§ 3.8 p.m.
§ Lord Graham of EdmontonMy Lords, I beg leave to ask the Question standing in my name on the Order Paper.
§ The Question was as follows:
§ To ask Her Majesty's Government whether their attention has been drawn to the increase of 11 per cent. in the price of common fletton bricks from 12th January 1987 and whether they are satisfied that the best interests of the consumer are being served by Hanson Trust being virtually the only manufacturer of common fletton bricks, given the present shortage of common fletton bricks.
§ Lord SkelmersdaleMy Lords, the London Brick Company has had a monopoly of the supply of common fletton bricks since 1974. However, flettons have faced increasing competition from concrete, concrete blocks, plasterboard and timber frames and by now command only a small proportion of the total market.
§ Lord Graham of EdmontonMy Lords, I am grateful to the Minister for his reply, but is he aware that common fletton production by the London Brick Company has declined from 680 million in 1980 to 217 million in 1986 and has been described in this month's issue of the Building Magazine as the most serious shortage since 1974? Does he accept that the increase of 11 per cent. for common flettons, following an increase of 21 per cent. over the 13 months to April 1975—that is, a 32 per cent. increase in 32 months—is damaging in the fight to keep house building prices down? Will the Minister note that the Master Builders' Federation has led the Building Employers' Confederation and the Building Merchants' Federation in expressing their gravest concern at this development?
§ Lord SkelmersdaleMy Lords, common fletton bricks are traditionally used more in the private sector than in the public housing sector. It is encouraging to see that the Government's policies are having a successful effect on building in the private sector, which is up by 23 per cent. in the period 1982 to 1986 in comparison with the period 1977 to 1981. It is important to note that the strength of this growth has not been handicapped by a shortage of building materials.
1253 So far as price is concerned, common flettons were sold at very low and uneconomic prices to combat the decline in sales. Even so, sales continued to fall and in 1986 stood at 18 per cent. of the London Brick Company's total sales. The cost increases were necessary to enable the company to reinvest in new and refurbished plant.
§ Lord Williams of ElvelMy Lords, am I right in thinking that the Monopolies Commission last reported on the building brick industry in 1976? In view of the potential shortage of building materials noted by the noble Lord in answer to an earlier Question, which I find rather astonishing, would it not be right to have a further follow-up reference to make sure that the monopoly, to which the noble Lord has referred, is not being abused?
§ Lord SkelmersdaleMy Lords, the Director General of Fair Trading considered this subject in 1984 and recommended to my right honourable friend the then Secretary of State for Trade that there were no grounds for reference to the Monopolies and Mergers Commission. If any noble Lord, or indeed anybody else, considers that the present case warrants investigation he should submit his evidence to the director general for consideration.
§ Lord Graham of EdmontonMy Lords, is the Minister aware that one of the consequences of the Hanson Trust takeover was that 1,200 brickmakers employed by LBC were made redundant? It is no good the Minister decrying the shortage of new houses when the policies of the Government and the actions of Hanson Trust are making brick shortages and putting brickmakers out of work.
§ Lord SkelmersdaleMy Lords, the noble Lord might be interested to know that in 1965, 4,258 million commons were sold. By 1985 sales had dropped to 1,085 million. In other words, this is a phenomenon which has been going on for a considerable time, as I said in my original Answer, because of an increase in the use of alternative materials such as concrete blocks.