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House of Lords

Monday, 1st May 1995.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Exeter.

The Building Industry

Lord Dean of Beswick asked Her Majesty's Government:

    What proposals they are considering to stimulate and assist the house building and construction industries.

The Minister of State, Department of the Environment (Viscount Ullswater): My Lords, the Government work with these industries on a wide range of initiatives to promote productivity, innovation and competitiveness.

Lord Dean of Beswick: My Lords, I am grateful to the Minister for that wide-ranging Answer. There is of course no question at all that an expanded house building programme of properties for rent would benefit the building industry. I wish to concentrate on the latter part of my Question regarding the building industry. There appears to be general agreement among all sections of the building industry that legislation is required for what is known as a construction contracts Bill. I understand that a commission formed by the Government under Sir Michael Latham is now looking at the situation with a view to bringing legislation forward. Is the Minister aware that almost all of those involved in the building industry are asking that such legislation be brought onto the statute book as quickly as possible in order to benefit their ailing industry? Can the Minister give an undertaking as to whether or not that will happen in the near future?

Viscount Ullswater: My Lords, I am sure that the noble Lord will be appreciative of the fact that the Government have given their support in principle to legislation. A consultation paper on legislative proposals on liability and latent defects insurance was published on 12th April. One on fair construction contracts—that was mentioned by the noble Lord—should be published shortly. I believe that the Construction Industry Board, which is chaired by Sir Michael Latham, has not stood still in wanting to put his recommendations forward.

Lord Mellish: My Lords, is the Minister aware that everyone recognises that the house building industry is in a parlous state? Why does the Minister not pick himself and the Government up and say that something will be done for house building, instead of messing about?

Viscount Ullswater: My Lords, construction output increased by 3 per cent. last year after three and a half years of decline. New orders held up well during the strong resurgence in 1993. I believe that some readjustment would be expected as construction emerges from recession. Public sector capital spending was high during the recession, boosted by government measures,

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and stood at record levels for three years. With recovery it is right, I believe, that private investment should rise to take its place.

Lord Bruce of Donington: My Lords, is the noble Viscount aware that completions of houses in 1994 were still some 30,000 below the figure that was achieved in 1979? Is not the fact of the matter that the Government are afraid of bringing supply and demand for housing into better balance because that might depress the value of existing houses and create further difficulties in the mortgage field?

Viscount Ullswater: My Lords, it depends on which measure one wants to judge these matters. However, the homelessness and bed and breakfast figures continue to fall. New lettings funded by the Housing Corporation plus new lettings provided by local authority investment should provide around 180,000 homes over the next three years. That is a substantial contribution to tackling housing need in the areas where it is greatest.

Lord Ezra: My Lords, will the noble Viscount indicate whether the Government are concerned about the results of the previous housing condition survey which showed the poor state of a large proportion of the houses in this country? Are not houses and buildings part of the national capital asset and will the noble Viscount indicate what the Government propose doing about making their condition better?

Viscount Ullswater: Yes, my Lords. I think that any survey which indicates such measures not only has to be looked at very carefully, but also the measures on which that survey is based. By no means do I believe that the conditions outlined by the survey indicate that the housing is not fit for human habitation. But certainly the construction industry and the Government are aware of that. They are putting large sums of money into insulation projects so as to make homes, especially for elderly and disabled people, more comfortable to live in.

Lord Stallard: My Lords, does the Minister accept—as it is universally accepted by everyone involved in housing—that there is a drastic shortage of affordable housing for the many thousands of people who are languishing on waiting lists because they do not earn enough and do not qualify for benefits? The housing corporations cannot supply their needs because they have to charge market rents; and local authorities cannot supply their needs because the Government will not release their money. Who, then, will build the affordable houses that everyone knows is the greatest need at present?

Viscount Ullswater: My Lords, that is why the balance of our housing programmes has shifted more towards low-cost home ownership schemes. It is not right to say that that harms the house building industry or fails to tackle housing needs. Grants to tenants to buy homes in the private sector creates additional demand that helps the house building industry.

Lord McIntosh of Haringey: My Lords, the Minister has just mentioned figures projecting 180,000 completions over the next three years. Will he confirm that the target for completions in the first three years of this

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Parliament was 153,000 but the actual number completed was only 87,000? Under those circumstances what credence can we give to his present forecasts?

Viscount Ullswater: My Lords, I am not satisfied that the noble Lord is equating like with like. However, I believe that the fundings, the lettings and the completions, together with the new lettings provided by local authorities, should provide 180,000 homes. As I indicated, the homeless and bed and breakfast figures continue to fall. We should pay great regard to that indication.

Lord Cledwyn of Penrhos: My Lords, the Government have failed to be helpful to the Aelwyd Housing Association in Wales, upon which many people depend for new housing at this time. Why is that?

Viscount Ullswater: My Lords, the noble Lord gives me little indication of how the Government have failed to be helpful.

Lord Cledwyn of Penrhos: My Lords, if I do that it will take me a long time. However, I shall write to the noble Viscount, and I hope that he will turn out to be more helpful than the Government have been in the past.

Viscount Ullswater: My Lords, I should be grateful to the noble Lord for more information, and of course I shall write back to him.

Lord Dean of Beswick: My Lords, in his reply to the second part of my supplementary question concerning the building industry, the Minister gave a rather broad answer about the present situation which is not in accord with what I read is happening in the building industry at present. Is he aware that between 400,000 and 500,000 building operatives are still unemployed? Is he also aware that there is a perceptible downturn in building activity almost across the board? Will the Government take that on board and do something to arrest that decline?

Viscount Ullswater: My Lords, the noble Lord is quite right in drawing attention to the fact that employment in the construction industry has declined. However, I am glad to say that that decline stopped last year. In addition, we have seen considerable productivity improvements, which typically run at about 3 per cent. to 4 per cent. per annum. Therefore, the construction industry is very well placed to take advantage of the fact that the economy is being well run at present.

British Banknotes and Coins

2.47 p.m.

The Earl of Kinnoull asked Her Majesty's Government:

    What consideration is being given to balancing the preponderance of coins in British currency by the introduction of a £2 or £3 note.

The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, the issue of banknotes is the responsibility of the Bank of

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England. The Bank has no plans to introduce a £2 or £3 bank note. However, the Royal Mint has recently carried out a public consultation exercise about the possibility of introducing a circulating £2 coin. The results are being evaluated but no decision has been taken.

The Earl of Kinnoull: My Lords, I thank my noble friend for that reply. Is he aware—I am sure that he is—of the strong popularity of the Scottish £1 note and the support in the United States for retaining the US dollar bill? Is not the Royal Mint a little out of touch in ignoring that support? How widely will the Royal Mint consult when considering this type of question?

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