The Housebuilding Industry

Abstract

The housebuilding industry is exceptionally fragmented. Although there were about 80 000 firms in the construction industry in the late 1970s, there were less than 100 housebuilding firms employing a 1000 or more workers, and although the largest constructed up to 20 000 dwellings per annum, the typical medium firm built little more than a 1000 houses each year. But 95 per cent of Britain’s builders are small, family-run concerns employing less than 50 workers. They operate locally and work on minor contracts. They are often solely involved in small scale infilling. Many do little more than collect together skilled craftsmen at the right time and employ labour-only subcontractors. In 1975 the Department of the Environment estimated that there were at least 220 000 self-employed construction workers (about a quarter of the labour force of the industry), most of whom were employed on the ‘lump’. The ‘lump’ is a system in which the worker is notionally self-employed, work being subcontracted on a labour-only basis. Some of the workers are skilled, but many are unskilled and receive little training because of their status. The result is often shoddy building and skimped work. They work on piecework, in appalling safety and health conditions and receive neither basic wages nor security of employment. Tax avoidance was substantial throughout most of the 1970s, workers being paid lump sums rather than tax deducted earnings.