HL Deb 16 June 1989 vol 508 cc1642-3

11.11 a.m.

Lord Gainford asked Her Majesty's Government:

What was the value of orders received by contractors for new construction work in Great Britain during 1988.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)

My Lords, the value of orders received by contractors for new construction work in Great Britain in 1988 was £20.6 billion in constant 1985 prices.

Lord Gainford

My Lords, I thank my noble friend for that encouraging Answer. Will he say something about the geographical spread of construction orders North and South? I do not have an interest to declare. I ask the question because the North-East of England is my old family homeland. I also spent five years as an employee of the Mowlem Group and was later on the staff of the architects' department at County Hall across the river.

Lord Hesketh

My Lords, if my noble friend is referring to the construction industry in respect of the North of England, as I believe he is, the latest state of trade inquiry conducted among firms by the Building Employers' Confederation reports an increase of full-capacity working principally among firms in northern England and in Scotland.

Lord Strabolgi

My Lords, can the noble Lord say how the figure of some £20 million plus which he quoted is split between industrial and business construction, and domestic housing?

Lord Hesketh

My Lords, the figure which I quoted was £20.6 billion. Of that £7.8 billion represents new housing; £3.1 billion, industrial premises; £4.5 billion, offices; £2.058 billion, shops; and £1.3 billion, entertainment construction.

Lord Dean of Beswick

My Lords, is the Minister aware that the high figure he gives of activity in the building sector as a whole is to be welcomed? Long may that activity continue, despite the high bank rate. Does the Minister not agree that the figures compare favourably with the first quarter of last year? However, there is a diminution in house building of approximately 20 per cent. in total affecting both the private and public sectors. Does the Minister not think, in view of the debate which took place in your Lordships' House last week, that this is an undesirable trend? Will he seek to influence his colleagues in another place to reverse it?

Lord Hesketh

My Lords, we believe that the building industry has far more to fear from a re-emergence of inflation than from the possibility of high interest rates which may have reduced housing demand in the south-east of England.

Lord Mellish

My Lords, recognising that the construction industry is probably the finest barometer of the nation's economy and how well we are doing as a country, last year's figures are without doubt very good indeed. Does the Minister see the same trend this year? Is there a downfall? If so, why?

Lord Hesketh

My Lords, we believe that there is not a "downfall", to use the word of the noble Lord, Lord Mellish. Yesterday I saw—as perhaps he did—the annual report of British Steel which is an indicator in itself because it supplies so much to the construction industry. According to the report, the prospects for 1989 looked pretty promising.

Lord Orr-Ewing

My Lords, will the noble Lord remind the House how these very encouraging and interesting figures compare with the road construction totals? Does he have the figures available?

Lord Hesketh

My Lords, in 1988 road construction expenditure was £1.03 billion.