Orders of the Day — Construction Industry

Part of the debate – in the House of Commons at 12:00 am on 2nd May 1977.

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Photo of Mr Hugh Rossi Mr Hugh Rossi , Haringey Hornsey 12:00 am, 2nd May 1977

I am sorry that I gave way to the right hon. Gentleman. He has only just come into the Chamber. I gave way in deference to his seniority. That is the last time that I shall give way to anyone, because of the shortage of time.

We have covered this point already, in this debate and the last debate we had on housing. We have explained clearly the distinction in our mind between capital and revenue cuts. There is a world of difference. I shall not waste time by going over the same ground again. The House is familiar with the arguments, which have been adumbrated time and again.

All that the Minister has offered are working parties, strategies, programmes and the rest—but not work. There is one exception, and that is the £30 million for rehabilitation. That is in addition to the £100 million which the Chancellor offered to the inner cities a few weeks ago. That £100 million, spread over two years, was treated with scorn by the industry. The President of the National Federation of Building Trade Employers equated that £50 million a year with a half-day's work for the industry. The additional £30 million will not give very much work to very many people.

The industry is united in its condemnation of the Government's attitude towards it. The Joint National Consultative Committee for Building states: Government action has resulted in the construction industry experiencing one of its worst recessions in the century. The Joint Economic Advisory Panel says: Construction work will suffer proportionately more than 10 times as severely from public expenditure cuts as all the rest of the public sector put together. George Smith of UCATT said: The Government's attitude to the construction industry is painfully clear. It has been singled out, unfairly and unwisely, to bear the brunt of the Government public expenditure cuts. That is the complaint, that the Government have seen it necessary to make such public expenditure cuts in the present situation. They have singled out, "unfairly and unwisely", the construction industry, with disastrous results. They have not made cuts in other areas where the industry indicated cuts could well be made if they had to be made. We have had this policy of penalising the industry, which is extremely short-sighted.

Construction is investment. It is not consumption. If we have to make economies, they should be made in consumption. The cost of unemployment benefits to the 220,000 now out of work in the building industry could build 20,000 new houses. Most important as my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) said, once the construction industry has been cut back, it finds it difficult to recover. There is a three-year time lag between the conception of a building scheme and its completion. As we have seen time and again, when men leave the industry, they do not return.

The Government have been warned by the Economic Development Committee for Building and Civil Engineering that the level now reached is below the danger level for the construction industry. It is a level that will lead to inefficient use of resources, low productivity, short working hours, idle plant, unused material and productive capacity, involving high unit costs. That is the consequence of the Government's short-sighted policy in making such savage cuts in this sector.

We accept that at a time of national crisis there must be some retrenchment all round. I am certain that the construction industry would be prepared to bear a fair share of the total cut-back that must take place. It considers—I think rightly—that it has been treated unfairly.

It has been suggested that a minimum survival production programme could be agreed with the industry—a level beyond which we should not fall, with a view to keeping capacity in hand so that the producers of building materials could gauge the extent to which they could keep their plant in operation, the extent to which they should keep in hand potential for the future against the day when there will be an expansion in the economy. This suggestion has been made by many people in the industry, and I hope that the Minister will treat it seriously.

Hon. Members have referred to the potential of overseas contracts. For the year ending March 1976, £1,400 million worth of contracts throughout the world was won by United Kingdom contractors. That was only a small proportion of the amount of work available. For example, Saudi Arabia has a five-year programme for 1975 to 1980 for the staggering sum of £42,000 million. Abu Dhabi has a programme for £5,000 million for 1977 to 1979. There is fierce competition for that work. We are competing against the United States, Japan and even India. South Korea hopes to win contracts worth £1,700 million in the Middle East this year. That is more than the whole of our overseas contracts throughout the world last year. Our skills and expert knowledge do not compare so unfavourably with those of the South Koreans and our other competitors that we should not be able to secure some of these contracts.

However, there is one great difference. Firms in those competing countries receive more Government support than British firms do. In the Middle East contracting is carried out by the Government—there is a preference for Government-to-Government contracts. There is a limited amount of private work available in Middle East countries for British contractors. As my hon. Friend the Member for North Fylde (Mr. Clegg) said, the Construction Industry Advisory Board, which was set up by the Government to assist British firms, merely advises. Other Governments help firms—