The Construction Industry and Housing

HL Deb 15 January 1992 vol 534 cc262-96

3.5 p.m.

Lord Dean of Beswick

rose to call attention to the state of the construction industry, with special reference to the housing situation; and to move for Papers.

The noble Lord said: My Lords, in moving the Motion I shall follow the subjects as they are outlined in the brief, but I shall not speak at length on the building industry itself. A number of noble Lords have put down their names to the Motion who may well discuss in further detail the problems of the building industry.

I begin by welcoming the noble Earl, Lord Howe, who sits at the Dispatch Box. He will sum up the debate. I wish him well in his endeavours. We are well used to the housing Minister changing in both your Lordships' House and in another place. Nevertheless, he has my best wishes—though for not too long a period!

The construction industry is by any standards one, if not the greatest, barometer of a nation's wealth and an indication of whether it is doing badly or well. No doubt other Members of your Lordships' House have been furnished, as I have, with a detailed brief from both the Building Employers' Confederation and UCATT, the major building trade union. They paint a bleak picture. For instance, the brief states at the beginning: Currently available indicators of future trends in construction activity suggest a worsening recession in the industry for some time to come. After falling sharply in 1991, output is expected to continue declining in 1992 despite the forecast upturn in the rest of the economy. As a result, the total number of job losses in the industry is anticipated to reach a quarter of a million before the end of 1992, and insolvencies will continue to rise. Investment in training, new capacity and research and development will be further cut back damaging the future efficiency and competitiveness of the industry". That is the considered view of the Building Employers' Confederation. Could any industry be faced with a more disastrous situation at this time when we are on the eve of entering Europe with all that that means in its fullest sense?

In its summary the brief states: A two-year downturn in construction output is likely between 1990 and 1992; output is expected to fall by 14 per cent. Orders for new construction work (published by DoE) continue to trend downwards, albeit at a slower pace than in 1990. Survey evidence confirms bleak short-term prospects for the industry. This shows that contractors and material producers are still experiencing falling demand, and confidence about future workloads is low. Falling profits and investment by construction firms will restrict the efficiency and competitiveness of the industry. Insufficient investment in training will lead to an erosion of the skills base of the building and civil engineering industries leading to skill shortages and possible wage inflation when the recovery comes. The reduction in capacity of the material sector has adverse implications for the balance of trade when demand for building materials improves. Unemployment and insolvencies are likely to continue rising in 1992, with serious economic and political implications". That is the considered view of the Building Employers' Confederation.

The two final paragraphs of the report are the most damning and deal with rising redundancies. The report states: DoE statistics show that unemployment (employees plus self-employed) in the construction industry has been falling continuously since July 1989. In the two years to July 1991 165,000 construction jobs have been lost. BEC estimate that there will be a further 80,000 job losses in the industry before the end of 1992". That brings the total number of job losses to 250,000 or more.

Running parallel with the rising number of insolvencies are business failures. The report's final paragraph indicates that the latest statistics compiled by the Department of Trade and Industry show that in 1990 there were 4,793 insolvencies (bankruptcies plus liquidation) in the construction industry. That was a 41 per cent. increase on the level of 1989. That represents 16.5 per cent. of the total number of insolvencies in the economy in 1990. The sectoral breakdown of the number of insolvencies in the whole economy is not yet available for 1991. However, the BEC estimates that the level of insolvencies in the construction industry rose to more than 7,000.

That is the situation that exists in the building industry today. If we as a country allow it to continue we do so at our peril. The wealth of a sophisticated and advanced country such as ours is mirrored by what is happening in the building industry. At present its situation is poor and the Government should take the matter on board and take urgent action. I understand that Sir Clifford Chetwood, chairman of BEC, met the Prime Minister prior to Christmas in order to make a special plea. Unfortunately he was unsuccessful but was due to see the Prime Minister again. Can the Minister tell the House whether a further meeting has taken place and will he urge the Prime Minister and the Cabinet to listen to the pleas? They are based on a just case for getting people off the dole and preventing others from joining the queue because there is so much more fulfilling work to be done.

I turn to the second part of the Motion; that is the housing situation. Volumes have been spoken in this House not only by me but by other Members about the serious situation that now exists. Surprise, surprise —the situation is still deteriorating! I welcome the temporary measures that the Government implemented during the Christmas break to get a large number of homeless people off the streets. However, when the holiday period had finished those people were once again turned out onto the streets with little opportunity to find a worthy place to sleep. There is no doubt that homelessness is still on the increase wherever one looks, and that is tragic. Only yesterday when walking from Victoria Station to this House I saw homeless people in Victoria Street. I have never seen them there before. One lad in particular had such a permanent billet that he had his dog at his side and was eating breakfast. That is the situation that we now face.

What has brought that about? The problem began in 1979 and it has not happened by accident. During the final 12 months of the last Labour Government almost 80,000 council houses were built. When this Government took over in 1979 the person who was supposed to solve all the problems, Mr. Michael Heseltine, began a political exercise to diminish the role of local authorities. He denied them their traditional role of building houses at the bottom end of the rented sector. The cuts were severe. If the system which was inherited in 1979 of financing local authority house building had been continued, local authorities would have had over 500,000 additional houses at their disposal to let. However, there has been a diminishing number of houses to let because of the Government's deliberate policy of forcing local authorities to sell council houses, whether or not they wanted to do so. About 1.5 million houses have been sold, but I do not say that there would have been 1.5 million houses left to rent.

I have confirmed my experience in Manchester with former chairmen of housing now in this House and in the other place. It taught me that when we cleared 6,000 slum houses each year in Manchester during my term as chairman, half that programme—that is, 3,000 houses—was met by re-lets. There is no point in the Government putting forward their hardy explanation that such houses would have been occupied in any event. There is a considerable out-turn of people from council property into the housing market. I understand that although in the owner-occupation market the prediction of 100,000 repossessions has not quite been topped, there have been more than 90,000 repossessions. The enormity of that disaster visited on such people has resulted in the loss of most of their life savings. Those people do not buy houses for luxury; they do so to have somewhere to live. A house is probably their only realisable asset and when it is lost it is lost for ever.

My party welcomed the Statement made by the Secretary of State in another place before Christmas. The Government announced that they would suspend the payment of stamp duty and that an arrangement would be made with the building societies to deal with the problem. As was reported in this morning's newspapers, the bonus of the stamp duty has been swallowed up by the increased insurance payments being demanded by building societies in respect of the purchase of the property. There is still no agreement between the building societies and others involved about where the money will come from and what should be done about the problem. As yet no one has benefited and no agreement has been reached. If the Government's proposed system works—and we hope that it does—it will be only a temporary stopgap. It is only a boil plaster on a major injury.

I believe that the Government must do something about the situation. More than £5 billion is held in the coffers. There is a moratorium on most of the money but local authorities are allowed to use some of it for a variety of purposes. We are asking for the unfreezing of the total amount. The explanation that such action will suddenly damage the economy is nonsense. People would be put back to work and they would find homes. I do not envisage any situation that the Government can defend by saying that they are unable to unfreeze the money because of the effect that will have on the economic situation.

We have a duty to house people at the bottom end of the market. Historically, that has been done by local authorities. Some did not do it particularly well but in the main it was done extremely well. My party has pledged that, if it wins the next election, the local authorities will be able to resume that role and that finance, which belongs to them, will be unlocked.

I commenced by speaking about the building industry. There is a building force available in both the private and public sectors which is waiting to perform. There is work to be done. It is calculated that at least £5 billion will be needed for work in educational establishments which are collapsing. If the Minister wishes to challenge what I say, I shall take him to some schools in Manchester and Leeds, where our kids are being educated, to show him what I am talking about.

We have a building force, finance available and an urgent need on a vast social scale for that building work to commence. In his reply I hope that the Minister will give an indication that he will plead that case as forcibly as he can with the Government as soon as possible. My Lords, I beg to move for Papers.

3.21 p.m.

Lord Davies

My Lords, first, I declare an interest, in that I own and run a construction and house building company in mid-Wales. My company, which employs around 40 people and provides regular work for around 30 sub-contractors, is typical of thousands of building firms spread across the country. They are long established and provide the backbone of the industry's training in their areas. They contain much of the industry's skilled workforce. They have built the schools and health centres, have developed small scale housing projects, have mended the churches and, particularly in Wales, the chapels, and have renovated old houses. Surveys of our schools, hospitals and housing stock all indicate that our skills and experience will be required well into the future if the nation's quality of life is to be maintained.

However, many of these companies are finding it extremely difficult to survive this recession. For most of us, the downturn started two and a half years ago. Now many of our private and company clients are going bust owing us substantial sums. Tender prices for local authority work are being forced down by the national contractors moving down the contract size scale and buying work to keep their staff going. Our assets are largely tied into our housing sites, which are barely moving. Many such long established companies have already disappeared. Most are surviving with support from their bankers which, with present interest rates, will not last indefinitely.

What do we see being done to get things moving? I well remember a year ago on one of my not very frequent visits to this House, being shocked to hear a Member of the Front Bench opposite telling us, in answer to a question on the economy, that the recession, if there was a recession, would be over by the middle of the year. I wondered what world he lived in. By the summer, we were being told that the recession would be over by the end of the year. Now we are being told that the recession has proved to be deeper than anyone expected. Who have the Government been talking to? Clearly they have not been talking to the lists of eminent economists who have signed letters to the quality press predicting dire consequences if nothing is done.

We are now told that the recession is over and we are on the up. What justification is there for such statements? If one talks to local bank managers and accountants and business people across all industries, the talk is of cash flow drying up, firms teetering on the edge of receivership and business people, who have put all they have into their companies, on the verge of bankruptcy.

Is this very surprising when interest rates, which were coming down with inflation, are now stuck, in real terms allowing for inflation, at an all-time high, and may have to go up again? We are told that rates must stay up to support the pound. But can the pound be at the correct level if interest rates have to be kept well above those of our competitors even when inflation is down to their levels? I do not know the answers to those questions, but I do know that if nothing is done we may be in for a further downturn which will be a disaster for our industry. Many business people, most of them traditional supporters of the Tory party, will lose all they have. They cannot be very pleased to see the former Prime Minister, under whose rule the seeds of our present troubles were sown, strutting the world. They wonder if her yes-men who are now in power have the strength to take real and difficult action to get things moving. After all, even the sheep that became a ram and said "no" is no longer on board.

I am grateful to the noble Lord, Lord Dean of Beswick, for initiating this debate. I am disappointed that more captains of our industry, several of whom sit on the Benches opposite, have not come forward to speak. Perhaps they have already discovered that their many warnings are being ignored. This situation is very serious, but not yet as serious as it was in the 1930s. I well remember one of the two splendid men who started my company after the war telling me that, when he started in the industry in the early thirties, there was one year when only one new house was built in the whole of Montgomeryshire and he had to walk the 150 miles to Oxford to find work. I ask the Government to take action now. Some of their excuses for inaction echo alarmingly what we read was being said in the 1930s.

3.25 p.m.

Lord Amwell

My Lords, I am grateful to the noble Lord, Lord Dean of Beswick, for introducing this debate on the state of one of the country's largest and most widespread industries—an industry which is currently in crisis.

The two noble Lords speaking before me have already covered the effect which the recession has had on general construction companies and, in the particular thrust of this debate, on the housing sector. I should like to expand the debate into another sector of the industry; namely, consulting engineering. Consulting engineers design the infrastructure which the contractors then build. Here I must declare an interest because I am with a consulting engineering firm engaged largely in public works.

In seeking details of the effect of the recession on the consulting sector, I have been provided with valuable information by the Association of Consulting Engineers. It tells me that the consulting sector employed some 42,000 staff worldwide in 1990, the great majority of whom were qualified engineers or technicians. The association's figures for 1991 are unfortunately not yet to hand, but it has been estimated elsewhere that at least 5,000 jobs have been lost in that sector in the past year; and all the evidence is that 1992 will be at least as difficult. That is a rate of loss of some 12 per cent. per annum. While in absolute terms it is small compared with the industry as a whole, it is a very serious matter for the sector and is a personal tragedy for the individuals involved. There are no golden handshakes in that sector.

However, that loss of jobs masks a more serious problem. The total fees earned by consultants on a real cost basis, discounting for inflation, rose steadily through the 1980s until 1987 but that has since fallen back until in 1990 income was back to 1985 levels. However, the per capita earnings of staff had fallen back to 1982 levels.

A simple analysis may suggest that firms simply failed to react fast enough or, to put it bluntly, to sack people fast enough and that therefore any fall in profitability was one of their own making. In fact the problem is more complex than that: first, highly qualified and expensively trained staff are a consultant's only asset. No firm wants to lay staff off the moment the water gets choppy. Secondly, the work that consultants were doing was not in fact falling off as fast as income. In part that is because clients' design requirements, particularly in the public sector, are becoming more complex for the same fee. Thirdly, and mainly, it is because firms have been caught in the spiral of Government-initiated fee competition to which has now been added the spiral of recession. Most firms saw and continue to see fee competition as undesirable, partly because profits would be harder to earn but mainly because they saw that quality would inevitably suffer. None of us is afraid of competition—we have been competing for years overseas. However, competition should be based on quality, not on price.

I am disappointed that the noble Lord, Lord Howie of Troon, is not in his place this afternoon. He has regaled us with the perils of fee competition on a number of occasions in this House and he has been rebuffed on each occasion most unsympathetically, I have felt, by Ministers. I cannot realistically, therefore, expect to win over the Government on this occasion. What I cannot understand is how the Government can remain apparently ignorant of the minutely small percentage that can be saved in design figures, and how long the infrastructure will be with us. Those small savings cannot possibly amount to more than 1 per cent. of the total cost of the infrastructure over its life; indeed, it would almost certainly be much smaller.

That is as nothing compared to the added cost of poor or defensive engineering design in the first instance if the fees are not available to do the job as thoroughly as it should be done, or increased maintenance costs stemming from that poor design in the longer term. With the present state of the market, those are the problems with which the nation will be faced. To paraphrase Ruskin, you never get anything for nothing.

The Government have hit on a new wheeze—fee competition with blindfolds. The Department of Transport is refusing to reveal the amount of the winning bids for road designs. What is it afraid of? It makes public the value of construction tenders; why not design fees? I suspect that it is possibly because the Government are afraid of being ridiculed should the low level of those bids be made public. They would be seen to be wholly inadequate to cover the briefs that were sent out. What hope does that give us for the future?

British construction consultants have always made a significant contribution to the country's invisible export earnings; some £480 million in 1990. Not only that, but they often paved the way for British contractors to be selected for the much more valuable construction contracts overseas. However, to a consultant whose margins are quite small in real terms, the cost of chasing overseas work is significant. Collapsing margins on the home front means less opportunity to seek work overseas. Add to that the fact that historically we were often dealing in many countries with third world nationals in positions of responsibility who had been trained in Britain and had a fondness for dealing with British companies. Through the Government's policies on overseas students all that has come to an end. Now they all go to America. That too does not bode well for the future.

How different all that is to Japan, where I understand that consultants are not awarded work on the home market on the basis of price, but in proportion to the amount of work that they have won overseas. Margins at home are generous. That enables them to bid with ever lower margins overseas and to beat us on price, though fortunately not always on quality. Far be it for me to suggest that the Japanese are more successful at managing these things than we are. But should present policies not be modified, the consulting sector in this country may be just that—in this country and nowhere else.

I have harped on somewhat about fee competition, but I feel that it is in large measure responsible for the current state of the consulting sector. Recessions have happened before, and in this industry we are well used to being treated as an economic regulator. I am sure that we could have coped more securely with this recession had we not already been cleared out by the effects of fee competition. Now we are seeing old, established and respected firms fail. At best there are enforced mergers coupled with rationalisations—further job losses—or at worst a takeover by an overseas, often American, company. Americans have a different work ethic, as we all know, based on "hire and fire". It may be that we will all have to follow suit. If that happens—and it is anathema to the expectations of this country—it will have the effect of driving away from consulting engineering the graduates of intellectual quality that we need in this country if an infrastructure fit for the 21st century is to continue to be built.

My final point is that engineering design precedes construction. If the predictions of further swingeing cuts in the design sector in 1992 are proven correct, then the upturn for the main contracting companies will be delayed into 1993 or 1994. That will be a serious matter for the industry.

3.34 p.m.

Lord Jay

My Lords, the present Government have got themselves into the housing and building muddle that we can all see because their economic policy flatly contradicts their housing policy. Their economic ERM policy demands high interest rates and their housing policy demands low interest rates; hence the confusion. That practical confusion springs in turn from the rather deeper confusion of mind of believing that by market forces alone we can house the whole population of a modern community in decent civilised conditions. In fact we cannot. Not even the United States has been able to do that.

The only countries that have properly housed their whole population are the Scandinavian countries. They have done so by major state intervention and by treating housing as a public service. By neglecting those basic facts the present Government have produced the results which we all see: an acute shortage of houses to rent; an almost total cessation of new building, particularly of houses to rent; record unemployment in the building industry, as we have just heard, and almost 150,000 homeless families—that is, around 1.25 million human beings without a home throughout the 24 hours in a day.

The public need, which is proved by every inquiry, is for a major increase in rented accommodation and a large expansion of such accommodation as a percentage of the total housing stock. The Government have heavily reduced both. It is perhaps worth reminding ourselves that during the period of the Labour Government of 1945 to 1951 1 million new houses were built in this country. A similar number were built between 1964 and 1970. How many new houses are the Government building under their present regime? People have also forgotten that the Government's housing Bill of two years ago was supposed to be the beginning of a large increase in private houses to rent. On 24th July I asked the Minister a Question on how many private dwellings to rent had been built in the first half of 1990–91. The Minister was not able to give me a figure and spoke about the repair of old houses. I suspect the figure is only a few thousand. Perhaps the Minister can give that figure to the House at the end of this debate; either for the first nine months of 1991 or for 1991 as a whole.

The worst blunder of all has sprung from the Government's extraordinary and irrational prejudice against the local authorities, which shows itself in all their policies and which has reduced new building of council houses to almost zero. We are now building the smallest number of houses of the type that we need the most; that is to say, council houses to rent. If the motive of the Government's right-to-buy campaign for existing council houses was really their sympathy with tenants they would have made it a condition that any council flat or house sold to sitting tenants, if resold, should be sold back to the council and, further, something like market value would have been charged.

In my opinion, that would have been and still is the right policy for the sale of council houses. It would have enabled those sitting tenants who genuinely wanted to buy their homes to do so and the stock of low-cost rented houses would have been maintained. When those tenants no longer wanted them they would have returned the stock. There was no need to cut down the total stock of council houses to rent in order to give the right to buy to tenants who really wanted it. Indeed, the fact that the Government did not impose such conditions suggests to many people that the Government's real motive—or the Tory Party's real motive —was not concern for the tenants but a determination to cut down the stock of low rent council houses.

In any case, that fact, together with the Government's indefensible refusal to allow local authorities to use their own capital receipts for building new houses, encourages those cynics who believe that the other main motive of Ministers was the belief that owner-occupiers always vote Tory. I believe that is now probably very far from the truth for, as we know, thousands of owner-occupiers are having their homes repossessed. I wonder whether noble Lords realise what that can mean. A family living in a rented council house—their family home in which they had absolute lifelong security of tenure if the rent was paid—having been induced or bribed, if you like, by the Government with the taxpayers' money, bought their house with a mortgage loan. Now, because that family cannot pay the mortgage interest, let alone the repair bills, they are evicted from the home which they had previously regarded as theirs and in which they were absolutely secure for life.

We should be told today whether the Government's rescue repossession plan, announced just before Christmas, is really working. Can we have the figures to show what has happened since then? My noble friend cast some doubt on whether anything has actually happened. The truth is that the several million council homes to rent built in the 25 years after the last war were the best homes in which many of those people had ever lived. The only thing seriously wrong with council houses and flats, in my opinion, was that not enough money was ever available for proper maintenance and a proper caretaker service to look after them. I say that not from guesswork but from experience of many hundreds of individual cases in my previous constituency.

The Tory Party's attempts to discredit council houses looks unpleasantly like another example of what appears to be becoming its strategy of starving the public services of money and then saying that they are so inefficient that they should be abandoned. What is now needed is a major re-expansion of council new building over the coming years with adequate funding not merely for construction but for maintenance thereafter. Of course we need private building as well and also housing association building. We need private and housing association building in addition to, and not instead of, building by local councils. It is also certainly desirable—I believe that it is part of the Government's plan—that building societies and perhaps the Housing Corporation should also rent as well as sell dwellings. Again, that should be in addition to the building work of the local authorities and not instead of it.

Therefore, what is urgent now is to build far more houses for rent. The way to do that, in addition to other measures, is to release 100 per cent. of the capital receipts of local authorities so that they can build as many new dwellings as they can. That will give us at least some of the acutely needed homes to rent. It will give some help, or at least hope, to the homeless. Such a provision would employ an increasing number of the quarter of a million people now unemployed in the building industry and whom the Government, in effect, are at present paying to do nothing. The Government's opposition to releasing these capital receipts to local authorities is really indefensible. It is due to blind prejudice. As I said, those receipts should be released so that houses can be built. That is what must be done. If this Government do not do that, it will be done by the next Government.

3.44 p.m.

Lord Ennals

My Lords, my noble friend Lord Dean of Beswick has chosen a subject of tremendous importance economically in terms of the health of the nation; in terms of the balance of payments; in terms of levels of employment, and also in terms of the social welfare of our people, many of whom are so desperately needing permanent accommodation. I am grateful to my noble friend and to those who have already spoken.

I agree with the noble Lord, Lord Davies. It is really extraordinary that not a single Member of the Conservative Benches, whether he is a captain of industry or someone who supposedly cares about the welfare of people and their housing, has put down his name to speak in this debate. One can only assume that that means that the Members of the Conservative Benches simply do not give a damn about the issue that we are discussing today.

I wish to concentrate on housing problems. Over Christmas many of us were very conscious of the appalling circumstances of the growing army of single homeless people in Britain. Thanks to the volunteers of Crisis at Christmas and Shelter, who gave so generously of their time and money over Christmas, it was possible to provide shelter, warmth, good food and friendship to those for whom Christmas would have been totally without joy. We are not only talking about the single homeless who were able to be accommodated. In addition to those single homeless the figures show that a record 60,000 homeless people spent Christmas in bed and breakfast hotels, mobile homes, council hostels and other forms of temporary housing. What way is this for a civilised country to behave when people have to spend Christmas in this manner?

I have deep recollections of this issue because in the early 1970s, when I was working directly with organisations dealing with single homeless people and founded and became the first chairman of the Campaign for the Homeless and Rootless, I had great respect for the voluntary organisations which co-operated in meeting some of these profoundly important social problems.

We are dealing not only with a housing problem, but for many we are dealing with the consequences of long-term unemployment and of mental ill health. I do not know how many times, speaking from the Front Bench, I have drawn attention to the very high proportion of single homeless people in hostels and sleeping rough who are in fact people suffering from mental illness with psychiatric disorders of one kind or another. It is a constant reminder of the inadequacy of our community care provisions and of the inadequacy of funds to provide community care for people who should be in decent accommodation but who live rough on the streets.

We know that funds which should have been made available for community care have been channelled into subsidising poll tax payers who have suffered so much from the monumental acts of folly of this Government in introducing a form of taxation which they themselves have recognised was quite inadequate and socially unjust. They are now trying to bring in another tax.

I believe that the figures for single homeless people are a disgrace to a caring society. There appear to be no official Government figures, but Shelter estimates that between 2,000 and 3,000 people are sleeping rough on the streets of London. They have had a few days' respite, but they are back again without a place to sleep. There are up to 5,000 other persons sleeping rough elsewhere in the country. Shelter has also estimated that 156,000 young people have become homeless in recent years. Centrepoint estimates that there are 50,000 young homeless people in central London between the ages of 16 and 19.

One looks at those large figures and one sees that behind them lies a great deal of social deprivation. For example, black people form a disproportionately high proportion of homeless people, according to the figures from local authorities. Single parent families are eight times more likely to be homeless than other households. A number of households have been accepted as homeless because, as I said, of mental illness. We have not just the single homeless, but whole households as well. Figures show that these increased by 75 per cent. in 1990 alone, and the figures for 1991 seem likely to show a continuing upward trend. I should have thought that these were social problems which would deeply concern a caring government who would have been coming forward with proposals today. Perhaps the Minister will do that on his own, without anyone to support him. If he does we look forward to what he has to say.

All these effects on deprived families and, individuals are part of the appalling shambles in the Government's housing policy, as my noble friend Lord Jay emphasised in a very able exposition. The Government have taken steps to make it almost impossible for houses to be built by local authorities for rent. It is quite extraordinary that they have taken action to ensure that there is virtually no business at the moment in building houses to rent for people who need them. We have a growing dependence on temporary solutions which seem to be typical of this non-interventionist Government. They are masters of patching up, but not of producing a programme for proper repairs and a proper policy for the future.

Look at what has happened to the temporary bed and breakfast situation. For those accommodated in bed and breakfast hotels it is utterly soul-destroying. Many of them are required to be out during the bulk of the day; they are not able to live as decent families and they are often in accommodation which is grossly overcrowded and often quite inadequate for proper family life. At the moment I do not particularly mind if people own or rent a property. Of course, owning is preferable because it gives security of tenure. But people are entitled to have accommodation in which they can live a proper family life.

To create a situation where bed and breakfast is the chosen solution is financially wasteful and socially unacceptable. Figures show that it is far more expensive for the public purse to spend money on bed and breakfast accommodation as opposed to building houses for rent, which will be ongoing and help to provide a permanent solution. Yet the use of bed and breakfast accommodation over the past 12 months has increased dramatically. Here we have figures: the number of people in bed and breakfast accommodation in 1991 has shown an increase in the North of England of 91 per cent. In the West Midlands the figure is 71 per cent.; in the East Midlands, 43 per cent.; in East Anglia, 38 per cent.; and in the South-West, 17 per cent. That is an appalling situation. More and more people are being forced into accommodation which must be socially very undesirable. It is the final proof of the bankruptcy of Government economic policies.

As has already been said by my colleagues, we now have record levels of repossession. Can your Lordships appreciate the misery and the pain of being forced out of one's accommodation? It happened to me personally just a few years ago. For reasons that I do not need to explain I was forced to sell my flat where I had lived for many years, where I had been very happy, and to move into quite different and much less desirable accommodation. At least I had somewhere to go. Those whose houses have been repossessed now do not know what the future holds for them. The effect on us was horrific—and for them it must be much worse. Now it is affecting tens of thousands of families throughout the country.

From June 1990 to June 1991 a record 63,940 families had their homes repossessed and were homeless. By the end of the year, as has already been said by my noble friend, that figure had increased to 80,000 and it may now be more than that. That is an absolute calamity for the families concerned.

What is the Government's solution? My noble friend on the Front Bench casts some doubt on whether the Government's solution of stamp duty was effective. We do not need to rely only on his words. The suspension of stamp duty was an ineffective measure which could lead to a housing market disaster late this year. As an electioneering stunt it was absolutely disgraceful. These are the words of John Wriglesworth, a housing specialist at the City brokers, Phillips and Drew, not of a Labour spokesman put up to make a party comment. Mr. Wriglesworth is quoted in the Independent as saying that, house prices fell 1 per cent. last month [November] on the Halifax index, which had no effect in reviving the market, so a 1 per cent. stamp duty saving was likely to be equally ineffective". He went on to say that the eight-month suspension was the, cheapest election ploy I have ever seen". That was not only the opinion of a Phillips and Drew spokesman. Harry Hill, the joint managing director of the Hambro Countrywide Estate Agencies also took a very critical view. He said: It is a clear sign that the Government—having effectively killed the housing market—are trying to make a sincere effort to regenerate it". Perhaps that was the intent and we shall have to see what is the result of that.

Looking at the last problem which has already been touched upon by my noble friend, the most fundamental question is: What are the Government going to do about the utterly depressed state of the construction industry? The failure to meet demand —demand for affordable housing as well as for other social purposes such as school building and other types of construction—is higher now than it has ever been. To meet housing needs the construction industry will need to build another 50,000 to 60,000 social homes each year for the rest of the decade. At the same time, the demand for repair and maintenance work and large-scale civil engineering work is likely to increase. Most of this work will be highly skilled and with training so badly hit and construction firms diversifying their interests domestic demand will not easily be met.

As I hinted earlier the widening trade deficit in building products is a very serious situation for the economy of our country. Because of lost capacity caused by the recession of the early 1980s, by 1989 Britain was running a £3 billion trade deficit in building products. What are the Government going to do about that to try to reverse that trend? If we look at our competition in Europe, Britain is alone among the major European economies in having a decline in construction output. We are in an extraordinarily serious situation, but apparently the Government have no long-term programme to put before us. Certainly they have not done so now and, as I said, clearly those in your Lordships' House who take the Conservative Whip seem to be unconcerned about the problems we are debating today. I find that utterly deplorable.

3.58 p.m.

Lord Mellish

My Lords, it is with sorrow rather than anger that I rise to speak in this debate. I happen to be one of those people who for most of my life has taken an interest in the construction industry. In 1964 I was made a junior Minister of Housing, so I became involved in the construction industry then. Later on I became the Minister of Public Buildings and Works and again I became very much involved. I have always watched that industry and recognised that it is a peculiar industry in the sense that about 50 per cent. are cowboys. They are not at all reputable. I completely ignore them. I am talking now of the reputable decent firms who comprise the building and construction industry as I know it.

I am delighted that the Leader of the House is present. It is ominous—and I do not ask for any comment from him—that in this very important debate concerning the construction industry, which is one of the great assets of our nation, that not one Conservative has put down his name to speak. Why is that? Is it because they are not interested, or is it because they are so ashamed of what is going on in the industry that they just do not want to get involved? I call the attention of the Leader of the House to the fact that not one of his supporters has put down a voluntary—

Lord Waddington

My Lords, I do not think that I really need to make this point. However, it has been drawn to my attention that not so very long ago there was an equally important debate on the motor industry and not a single member of the Labour Party put down his name to speak. It is not a good point.

Lord Mellish

My Lords, with great respect, I do not defend that either. I do not necessarily defend members of the Labour Party, whether they are speaking officially or not. I am saying that as regards a debate on construction, which is one of the most important parts of British industry, not one single Conservative has put down his name to speak. I find that incredible. So be it.

I have a special regard for the industry. On virtually the first day I became a member of your Lordships' House I joined the building and construction group. I quickly found that it was not a viable group. It was not powerful enough. We had no right to ask Ministers to come and talk to us. I am glad to say—and here I pay tribute to the Conservative Party—that the Conservative Chief Whip readily agreed to the group becoming a viable all-party group and welcomed it. The Leader of the House may be interested to know that in the past three or four months we have held one meeting. We have a Minister coming to the next meeting, which is very important because he will state government policy.

I recognise the Government's difficulties. Unlike many in the House I do not come here with a great prejudice that everything was perfect before and everything is black now. I do not accept that. It is nonsense. From listening to my noble friend Lord Ennals one would believe that there was no such thing as a homeless family in 1979. Where was he?

Lord Ennals

My Lords, I shall tell my noble friend where I was. I was in Parliament. The number of homeless families has risen dramatically. My noble friend must recognise that. He was a Minister at the time.

Lord Mellish

My Lords, of course I recognise that the number of homeless families has risen dramatically. I shall go on to talk about the construction industry and the plight that it is now in. But what I am saying to my noble friend—let it be quite clear what I am saying—is that he talks as if this were a sudden occurrence and that there were never homeless families before. Homeless families have always been with us and I do not deny that something special has to be done for them.

The construction industry now faces a two-year downturn in construction output. This year and next year output is expected to fall by 14 per cent. By the way, those are not my figures: they come from the employers' associations, which are determined that their point of view shall be understood. They are friends not of mine; they are friends of the party opposite. These figures cannot be disputed by any government. Orders for new construction work continue to fall. Falling profits and investment by construction firms will restrict their efficiency. There is also inefficient investment in training. Fancy that! Firms have cut back on investment in training. That will lead to an erosion of the skills base in the building and civil engineering industry. Furthermore, a reduction in the materials sector has adverse implications for the balance of trade when demand for building materials improves.

I have gone into the whole question of training because that matter concerns me very much. I find that the number of apprentices in the six months to January was 2,710. That represents a fall of 37 per cent. on a year ago. The registration of bricklayers under training fell by 44 per cent.; the registration of carpenters by 39 per cent.; the registration of painters by 50 per cent. These figures come from the Construction Industry Training Board itself. We have cut back on the number of trainees. The overall reduction is 10 per cent. What in heaven's name are the Government doing? Why are they doing this? I have heard the arguments about the fight against inflation. I understand that point and I also know that there is a world recession and that the recession is not confined to this country. Having said that, is it not clear in their thick skulls that the construction industry is one of the basic industries of our nation? If it is doing badly, the whole nation is doing badly. If it is doing fairly well—I do not expect it to reach 1983 levels again—and if it has a more viable future than the document from which I have quoted shows, it means a bright future for Britain. Do not the Government understand that? What will they do to help?

Perhaps I may refer to local government. It will be known in this House that I am not a local government man. I know its faults and its heartaches and I know that it has made many mistakes. However, the trouble with the Government is that they compare everything with what Lambeth and Southwark do. That has nothing to do with the argument. Lambeth and Southwark are way out. They are different. The vast majority of councils in this country today are decent and respectable and are entitled to be helped. They should not be ignored and treated like rubbish.

I supported right from the start the policy of allowing people to buy their council flats. I always agreed with that. I am all for home ownership. Why should I own my house but deny that right to other people? Of course one encourages councils so to do. However, having encouraged them to do it the Government then imposed strictures on the capital which councils received. I have figures from the employers which show that an estimated £6.6 billion is in the kitty. That money is held by local authorities but they are not allowed to spend it. Have you ever heard such a thing? The sales this year alone will bring the total accumulated receipts to around £10 billion. I understand that if the Government were immediately to release £10 billion onto the market it would have an inflationary effect. I understand and recognise that. But there is no reason why they should not control that release and why the vast majority of decent and honest local authorities should not be helped and assisted.

I am told that the proportion of capital receipts available to local authorities from the sale of council houses is controlled at the rate of 25 per cent. The employers are asking for that proportion to be raised to 40 per cent. Why should it not be so? That would still leave the Government with control of 60 per cent. Some respect must be paid to those councils who receive that money. I recognise that some do not need it as much as others. However, the inner London boroughs need it badly. Why in heaven's name do we not allow local authorities to increase their expenditure? By doing so we would give the building industry a chance to flourish.

Against that background I ask the Minister to treat this debate seriously. His brief must be lousy. I feel sorry for civil servants who provide Ministers with their notes. However, what the Government are trying to do is almost indefensible. I know why they are trying to do it. However, with an industry of this size and importance, it is indefensible. I ask the Minister to ignore his civil servants. I ask him to make a speech of his own, to talk with some humanity, to talk as if he had some feeling about this issue and to talk as if he really means what he says. Let us hear from him.

4.9 p.m.

Lord Blease

My Lords, I join other noble Lords in complimenting my noble friend Lord Dean of Beswick on initiating this important and timely debate. I share the concern of other speakers about the ominous decline of the construction industry throughout the United Kingdom and the pervasive crisis with regard to the availability of affordable housing in England, Wales, Scotland and Northern Ireland. Noble Lords will not be surprised if I direct my remarks mainly to the general situation of the construction industry and housing in Northern Ireland. I must mention that I fully realise—and I am sure that noble Lords appreciate this—that there are crucial community elements in Northern Ireland which contribute additional difficulties to the construction industry and the problems of housing in the Province.

In Northern Ireland we have the wilful, criminal and cruel action of the terrorists and the paramilitaries: the bombing and destruction of homes, hospitals, schools, shops, places of work and businesses, buildings for recreation and culture and the public and private means of transport and communications. That causes widespread havoc and impedes developments which make for employment, prosperity and human happiness throughout the Province.

That mayhem makes untoward demands on public and private finance, as well as on our major capital resources. The peaceable Northern Ireland citizens have to endure unnecessary, purposeless physical and mental strain and human suffering. I am glad to say that because of the spiritual resilience of the general public, together with the resolve of the professional civil engineers, the skilled artisans and the committed workers in the Northern Ireland construction industry —and, I may add, with the purposeful help of the past and the present Northern Ireland Office Ministers—the battered fabric of Northern Ireland's infrastructure has, in the spirit of the mythical phoenix, continued to rise from the ashes with new life and determination. At the same time, Northern Ireland is an integral part of the United Kingdom. On parliamentary issues it cannot be isolated from the overall outcome of policies and decisions of government. It is to those fiscal and economic policies which affect the construction industry and affordable housing accommodation that I wish to address my remarks.

The four matters that I wish to put to the Minister are as follows. First, the relative decline in the Northern Ireland construction industry; secondly, the relevant health and safety factors in the industry—that is, those relevant to this debate so far as concerns fair competition and other matters—thirdly, the need for affordable housing and the care of the homeless; and fourthly, suitable urgent measures to deal with the growing number of mortgage repossessions.

The relative recession in the construction industry as between Great Britain and Northern Ireland is portrayed in the Northern Ireland official employment data for December 1991. In the United Kingdom, employment in the construction sector for June 1981 was 1,122,000. In June 1991, the number had fallen to 981,000—that is a loss of some 147,000 jobs, or a 13 per cent. reduction in the construction labour force in 10 years. During the same period in Northern Ireland the figures were 28,300 for 1981 and 22,920 for 1991. That represents a loss of jobs over the 10-year period of 5,380—some 19 per cent. added to the chronic unemployment figure in the Province. The construction sector production output during the same 10-year period showed, in Great Britain, a 36 per cent. increase, while in Northern Ireland we had a 46 per cent. increase. Those figures are taken from official data. Therefore, notwithstanding the community problems that I mentioned earlier, those figures indicate that the Northern Ireland construction industry is competitive and efficient.

A further indication of the serious decline in the construction industry is the relatively high number of building contractors and construction companies which have closed, reduced their operational work or which have, sadly, been declared bankrupt. Perhaps a few extracts from the 1989–90 biennial report of the Health and Safety Division of the Department of Economic Development will show how the recession is affecting working standards and practices in the construction industry and also its overall competitiveness. The report says: During the past two years there has been a significant change both in the level of activity and the nature of the projects undertaken in the construction industry. There was a marked decrease in house building, particularly in the private sector where most developers now operate on a 'build when sold' policy. With the exception of Belfast where commercial development has blossomed there has been a decline elsewhere. Increasing competition for major contracts has enabled clients to impose very tight building schedules with heavy penalty clauses for delay in completion. This additional pressure on the contractor can lead to short cuts being taken, often at the expense of safety … The ever increasing use of labour only and self-employed sub-contractors, together with the modern trend towards management contracting, means that there is often uncertainty as to who and to what extent they have responsibility for the maintenance of safety standards on site". I concur with what has already been said by the noble Lord, Lord Mellish, as regards the number of cowboy operators who are in the industry and how they bring the whole construction industry into disrepute. Indeed, they sometimes fleece considerably those people who are employed and those people who contract with them.

I continue now to quote from the report: Cut throat competition frequently means that savings are made at the price of safety. This will continue until contracts are awarded on factors other than price alone". I believe that that has already been stated in the debate. The report continues: As has been stated many times in the past, the only certain way for the foreseeable future of maintaining reasonable health and safety standards within the construction industry is through a programme of regular inspection coupled with appropriate enforcement action … Most safety problems occurring on construction sites can be attributed to the failings of management … The Inspectorate views the promotion of health and safety within the construction industry as an important and integral part of its work".

I should like to put to the Minister that, while we may have many opportunities during the coming year to discuss health and safety matters, it is important in this connection that the recession should not in any way inhibit the increased employment of factory inspectors and the carrying out of site examinations. Indeed, I shall go further than that: I call for the compulsory registration of all building sites, with reference to a particular period and a particular number of employees; for example, 10 employees on a site for one week could be compulsorily registered.

I turn now to the need for affordable housing and the problems of the increase in homelessness. I know that this has been dealt with at some length during the debate, but I should like to put forward the picture of what is occurring in Northern Ireland. If the opportunity of this debate had been taken, I am sure that other regions of the country—for example, Scotland, Wales and other parts of England—could have dealt with what is happening in their areas.

There are currently about 23,000 people on the waiting list for housing accommodation in Northern Ireland. Some 10,000 of them are in urgent need. Yet the Northern Ireland Housing Executive has had to cut its building programme for the next three years by 600 homes. The Simon Community is the main voluntary organisation in Northern Ireland endeavouring to cope with the tidal wave of homelessness. Last year, the organisation had over 30,000 requests from people for somewhere to live —that is, just for a roof over their heads. I want to make the qualification that 30,000 requests does not mean that there are 30,000 homeless people. It means that over the years many people have come knocking at the door to find some place to lay their heads for the night. They include many young people and many elderly people in distress.

However we look at it, homelessness is a growing social problem which is not being tackled in a satisfactory parliamentary, social or civilised manner. As we have already heard, mortgage repossessions in 1991 reached alarming proportions. In Great Britain, I understand that the figure for 1990 was 44,000. That figure has now reached some 100,000. One leading housing consultant body has said that it may rise to about 150,000 in 1992. Belfast Housing Aid, one of the voluntary organisations in Northern Ireland, has been carrying out advisory and representative work on the soul-destroying issue of home repossessions. It believes that the 1991 figure for Northern Ireland will be in excess of 3,000. What an awful outlook for life that is for any part of the United Kingdom, and I am especially interested in the Province.

Will the Minister use his good offices—I join with others in this respect—to urge the Government to take urgent new steps to establish suitable rescue schemes for people subject to mortgage repossessions. It is something that should not wait until after a general election. There is an urgent need now when we think what repossession means to families and to the social life of the whole of the United Kingdom.

I have no pecuniary interest in the Northern Ireland Housing Executive; but since its inception in 1971, I have had a close link with many of its activities and could perhaps be said to be one of its founding members. It was set up by the Government and makes representations to them. Since 1971, it has made a significant contribution to the improved welfare of individuals, homes and the Province's wider economy. During the past 20 years, the executive has expended an estimated £3 billion on a broad spectrum of development programmes which have brought material, social, physical and economic benefits to Northern Ireland society as a whole. It has, for instance, been estimated that for every £1 million spent by the executive, 60 jobs are sustained in the local construction industry. It is an important facet in the building of homes.

This year (1992) will witness the publication of the fifth Northern Ireland House Condition Survey undertaken since 1974. In that year, 19 per cent. of all Northern Ireland's dwelling accommodation was deemed to be unfit, according to public health legislation. While the latest survey in 1987 showed that that figure had been reduced to 8.4 per cent., the executive hopes that the current survey will reflect further improvement. It is a demonstration that public house building can do a job in the interests of the community provided the facilities exist and the policies are right.

In the 21 years since 1971, the Housing Executive has completed over 72,000 new homes. An exercise on that scale alone has resulted in a dramatically improved quality of life for countless individuals and families. Moreover, an improved residential environment can have a corresponding and positive effect upon personal health. It can reduce crime, lead to enhanced educational attainment and help to safeguard the quality of the general environment. It can also contribute to good neighbourliness and understanding. It can help the lives of many of our children. The reverse leads to a downward spiral of values in our society.

In recent years, the Housing Executive has slipped down the priority ranking in the allocations made in the Northern Ireland budget as security, health and education have commanded more and more resources. It can be argued that the slippage in status has gone too far.

I see that I have exceeded my 15 minutes. Perhaps I may crave the indulgence of the House and speak for a few more minutes to round off what I have to say —I believe that there is sufficient time and that I shall not be denying anyone time to speak. Not only will the Housing Executive be unable to offer homes to those who need them, there is a risk that under the present arrangements its existing stock and some in the private sector could be allowed to decay. In such an eventuality, the remedial work necessary in future will be much more expensive than if the properties were properly maintained.

A document has been circulated by the Union of Construction, Allied Trades and Technicians. It is entitled, Kick Start —How To Get Construction Going Again. Its campaign has my full support and that of many of my colleagues on this side of the House. It is campaigning for a cut in interest rates, increased investment in training, local authority house building programmes, transport infrastructure and the repair of school buildings.

This is the first time that I have had the opportunity to address the House when the new Minister is to reply. I have tried not to spring on him anything about Northern Ireland because I know that that is outside his general remit. I shall be pleased to hear whatever reply he can offer me.

4.28 p.m.

Lord Bruce of Donington

My Lords, I believe it will be generally agreed on all sides of the House that there are three basic essentials to human life: food, clothing and shelter. Within the concept of a civilised society, shelter means rather more than a cardboard box on the Embankment and some kind of temporary bed-and-breakfast accommodation. It means a dwelling; it means a home; it means a place where families can have their individual privacy, sometimes even from one another, and where a child can do its homework without interrupting the normal family routine; it means a place to which one can ask one's friends for entertainment; it means a place where one can, in hopeful tranquility—in a "rock" age—look occasionally at television without interruption; it means, in fact, the provision of those amenities which most Members of the House, on all sides, have come to take for granted as a matter of course: a place where there can be some deep sense of that personal serenity which always lies at the root of human happiness. That is why the House should be most grateful to my noble friend Lord Dean of Beswick for having raised the situation in the construction industry with reference to housing.

Perhaps I ought to warn the noble Earl that sooner or later he will—and, if he cannot, the Government will—have to address the principal problem that is raised in this debate. It will be no good him producing a presentation of selective figures relating to the aid given to housing associations in 1991 compared with 1990. It will be no good him producing figures to show how much matters have improved from 1985 to 1988. He will have to answer the main charge which was put succinctly by my noble friend Lord Jay.

Here we have a situation where on the one hand the need for houses—in which I include flats or dwellings—is clamant but on the other we see the idleness of people, capital and material which can satisfy that need. The noble Lord, Lord Jay, asked why, despite all the economic miracles which were going to do away with this kind of problem and which presumably have occurred in the past 10 years, the operation of the free market in the field of housing and generally in construction has failed to solve the problem. So, when the noble Earl comes to reply, unless he addresses the principal and vital question and tells us what the Government will do about it, his reply to the debate will be nothing more than a mere technical manoeuvre.

Let us deal first with the need. It has been referred to by other noble Lords in the course of the debate and reference has been made to the 150,000 homeless. Incidentally, we should like to have the government figure for homelessness at the end of June 1991 compared with that for 1990, if the noble Earl can provide it. We have heard mention of the homeless, of the families herded together in one room, often with primitive facilities for toilets, privacy and everything else in the bed-and-breakfast accommodation.

However, there are further factors which have been produced by the Building Employers Confederation, which is not a typically Marxist organisation, as I am sure the noble Lord the Leader of the House will agree. What do the figures reveal? They reveal that, of the total of 19 million houses in the United Kingdom—and I shall quote figures to the nearest thousand, although I have figures here which are accurate to the last digit—over half a million still lack the normal amenities which civilised society has come to regard as essential. Over I million houses, in round figures, were unfit for human habitation and a further 1 million were in a serious condition or what is described as in serious disrepair.

The confederation said that £24 billion would have to be spent sooner or later—not all at once—to bring the housing or dwelling stock back up to a reasonable, civilised standard. We wish to know why this has not been done. It is difficult to obtain figures. If we phone the Department of Employment we cannot obtain them nor can we obtain them from other ministries. The figure for the unemployed at the moment agreed between the Building Employers Confederation and the trade unions is 185,000, as near as they can make it. As my noble friend said, that is due to increase to 250,000 by the middle of 1993 unless something is done. In 1991 there were 7,000 bankruptcies in the building and construction industry.

Why has nothing been done at governmental level in order to ensure that the facilities available for building houses are used? Why have the Government done nothing? Unless they answer that question, they will forfeit the respect of the British population. As of now, the record of the Government on housing over the past 10 years is the most disgraceful in Europe. The Government will have to answer that question. They may say that they have no money to do anything. No money? On certain matters they can provide all the money they wish because questions of principle are involved. I shall never forget the right honourable gentleman, the Member of Parliament for Henley, providing billions of pounds in expenditure for the rehabilitation of the Falklands. He said, "That is a question of principle, the money has to be found". However, when it came to other environmental matters, including health and housing, of course the money could not be found, because we were short of resources.

That will not wash any more. As my noble friend said—and this was reinforced by the noble Lord, Lord Mellish—£6 billion is in the hands of local authorities. They are not allowed to spend it or are only allowed to spend it in dribs and drabs. Not all local authorities share those resources equally. Some do not have much in their capital accounts. However, is there any reason why local authorities should not be allowed to borrow in respect of capital expenditure? The Government do it all the time. There is no reason why local authorities should not be allowed to do the same. The noble Earl may reply, as advised by his economic advisers, that this would be inflationary. He has no need, coming from his party, to talk about inflation. What the Government hope for is a rise in housing prices, which will be inflationary because it will provide extra collateral for credit which the banks will be only too glad to provide.

The inflationary argument simply will not wash. The public sector borrowing requirement may, as some City commentators have already put it, rise to a figure of £22 billion next year. This will not matter as long as the capital investment is there to cover the deficit. The noble Earl or his Government should know this just as well as anyone else.

If we refer to capital expenditure by other countries, we find that Britain is well down the league. The Government's share of fixed capital formation as a percentage of gross domestic product in the United Kingdom runs at 2.3 per cent. In Germany it is 2.5 per cent., in France it is 3.4 per cent. and in Italy it is 3.5 per cent. No economist—even at the London School of Economics—can produce figures which will convince me, the House, the City or intelligent people anywhere, that an increase in the public sector borrowing requirement sufficient to allow local authorities to borrow to build houses, to reduce unemployment and to reduce human misery will be inflationary.

Let us not underestimate the misery that is being caused by the catalogue of needs to which I have referred, the necessary repairs and the houses which are unfit for human habitation. It is no good for the Government to try to ride away from that on a set of disconnected and probably entirely irrelevant figures.

I should not wish to conclude the few remarks which I have ventured to address to your Lordships without being constructive and without telling the Government what in my view should be done. That goes for this present Government as well as for the government which I hope will succeed it. Something has to be done now and can be done now. It can be done as soon as the Prime Minister gives priority to this greatest of all human needs—the provision of proper housing. The Government can have a meeting tomorrow and decide to release the funds to allow local authorities to start immediately to repair their housing stock and to lay plans for new housing. They can authorise local authorities tomorrow to start borrowing on capital account in order to invest in new housing.

It is not often understood that the housing industry is not a manufacturing industry but is essentially an assembly operation. It does not need any lengthy tooling up. Although it is desirable to have long-term investment, in an emergency the housing industry does not need to lay down funds for the manufacture of vast plants and to acquire vast tracts of land and build factories. It is essentially an assembly operation which can go into action tomorrow.

In any good local authority there will already be plans for the houses it wants to build and the places in which they should be built. Local authorities have even abolished the old bills of quantities which used to be the subject of so much manoeuvring on tendering and so costly to repair and which took so long to reply to. In modern housing most local authorities not only have the plans of the houses themselves, they have detailed drawings and specifications right down to bending schedules and schedules of finishes, with the minimum of what used euphemistically to be called PC items. That is all ready.

The authorities know where to put the work out to tender. The tenders are not difficult to reply to and can be replied to within weeks. If land has to be prepared, all that is necessary on virgin land is to sink boreholes to make sure that the builders do not encounter running sands when the foundations are put in, because running sands can be hell to deal with if one is building houses on any scale. That can be done the following week. There is plenty of hardcore for foundations; there is plenty of cement in the country; there are plenty of bricks, even though it may take some time to hot up the kilns; there is plenty of bitumen for damp courses; there are plenty of breeze blocks for internal walls; and there is plenty of timber, but if timber is not available it can be obtained from the Soviet Union. Builders can obtain all the electrical wiring they want. All of that can be done within weeks and a start can be made on making an impact on the housing situation. Above all, that will give a kick start to the economy.

That can be done now. It can be done tomorrow if there is a sense of urgency. It can begin to make an impact on the economy within a matter of months. It might even begin to make an impact on the economy before the last possible date for the election of 9th July next, if I may hang out the electoral bait to the noble Lord. The Government should act on the matter now. It can be done now and either they should get on with it or they should get out.

4.45 p.m.

Lord Ezra

My Lords, like other noble Lords who have spoken, I should like to express appreciation to the noble Lord, Lord Dean of Beswick, for having introduced the debate today, in which he spoke from his great experience of the construction and housing industry.

Rarely in the recent past have we tackled a subject of greater economic and social importance. It impinges on the economy and it impinges on the way people live. In dealing with the issue this afternoon noble Lords have touched on many aspects of this wide-ranging problem. In introducing the subject, the noble Lord, Lord Dean, reminded the House of the most recent pronouncements and estimates of the Building Employers Confederation, which unfortunately considers that the present recession in the construction industry will last throughout this year and cannot see any signs of it coming to an end at an earlier date.

My noble friend Lord Davies spoke from his personal experience of the building industry to support that view. The problems of the consulting engineers, an important branch of the industry, were dealt with by the noble Lord, Lord Amwell, from his personal experience. The noble Lord, Lord Jay, with his great economic expertise, made the case that we cannot depend on market forces alone to deal with the housing sector and that this is an area in which there has to be a substantial degree of intervention in order to put matters right.

The noble Lord, Lord Ennals, with his experience of the social aspect of the problem, dealt particularly and most graphically with homelessness and the need for more community care resources. The noble Lord, Lord Mellish, with his usual practical approach and his experience of government office in housing and public building, made the particularly important point concerning the erosion of skills with the cut-back in training. We have found repeatedly that in the ebbs and flows of the construction industry in periods of recession cut-backs have affected training and that when the recovery has set in we have been short of the essential skills. How we can overcome that problem I do not know; we have not succeeded so far.

The noble Lord, Lord Blease, spoke particularly about the problems in Northern Ireland. The noble Lord, Lord Bruce of Donington, who has just sat down, spoke about the need to restore to a proper state of repair the many homes which at present are in serious disrepair. That is an aspect on which I should like to dwell.

The issue needs to be put in perspective. The fact is that over the past decade the Government's housing policy has concentrated on the objective of encouraging home ownership. That policy has helped to swell home ownership in Britain, which had already grown rapidly since the war, from 4.3 million owner-occupiers in 1950 to no fewer than 15 million in 1990. During that period, national average house prices have also risen from £5,000 for an average house in 1970 to £65,000 in 1990. The years of house price inflation and wider owner-occupation have placed some £700 billion of housing equity in the hands of 15 million homeowners. All that wealth has begun to have a major effect on our readiness to spend and to borrow, making us enthusiastic purchasers in times of boom and cautious spenders in times of recession, thus exacerbating the economic cycles.

However, there is another side to this issue. The sale of council houses has generated some 43 per cent. of all privatisation receipts and much of that revenue has been lost to housing investment. The Government have held on to the proceeds and used capital receipts from housing to finance government expenditure allocations in local authorities. As the noble Lords, Lord Dean and Lord Mellish, and others, have said, surely the time has now come, in the light of the continued depressed state of the economy, to release progressively some of the £6 billion to £10 billion worth of capital receipts built up from right-to-buy sales since the early 1980s. It would be necessary to ensure that that increased expenditure was kept under control, and in my opinion an adequate proportion of it should be devoted to repairs and maintenance of the housing stock and to the renovation of sub-standard houses.

The urbanisation that expanded dramatically during the 19th century and has continued ever since has provided a major capital asset for the nation in the form of houses. Although many of those early dwellings have proved to be unsatisfactory and have required demolition, a number have remained in use, and a significant proportion of the housing stock at present is old. Over half of the existing dwellings were built before the Second World War, and some 29 per cent. of those before 1918. It follows that a continuous programme of investment to repair, maintain and improve housing is required if the nation is to be adequately housed. The National Home Improvement Council, an organisation in which I must declare an interest as its president, has spent the past 16 years seeking to persuade successive governments of that need. Even though the NHIC has been successful in encouraging governments to adopt a number of new initiatives, those initiatives have not made the expected impact on improving housing because governments have not maintained an adequate financial resource for that purpose even when public expenditure might well have attracted large amounts of private expenditure too.

One of the most important requirements from the Government is an effective home improvement grant policy. A new grant system was introduced in the 1989 Local Government and Housing Act. That was welcomed at the time with high hopes as it provided for grant aid related to real repair costs; it defined a fitness standard below which housing would be eligible for grant aid; and it targeted help to families in most need. Unfortunately, the parameters set for the means test which defines those in most need are extremely restrictive and the financial resources available to local authorities have not encouraged the up-take of grant aid for substandard housing. The Minister for Housing is at present in consultation on how those problems can be dealt with. I know that there is a large measure of agreement among organisations which have responded to that consultation exercise.

Urgent action and investment is needed to improve the 2.5 million dwellings, to which the noble Lord, Lord Bruce of Donington, referred, identified as being in a poor condition. The backlog of disrepair in England alone is estimated to be in excess of £50 billion based on the survey carried out in 1986. When the results of the 1991 survey are eventually published, the backlog could be even greater. Currently, the spending on renovation grants is at its lowest level for several years, despite the new grant scheme, and local authority investment is running at about £500 million a year against the current repair backlog in council housing of no less than £22 billion.

In those circumstances, the Minister should implement the revised home improvement grant scheme as soon as possible, and the Government should make adequate resources available to enable local authorities to direct grants to improve housing. Indeed, in the current economic recession the Government could make unlimited resources available to meet all eligible grant applications. Now that only housing and families that comply with the means test requirements can obtain grants, there is no fear of that investment going through the roof or indeed falling into the wrong hands. That was the criticism made in 1982–84 when the Government last agreed to unlimited grant applications. There was an element of justification in that criticism, but under the new scheme that could not happen.

These measures, sensibly applied, would go a long way to assisting the housing construction industry whose workload is forecast to be running at some £2 billion below 1988 levels in 1991–92, and job losses in the industry are likely to be in the region of 100,000 this year. As other noble Lords have said, reinvestment would create jobs, be non-inflationary, help to tackle the homelessness crisis, ease the pressure on new house prices, and begin to tackle the backlog of housing disrepair. There would also be cost savings in unemployment benefit, reduction of the cost of bed-and-breakfast accommodation, to which many noble Lords referred, and more taxes would be generated from the building manufacturing industry. Never has there been a better time to make a concerted attack on stopping the rot in the nation's housing stock. There is a good supply of skilled workers, and builders' merchants and manufacturers have their yards stocked full of building materials. Thus, the manpower resources and the material resources are there. The NHIC, the Institute of Housing and many other organisations have made a well-researched and soundly argued case to the Government to stimulate the economy through improving the housing stock. That should be one of the principal measures introduced to counteract the continuing recession.

4.58 p.m.

Earl Howe

My Lords, I too should like to thank the noble Lord, Lord Dean of Beswick, for introducing this debate and for his kind opening remarks. It is a subject on which he speaks with personal knowledge and a deep commitment.

I have listened to the points made by noble Lords with much interest, just as throughout the course of this recession members of the Government have always been ready to listen sympathetically to construction leaders to ensure that we fully appreciate the industry's problems. Department of the Environment Ministers have met industry representatives on several occasions and my right honourable friend the Prime Minister met the three leaders of the Construction Industry Employers Council last autumn. The Government can be relied upon to continue to listen and to do all they can for the industry within the necessary economic constraints.

It has been suggested by many noble Lords today that the Government could do more to help the industry. Proposals have been made for programmes of contra-cyclical expenditure, but that kind of interference in the market on behalf of one sector of industry does not recommend itself. Having said that, I hope that noble Lords opposite will take comfort from the remarks that follow. Government capital expenditure on construction is already considerable —at least £19 billion in the current financial year. In addition, government investment in non-housing construction is at an all-time high and is spread across a wide range of areas in the country. Through City Challenge we shall spend £400 million over the next four years to generate private investment in the inner cities. Central government support in the form of credit approvals for local authority capital expenditure and grants on education rose 12 per cent. in 1991–92 to £506 million. In addition, central government will itself spend £635 million on school and higher education building this year, making a total of £1.14 billion. Capital spending on hospitals is at an all-time high. Gross capital expenditure in England rose 12 per cent. in real terms in 1990–91 and a further increase is expected in the current year. The Government have also provided substantial increases in spending on national roads. Expenditure on national roads this year is around 50 per cent. higher in real terms than it was in 1988–89.

I accept that the private housing market has declined since the boom times of three years ago. A slow upturn in house building starts is not evident but any recovery will be slow due to the large unsold housing stock. The recently announced temporary relief from house stamp duty—which is a reality—should provide a boost to the market, while the mortgage relief package will help to prevent the market being flooded with repossessed homes as well as assisting those with mortgage arrears.

The noble Lords, Lord Jay and Lord Blease, among others, asked whether the mortgage rescue schemes announced just before Christmas were working. They asked whether we had any figures. The Council of Mortgage Lenders now expects that the total amount pledged by lenders for mortgages into rent schemes will be at least £1 billion. Lenders and housing associations need to settle the detailed arrangements for those schemes but they are pursuing them as a matter of urgency. The schemes should be coming on stream by the end of February.

The noble Lords, Lord Dean and Lord Jay, as well as other noble Lords, laid particular stress on the need for affordable rented accommodation. We recognise that there are shortages of social housing in some parts of the country, especially for those people who cannot afford to buy and cannot find private rented accommodation. We therefore plan to increase the output of social housing substantially over the next few years; but that need not mean more council housing.

As a first step, we want to reduce the local authority monopoly of rented housing and provide more choice for tenants. We have therefore been encouraging authorities to move away from their traditional role as direct providers and to adopt an enabling role in housing. Although they retain important statutory duties—for example, housing families in priority need under the homelessness legislation —we have been asking authorities to concentrate on assessing the needs of their areas and using housing and planning powers to stimulate activity by housing associations and the private sector to meet those needs. Local authorities' main responsibilities now lie with the renovation of their existing stock, on which, to answer the noble Lord, Lord Ezra, they will spend over £1.5 billion a year.

As local authorities concentrate on their strategic role, housing associations have become the main providers of new low cost housing for rent and sale. Let me explain what the Government have done. We have increased public resources available to the Housing Corporation for new development by housing associations to £1.8 billion next year, rising to over £2 billion a year thereafter. We have reformed associations' grant arrangements to enable them to attract private investment to supplement public resources. So they can build more houses than would otherwise have been possible. Together with associations' increased efficiency and the recent falls in land and construction prices, these measures will enable Housing Corporation sponsored output to reach 43,400 next year—almost 25 per cent. more than previous forecasts. It will rise further to over 50,000 a year in the following two years. Over half of those homes will directly benefit homeless families and more than three-quarters of them will be for rent.

We are frequently asked to allow authorities to spend a greater proportion of their receipts on both the provision of new housing and the maintenance of existing housing. That was a point raised by the noble Lords, Lord Jay and Lord Mellish, and other noble Lords. As has been said many times by my noble friend Lady Blatch from this Dispatch Box, relaxing the rules on receipts would have perverse distributional effects. The incidence of capital receipts, especially those from right-to-buy sales, bears no relation to housing need: it is greatest in the relatively well-off shire districts and lowest in the inner cities. Allowing authorities to spend more of their receipts would mean giving relatively more spending power to those authorities that need it least, and taking it away from those in greatest need.

Of course, not all rented housing need be subsidised or publicly owned, as the noble Lord, Lord Jay, emphasised. We are keen to revive the private rented sector, which has a particularly important role to play in providing housing for young, single and mobile people. Private landlords have been battling for years against statutory low rents which gave them little return on their investment. Not surprisingly, many withdrew from the market. We deregulated rents of new lettings from January 1989 and enabled landlords to let on fixed term tenancies at market rents. That is helping to create a more positive attitude among existing and potential landlords and is encouraging them to bring more and better accommodation on to the market. The availability of housing benefit, generally up to market rent levels, means that poorer tenants can consider private renting as well as social renting.

However, some 600,000 private dwellings remain vacant—over 4 per cent. of the housing stock. Many are in the areas where demand is at its highest. Many are empty for good reasons. But many are ready to be occupied and they could be used to house the kind of families referred to by the noble Lord, Lord Ennals; that is to say, families who are in real need. Landlords and tenants just need to have confidence that they will both get a fair deal. We have recently taken two initiatives to bring back into use some of that property and so help to relieve housing shortages.

First, we have set up a pilot scheme whereby housing associations will let and manage private property for a fee and rehouse the tenants if the owner needs possession. So far, five associations in London and the South East are involved. Secondly, we have a new scheme operative from 1992 to bring back into use flats over shops, very many of which are empty. Under this scheme, we have set aside £25 million over three years for local authorities to pay grants for minimum works to make such flats fit for letting. That is expected to bring 2,000 flats back on to the market.

The noble Lords, Lord Ennals and Lord Mellish, laid great stress on the problem of homelessness. I echo many of their sentiments. Reducing family homelessness underlies all our housing policies. However, building new houses is not the only answer, as I have just tried to explain. We must also ensure that the nation's existing housing stock is used to best effect. As a further example of that, we are encouraging local authorities to improve the management of their stock and reduce the period between re-lets instead of resorting to bed and breakfast accommodation. If all authorities achieved an average re-letting target of six weeks in London and three weeks elsewhere, the effect would be equivalent to 17,000 extra lettings in England compared with 13,350 families in bed and breakfast accommodation.

The noble Lords, Lord Mellish and Lord Ezra, mentioned training and the Government's commitment to it. The Government are as committed as ever to training. The reduction in the number of trainees is largely because of the difficulty in finding placements in firms. I fully understand why that is happening when firms are in financial difficulty, but in the the end it is shortsighted. That is why the Government welcomed the CITB's special funding package last year when it drew £6.5 million from its reserves to provide additional financial support for firms taking trainees. Training is vitally important and will be ever more so as new skills are needed for the industry.

Lord Mellish

My Lords, perhaps the noble Lord will allow me to interrupt. I am much obliged for what he said about training. The Construction Industry Training Board is a body that is well known to the Minister and his department. If what he said is true, can he explain to the House why, after all this time, there still has to be an inquiry into the way it conducts its business? All that does is hold up its work.

Earl Howe

My Lords, I am not quite sure of the point that the noble Lord, Lord Mellish, makes. I do not believe that there has been an inquiry as such, but it is necessary—

Lord Dean of Beswick

My Lords, perhaps I can help on this matter. The original CITB was recast about two years ago and reformed on a different basis. The noble Lord, Lord Mellish, asks why it is coming under review again so soon.

Earl Howe

My Lords, perhaps the noble Lord will allow me to drop him a line on that point. The announcement to which I referred was one in which the noble Lord, Lord Dean, was involved just before Christmas. It was welcomed on all sides of the House. We do well to look at the CITB's budget every time that its affairs come before the House. It gives us a good opportunity to review the training situation in the construction industry.

In what I have said I am not pretending—how could I?—that the Government's policies will have the effect of ironing out the peaks and troughs. Activity in the industry will always be cyclical. It is inextricably linked with the state of the national economy, as has been said by a number of noble Lords. While the economy boomed in the 1980s, the UK construction industry enjoyed a period of unprecedented growth. Output rose steadily every year from 1981 to 1990, from £25.1 billion in 1981 to £35 billion in 1990; both those figures are at constant prices. That is 10 years of continued growth, despite increasing difficulties. New orders rose every year from 1981 to 1989.

When times became harder, the harsher economic climate hit the construction industry earlier than many others; and just because past growth had been so high, the downturn when it came felt that much worse. But to keep things in proportion, I should point out that even now the rate of activity is one-third higher than it was in the 1980 recession.

Several noble Lords referred to the prospects for recovery. The recovery in the construction market was expected to start in the housing sector and a slow upward trend in housing starts is now established. The latest figures show that although private sector housing orders fell back in the third quarter of the current financial year, housing association investment is keeping public sector output up. It is still too soon to talk about established trends but those are hopeful signs.

There will always be some variations between the prosperity of different sectors of the economy over time. But what we are striving to do is to create the long-term economic climate in which construction and other industries can flourish. Inflation in November was down to 4.3 per cent., which was below the EC average for the first time in five years. Interest rates have been substantially reduced since we joined the ERM. Those factors assist home owners and tenants as much as they do industry. There were some helpful fiscal measures in the last Budget designed to assist industry over the recession.

Some enlightened industry leaders not only accept the variations in the economic cycle but have developed management that is flexible enough to allow their companies to flourish in most conditions. They realised the boom would not last for ever and planned accordingly; borrowing only modestly and not over specialising in any one specific type of work.

The noble Lord, Lord Amwell, referred to the overseas markets. The advent of the single European market which, in terms of construction output will represent about £300 billion, will further increase the options for adventurous companies. In the longer term, Eastern Europe will provide additional opportunities. Next week my honourable friend the Minister for Housing and Planning will be leading a group of a dozen top British contractors, property developers and consultants on a trade mission to Bonn and Berlin. That arose from a visit to London last summer by the German Federal Minister for Urban Development who told us that her Government would welcome the participation of British firms in the massive infrastructure and urban renewal programme needed for East Germany.

My honourable friend's department has also been organising the forthcoming British Construction Day in Erfurt, one of the regional capitals of former East Germany, in which over 40 different British construction companies will be taking part. My honourable friend also plans to lead a party of building materials' producers to Sweden in a couple of months time if sufficient interest is shown by the industry —and of course we hope that it will be.

In the time left perhaps I may cover a number of points that I have not already addressed, raised by noble Lords during the debate. The noble Lord, Lord Dean of Beswick, said that local authorities are forced to sell their housing stock. I do not believe that he really meant to say that because that is very different from saying that tenants have a right to buy, which is the way one should put it.

Lord Dean of Beswick

My Lords, what is the end result if the local authority does not wish to sell to a tenant? There is no difference.

Earl Howe

My Lords, tenants have the right to buy. They are not being forced to buy. They can exercise that right if they wish. Local authorities are not forced to sell to them.

Lord Dean of Beswick

My Lords, I am sorry but the Minister must get this clear. He said—I heard him quite clearly—that local authorities are not forced to sell if the tenant wishes to exercise the right to buy. The noble Earl does not understand the legislation. If the tenant wishes to buy the council house in which he lives the local authority is forced to sell. There is no doubt about that. There are no two interpretations of that situation. Incidentally, the Secretary of State who brought about much of that legislation sits on the Government Benches. If I am wrong he will tell me.

Earl Howe

My Lords, I am glad to have that clarification from the noble Lord, Lord Dean.

It is worth pointing out that 1.4 million families in England have exercised the right to buy. That is testimony in itself to the popularity and sense of the Government's policies.

The noble Lord, Lord Bruce, asked whether I could provide comparative figures for homeless people between June 1990 and June 1991. I have figures that I hope will be helpful, though they are not quite the figures for which he asked. Local authorities accepted responsibility to secure permanent accommodation for 36,800 households in the September quarter of 1991, compared with 36,100 households in the June quarter of last year and 36,100 households in the September quarter of 1990. In the year to September 1991, local authorities accepted 144,300 households as homeless. However, it must be remembered that those figures relate to the numbers of households actually found accommodation by local authorities. They are not people without a home.

The noble Lord, Lord Blease, spoke of the health and safety record declining as a result of the recession. The Health and Safety Executive continues to monitor the industry with its customary diligence. It is not possible for it to see all the sites but those most at risk are targeted. In 1991, 40,000 sites were visited out of a total of 400,000 active sites in progress. I am pleased to note that there has been a recent and significant decline in the number of fatal accidents.

The noble Lord, Lord Ennals, asked what the Government will do about the trade deficit in building materials. It is the Government's view that the industry itself must face up to its own challenges and problems and must not shy away from the innovation that is needed. Some firms are seizing export opportunities even now. There are trade missions to promote British products. Much of the deficit, however, is due to timber imports which unfortunately are largely unavoidable.

The noble Lord, Lord Jay, asked me how many houses are built privately for rent. I am sorry to say that those figures are not available. Private housing completions for both sale and rent in 1990 amounted to 130,000 units. The figures for last year are not yet available.

The noble Lord, Lord Ennals, suggested that other EC states are not similarly affected by the recession in the construction industry. I should like to put the record straight. Output is declining throughout the EC without exception.

The noble Lord, Lord Amwell, asked whether quality was in some sense the victim of the requirements for fee competition and compulsory competitive tendering. The Government fully accept that quality will need to be taken into account more explicitly in considerations of tenders for professional services. As I am sure the noble Lord well knows, there are provisions in the Local Government Bill currently before Parliament which will allow the introduction of modified tendering procedures to enable local authorities to consider tenders against a quality threshold.

If I have missed any important points from the debate I shall be pleased to write to noble Lords afterwards.

The Government are fully aware that these are hard times for many in the construction industry, but the medium to long term prospects are bright. I am confident that when the recovery comes the industry will play its full role in the national economy. But I must stress that it is now, while times are still hard, that the industry must begin preparing for the future, otherwise it will simply be too late. I hope that I have made clear to your Lordships that the Government are doing what they can to assist the industry in its present difficulties; but at the same time it is for the construction industry's leaders to continue to do all they can to make and seize their own opportunities.

5.20 p.m.

Lord Dean of Beswick

My Lords, I am grateful to the Minister for his reply. However, it indicates the enormity of the gap between the Government and everyone who has spoken in the debate. The Minister has reiterated part of the policy that is responsible for the present situation: the removal from local authorities of their historical role of building council houses.

A few weeks ago the noble Baroness, Lady Blatch, told me that the most ambitious building programme that the voluntary sector could provide was that of building 48,000 houses per year in two years' time. That is less than half the total number of houses that housing organisations say must be built annually in order to have any impact on the present disastrous situation. Will the Minister convey to the Secretary of State the request for 100,000 houses to be built each year? Will the Secretary of State untie the garrotte from around the throats of local authorities and let them build the remaining 52,000 houses per year that are required in the interests of everyone else?

The Minister also listed the Government's expenditure this year on the building industry. However, one of the saddest aspects is the fact that once again the local authorities are victimised. The Minister spoke about increased amounts being spent. I assumed that he was speaking about announcements made in the Autumn Statement. However, the Housing Magazine dated 20th December states: Overall allocations to local authorities have been cut from £1.86 billion this year to £1.82 billion next year". A cut of £40 million has been made in the amount given to local authorities, even though they have the awful job of trying to provide houses for homeless and displaced people as a result of Government legislation.

The statement that the Government have done so well as regards spending so much money on building by health and education authorities will not wash. I have tabled two Questions to be answered next week which will deal with the issue. As regards spending on the health sector building programme, the amount spent per person in opted-out trust hospitals is five times greater than that spent on people in hospitals still managed by health authorities. As regards the education sector building programme, the Government provide five times as much money for every child in an opted-out school as compared with those in schools in the public sector. I hate to tell the Minister that on that count the Government must be accused of partisan treatment against people in the public sector.

I initiated the debate with two aims in mind. First, to unlock an increased allocation of money from the capital receipts that are held in abeyance. Secondly, to have that money made available to local authorities which would then activate the building industry mainly in the private sector but in some cases in their own building departments. There is no evidence to show that the Government's reliance on the voluntary sector, albeit welcome, would ever provide the solution that we require.

I thank all Members of your Lordships' House who have taken part in the debate. It was worthwhile but, unfortunately, the Government still refuse to recognise their mistakes. I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.