lords, is the Minister aware that we are delighted with the increase he has announced today but that a 40 per cent. increase on the lowest levels for over 60 years is still not very much to crow about?

§ Lord Bellwin
I did not make the statement in order to crow, my Lords, but in response to a question that was put to me. What the noble Lord says is correct, but I am sure that he, too, will be as pleased as I am that there has been an upward trend of some significance.