Housing and the Building industry

Part of the debate – in the House of Commons at 4:48 pm on 11th February 1981.

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Photo of Gerald Kaufman Gerald Kaufman Shadow Secretary of State (Environment) 4:48 pm, 11th February 1981

I beg to move, That this House condemns Her Majesty's Government's housing and construction policies, which have made new homes for sale and to rent scarcer than for generations, have driven up the costs of buying and renting a home to higher levels than ever before, and have resulted in post-war record unemployment figures in the construction industry. Britain today faces its gravest peace-time housing crisis for more than half a century. The construction industry is at its lowest ebb for many years. The Government seek to blame everyone but themselves for the ills that we are suffering. They seek to blame world conditions, oil prices, the wicked trade unions and anyone or anything that they can think of. However, for this crisis in housing and construction none of those excuses is available. The willing and active instigator of Britain's housing disaster now sits on the Government Front Bench. The cause of Britain's housing crisis is the Secretary of Stale for the Environment.

No doubt, when the Secretary of State speaks we shall be regaled with the formula to which the House is accustomed—fiddled figures that will not stand up to a moment's examination, phoney comparisons with the record of the Labour Government—all the paraphernalia of a shifty politician in a fix, which we have come to know so well, if not exactly to love. None of his usual strategems can dispose of the stark facts. No one has spelt out those facts in language so lurid as that employed by the building employers" organisations, the very bodies that campaigned so assiduously and expensively for the return of this Government. Those organisations are now horrified at what their lavishly financed propaganda has brought about.

The president of the House Builders Federation, Mr. Lynn Wilson, said the other day that the shortfall in new housing output in 1980 was disastrous and that a housing shortage of crisis proportions was developing. He went on: We are no longer talking about theoretical housing shortages or surpluses, but the danger of a real housing shortage beginning to affect society's conscience and comfort. In its survey published the day before yesterday the Federation of Civil Engineering Contractors says that the smallest firms are faring the worst. It gives this warning: firms have been forced to break up skilled teams and to shed the operatives and staff they have tried to retain in anticipation of future orders… This is a situation which bodes ill for any future recovery of the economy as a whole. We would urge the Chancellor… and the rest of the Government…to consider how the money currently being paid to the industry's unemployed could be used positively. The federation estimates that last year new public sector orders other than for housing were at their lowest for 21 years. It says that the proportion of firms reducing employment has doubled in the last three months to 82 per cent., and that more than half of the industry's plant is lying unused.

The National Federation of Building Trades Employers reported much the same thing in its survey published three weeks ago. Both federations, joining together in their Budget memorandum for the Chancellor of the Exchequer, state: All the indicators of construction workload and employment point to the worst post-war recession in the industry. This will severely and permanently damage the industry's long term capacity, both in skilled labour resources and specialist expertise …the present inadequacy of investment by both public and private sectors in new construction, renewal and maintenance will place our economy even further behind its competitors. The roots of this problem lie in (a) the apparent need for even this Government to resort to capital rather than current cutbacks to meet public expenditure targets, (b) the sudden imposition of disruptive capital moritoria on public capital spending, (c) the failure to provide adequate and balanced incentive for private sector investment in construction and (d) the disincentive to business investment of high interest rates …This Government have particularly under-estimated the damage to the economy of their swingeing housing cuts, the crisis growing under the ground in our neglected sewerage system… The federations estimate that by next year total new work completed by all construction bodies will be at only 60 per cent. of the 1970 level, that public investment in roads, bridges, sewers, schools and hospitals will be only half of the 1970 level and that public new house building will be no more than a quarter of the 1970 level. They go on: Insofar as the decline in new work represents the deferral of essential investment in better factories, infrastructure and housing, then it only serves to increase their eventual cost and reduce efficiency. That is what the right hon. Gentleman's friends are saying about him and his policies. It is different from the sort of material that those two federations, when they combined in the CABIN campaign, distributed before the last election. I have them here—the leaflets, the stickers and the carrier bags which mutely call "Keep Britain's Builders Free". Those carrier bags are now useful only as receptacles for Tory broken promises to the builders, who are now free—free to go bankrupt. I also have the balloons which proclaim the same message: "Keep Britain's Builders Free". I shall leave it to the Secretary of State to blow them up. He has more reserves of wind than the rest of us.

There were also posters in that campaign. One of them said that the results of the Labour Government's policies on the building industry would be more public intervention, less efficiency, higher costs, inevitable losses, more taxation and fewer jobs. Every one of those dire prophecies has been fulfilled, but by a Tory Government and a Tory Secretary of State. I shudder to think what CABIN will say on its posters, carrier bags and balloons at the next general election, when presumably it will be campaigning enthusiastically for the return of the Labour Government who will provide it with the work of which it is now so starved.

Not only the builders are facing a slump, but companies which produce the materials used by the building industry. Cement production is at its lowest since 1963. Brick production is at its lowest peace-time level since records were kept, almost certainly the lowest level this century.

A survey by the British Woodworking Federation reports that over half its firms showed a reduction in their labour force in 1980. One-third were on short-time working and over 40 per cent. were affected by the moratorium on public housing investment. One and all, the old CABIN mates agree that this damage to their industry has come about as a direct result of the policies deliberately pursued by the right hon. Gentleman.

Those policies have harmed others as well. Families buying or wanting to buy a house have been hit harder than ever before by the Government's interest rate policy. For more than a year, mortgage rates have been at levels far above those which used to spur the Secretary of State and the Prime Minister to paroxysms of synthetic fury when they were in Opposition.

Last week, the secretary-general designate of the Building Societies Association accused the Government of unfair competition amounting to almost an abuse of power in the battle to attract personal savings. He said that if the Government's rivalry with the societies continued, higher mortgage rates were the "only possible outcome", and that the Government's decision to raise large sums from personal savers would reverberate through every building society decision on interest rates and mortgage rates for some time to come. The result has been a disastrous fall in the number of new mortgages. In 1978, the last full year of the Labour Government, the number of home loans granted was at an all-time record of 804,000. In 1980, the right hon. Gentleman's first full year in Government, home loans were down from 804,000 to 677,000, which is a reduction of 16 per cent.