Forestry (Hansard, 5 December 1983)

§ Mr. Archy Kirkwood (Roxburgh and Berwickshire)
I am pleased to have this opportunity to rehearse the difficulties facing the forestry industry. I wish to detain the House for a short while to explain the background to the problems.
The Secretary of State for Scotland said: A continuing expansion of forestry is in the national. interest, both to reduce our dependence on imported wood in the long-term and to provide continued employment in forestry and associated industries."—[Official Report, 10 December 1980; Vol. 995, c. 927.] That statement was followed by the publication of the Forestry Bill 1981 which gave the Commission powers to dispose of assets to private owners and to allow Ministers with Treasury approval to direct payments of sums from the forestry fund to the consolidated fund.
On Second Reading of the Bill, the Secretary of Scotland said: In deciding on the method of sale and in selecting areas for disposal under the new policy, the commission will be taking into account a number of important factors. Paramount among them is the need to ensure long-term supplies of the wood-using industries, the effect on employment and special commitments to the public recreation and amenity."—[Official Report, 26 January 1981, Vol. 997, c. 652.] In a subsequent letter to the Chairman of the Forestry commission, the Secretary of State said: The main considerations within forestry which forestry ministers would wish commissioners to take into account in the selection process for the disposal of assets are, inter alia"— they are not in any order of precedence (a) The financial implications, including the need for disposal to be fully in accordance with the principles of public accountability; (b) The maintenance and development of the wood processing industry; (c) The maintenance of employment and the viability of local communities in special and socially fragile areas; (d) The use of forests for public access and recreation; (e) The interests of conservation, research and education; (f) market preferences; (g) the effect of efficient management of the commission's remaining land holding; (h) the rationalisation of the forest estate. Those constraints were placed by the Government on the Forestry Commission. That is the summarised purported policy of the present Government. Incidentally, in 1981, they ended almost 30 years of all-party support for the forestry industry. The members of the Liberal party who were then Members of Parliament, together with members of the official Opposition, voted against the Bill. The Bill was enacted in 1981, and since then there have been further developments.
First, we had the accounting revaluation at the commencement of the second quinquennial review on 31 March 1982. That had the effect of increasing the amount to be realised, as instructed by the Treasury, from some £43 million over a three year period—as announced in 1981—to £82 million by 1986. That feat of accounting acrobatics has rarely been paralleled since then. Secondly, the Rayner committee review brought about a management structure review, which eliminated one tier of management. Thirdly, the Government's overall policy of cutting Civil Service manning levels required the commission to reduce its salary bill by 8 per cent. between 1 April 1979 and 31 March 1982. those three changes caused the industry severe problems. They were all 135 crystalised in a recent properly carried out lobby by the joint unions involved in the forestry industry. They brought evidence from all parts of the country about the difficulties being experienced.

§ Mr A. J. Beith (Berwick-upon-Tweed)
Is my hon. Friend aware that the forestry industry came to areas such as that which he and I share—the Cheviot hills—to create employment? Industries were built up around forestry, but the job losses are now very severe because of this policy and the management review.

§ Mr Kirkwood
I am well aware of my hon. Friend's continuing interest in the subject. He has had two Adjournment debates this year on the subject. I have evidence from my hon. Friend for Isle of Wight (Mr. Ross) whose area is also suffering severe setbacks. In addition, I have had evidence from my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) about some of the experiences in his constituency. There are also difficulties in other parts of the country.

§ Mr Charles Kennedy (Ross, Cromarty and Skye)
Will my hon. Friend take this opportunity to question the economic logic of the Government in forcing the Forestry Commission publicly to sell its assets, thus allowing the market to take over to such an extent that more assets are having to be sold such as Glenelg, and Glen Affric, without proper consultation? Indeed the Forestry Commission has had to write to the local unions concerned saying that it will not face "public inquisitions", which is—

§ Mr. Deputy Speaker (Mr. Harold Walker)
Order. Interventions should always be brief, particularly during an Adjournment debate.

§ Mr Kirkwood
I am grateful, Mr. Deputy Speaker, for your protection.

§ Mr Martin J. O'Neill (Clackmannan)
On a point of order Mr. Deputy Speaker. Is it in order for the so-called alliance to expect to hold a debate involving three hon. Members and a Minister, when one issue has been raised by an individual hon. Member? Is not that an abuse of the House?

§ Mr. Deputy Speaker
Mr. Speaker has said that he would normally expect an Adjournment debate to be conducted between the hon. Member who raised it and the Minister. However, I thought that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) had given way so that the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) could make a brief intervention.

§ Mr Kirkwood
I am grateful to you, Mr. Deputy Speaker, for that further protection.
In my constituency, in the forest of Leithope, 2,500 acres have been sold to a pension fund under a "veil of secrecy" according to the Southern Reporter, my local newspaper, in its edition of 24 November. In addition 1,200 acres have been sold at Ettrickshaws, in the constituency of my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale, (Mr. Steel). The 6,000 acre commission holding at Lammermuir is also to be put on the market in the near future. That means that nearly 9 per cent. of forestry assets are to be sold in the Borders this year, with more sales planned.
136 The entire work force of 13 at Lammermuir, living at Lauder and Duns, are faced with redundancy as part of a programme of 43 redundancies in the south of Scotland conservancy area. That is the reality of the Government's policy since the 1981 legislation.

§ Mr John Home Robertson (East Lothian)
rose—

§ Mr. Deputy Speaker
Order. Mr. Kirkwood.

§ Mr Kirkwood
I shall give way briefly to the hon. Member for East Lothian (Mr. Home Robertson).

§ Mr Home Robertson
rose—

§ Mr. Deputy Speaker
Order. Perhaps I might point out to the hon. Gentleman that I have already told the House of the view expressed by Mr. Speaker that Adjournment debates should be conducted between the hon. Member who has the debate and the Minister. Interventions should normally occur only with the consent of the hon. Member whose debate it is and the Minister. It would be helpful if the Minister was given a chance to reply and if the hon. Gentleman got on with his speech.

§ Mr Kirkwood
I am grateful for your guidance, Mr. Deputy Speaker. I am relatively new to this business.
If I have misrepreseted the Government's policy I hope that the Minister will put me right. The background that I have described is causing much anxiety in my constituency and in other parts of the country. I should like to make three points.
First, do not the Government accept that the commission, which is entirely their creature, should be assured either that the £82 million will be raised over a longer time or that the Government will say that no more disposals of forest land will take place after the £82 million has been realised?
Secondly, is it not time that the Government reexamined the guidelines which the Secretary of State for Scotland announced in his letter to the commission dated April 1981. That instruction is being disregarded. It is having no effect on the employment in so-called socially fragile areas.
Thirdly, will the Government now end the apparently clandestine disposal of large tracts of forest land by allowing the details of sales authorised by the Chief Land Agent to be announced, including such details as the identity of the purchaser, the valuation, the purchase price and the acreage sold? If not, there will always be a suspicion that forests are being sold at give-away prices in back-stage deals.
There is a unique quality about the forestry enterprise and those who engage in it. Those who sow know that they are planting something for later generations to harvest. They are dedicated people who believe in and care about what they do. However, their morale is at a low ebb. The Minister has the power, if he has the political will, to boost that morale. Christmas trees are the topical symbol of the Christian message of hope. Christmas trees should also carry a message to the firesides of the entire nation. Let that message be one of hope for the forestry industry, especially for those employed by the Forestry Commission. That can be done only with appropriate Government assurances tonight.

§ Mr Dennis Canavan (Falkirk, West)
Here comes the good fairy.

§ The Under-Secretary of State for Scotland (Mr. John MacKay)
The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) concluded by reminding us that it is Christmas time with Christmas trees, but for a little while I thought that I had stumbled into a Christmas pantomime. Alliance Members tripped across the stage after each other with well-rehearsed interventions and well-rehearsed little points and, to be honest, stayed too long.
I have listened carefully to the hon. Gentleman. I was struck by his pessimism about forestry. There is no call for such pessimism. Like other industries, the industry has its problems, but is also has its success stories and great promise for the future.
I remind the House that the Government have consistently voiced their support both for the private and for public sectors of forestry. Indeed, when my right hon. Friend, the Secretary of State for Scotland, made his policy statement on forestry in the House in December 1980, he underlined that support and stated that the main basis of policy for the future must remain the successful and harmonious partnership between the private sector and the Forestry Commission. The hon. Gentleman did not mention the private sector. I take it that this reformation of alliance policy—or is it Liberal policy—does not approve of the private sector.
Since 1980 there has been a noticeable rise in confidence within the industry, contrary to what the hon. Gentleman has tried to suggest. New planting by the private sector is rising, while the Commission continues with a reduced but still significant planting programme and in increasing replanting programme. Our forests are maturing, timber production is set to rise substantially, and we are beginning to reap the reward of many years of investment.
Heavy industry must pay particular attention to the market for its products, and forestry is no exception. By far the greatest problem that the industry has had to face in recent years has been the loss of some of its markets, due to the closure of several large pulp mills. These were heavy blows, and it was to the credit of the forestry industry and a measure of its resilience that it did not lie down under these set-backs, but set about the task of finding and creating alternative markets. I mention the opening, over a very short space of time, of an export market in small timber to Scandinavia.

§ Mr O'Neill
Will the Minister give way?

§ Mr. MacKay
To be honest, I have been reminded once or twice by the Deputy Speaker of Mr. Speaker's ruling on the subject of Adjournment debates. I have no doubt that the hon. Gentleman would make a genuine point.
There was more than a touch of carrying coals to Newcastle about the export market in small timber to Scandinavia. I pay tribute to the leading part played by the Forestry Commission in opening up that market. There are a number of reasons, which I am sure would find broad agreement, why we would not wish to see the Scandinavian market as permanent, but it has been important and has helped to bridge the gap. As an hon. Member who has in his constituency more forests than most, I know how important that market has been in bridging that gap.

§ Mr O'Neill
I am thankful to the Minister for giving way.

§ Mr Beith
On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to intervene in the debate without getting the consent of the hon. Member whose debate it is?

§ Mr. Deputy Speaker
All this must be consistent with what I said earlier about Mr. Speaker's view. I ask the Minister and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) whether they object to the hon. Member's intervening. If they do not object, I call the hon. Member for Clackmannan.

§ Mr O'Neill
I am grateful to all concerned. Will, the Minister look at the timber finishing industry and consider the claims of the Caber Board plant in Cowie in my constituency to provide assistance for the developments that the plant wishes to carry through? Will he expedite the support under section 7 of the Industry Act, which I understand would be available to the plant if the Scottish Office were more agreeable?

§ Mr. MacKay
I know that Caber Board has played an important part in the use of timber. I shall draw the hon. Member's remarks to the attention of my hon. Friend the Under-Secretary who has responsibility for these matters.
Investment has taken place with Government backing, and continues to take place in timber-using industries. The decision taken last March by United Paper Mills of Finland to build a pulp and newsprint mill at Shotton in north Wales will mean that the mill will use 450,000 cubic metres of home-grown timber each year. More recently, there has been the announcement by Highland Forest Products that it is going ahead with the construction of a mill at Inverness to make orientated structure board, which in full production will use about 160,000 cubic metres of timber a year. This year alone, projects have come on stream or have been announced which should provide markets for about 800,000 cubic metres a year of British-grown timber, with consequent employment opportunities. I am sure that every hon. Member welcomes that approach, but we are by no means content to leave matters there. We want to see further large-scale investment taking place, and in Scotland a forest products development group has been set up by the Government to encourage this. This is a useful collaborative effort involving representatives of the Forestry Commission, private growers, the industry Department for Scotland, the Scottish Development Agency and the Highlands and Islands Development Board. We have the timber —indeed I understand that we are the only country in Europe with large future supplies of timber still uncommitted. The market is firming up and, unlike the hon. Gentleman, believe that we can look forward with reasonable optimism.
With market prospects improving, and with the good news outweighing the bad—although the Labour party would never allow that to cloud its judgment on the subject —it seems that we must look elsewhere for the reason for some of the less than cheerful statements that are sometimese made about the industry. The hon. Gentleman's speech did in fact give us at least part of the answer, since he devoted most of it to expressing his fears over the effects of the disposals programme that the Government have asked the commission to undertake, I 139 must say that I find his fears exaggerated. I shall consider the programme. First of all, it is a limited one, aimed at reducing the commission's call on public funds for the operation of the publicly owned forests—the forestry enterprise—at a time when the Government are working hard to keep public expenditure under control and many other facets of our national life must work on constant or, in some cases, reduced budgets. I remind the House— the hon. Gentleman has done it for me in quoting a letter from my right hon. Friend to the Forestry Commission chairman—of some of the assurances given by Ministers during the passage of the Forestry Act 1981. The Forestry Commission would not be dismembered; there would be no question of the commission being placed at a commercial disadvantage by the creaming-off of all its best and most productive woodlands; Forestry land would not be sold at knock-down prices; the forestry commissioners would be left in full control of the selection of areas for sale. That remains the policy, and it has not been changed.
Forestry Ministers also provided the commissioners with guidelines on matters to be taken into account when properties were being considered for sale.

§ Mr. Canavan
rose—

§ Mr. MacKay
I am not giving way.

§ Mr. Canavan
rose—

§ Mr. MacKay
I wish that the hon. Gentleman would show patience. As that is something that he does not usually do, I am not really surprised that he is not doing so tonight.
I have heard claims that the guidelines are being disregarded — they are not. They refer among other things, to the need for the commission to maintain its ability to ensure long-term supplies to wood-using industries, to provide employment and to have regard to public access and recreation considerations. I know that the commissioners take careful account of the matters covered by the guidelines in reaching decisions about the areas to be offered for sale. It is important to remember, however, that these are guidelines, not a set of rigid rules. Every prospective woodland sale is considered on its merits. No single consideration can always be paramount. The interpretation of the guidelines involves a balanced judgment by the commission.

§ Mr David Steel (Tweeddale, Ettrick and Lauderdale)
rose—

§ Mr. MacKay
I must get on with my reply. I have only 10 minutes left to answer the points raised.

§ Mr Steel
The Minister has omitted reference to the first guideline, which is that the disposal must be fully in accordance with the principles of public accountability. Surely my hon. Friend's main point was that the public at large and the employees of the commission are not being properly informed when the sales take place. Who buys them and at what price?

§ Mr. MacKay
The right hon. Gentleman should show patience because I am about to come to the point about confidentiality and the charge that information on sales is being unreasonably withheld, coupled with the suggestion that, behind a cloak of secrecy, commission woodlands are 140 being disposed of for less than they are worth. There is no truth whatsoever in that. The commission does not sell woodlands for less than the reserve prices which it sets in accordance with Treasury guidelines. The case of Leithope has been mentioned. That property was sold at a price acceptable to the commission and in excess of the reserve price. It was not given away. The commission seeks in every case to get the best price for the benefit of the taxpayer, and I refute any suggestion either that the rules of public accountability are being flouted, or that the public interest is being set aside. As for the charge of secrecy, the commission does not publish the names of purchasers or the sums they have paid when sales take place. Nor does the commission divulge that information in the case of its purchases. In both cases it respects the confidentiality that is normally and properly expected between a purchaser and a seller.
The hon. Gentleman referred to the extent of the disposals programme. What we have thought it reasonable to do is to ask the commission to raise some £82 million from sales over a five-year period to 1986. The figure of £82 million is, of course, being bandied about as though it was a sword of Damocles hanging over the commission. In fact, by the time the commission has raised that sum of money, it will still have sold less than 10 per cent. of its holdings and will still manage a substantial part of the productive woodland in this country. We must bear in mind also that it is the forestry commissioners who decide just what is to be sold, and I would find it surprising if they did not take the opportunity offered to sell off some of the woodland that they find difficult to manage. At Glen Affrie they are selling 11,356 hectares of land on which there are no trees, nor can there be trees, and only 342 hectares of plantation. Some Opposition Members want the Forestry Commission to hold on to land that it cannot plant, but that is no purpose of any part of the Forestry Commission.
I hope that what I have said will help to put the disposals programme into the proper perspective. No decision has yet been made on what might or might not happen after the end of the present programme. I am not prepared to speculate. I accept however, if it is of any comfort to Opposition Members, that the scale of the programme must be considered carefully, and that that is done in the context of the annual reviews of public expenditure.
I am well aware, of course, that the sale of commission woodlands brings fear of change which can loom large in the eyes of people who live close to these woodlands or who work in them. I think, therefore, that there are a number of things I should say about that.
First, woodlands do not disappear when they are sold to the private sector. Opposition Members live in cloud-cuckoo-land if they think that that is what happens. The woodlands remain. The felling of trees is controlled by the Forestry Commission, which can prescribe replanting conditions. That apart, woodlands are being bought by people paying the market price for them, and they will surley have every incentive to look after them and manage them properly.
Naturally, what gives rise to much concern when commission woodlands are sold is the question of the jobs of commission workers. The hon. Member made clear in his speech his own concern on this score. I can understand his concern, of course, over the proposed sale of the Lammermuir forest in his constituency, where some 141 redundancies have been announced. I know how even the loss of a few jobs can affect a rural community, and I have every sympathy for those who are made redundant, at Lammermuir or elsewhere. I am also keenly aware that no argument that I can put forward will reconcile a man to losing his job—something that is true in any industry, not just forestry. I know, however, that the forestry commissioners feel as I do on that subject, and that as they sell woodlands they try to keep jobs losses down and to keep compulsory redundancies to a minimum. I have to emphasise, however, that only a very small number of redundancies have arisen as a direct result of the disposals programme.

§ Mr Canavan
How many?

§ Mr. MacKay
Sadly, the loss of jobs cannot be avoided altogether in an industry where efficiency in work methods is increasing. Despite the increased acreage being planted and growing in Scotland, the number of people involved in forestry is declining because the methods used in forest harvesting, and so on, have changed over the years. We can hardly expect the commission to employ men when there is no work for them. The labour force has been falling quite sharply in recent years, but that is due, as anyone who knows anything about forestry will acknowledge, to mechanisation, different techniques, and so on.
Since the war we have seen a massive reduction in the number of jobs in agriculture. No one has any doubts about why that has happened. Mechanisation has taken over on the farm, and the same is true in forestry, although it has taken place a little later than in agriculture. New methods are being introduced and there are new work practices in the forest, especially in harvesting. It is highly mechanised, as anyone who watches forest harvesting will know. It is a far cry from the man with the horse, although perhaps some hon. Gentlemen might prefer to go back to that. It is a highly technical operation, with very few men involved. It is capital intensive, and there is much skill involved. That is the main reason why the commission employs far fewer workers than it did, say, 10 years ago. I admit that the smaller commission planting programme has also had its effect, as has the recession in the timber-using industries, but new working practices, and not the sale of plantations, have had the greatest and most lasting impact on employment in forestry.
Clearly, a great majority of the commission's woodlands are open to the public. It is inevitable that many of the woodlands that are sold will have been used by the public for quiet enjoyment. I understand the concerns that have been expressed, but I stress that many woodlands have been sold and there is no evidence to suggest that the majority of purchasers will seek to deny reasonable access. Of course, public rights of way have their own legal protection, which is not affected by a change in ownership.
Much of what has been said in the House tonight has been about job losses, but let us not forget that there is another side to the coin. Our forest estate is expanding. Millions of young trees are planted each year. The House could be forgiven for thinking otherwise, but anyone who 142 walks around the Scottish countryside with his eyes open can see that. New timber-using industries have been set up —I have mentioned some of them—and an increasing volume of timber is coming out of our forests to feed those interests. In Argyll and Bute, I see the increasing volume on the roadsides. This all means job security for a great many people. It also means that new jobs have been created. The industry has been going through a period of change, but the picture is not dark for jobs.
The best guarantee of employment in forestry is not resistance to change, but a willingness by the industry to adapt to the times so that it can continue to supply timber to the user industries efficiently and at competitive prices. Contrary to what has been said, the Forestry Commission is continuing to recruit and to provide training, especially for young people. I am pleased to say that in the Last year it has taken on about 100 young people, many for permanent employment. I hope that the Opposition will join me in welcoming that.
The private sector of the forestry industry is also in good heart and will play an important part in the production of timber. Its confidence was given an undoubted boost by the Government's firm commitment to forestry expansion in the 1980 policy statement and we have been greatly encouraged by the response from private woodland owners to our call to them to undertake a greater share of the new planting. The new forestry grant scheme introduced in October 1981 has got off to a good start. In its first two years, applications covering about 85,000 hectares of land have been approved, of which some 55,000 hectares are scheduled for new planting. This revival of confidence is also reflected in the actual planting figures. In each of the past two years new planting—as distinct from restocking — has been running at over 12,500 hectares, about 50 per cent. above the level before our policy statement, and we expect to see a steady increase in this figure.
We also welcome the decision by the several timber growers' organisations in Scotland, England and Wales to unite to form a single body—Timber Growers United Kingdom. This new organisation, which came into being on 1 October this year, is further evidence of the assurance and sense of purpose now to be found on the private side of the industry. It must be clear to the private sector of the industry that the Liberal-SDP alliance has little or no interest in the expansion of the private sector, because not one word has been said about it by alliance Members tonight.
This debate has been about the problems in the forestry industry. Unfortunately, perhaps inevitably, it turned out to be more of a debate on the commission's disposal programme. I have done my best, in the limited time available, to answer the points and to paint a broader and far rosier picture of the future for the timber industry.
If I may sum up—