I beg to move, That the Bill be now read a Second time.
Hon. Members who served in the last Parliament will be familiar with this Bill. Indeed, some of them were more familiar with it than I was, because I am in the position today of making what amounts to my maiden speech as Minister of Public Building and Works. I hasten to assure right hon. and hon. Members opposite that I do not claim any indulgence on that account, partly because the matter which we are discussing and my own speech will in some respects be controversial and in that sense, therefore, I shall find myself contravening the traditions of a maiden speech. But there is at least one parallel with a maiden speech proper that I wish to observe—that is to be relatively brief.
I want to be brief, partly because it is a good habit for Ministers to be brief, and partly because the proceedings on the Bill are due to finish at a comparatively early hour and many hon. Members wish to take part in the debate. For these reasons, I want to speak on what seem to me to be the main issues of principle between the two sides of the House and not to go too much into what might generally be regarded as Committee points.
The purpose of the Bill is to provide permanent machinery for the control of privately sponsored building projects of a value of £100,000 or more. It therefore affects only a part of the building industry. According to a recent figure, about £180 million a year—about 7 per cent. of all new starts in building and indeed, in all parts of construction defined in the Bill—will be affected.
Our purpose is to lay down a rate at which starts can be made in this sector of construction and to use that power, alongside those already exercised by the Government in the public sector, to correlate demand and capacity and to ensure that priority is given to projects of relatively large social value.
The case for this ought to be considered in the main by looking forward, but I understand, from reading the proceedings of the Bill in the last Parliament, that quite naturally much of the discussion was concerned with the situation that existed in July 1965, when my right hon. Friend the Chancellor of the Exchequer announced measures to deal with the economic situation, and with the situation of the construction industry in 1965 and 1966. Clearly, this will be part of the framework within which we shall be discussing the Bill this time.
But the point to which the House should direct its attention is that we are concerned here with a permanent piece of machinery and one that will affect the well-being of the construction industry as a whole and, therefore, the well-being of the economy in the years ahead. Looking back to July 1965, it would be difficult in retrospect for anyone to argue against the proposition that, at the time, the country had an over-heated construction industry within an over-heated economy and that it was essential for the Government to take some measures to restrain pressure of demand.
Equally, I think it would be difficult for people to argue—although I am prepared to listen with interest to what is said in Committee—that in taking measures to restrain demand the Government should have confined them to construction in the public sector. I do not see that anyone can make a defensible case for saying that the economic situation required the Government then to defer university building, road building etc. but not to do anything about holiday camps or restaurants. I do not believe that any kind of presentable case could be made for saying that the private sector should not have been included in the restrictive measures taken.
We need to look forward and, in doing so, the House should have some regard to the time scale of what we are doing. In particular, we are not discussing the state of the construction industry now. Any decision taken now and any taken in the months ahead when the Bill becomes law will really be affecting the pressure on the construction industry in 1967 and 1968. It is this forward looking view that is really relevant to the question of whether the Bill should have its Second reading.
We can draw a lesson from July 1965 and a similar lesson from occasions under Conservative Governments who found it necessary to slam on the brakes on the construction industry and the economy generally at times of economic difficulty.
We have to face the fact that in the post-war period Governments of all parties have found it necessary to exercise a measure of control over construction activity. In most of the situations in which this has been done, including that of last year, the exercise of that control has been by a blunt instrument, or has been arbitrary or perhaps unfair, and it has been felt to be unfair by those in the construction industry who have said that they always take the brunt of an economic crisis to a greater extent than others. It was not the best kind of control for that reason.
To paraphrase what I said a few minutes ago, when a measure is taken suddenly to prevent new projects from starting, it has an effect not only on the immediate future, but on one year and two years ahead. In other words, it controls the level of demand at a later period when the economic situation might have changed altogether. That is why that kind of measure was unsatisfactory, and that is why the Government need powers of a permanent and more sophisticated kind. That is the essential issue which the House has to decide this afternoon. If hon. Members opposite do not agree, I put it to them that when their party was in power they found it necessary to slam on the brakes and use blunt instruments from time to time when those instruments were not the most effective means. Part of the case against what they did and against what we were forced to do last July is the case for the Bill.
The kind of powers which the Government need to have in this respect should have three main characteristics. First, in addition to the powers over the public sector, which already exist in many different ways, there should be powers over the private sector. I do not know whether hon. Members opposite accept that proposition, but if not I should like to hear their arguments against it. I can only say that if there are to be powers to control school building in the public sector, there should be powers to control projects at least as large in the private sector. There are powers relating to the level of housing and hospital building, and similarly there should be powers relating to holiday camps, restaurants, bingo halls, and so on. This is a proposition which it is difficult for the Opposition to counter.
Secondly, the powers should be reasonably long-term, because, as I have explained, starts in construction in a particular year affect the following year and the year after. Therefore, the way in which the Government operate these powers should be related to the forecasts of the progress in demand and the pressures on the industry in the following year and the year afterwards. Our aim, therefore, has to be as far as possible to ensure that the industry is not subject either to under-employment or overheating, but that there is a framework within which controlled expansion related to the growth of efficiency in the industry can take place.
Thirdly, the powers which the Government possess ought to enable us to discriminate both between different types of construction and different areas of the country, so that we can operate a different kind of policy in an area subject to local unemployment from that in another area where there is over-full employment and overcrowding.
In other words, what is needed is a sophisticated discriminatory system which can operate in time and which therefore makes it less likely for any Government in the future to need to operate the kind of control which is applied in a hurry by slamming on the brakes and preventing development from taking place. It is against that background that I want to describe what is in the Bill. I shall do so briefly, because I have no wish to detain the House too long.
In Clause 1 there is the main provision which makes it unlawful to carry out work in construction or alteration of buildings or fixed work of construction and civil engineering unless that work has been licensed, or comes within one of the categories exempted in later Clauses. In Clauses 2 to 7 there is a list of exemptions of which the more important are work costing under £100,000, work in progress or contracted for before 28th July, 1965, all housing work, all industrial building, all work in development districts and all work in the public sector. In other words, there is exemption for about 93 per cent. of current starts in construction, leaving about 7 per cent. remaining, although within the 93 per cent. a great deal is already subject to public control in one form or another.
Clause 8 gives the Minister power to vary the scope of the control. Generally speaking, any decision to extend control in any way would need an affirmative Resolution of Parliament, while any decision to relax it would need only the negative procedure. Two very important aspects are entrenched within the Bill and cannot be altered by regulation. The Bill cannot apply to housing and cannot apply to projects of less than £50,000 in value, so that variations downwards can extend only that far.
Clause 9 deals with enforcement and related matters. Here I should like to take the opportunity to repeat what was said by my predecessor during one of the stages of the Bill in the last Parliament. We regard this aspect of the Bill, and particularly the powers of entry, as being matters to be used only in the last resort. Our approach to the Bill is that the penal sanctions have to be included, but we expect them to be used only in very exceptional circumstances. It is relevant to that to say that ever since last July a system of authorisations has been operating between the Ministry and the industry very well and, on the whole, with the co-operation of everyone in the industry. There have been very few exceptions to this, and I take this opportunity of paying tribute to those in the industry who have co-operated in this way.
In the best traditions of the House, a number of Amendments were made to the last Bill in Committee, Amendments to which hon. Members from both sides contributed. While some were made in Committee, others were put down as a result of discussion in Committee for what would have been the Report stage. By and large, I have aimed to preserve these Amendments and I have no wish to interfere with those arranged after joint discussion and agreement between the two sides in the last Parliament.
Inevitably, one Amendment was made in Committee which I feel bound to reverse. That deleted the reference to alterations in Clause 1. Clearly, it is absolutely logical that if the Bill is to apply to new construction, it should equally apply to alterations. Alterations can use up resources on a very big scale, in the same way as new construction, and they may be less desirable. In certain circumstances, someone refused a licence to set up a new building might instead make alterations to an old one, costing just as much but being far less desirable from the planning or aesthetic point of view. This is therefore a logical Amendment. Whether hon. Members opposite will accept it as such, I do not know. They are always logical in these matters and they ought to see the logic of this case.
I turn to what has been one of the most difficult and controversial aspects of the whole argument, the subject of retrospection. I reiterate to the House what was said towards the end of the last Parliament by my predecessor and the Leader of the House about the way in which this operates. I say straight away that I agree completely with what they said about this matter, but I would like to deal with the argument about it. This has not only engaged hon. Members but been the subject of editorials in The Times and other comment.
When the Bill becomes law in, say, a few weeks' time, it will then be unlawful to proceed with any project within the scope of the Bill which has not been licensed. As was explained in the last Parliament, no penal sanctions apply to actions taken before the date on which the Bill becomes law. I should like to make it clear that we are dealing with the status of what one might call overlapping projects—projects started between 28th July, 1965, and the date on which the Bill becomes law, and which are not then completed.
If a project of that kind is within the definitions of the Bill and it is unlicensed, then it will be unlawful to proceed with work upon it after the Bill becomes law. For that purpose the whole value of the project counts, not merely the value of the work remaining to be carried out after the date upon which the Bill becomes law.