§ Mr. Frank Allaunasked the Chancellor of the Exchequer if he will make a statement on the visit he received from a deputation from employers and trade union leaders in the construction industry earlier in the month, particularly as regards the request for reversal of the cuts in building activity.
§ Mr. HealeyThe deputation came to see my right hon. Friend the Secretary of State for the Environment and myself at the Treasury on 1st December.
In the course of a useful and stimulating discussion I accepted that the public expenditure cuts of recent years, though unavoidable, had borne hard on the construction industry. I pointed out, however, that the extra spending on construction announced this year would broadly offset the cuts made last year in public construction programmes for 1978–79; and that the planned level of public spending on construction next year was well above that for the current year. I think that there was general agreement that it was unrealistic to look for a return to the high levels of public spending on construction seen earlier in the decade when, partly for demographic reasons, the public sector's requirements for construction were exceptionally high. We discussed the possibility of improving the flow of information to the industry about future plans for public spending on construction.
549WThe delegation stressed the need for a quick injection of extra spending to help the industry. It also expressed concern lest preparatory work on projects to be financed from the £400 million added to next year's construction plans should be held up because no funds were available this year. My right hon. Friend and I explained that, especially given the extra funds made available in the summer for the current year's construction programmes, there should in general be no difficulties in financing preparatory work; and that existing allocations of funds for the current year should be sufficient to allow useful construction work to be set in hand quickly.
The delegation put forward a number of other arguments—including points relating to the taxation of overseas earnings and industrial building allowances—which I promised to bear in mind.