Orders of the Day — Construction Industry (Unemployment)

Part of the debate – in the House of Commons at 12:00 am on 17th March 1972.

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Photo of Mr Peter Trew Mr Peter Trew , Dartford 12:00 am, 17th March 1972

I welcome this opportunity of raising on the Adjournment the question of unemployment in the construction industry. I must begin by declaring an interest in construction.

The situation in the industry presents a strange contradiction. On the one hand, a very large number of construction workers are registered as unemployed; on the other hand, builders all over the country are experiencing acute shortages of skilled craftsmen. The number of men aged 18 and over registered as wholly unemployed on 14th February was just under 155,000. That is a very large number by any standards. It represents about 13 per cent. of the total work force of the industry, and one-sixth of all the unemployed. Clearly it is unacceptable that so large a number of men should be out of work. But, although I do not want in any way to minimise the seriousness of those figures, I believe that they are misleading.

A large proportion of those registered as unemployed are unskilled men. The breakdown of occupations in the February figures shows that those identified as having a specific skill account for only 42,000 out of the total of 155,000, and allowing for some men with miscellaneous skills in the remaining 113,000, it is fair to say that about two-thirds of those registered as unemployed in the construction industry are unskilled. In the key skilled trades of carpenter, bricklayer and plasterer, the numbers unemployed are small. For carpenters, the number is just under 6,000, for bricklayers it is just over 3,000 and for plasterers it is only 1,200. The only skilled trades in which there are significant numbers of unemployed are painting, decorating and sign-writing, where the total is just under 11,000, about a quarter of those having specific skills.

Much of the unskilled work in the industry is basic labouring and is the sort of work to which employment exchanges tend to direct men regardless of their previous experience because, subject to good health, it is something that can be done by most people. Thus at any time in the industry there is a large number of transient workers in the unskilled category. If they are unfortunate enough to lose their jobs, they are registered as unskilled construction workers because that happens to be the last industry in which they were employed. They are not construction workers in the normal sense of the word, because they do not habitually work in the industry and their inclusion in the unemployment figures gives a misleading impression of what is happening in the industry.

Another factor could be distorting the figures. Because the work is physically demanding quite a large number of men leave the industry each year before they reach retiring age, in order to seek more congenial work in other industries. My research suggests that between 20,000 and 30,000 men leave the industry in this way each year. Normally when the economy is buoyant they are quickly reabsorbed into other industries but at present they are likely to remain unemployed, and their numbers swell the unemployment figures.

Another factor bears on the reliability of the unemployment figures. It is possible that some men who are registered as unemployed are working and fraudulently claiming unemployment benefit. The recent inquiry at Southend revealed 70 cases where there was evidence of fraud in claiming and drawing unemployment benefit, and it is estimated that as a result of these revelations the employment exchange there is now saving £84,000 a year. If we assume that the prevalence of such malpractices is proportional to the number of unemployed throughout the country, the total losses nationally could be in the region of many millions of pounds a year.

The Daily Telegraph of 11th February, commenting on the Southend inquiry, reported a spokesman of the Department of Employment as estimating the total annual losses at only £250,000 a year—three times the losses incurred at Southend before the inquiry.

Surely that must be a ludicrously inadequate estimate? Allowing that there might have been special factors at South-end it is beyond belief that one area could have accounted for one-third of all the malpractices in the country. The true figure must be very much higher and certainly high enough to justify employing more than the 30 inspectors at present engaged in detecting these frauds.

I have suggested three reasons why the unemployment figures in the industry are misleading—first, because they include many men who are not construction workers in the normal sense; secondly, because they include men who have retired early from the industry and have no intention of returning to it; and, thirdly, because they include some men who are working and fraudulently claiming benefit. It is important to get the figures right, because the present very high figures are distracting attention from another equally serious manpower problem in the industry—the acute shortage of skilled labour. This shortage is widespread throughout the country, and I will cite two examples. I have taken these from development areas in order to counter any belief that these shortages are confined to the more prosperous parts of Britain.

Teesside Borough Council has a workload on its present housing programme which would justify the employment of 1,250 men of all trades. At present it can employ only 980, because of the shortage of skilled craftsmen. There is a particular shortage of plasterers, and recently three plasterers were finishing off 380 homes. The result is that the Council's contracts are behind programme, and it has had to grant extensions to its contractors. There is no shortage of unskilled men in the area, but unskilled men cannot be taken on unless the skilled men are there to support them.

In South Wales the building firm, Modern Building (Wales) Ltd. has a contract for 315 houses for Bridgend Urban District Council. The programme requires 36 bricklayers, but the company is able to find only one-third of that number, and the local branch of the National Federation of Building Trades Employers tells me that few building firms in South Wales, if any, can fill their full complement of craftsmen. Similar stories could be told from all over the country. The fact that the official figures of unfilled vacancies are comparatively low is meaningless, because it is common knowledge that many builders do not bother to notify the employment exchange of vacancies.

There are two possible reasons for this shortage of skilled craftsmen. First, there has been a considerable upturn in two classes of construction work which make heavy demands on skilled labour—private house building and improvement grant work. Private house building is more labour-intensive than local authority building because the houses are built more quickly—in an average of 12–13 months compared with 16 months for council houses. Improvement grant work, particularly with the considerable increase in discretionary grants, needs craftsmen with all-round skills, who are in particularly short supply.

Second, there has been a serious falling off in the recruitment of young men into the industry. Figures from the Youth Employment Service indicate that the number of young recruits to the industry fell from 44,000 in 1964 to 28,000 in 1970, and in those figures the number of apprentices has fallen from 29,500 to 19,500. Admittedly, during those years the total number of operatives in the industry also fell, from 1,092,000 to 882,000, a reduction of 19 per cent., but the fall in the intake of young recruits was 36 per cent., nearly twice the fall in the total number of operatives. That is a serious reduction in the number of young recruits.

It is not as if the industry faces a static work load. It has been depressed for the past eight years, but now there are indications of a healthy upturn in construction activity. The industry could well face a situation in which its supply of skilled craftsmen was wholly inadequate to meet its needs.

I referred briefly to the increase in improvement grant work, which I welcome. There is a vast amount of work to be done in upgrading the conditions of the nation's housing. Improvement is cheaper than rebuilding, and it maintains existing communities intact. So I am very much in favour of it. But I have heard Government spokesmen refer to it as a cure for unemployment, particularly in the development areas. In the general Keynesian sense, of course, it could well make some contribution towards reducing unemployment, because it injects purchasing power into the economy. But as a cure for unemployment in the construction industry it is of little value. It is craft-intensive. It provides little opportunity for employing unskilled men, who form the bulk of the unemployed in the industry, and it can further aggravate the shortage of skilled craftsmen, which in many parts of the country is already making it difficult to get builders to quote for this class of work.

The most helpful development for the industry is the Government's recent announcement of a massive increase in training facilities. The situation in the industry is tailor-made for a policy of retraining. It obviously makes sense to equip some of the large body of unskilled workers with the necessary skills to fill some of the shortages of craftsmen, and I look forward to hearing the Government's plans for retraining as they affect the construction industry.

In conclusion, I should like to suggest other positive lines of action by the Government. The first requirement is to make the unemployment figures more meaningful. I should like there to be a survey to establish the number of unemployed who are genuinely construction workers and who could usefully be re-employed in the industry, and also the number who could be retrained to higher skills. At the same time, I should like to see a sample survey among building firms to try to ascertain the exact extent of the craft shortages. These would be very much higher than the official figures of unfilled vacancies suggest.

Second, there must be an all-out attack on abuses of the unemployment benefit system, or "dole-diddling", as it is picturesquely called. The present total of 30 inspectors for the whole country must be inadequate in the light of the Southend revelations, and the penalties do not seem anything like severe enough.

Thirdly, the Government should, in consultation with the leaders of the construction industry and the trade unions, evolve a manpower policy for the industry with special reference to stepping up the recruitment of apprentices and the rate of retraining.

Lastly, the Government, in their capacity as sponsors for a large volume of construction work, should give increasing attention to designing projects in ways which minimise the dependence on skilled site labour. Industrialised building got off to a false start eight years ago and had a further setback with the Ronan Point disaster, but given an increasing work load, the industry might well be facing a critical shortage of skilled craftsmen, and the time has come to take another look at construction techniques which minimise dependence on skilled site labour.

I am glad to have had the opportunity of airing the manpower problems of this key industry, and look forward to my hon. Friend's reply.