Construction Output

Oral Answers to Questions — Business, Innovation and Skills – in the House of Commons at 9:30 am on 8 November 2012.

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Photo of Chris Williamson Chris Williamson Shadow Minister (Communities and Local Government) 9:30, 8 November 2012

What assessment he has made of the latest construction output figures; and if he will make a statement.

Photo of Pat Glass Pat Glass Labour, North West Durham

What assessment he has made of the latest construction output figures; and if he will make a statement.

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills

The latest figures from the Office for National Statistics show that construction output fell by 2.5% in the last quarter, but overall gross domestic product increased by 1%.

Photo of Chris Williamson Chris Williamson Shadow Minister (Communities and Local Government)

Earlier this year, the Secretary of State gave a commitment that the Government were taking steps to address the decline in construction output, but this week’s construction trade survey showed, for the first time ever, a decline in every single construction sector. What has gone wrong?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills

There are various surveys; another construction survey shows that output increased in October. In September, we announced a housing and planning package that will deliver up to 70,000 new homes and 140,000 jobs, with a £40 billion guarantee for infrastructure projects and £10 billion for new homes. We have also introduced the Growth and Infrastructure Bill to speed up the planning system and unlock new investment in housing and infrastructure. I am surprised the hon. Gentleman voted against it on Monday night.

Photo of Pat Glass Pat Glass Labour, North West Durham

Given the importance that the Government placed on the national infrastructure plan just a year ago, why has the value of new construction orders for infrastructure fallen by more than 40% in the first two quarters of this year?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills

It is being so cheerful that keeps you going, isn’t it? I would have hoped that the hon. Lady welcomed the £4.5 billion contract won by Hitachi to build the next generation of inter-city trains, creating 900 new jobs in north-east England. The north-east also did particularly well under round 3 of the regional growth fund, with 29 bids selected, worth £120 million, creating or safeguarding 30,000 jobs. I am looking forward to my visit to the north-east next week to open new factories in Blyth and on Tyneside.

Photo of Iain Wright Iain Wright Shadow Minister (Business, Innovation and Skills)

The 2.5% quarterly drop in construction output to which the Minister referred is dire enough, but year on year, activity in the construction sector has fallen by a massive 12%, and further decline is predicted through to at least 2014. The sector is crying out for assistance from, and co-operation with, a Government who value construction as an important part of an active industrial strategy. Will the warm words, the excuses, the complacent tone that we have heard this morning, the protestations of just how difficult it is and the bland and vague promises of help in future stop, and will the Minister take decisive action that will help the construction sector now?

Photo of Michael Fallon Michael Fallon The Minister of State, Department for Business, Innovation and Skills

As I have already said, we are investing £4.5 billion to fund new affordable homes over the spending review period, all of which is committed to be spent in this Parliament. That is leveraging in a further £15 billion of private sector investment. We are on track to deliver 170,000 affordable homes by 2015.

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