Report - Section 6

Construction

The construction industry employs a substantial part of the labour force and its fluctuations have been a major factor in unemployment. In 1971 no less than 25,000 of the 100,000 unemployed were registered as construction workers. In times of boom the shortage of skilled labour in the industry becomes a serious bottleneck in the economy although coupled with continuing large numbers of unskilled unemployment.

The industry does not play as large a part in the British economy as in most other European countries as the following table shows and this coupled with the manifest need for urban rebuilding and house replacement suggest that, with the proper policy, the industry could play a much larger part in providing steady employment for the Scottish labour force. Indeed, if the Scottish construction industry employed 10 per cent of the labour force, the EEC average, this would mean employment for an additional 40 thousand.

* GDP at factor cost

With North Sea oil revenues, public expenditure on construction projects could be greatly stepped up and a major operation should be mounted to carry on the rebuilding of Glasgow and do much more than has been done in the past for environmental recovery. This would probably require a special Environmental Recovery Agency to assist the local authorities rather in the way that SSHA operates.

Housing policy has been bedevilled in the past by the subsidisation of certain types of housing. This has led to the colossal public housing sector in Scotland with the emphasis on quantity rather than quality. It seems desirable to subsidise housing for many years to come both to improve the living conditions of the Scottish people and to keep up the demand on the construction industry. Instead of subsidising rents at one extreme and at the other giving tax relief on mortgages which is greater the larger the mortgage, it would seem much more appropriate to give the assistance to individuals regardless of the type of house they occupy or whether they are tenants or owners. This could probably be done under the new tax credit system and it would have the effect of providing a housing subsidy or negative tax to those with low incomes and a housing tax allowance to others. In this way demand for housing as a whole could be encouraged while avoiding the distortion between different types of housing which has been such a feature of the past. It would be likely that local authority housing would then gradually decline in importance and housing associations would assume greater prominence. As competition between different forms of housing increased, so the quality of housing would improve.