Building Industry: Chancellor's Statement (Hansard, 20 November 1984)

§ Lord Dean of Beswick
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon)
My Lords, the effects of the Chancellor of the Exchequer's Statement on Monday, 12th November can only be beneficial for the construction industry. The industry has shared in the 3 per cent. increase in total output in the first half of 1984. It is likely to benefit from continuing growth in 1985, and from the low rate of inflation and the scope for tax cuts resulting from the Government's economic policy.

§ Lord Dean of Beswick
My Lords, I am grateful to the Minister for that reply, but he must be aware that nobody in the building industry outside will believe what he said: that they are to benefit from the Chancellor's Statement. Is the Minister aware of the Policy 487 Studies Institute report which shows the need over the next 10 years to expend £3.5 billion a year on new housing, the repair and maintenance of old housing, new roads, and the repair and maintenance of old roads, in order to stop the dangerous decline in the infrastructure in this country? When will the Government start talking some sense in this matter and give some work to the building industry, instead of trying to cripple it?

§ The Earl of Avon
My Lords, I hear what the noble Lord says. Indeed, the report he mentioned is being carefully studied, as is the National Economic Development Council's report. In particular, we are looking forward to the discussions with NEDO at the February meeting. But the fact remains that since 1981 the construction industry has been increasing its turnover.

§ Lord Diamond
My Lords, has the Minister's attention been drawn to the report of the OECD, published in The Times only this morning—I am sure it has been drawn to his attention—which states that Britain proportionately spends less money than any other country on improving and increasing its housing stock? Would it not be reasonable to suggest to the Minister that the Government should now change their policy to come more in line with other countries, thereby benefiting the economy?

§ The Earl of Avon
My Lords, I have not in point of fact seen the article to which the noble Lord refers. I shall look at it immediately after Question Time. However, I believe that the help which the industry is receiving through the Government's economic policies is formidable, and the lowering of interest rates will help the construction industry in particular.

§ Baroness Birk
My Lords, how can the Minister say that this can only be beneficial to the construction industry when the housing budget for 1985–86 will be cut by £660 million and when the reduced expectation of receipts from council house sales, the vital lowering of the cash limit, and inflation have all been taken into account? Is the Minister aware that a £660 million cut means the loss of 50,000 jobs in the construction industry?

§ The Earl of Avon
My Lords, I think it is too early to tell at the moment. Decisions have not yet been fully taken on, for instance, the split between capital expenditure and current expenditure from which an estimate of total spending on construction can be determined. I hope that when the White Paper is published in January I can be more specific in what I say to the noble Baroness.

§ Lord Boyd-Carpenter
My Lords, is my noble friend aware of the fact that the best way to help the building industry at the moment would be to persuade local planning authorities to expedite their decisions?

§ The Earl of Avon
My Lords, I am grateful to my noble friend for his comment.

§ Lord Howie of Troon
My Lords, when the noble Earl is studying the reports mentioned earlier, will he also study the recent reports of the Federation of Civil Engineering Contractors and the CBI, both of which asked for substantially increased investment in construction? Can he tell us when his studies are likely to come to an end and when action is likely to begin?

§ The Earl of Avon
My Lords, as I said to the noble Baroness, we shall be publishing the White Paper in January, or thereabouts. I have, indeed, taken note of the CBI and TUC policy reports, and these will be studied along with the NEDO report.

Lord Bruce of Donington
My Lords, is the noble Earl aware that his very confident answer on the effect that the Government expects as a result of the Chancellor of the Exchequer's Statement of Monday 12th November leads one to suppose that the Government must have arrived at some forecast as to the number of people who will be taken off the unemployment register in the building and construction industry? Will he please state how many people in the building and construction industry he expects to be taken off the register during the next 12 months as a result of what he describes as the beneficial effects of the Chancellor's announcement?

§ The Earl of Avon
My Lords, I do not wish to be drawn into discussing specific figures with the noble Lord on this question. But during 1983 and also, I think, in the current year, we have seen a fairly steady rate of employment in the construction industry. I understand that the self-employed element has gone up slightly, while the other has stayed almost the same. As for the future, we hope very much that the upturn in the construction industry will be related to increased employment, as I am sure the whole House will wish.

§ Lord Dean of Beswick
My Lords, arising from the Minister's reply that various organisations' views have been taken into account—those mentioned by both the noble Earl himself and the noble Lord, Lord Howie of Troon—is it not clear that the Government are standing in splendid isolation on this issue? If they should decide to do something positive, may I urge the Minister to do it as a matter of urgency before the building industry haemorrhages to death?

§ The Earl of Avon
My Lords, I again hear what the noble Lord says. I hope that he will take some comfort from the construction industry's turnover in the last two years.