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LANG WARNS OF THREAT TO CONSTRUCTION INDUSTRY

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The prosperity of Britain's construction industry, secured through sound economic policies and reduced burdens on b...
The prosperity of Britain's construction industry, secured through sound economic policies and reduced burdens on business, would be undermined by the kind of cumbersome regulations which European social policy threatens, Ian Lang, President of the Board of Trade, has warned.

Mr Lang said that Britain's construction industry plays a key role in the economy, accounting for some 10 per cent of GDP and employing almost a million and a half people. In 1994 it secured some£7m in export earnings while export contracts won by British companies in 1995 increased by over 40% over the previous year.

Mr Lang cautioned against the damaging effect of European burdens on business. He said:

'I worry about the burdens on business that are threatened from Europe. The European Social Model - of intrusive state regulation and heavy burdens on business - is a manifest failure. Last month alone half a million Germans lost their jobs. And it is no coincidence that the construction industry is among the worst hit by the mounting uncompetitiveness there.

'If we signed up to the Social Chapter we would open ourselves to a pipeline bulging with future burdens on business, that would transplant here the social model from which we have distanced ourselves through the opt-out the Prime Minister secured at Maastricht.

'The Working Time Directive is also bad for employers, bad for employees and bad for industry. It would hit the construction industry particularly hard - replacing flexibility with rigidity and bureaucracy.

'The construction industry is key to ensuring that we are well placed to prosper in the future. If we have replaced volatile economic cycles with steady, sustainable growth, as I believe we have, no industry will benefit more than the construction industry.

'I am encouraged by the return to real, long-term investment in property as reflected in the number of housing starts. New orders in the private housing sector in the final quarter of last year were a third up on the previous quarter and 43% higher than a year before. This contributed to the first overall year on year increase in new construction orders since 1993.

'The Private Finance Initiative will become part of everyday life and, I believe, will benefit the construction industry as much as it benefits taxpayers. That is because it will remove the short-termism, and take the politics out of large scale infrastructural projects. It will be another contributor to a more dependable environment in which the industry can work.'

In order to allow the construction industry to take advantage of a stable economy by untying it from unnecessary regulations, Mr Lang said:

'Having favourable macro-economic conditions is not enough. For businesses to prosper and grow they need to be free to act in their own commercial instincts - free from unnecessary rules and regulations; free from burdens and overheads; and free from government interference.

'We have made progress. Over 1,000 regulations have been abolished during this parliament alone. These range from relaxing rules so that half a million businesses can submit annual, instead of quarterly, VAT returns to setting up a single employer's helpline for all tax, national insurance and VAT queries which is used by some 15,000 businesses a week.'

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