Commons Sitting of 26 January 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  Oral Answers to Questions
  Mr. Speaker: I remind the House that if hon. Members ask more than one supplementary question the Minister will find me smiling upon him if he answers one only.
  Oral Answers to Questions
    Energy

      Combined Heat and Power Schemes
      Mr. Spearingasked the Secretary of State for Energy if he will make a statement on the progress of demonstrations on pilot projects for schemes for combined heat and power.
      Mr Rostasked the Secretary of State for Energy when he expects to announce the areas in which it is proposed to proceed with feasibility evaluation of combined heat and power.
      The Under-Secretary of State for Energy (Mr. John Moore): The Department has now received from its lead consultants, W. S. Atkins and Partners, a report which contains its recommendations on the areas for further work under the CHP feasibility programme. I am placing copies of the report in the Libraries of both Houses. We shall be considering these recommendations together with the views of the local authorities which have participated in the programme, and will announce our response shortly.
      Mr. Spearing: Are any programmes in London, in particular in East London?
      Mr. Moore: One of the six areas recommended covers East Central London. The Atkins report suggests that the following London boroughs could be included in the East Central London scheme: Camden, Southwark, Tower Hamlets, Barking and Newham.
      Mr. Rost: As one of the criteria which my hon. Friend said he is applying in selecting a suitable site for a lead city CHP scheme is the availability of a suitable power station, what is he doing to prevent the CEGB from closing any more of these suitable power stations and scrapping them? Is he aware that the closure of some stations already has probably prejudiced the development of CHP in some city centres?
      Mr. Moore: I ought to have congratulated W. S. Atkins and Partners on the speed of its report. I also thank the fuel authorities and the local authorities which have co-operated so well.
      My hon. Friend is right in his remarks, with his long background in the subject. There is a need for the availability of a suitable power station or power station site. That was one of both three important factors
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      considered by W. S. Atkins. I ask, however, that hon. Members, including my hon. Friend, should consider the detailed report which I have placed in the Libraries of both Houses.

      North Sea Gas (Pipeline)
      Mr. Eggarasked the Secretary of State for Energy what matters remain to be resolved before the interim pipeline company, which will be responsible for the North Sea gas-gathering pipeline, can be formed.
      Mr. Viggersasked the Secretary of State for Energy if he will make a statement on the latest developments in the plans to construct a gas-gathering pipeline in the North Sea.
      The Minister of State, Department of Energy (Mr. Hamish Gray): The gas-gathering organising group is conducting discussions with gas producers and with potential customers for natural gas liquids, to determine the basis on which they would participate in the interim company, and with banks on the provision of interim finance. The organising group is pursuing these matters with a view to agreement on the structure and financing of an interim company by the end of March. Meanwhile, work continues on the offshore and onshore design of the project and its associated facilities.
      Mr. Eggar: I am grateful for my hon. Friend's full reply. However, do the Government remain fully committed to the idea of introducing private equity capital from sources other than the oil companies and BGC?
      Mr. Gray: At the moment, the finances are being arranged by the Bank of Scotland together with lead banks for the interim company. In due course, when the private utility is formed, it is intended to encourage private capital into it.
      Mr. Douglas: Will the Minister clarify the role of BNOC in this organisation? Will he also confirm the statement he made during the debate on the Christmas Adjournment, that allowance could still be made for some of the NGLs to come down the line to Moss Morran and Braefoot Bay?
      Mr. Gray: I made made it clear to the hon. Gentleman during the Adjournment debate that the basis on which the natural gas liquids would be dispersed was a commercial matter, that the Government had outlined the line they favoured but that it was now up to the commercial interests to conduct their own negotiations. I also made it clear to the hon. Gentleman that the BNOC and the British Gas Corporation would adopt the role of wholesalers in this matter, and on the purchase of gas liquids for the gas-gathering line.
      Mr. Skeet: Since BNOC will be in control of at least 60 per cent. of the total ethane which comes from the North Sea, will BNOC organise the price or will it be the market?
      Mr. Gray: The price will be largely determined by commercial negotiation. BNOC and the BGC, as I said, will act as wholesalers in this capacity.
      Mr. Rowlands: What now are the chances of the Norwegians participating in any gas-gathering pipeline scheme and what initiative will the Government take to get them involved, since that would be of considerable mutual benefit?
      Mr. Gray: We have made it clear up to now that the future of the gas-gathering line is not entirely dependent on our being able to purchase gas from the Norwegian sector of Statfjord and there is no question but that the gas-gathering system will go ahead whether or not we can purchase it. Nevertheless, we believe that the offer by the British Gas Corporation is the best package available to the Norwegians. If the decision is taken entirely on economic grounds, we are confident that the BGC proposals must still be very much in the reckoning.

      Nuclear Energy Programme
      Mr. Adleyasked the Secretary of State for Energy if he will make a statement on the progress achieved in the expansion of the nuclear energy programme.
      Mr. Geoffrey Johnson Smithasked the Secretary of State for Energy whether he is satisfied that the reorganised nuclear industry will be able to meet cost and time targets for the United Kingdom's new nuclear power stations.
      The Under-Secretary of State for Energy (Mr. Norman Lamont): Following my right hon. Friend's statements of 18 December 1979 and 14 April 1980 the structure of the nuclear industry has been strengthened and work is in hand on the two new advance gas-cooled reactors and on the design of the proposed pressurised water reactor. The opportunity now exists for the creation of a strong and efficient nuclear industry in the United Kingdom.
      Mr. Adley: I thank my hon. Friend for that reply. Does he not agree with me that some of those who criticise the Government's nuclear policy on safety grounds are implying incompetence, evasion or dishonesty by the CEGB? As that is a most unfair and improper suggestion, will he and his colleagues be rather more robust in defending the Government's policy and explaining it to ordinary people?
      Mr. Lamont: We shall certainly be robust. I am somewhat surprised at my hon. Friend's suggestion, since we are frequently accused of being simply a mouthpiece for the nuclear industry—whereas the Government wish the nuclear debate to be an open one. However, the Government have made no secret of their view that this country, particularly in view of the concern about energy prices, needs a strong and larger nuclear component.
      Mr. Johnson Smith: Can my hon. Friend reassure the House that the development of a British version of the PWR remains on schedule?
      Mr. Lamont: The development of a British version of the PWR does remain on schedule, but my hon. Friend will know that we are still at the preliminary stage of doing the design work. The NII is doing its work for the inquiry. So far we are on target, but matters are at a very early stage.
      Mr. John Home Robertson: Is the hon. Gentleman aware that the nuclear programme at Torness in East Lothian is likely to run into some difficulties if the authorities continue to ignore the undertakings given about the employment of local people? Is he aware that there are 643 unemployed construction workers in East Lothian but that the contractors at Torness are bussing in 614 workers from outside the Lothians and Borders?
      Mr. Lamont: I note what the hon. Gentleman says, but I am afraid that Torness is the responsibility of the Secretary of State for Scotland.
      Mr. Patrick McNair-Wilson: Can my hon. Friend give us any idea of the time scale that the Government have in mind for the development of a commercial fast breeder reactor?
      Mr. Lamont: I cannot say when an announcement might be made. No decision has yet been taken. There have been various discussions between the AEA and people in other countries about the possibility of collaboration, but I stress that no decision has yet been taken. This House will, of course, be informed at an early stage.
      Mr. Penhaligon: At the open and public inquiry into PWR safety, will the Government be prepared to ensure that those objecting to the PWR do not lose their case in the face of Government propaganda because of a lack of finance?
      Mr. Lamont: It has never been policy that objectors to projects should be funded at the taxpayers' expense. We have no present plans to alter that policy.
      Mr. Ancram: Is my hon. Friend concerned at the escalation in the projected outturn costs of the new AGRs at Heysham and Torness? Is he still satisfied that they are justified economically?
      Mr. Lamont: I am concerned about the escalation of costs for AGRs generally. Certainly there is a large margin. However, I strongly believe that the industry has to get to grips with those costs or the economic case for nuclear power will be endangered. The situation is not one which can leave us complacent.
      Mr. Eadie: Since, in reply to his hon. Friend the Member for New Forest (Mr. McNair-Wilson), the Minister was not very specific, and since he must have seen the trailer running in the press to the effect that most of the experimental processes at Dounreay are almost complete, will he try to avoid giving the impression that the Government are complacent about this? Will he ensure that the House receives a statement about this matter, arising from statements which have appeared in the press?
      Mr. Lamont: I have seen many statements in the press, including many misleading and totally inaccurate statements, and I do not think that we should make a statement to the House on the basis of them.

      Gas Prices
      Mr. Whiteheadasked the Secretary of State for Energy what calculation his Department has made of the additional cost to British industry of the recent increase in gas prices.
      Mr. Norman Lamont: The most recent available figures show that, for the first three quarters of 1980 the increase in gas prices, if there were no alteration in consumption, would represent an additional cost to industrial consumers of some £200 million.
      Mr. Whitehead: Is the Minister aware of the extremely serious situation in the Courtaulds factory in my constituency, where the recent increases have added £300,000 to the bill for a firm which has just had to shed

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      2,000 of its 6,000 workers? Is he not aware that, with the great competitive disadvantage that we suffer by comparison with the United States, such firms are going out of business as a result of Government policy?
      Mr. Lamont: I am aware of the representations by the hon. Member on behalf of firms in his constituency. One of them—I am not sure whether it is the one to which he has just referred—will certainly benefit from the concession which my right hon. Friend recently announced about the price for new gas contracts. I also recognise that this country is at a disadvantage on gas prices compared with the United States. The Government are pressing the United States Government strongly to accelerate the deregulation of gas prices there.
      Mr. Marlow: Although we on the Government side fully support the idea that energy should be charged at its market price, is is evident that some countries in Europe are cheating and thereby gaining a competitive advantage. Will my hon. Friend see that levies are introduced so that those countries do not continue to export their unemployment to this country.
      Mr. Lamont: Where other countries are subsidising or cheating, the Government will certainly take strong action. That is exactly what we did in the case of Dutch horticulturists, where the case is likely to go to the European Court. But my hon. Friend should recognise that gas prices in Europe are also increasing rapidly. In real terms, industrial gas prices have increased in France by 100 per cent. in two years, and in Germany faster than the United Kingdom rate of 50 per cent., so many increases in gas prices to industry are occurring in Europe as well.
      Mr. Rowlands: Does not the Minister realise that in all our constituencies small firms have been complaining bitterly, and justifiably, about the swingeing increases in gas prices over the last 12 months? What is the Department's estimate of the increases in the coming year, in the light of press reports of 25 per cent? Surely small firms cannot take those continuing increases. It is the Government's policy which is causing them.
      Mr. Lamont: No decision has been made yet by the British Gas Corporation about increases in industrial prices. Consultations are still going on. I note what the hon. Gentleman says about small firms. There is something in that, of course, although many of the complaints that we receive are from the very largest users. Those are the people who complain that they are most at a disadvantage. But on one point, the hon. Gentleman is wrong. These are not Government-imposed increases or Government taxes. These are the BGC's price increases. It wants them and it does not want the policy altered in any way. I know that the hon. Gentleman cannot understand this because, at the behest of the IMF, his Government imposed a 10 per cent. increase in gas prices.
      Several Hon. Members rose—
      Mr. Speaker: Order. This topic comes up again in a number of the following questions.

      Energy Prices
      Mr. Canavanasked the Secretary of State for Energy what representations he has received about energy prices; and if he will make a statement.
      Mr. Campbell-Savoursasked the Secretary of State for Energy what consultations he has had with the leaders of the Confederation of British Industry on energy pricing policy.
      Mr. Douglasasked the Secretary of State for Energy if he will make a statement on the discussions which have taken place on energy pricing.
      The Secretary of State for Energy (Mr. David Howell): Representations from trade associations, the CBI and others have culminated in discussions in the January National Economic Development Council. The National Economic Development Office study concluded that, while British industry generally did not suffer a disadvantage compared with European competitors over energy prices, bulk users in energy-intensive industries could do so. From early last year, a number of measures to deal with specific problems have been taken.
      Mr. Canavan: Does the Secretary of State realise that by forcing the fuel boards to increase their prices he is responsible not only for crippling British industry but for creating poverty and the possibility of hypothermia for countless thousands, including pensioners, who cannot afford to pay escalating fuel bills? As the existing scheme of Government assistance for heating costs is hopelessly inadequate and confined to those on supplementary benefit or family income supplement, will the Government introduce a more generous and comprehensive scheme to help all people with low incomes.
      Mr. Howell: The hon. Gentleman may feel strongly about this matter, but he is blinding himself and, I am afraid, others, to reality. We must do as much as we can to protect those in difficulties in an age of high energy costs. However, energy prices have risen world-wide. Tariffs must cover the long-run cost of supply. It is not a matter of the Government forcing up tariffs, but we must ensure that industry and individuals are able to respond in order to meet the new and undoubtedly difficult conditions.
      Mr. Douglas: Will the Secretary of State do us the kindness of not trying to kid us that there is a market price for oil and gas, when we know that the prices result from OPEC's administration and one cartel facing another? Will he take urgent steps to ensure that specific bulk users of oil and gas in the United Kingdom are given the same consideration as those in the United States?
      Mr. Howell: I shall try to gain your smile, Mr. Speaker, by answering only the second question, concerning bulk users. As I said earlier, it was recognised in the NEDC that bulk users in energy-intensive industries could be at a disadvantage vis-a-vis their European competitors. However, the United States has vastly greater hydro power, very much cheaper coal and, even now, a considerably greater nuclear proportion of electricity. On a cost basis alone, it will be a long time before we can get the competitive coal and the greater nuclear component to deliver electricity at a price competitive with our world trading rivals.
      Mr. Crouch: Does my right hon. Friend agree that the nationalised industries in the energy sector hardly present an understanding of the realities of industry today? Does he also agree that the CEGB and the Gas Corporation, in

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      the absence of any competitive pressure at home whatsoever, have a duty to recognise the value of big business as intensive energy consumers?
      Mr. Howell: Yes. The great nationalised industries have been supplying under monopoly conditions. In the case of gas, there was not an opportunity for users to switch to oil. Those industries therefore have a duty to act sensitively and to understand their customers' problems in very tight market conditions. I have urged the industries concerned to act sensitively, without abandoning their proper commercial commitment to sensible economic pricing, which must be overriding and which makes sense.
      Mr. Park: Given the Minister's support for free competition, may I ask whether he will consider amending that view to include free and fair competition and altering his Department's attitude in that direction?
      Mr. Howell: I am not sure what lies behind the hon. Gentleman's question. Where there is direct competition between oil suppliers and oil consumers—and there is completely free, open and fair competition in oil and oil product supplies—or between gas and oil, where a firm has both the facilities and the back-up to switch from fuel oil to gas, that is free and fair competition and prices are set by the market accordingly.
      Mr. Forman: Is my right hon. Friend aware that the Government's policy of realistic energy pricing in the only responsible and long-term approach and that present and future generations will be deeply grateful to him for his firm but flexible attitude?
      Mr. Howell: I am grateful to my hon. Friend for his support.
      Mr. Merlyn Rees: Does the Secretary of State accept that we await the Neddy report with interest? However, is it the Government's policy to insist that the charges of nationalised energy industries are set at rates greater than marginal or average cost?
      Mr. Howell: The policy is that tariffs should be set to cover the long run cost of supply. There is a difference between short run and long run costs. Where there is a market, the market price is charged. Where fuel is supplied under monopoly conditions—under a statutory obligation to supply—the charge is calculated on the long run cost of supply.

      Fuel Prices (Industrial Consumers)
      Dr. Edmund Marshallasked the Secretary of State for Energy if he will make a statement on the progress of discussions about the cost of gas and electricity for large industrial consumers.
      Mr. Skeetasked the Secretary of State for Energy whether he has any further proposals to ease the burdens of gas and electricity prices for the energy-intensive industries.
      Mr. David Howell: I outlined to the House in the debate on energy policy last Wednesday a number of measures already taken and still under discussion, aimed particularly at the large energy intensive industrial users. The NEDC task force will provide a unique opportunity to reach agreement on the facts. The Government will obviously consider carefully the facts established by the task force.
      Dr. Marshall: Will the right hon. Gentleman inject a sense of great urgency into the discussions, because almost weekly firms consuming industrial energy are closing or contracting? May we have a reply to the question asked by my right hon. Friend the Member for Leeds, South (Mr. Rees) last Wednesday, as to whether a new gas tariff for such consumers is to be introduced, halfway between the present tariffs, for firm and interruptible supplies?
      Mr. Howell: A sense of urgency was injected by the Government at the beginning of last year, when we first saw the enormous impact rolling through our economy and others of the gigantic leap in oil prices in 1979–80. For instance, the British Gas Corporation decided to abandon its policy under the previous Government, of fully relating its prices to firm contracts to gas oil and to abate them to 75 per cent. As I said last Wednesday, all along the Government have been seeing what response can be made within the limits of economic principles. We should like to see the task force producing results as soon as possible, and I believe that we shall do so. Changes in the pricing practice of BGC is a matter for the corporation, but I have raised with BGC the idea of a different category of interruptible supplies. It has also undertaken, as has been mentioned, that for new customers in the second and third year the contract can be renewed at the 75 per cent. rate, which will help many firms.
      Mr. Skeet: Is the Secretary of State aware that industrial gas prices are related to fuel oil in Europe and gas oil in the United Kingdom? Should we not try to harmonise the approach?
      Mr. Howell: My hon. Friend is not entirely right. It is hard to follow the matter, as the position changes quickly, but he is becoming less right by the day. Firm gas prices are being increasingly related, particularly by Ruhr Gas and other German suppliers, to the full gas oil price. For interruptible supplies—supplies where there is an undertaking that there may be a cut-off at any time and the firm has facilities to go to oil instead—the relationship is to heavy fuel oil. At the moment, although I cannot guarantee that it will stay this way, the price of heavy fuel oil in this country is below that in almost every other country in Europe, so the relationship there brings a favourable advantage for the British. However, all energy prices are high and rising, which is very uncomfortable for the high energy user.
      Mr. Allen McKay: Does the Minister realise that the Government's policies—or lack of policies—over energy pricing are causing small firms and factories to go out of business? Is he aware that this weekend someone from BSC told me that its largest enemy was energy prices? Does he accept that council tenants and others in rented property are faced not only with high energy prices but increasing rents, also as a result of Government policies?
      Mr. Howell: No one welcomes or likes the enormous upheaval in energy prices that we have had to face and absorb. However, the choice is between not facing increased prices and absorbing them or pretending that they are not with us, between facing them and absorbing them now or deliberately burying our heads and seeing far greater and more unpleasant consequences, which will hit the very people whom the hon. Gentleman wants to protect.
      Mr. Nicholas Winterton: Will the Minister bear in mind the almost unanimous representations made to the Government by business organisations about the price of energy? Will he go slightly further than the statements he made last week, take on board the message of the hon. Member for Goole (Mr. Marshall) and bring forward an energy package as soon as possible? Large consumers of energy cannot tolerate the current rise in prices, which is the straw that will break the camel's back, as it broke the back of Bowater's on Merseyside.
      Mr. Howell: I take up the last part of my hon. Friend's question. In fact, Bowater's was offered quite favourable energy prices, but it decided not to accept that offer and closed for other reasons. That leads me to my general reply to my hon. Friend, who is second to none in his robust defence of manufacturers in his area, which, as in other areas, are in great difficulty. It would be misleading of me and of him—I know that he would not wish to mislead his local people—to suggest that the Government can wave a wand over internal energy prices to meet the colossal problems that industry faces in his area and in others. There are deeper structural problems to be faced. They are faced throughout Europe in synthetic fibres and textiles and these have to be overcome. That cannot be done by flicking a switch and changing our internal energy prices. That cannot be done, and it would not help if it were possible to do so.

      Continental Shelf
      Mr. Hannamasked the Secretary of State for Energy what is his estimate of the United Kingdom share of orders placed in 1980 for goods and services for development of the United Kingdom continental shelf.
      Mr. Gray: The figures for 1980 showing the total orders and the share coming to the United Kingdom have not yet been finalised. They will be published in due course in the annual report to Parliament by the Secretary of State—"Development of the Oil and Gas resources of the United Kingdom".
      Mr. Hannam: Is my hon. Friend aware that some large oil rig contracts are going to countries such as Korea and Taiwan? Is he satisfied that unfair subsidies are not being applied by some Governments?
      Mr. Gray: There have been many accusations and much speculation about unfair subsidy and whether it has been paid in countries such as Korea and Taiwan. Unfortunately, my Department has been unable to establish the facts. If the hon. Gentleman or anyone else can provide us with sufficient evidence, we shall be happy to follow it up.
      Mr. Douglas: Will the hon. Gentleman give us some assurance that the Government's proposed tax changes are not holding up significant orders?
      Mr. Gray: I know of no orders that are being held up because of any proposals to change the tax regime. As my right hon. Friend said during the recent debate, all the blocks that were offered in the first tranche of licences in the seventh round have been taken up by the oil companies, and all the £5 million deposits have been paid.
      Mr. Bill Walker: Will my hon. Friend confirm that every assistance is being given by his Department to ensure that Scottish companies enjoy the benefits of North Sea oil?
      Mr. Gray: I assure my hon. Friend—I know of his constituency interest—that there is no discrimination against any Scottish firm, and that Scottish firms benefit to the same extent as other firms in the United Kingdom.

      Nuclear Power (Pressurised Water Reactor)
      Mr. Hooleyasked the Secretary of State for Energy when he expects the first pressurised water reactor nuclear power station to begin supplying electricity to the national grid.
      Mr. Norman Lamont: Work is now proceeding on the design of the PWR and on the preparations for the public inquiry, but it is too soon to say when the PWR might be commissioned.
      Mr. Hooley: Does the hon. Gentleman agree that on all the evidence flats fantastic £25 billion programme will not make any serious contribution to Britain's energy strategy for decades, if at all? Would it not be more sensible to abandon it and to concentrate on conservation and other energy sources that are much more likely to yield a good result?
      Mr. Lamont: First, it is a £15 billion programme and not a £25 billion programme. Perhaps it should be £25 billion. Secondly, the hon. Gentleman says that it takes a long time to construct a nuclear power station or to get a nuclear programme under way and that it would be better to abandon it. I cannot accept that. We have already had many questions about energy costs. One reason why our electricity costs compare badly with those in France, for example, is that the French have a higher proportion of nuclear energy than we do. That is why we must press ahead and why we must build nuclear stations in Britain to time and to cost.
      Mr. Rost: Is my hon. Friend aware that there is already a serious slippage in the timetable for the design of the British PWR? How does my hon. Friend think that this will affect the timetable for its construction and completion?
      Mr. Lamont: I do not think that my hon. Friend is quite right. My right hon. Friend and I had a meeting last Friday with all those involved in the preliminary work on the PWR. It is not right to say that there is a slippage. Indeed, there is not a slippage on the design work. We know very well that there have been problems with power stations both nuclear and conventional. The industry must get to grips with these problems, otherwise nuclear electricity will not be economic.
      Mr. Speaker: Order. I remind the Minister that he is addressing the House, of which I am a part. The hon. Gentleman has turned his back on me throughout all his answers.
      Mr. John Evans: In view of the doubt cast upon forecast demand for electricity at the end of the century, and bearing in mind the public hostility towards the PWR project, does the Minister think it necessary to go ahead with its development?
      Mr. Lamont: There may or may not be arguments about demand for electricity. However, to accept those arguments would be to accept arguments against power stations of any type and not necessarily against the PWR project. As he knows, the electricity industry, in

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      consultation with the Department, continually revises and re-examines its forecasts. We are satisfied that in the 1990s there will be a need for more nuclear electricity. The hon. Gentleman should not forget that nuclear electricity is cheaper than other forms of electricity. We need cheaper electricity as well as more electricity.
      Mr. Merlyn Rees: Regardless of whether there is slippage in the conventional sense of the term, the hon. Gentleman will recall that in last week's debate he announced that there were no terms of reference and no time scale for the inquiry. Does that not mean that there will be delay in the PWR project and that the Department should be considering further orders for the AGR project?
      Mr. Lamont: No. I said to the right hon. Gentleman that we expected that the inquiry would begin in 1982, and without in any way presuming what the inquiry's findings will be, if the findings are in favour of the PWR, construction will be in 1983. The construction of the station could take six or seven years. We are at a stage where much work still has to be done on the design.

      Coal Imports
      Mr. John Evansasked the Secretary of State for Energy if he has any plans to curb coal imports into the United Kingdom.
      Mr. John Moore: The choice of supplier is a commercial decision for the consumer. It is not our intention to restrict his freedom of choice. However, the great bulk of United Kingdom coal demand is met from indigenous sources and this should continue to be the case as long as our production is competitive.
      Mr. Evans: Is the Minister aware that that is an entirely unsatisfactory answer? Is he further aware that miners have increased their productivity in response to the constant demands that have been made upon them? Does he understand that they will be disappointed by an answer that suggests that the coal that they produce should continue to be stockpiled, at great expense to the NCB, while coal continues to be imported? Does he understand that, if there is to be the closure of collieries while coal continues to be imported, that is a recipe for trouble within the mining industry?
      Mr. Moore: First, I confirm that there have been productivity and production increases that reflect the underlying strength of our coal industry. Those are increases that should be commended by both sides of the House. However, to subsidise or protect markets is surely a route to stagnation. The major growth markets for coal are in areas where there is competition with other fuels, especially during the next 20 years in industrial markets. It is vital for all those with the interests of the coal industry at heart, and vital for the industry's future if it is to grow, that it stays competitive.
      Mr. Bill Walker: Does my hon. Friend agree that the high productivity pits in Scotland and the United Kingdom can compete with any pits in the world and that if the rest of the industry were as competitive, we need have no fear about coal imports?
      Mr. Moore: Whilst I accept my hon. Friend's basic comments, I would not wish to discriminate between pits in any part of the United Kingdom. I stressed in my main
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      answer that the bulk of our production—and the bulk of our future—is in pits that should have no fear if we are to retain a competitive industry.
      Mr. Edwin Wainwright: Does not the Minister realise that what he is saying means that we could rub out the coal mining industry? That could happen if we allow coal to come in in quantities that could be supplied to the nation from our own resources. Does he not agree that threatened pit closures and allowing the importation of 7½ million tonnes of coal will cause a good deal of unrest in the industry? Why do not the Government try to make certain that our energy prices, altogether, are so reasonable that fuel can be sold to our industries, to ensure that we no longer have the present surplus of coal, when we are also importing it?
      Mr. Moore: I understand the concern, in the midst of recession, but we must keep the facts in proportion. Approximately 95 per cent. of our consumption is of domestic coal. That excludes nearly 4 million tonnes of coal that we exported last year. The industry has nothing to fear from the defeatist comments that tend to be made in parts of this debate. Most of our coal is produced and used indigenously. We hope that that will continue.
      Mr. Skeet: Does not my hon. Friend agree that only 5·8 per cent. of the United Kingdom's total consumption is imported, and that the crucial factor that the Opposition have overlooked is the price of coal that we import? Is it not cheaper to buy some of the coal from abroad, bearing in mind the specification and requirements?
      Mr. Moore: A large percentage of the increase in imports in 1980 was, as the Opposition well know, a reflection of contracts negotiated during the appalling winter of 1978–79. As I indicated clearly in answer to a different question, they will be reducing in 1981.
      Mr. Eadie: We established in last Wednesday's debate that this year there would be a 6 million tonne drop in the consumption of coal supplied by the National Coal Board. We also established that there would be imports of about 8 million tonnes. Do the Government prefer coal imports even if it means miners being unemployed?
      Mr. Moore: That is a slightly simplistic view of what is happening in 1980–81. While sales are down by approximately 1·2 million tonnes, exports are up substantially, to the tune of 4 million tonnes. Stocking is certainly up 3·9 million tonnes, but production is also up by over 3 million tonnes. So it is a combined problem, a problem that we expect the board, not the Government, to tackle.

      North Sea Oil (Exploration Plans)
      Mr. Dykesasked the Secretary of State for Energy when he expects to finalise and announce the allocation of oil exploration plans in the seventh round.
      Mr. Gray: Assessment of seventh round applications for blocks designated by the Department is still in progress. I expect to make a further announcement next month concerning the awards.
      Mr. Dykes: I thank my hon. Friend for that reply. In view of press suggestions that there have been hitches or delays, can he confirm that things are going according to plan?
      Mr. Gray: I am happy to confirm that they are going according to plan. A considerable amount of work has been involved in interviewing those on short lists for various blocks. The Department has been under considerable pressure as regards petroleum engineers. Nevertheless, everything is going according to plan, and we hope to make an announcement next month.

      Energy Prices
      Mr. Hal Millerasked the Secretary of State for Energy when he expects the NEDO task force to reach a conclusion about energy prices for industry; and if he will make a statement.
      Mr. Norman Lamont: I understand that the task force's report will be discussed at NEDC on 4 March.
      Mr. Miller: Will that task force consider, amongst other elements of the pricing of fuel and power, whether there is any element of contribution towards the investment costs of those industries, which in other industries might be expected to be met by borrowing?
      Mr. Lamont: That is a matter that the task force might consider. Its main remit is to consider those areas in which there is a disagreement between the Government and industry over the facts of comparisons between countries.
      Mr. Merlyn Rees: Will the comparisons be made only with EEC countries, or will they be made with, for example, Scandinavian countries as well?
      Mr. Lamont: I tried to respond to that point in the debate. It is open to the task force to make comparisons with Scandinavia and the United States, but we envisage that most of its work wil be on comparisons with the EEC, precisely because there is agreement about what the position is vis-à-vis the United States and Scandinavia. We know that we are at a disadvantage, but that usually reflects a fundamental cost difference.
      Mr. Moate: Does not the announcement of the task force and of the review of the costs to major bulk users of gas and electricity imply an admission by the Government that many of those industries are suffering a severe disadvantage compared with their Continental competitors? As protests have been made for so long, how quickly can we see some results from these studies?
      Mr. Lamont: The report will be discussed in March, and I hope that results and agreement on the issues will follow fairly quickly. It was agreed at the NEDC meeting that British energy costs in general were not out of line with those in Europe, but it was also agreed that there were some specific areas, such as the bulk users—particularly in electricity, but possibly gas—where we were at a disadvantage.

    Government Accountability
    Mr. Canavanasked the Chancellor of the Duchy of Lancaster whether he proposes to take any new initiatives to make Government more accountable to Parliament.
    The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): The only recent initiative
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    taken by the House is to establish a Select Committee to consider our Supply procedures. I have no further proposals to make at the present time.
    Mr. Canavan: Does the right hon. Gentleman recall that last month the Government suffered a humiliating and unprecedented defeat by 40 votes to none in the Scottish Grand Committee, after a debate on Government proposals to close down three colleges of education, yet the Secretary of State for Scotland has so far failed to withdraw the proposals? Will it not be to reduce parliamentary democracy and accountability to an absolute farce if a Minister is allowed to get away with that? Therefore, will the Leader of the House arrange for this important matter to have a full-scale debate on the Floor of the House?
    Mr. Pym: I do not know whether it is in order to take a business question on a Monday, but I think that I should tell the hon. Gentleman that I do not think that a debate on the Floor of this House is appropriate. But I shall consider with my right hon. Friend the Secretary of State for Scotland the matter that the hon. Gentleman has raised.
    Mr. Ancram: Will my right hon. Friend take this opportunity to assure the House that, unlike the Labour Party, he has no intention of making the Government more accountable to, least of all the poodle of, the trade unions?
    Mr. Pym: However that may be, I think that the accountability of Ministers to Parliament is really quite important.
    Mr. John Silkin: May I take this opportunity to congratulate the right hon. Gentleman on obtaintng two senior Ministries for the price of one. Does not he agree that a proper measure of accountability to the House is for Ministers in future to make important policy decisions known by oral statement, not by written answer and not by prior leak to the press?
    Mr. Pym: We must be careful about the number of statements. I have every sympathy with what the right hon. Gentleman said, but one can reach a stage—I have witnessed this, and I am sure that the right hon. Gentleman has—when there are too many. Therefore, I think that the written answer certainly has a validity and is appropriate for certain kinds of statement. Howeve, I shall of course bear in mind what the right hon. Gentleman says.

    Select Committee Reports (Debates)
    Mr Ioan Evansasked the Chancellor of the Duchy of Lancaster if he has any proposals for improving the arrangements under which reports from Select Committees are debated in the House.
    Mr. Pym: I have no specific proposals to bring forward at present. There are always competing priorities for time on the Floor. Subject to this, however, I shall of course seek to meet the wishes of the House in this matter.
    Mr. Evans: As there are a number of interesting and informative reports coming from the Select Committees, will the right hon. Gentleman consider bringing before the House a proposal that a certain number of days be allocated for consideration of those reports? Does the right hon. Gentleman realise that the Select Committee on Welsh Affairs has made some strong recommendations about the deplorable economic policies being pursued by

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    the Government, with their effect on employment? Although we fitted in a Welsh day, the House could not come to any conclusions on the matter. In addition, the Select Committee on the Treasury and Civil Service is now looking at monetarism. Does the right hon. Gentleman agree that that would be the subject of an interesting debate which we should have before the Budget?
    Mr. Pym: I do not think that it would be right for me—and anyway I do not feel ready—to give any formal commitment of time in the way that the hon. Gentleman suggested. I indicated my thoughts about the matter in the debate on Friday 16 January. The report of the Select Committee on Welsh Affairs was included in the matters debated by the House on the Welsh day not many days ago. That seemed to be one way of incorporating in a general debate the report of a particular Committee. But I have quite an open mind abut this issue.
    As to the particular matter under consideration by the Treasury and Civil Service Committee, many Committees are looking at highly important and interesting topics. I cannot give a time for the debate suggested by the hon. Gentleman, or for a debate on the Committee's work before the Budget. It would not be right to do so. However, I fully acknowledge that that investigation is very important.
    Mr. Aitken: Does not my right hon. Friend agree that there are some reports from Select Committees which should be given priority and debated promptly, particularly if they have an important bearing in legislation that is likely to come before the House in the near future? In that regard, will my right hon. Friend carefully consider giving such priority to next Friday's report of the Select Committee on the Canadian constitution? Is he aware that such an early debate could head off a good deal of wasted parliamentary time on the Floor of the House later this year?
    Mr. Pym: That report has not yet been received by the House. Every hon. Member will have his own view as to the priorities. When the Select Committees were set up, it was not envisaged that they would add enormously to the amount of time required on the Floor of the House. Indeed, part of the concept behind those Committees was that they would be better able to inform the House, without necessarily taking up more time on the Floor of the House. However, that does not mean that some of those reports will not be debated, because some will. When it comes to priority, there are many factors to be taken into account. It would be wrong of me to be unduly optimistic about the number of days that might be available, but I hope that we can conduct our business and make enough time available to debate the work of the Select Committees to the satisfaction of the House.
    Mr. Charles R. Morris: Bearing in mind that many right hon. and hon. Members have still not declared their financial interest for inclusion in the register of financial interests that was established by the Select Committee on Members' Interests, will the right hon. Gentleman give an indication as to when he expects the House to have an opportunity to debate the report of the Select Committee on Members' Interests?
    Mr. Pym: I seem to remember—I am rather rusty on this—that that matter was left over from the last
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    Parliament, not simply the last Session. I shall have to consider the matter. I should not like to give any reply to the right hon. Gentleman now.

    House of Commons

      Strangers Gallery (Tickets)
      Mr. Freudasked the Chancellor of the Duchy of Lancaster whether he has plans to extend the distribution of tickets for the Strangers Gallery.
      Mr. Pym: No, Sir
      Mr. Freud: Does not the Leader of the House accept that the administrative, security, secretarial, catering and domestic staff are as loyal to this House, and are as proud of being here, as the rest of us? Would it be so difficult to play the part of a good employer and occasionally give seats in the Strangers Gallery to members of that staff, even if only once or twice a Session?
      Mr. Pym: That would be a matter for consideration by the Accommodation and Administration Sub-Committee of the Services Committee. As the hon. Gentleman will know, it looked at the allocation of tickets in 1979, and reported that autumn or winter. I shall consider whether the matter can be brought to its attention and discussed.

    Palace of Westminster

      Cleaning and Restoration
      Mr. Greville Jannerasked the Chancellor of the Duchy of Lancaster what proposals are being considered by the Services Committee for the cleaning and restoration of the Palace of Westminster.
      Mr. Pym: The Services Committee made its proposals in its fourth report of last Session. The implementation of the report is a matter for my right hon. Friend the Secretary of State for the Environment.
      Mr. Janner: As the Minister who is responsible in many respects for this great building, will not the right hon. Gentleman give consideration to the sad, sorry and in many respects dangerous state of this structure, and assure the House that he will do what he can to ensure that the recommendations of the Committee are implemented as soon as possible, before the place falls down and becomes infinitely more expensive to maintain and repair?
      Mr. Pym: I am sorry that the hon. and learned Gentleman uses slightly exaggerated language, because that is not helpful. I observe that there was a report from the Services Committee on the fabric of the building in the last Parliament, as a result of which nothing happened. The Committee returned to the subject in this Parliament, which was right and proper, and it has reported. We are now awaiting the views of my right hon. Friend the Secretary of State for the Environment.
      Mr. Stokes: Should not the Government make haste to clean the Palace of Westminster, on the excellent military grounds that a smart unit always performs well?
      Mr. Pym: It is possible that the House will have to face up to the enormous costs of that, but it is not for me to pronounce on the matter. It is for my right hon. Friend the Secretary of State for the Environment, and I shall take the opportunity to discuss it with him.
      Mr. Chapman: Does not my right hon. Friend agree that the Palace of Westminster should have been cleaned up many years ago and that, however limited the resources, the time is now opportune, particularly when that other great building facing Parliament Square—Westminster Abbey—is being cleaned up?
      Mr. Pym: As I said, that responsibility belongs to my right hon. Friend. It would not be right for me to go further than I have already done, but I shall take the opportunity of having a word with my right hon. Friend.

    Official Information
    Mr. William Hamiltonasked the Paymaster General what steps he intends to take to improve the quality of official information sources of Her Majesty's Government.
    Mr. Pym: I am not aware of any inadequacy in the quality of official information, but if the hon. Gentleman has any particular points I shall be glad to look into them.
    Mr. Hamilton: Has it ever occurred to the right hon. Gentleman that it might be the product that is wrong, rather than the way in which he tries to sell it? For example, when we are informed tomorrow that the unemployment figures are more than 2½ million, does he intend to repeat the advice that the Prime Minister gave some time ago—that we should continue taking this medicine, even though it might result in 4 million unemployed by the end of 1982?
    Mr. Pym: It would be a mistake to anticipate tomorrow's figures, but the hon. Gentleman has a point. The product as well as the presentation is important. He obviously has no particular point to raise, so I leave the matter there.
    Mr. Arthur Lewis: In the knowledge that the quality of official information sources could be improved if there were a Freedom of Information Act, which both parties have promised and which both have done their damndest to smash, will the right hon. Gentleman give an assurance that the Government will not take any action on Friday week to prevent the progress of the Freedom of Information Bill introduced by my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley)?
    Mr. Pym: What happens on Friday week is a matter for hon. Members. On the Friday before last, we were in the general territory of papers and information being produced for Select Committees. I made the point in my speech during that debate that as well as wanting to make as much information as possible available—the Government have a good record—we must always remember that the basis upon which Ministers operate requires an adequate degree of privacy between Departments and Ministers.
    Mr. John Silkin: While the Paymaster General is busy trying to improve the quality of official information
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    sources, will he do something about the quality of unofficial information sources, particularly with regard to the Prime Minister and her views on income tax?
    Mr. Pym: I hope that the right hon. Gentleman's conscience is clear. He has been a Minister for quite a long time, and I dare say that there may have been occasions when he may have come close to doing what he is alleging my right hon. Friend did. However, I think we understand how the system works.

    Government Policy
    Mr. Adleyasked the Paymaster General what new proposals he has to enable him effectively to carry out his role as it relates to the promotion of Government policy.
    Mr. Pym: At present I have no new proposals to make.
    Mr. Adley: Is my right hon. Friend aware that many of my constituents feel that the willingness of the Prime Minister to explain, defend and promote her policies and those of the Government is not always matched by all her ministerial colleagues? Is my right hon. Friend aware that many of my constituents would welcome a more robust effort in that regard?
    Mr. Pymm: I take note of what my hon. Friend says. The responsibility for presenting and explaining programmes and policy belongs to every Minister. I wish to do what I can in my present role to assist that process.
    Mr. James A. Dunn: If the right hon. Gentleman has no plans for new methods, will he examine the existing methods, and give instructions to all his ministerial colleagues to the effect that whenever a report emanates from a publlic body it should be supplied at the request of any hon. Member? Is the right hon. Gentleman aware that I refer to the report of the National Ports Council on the port of Liverpool, which is still withheld from hon. Members, even though they continue to request it?
    Mr. Pym: I am not informed on that point, but I shall look into it.
    Sir Anthony Meyer: As it is the settled policy of the Conservative Party and the Government to make a success of British membership of the EEC, will my right hon. Friend encourage Ministers to make speeches indicating their objectives within the EEC, bearing in mind that the British Presidency is only six months away?
    Mr. Pym: It is obviosuly of the utmost importance that Britain remains, as we shall remain, a member of the Community. It is extremely important from the point of view of our trade and employment. I think that the Community now takes more than 40 per cent. of our exports. Therefore, it is of the utmost importance to us not only in terms of ordinary everyday trading arrangements, but in a wide political sense. I agree with my hon. Friend that from time to time many of my right hon. and hon. Friends in the Government make speeches about the European Community, and they will continue to do so.

BL (Corporate Plan)
The Secretary of State for Industry (Sir Keith Joseph): With permission Mr. Speaker, I will make a statement on the BL 1981 corporate plan.
I am making available in the Library of the House and in the Vote Office a report by BL on its recent performance and details of the corporate plan.
The plan contains BL's strategy for returning the company's businesses to viability in the medium term. It foresees a need for some £620 million of additional Government equity in 1981–82, £370 million in 1982–3 and £150 million over the two following years in order to assist the continuing programme of restructuring and investment in new projects, including the LC10 medium car family.
The plan was submitted in four business sections. The policy of the BL board has been—and will continue to be—to decentralise decision-making to the operating units. The intention of the board, as stated in the plan, is to draw these operating units into four distinct businesses to enable management to concentrate on well-defined product groupings. These businesses are BL Cars, Land-Rover, Unipart and the Leyland Group. As the structure evolves, so the progress of each business will be separately monitored.
The board is meanwhile exploring a variety of possible forms of collaboration, and has written to the Government in the following terms:
"The board sees collaboration with other manufacturers as an important part of its strategy for recovery and reducing and eventually removing dependence on Government support. This might take the form of collaborations on components or on particular parts of the business; but the board would also welcome, and actively seeks, a relationship of a more comprehensive kind which might grow out of such collaboration."
The Government support BL's intention of creating viable businesses and of attracting private capital into them. It has approved the plan and has agreed to fund the first two years of the plan, including the first phase of the LC10 programme—that is, £620 million in 1981–82 and £370 million in 1982–83—subject to regular monitoring by the BL board of progress in achieving the plan. The Government, as shareholder, will also be watching closely the financial performance of the company.
The chairman's letter to me of today's date, which I am publishing in full today in the Official Report and placing in the Vote Office, also makes it clear how the board will respond if the chances of achieving the plan's major objectives are appreciably reduced. It says:
"Circumstances may arise in which, through a substantial deviation in performance or an appreciable departure from the assumptions underlying it, the Corporate Plan is clearly not being achieved and it appears impossible to bring about recovery within the timescale envisaged. This could arise for external or internal reasons; an example would be a major strike which damaged or appeared certain to damage any substantial sector of the business. In such circumstances the Board would, in accordance with section 1 of the Plan, very quickly initiate a review (in consultation with the Government) of the Plan of the relevant business group, with consequent implications for continued Government funding."
The board and management have assured me that they will not hesitate to take whatever difficult and fundamental decisions about the future of the company are necessary if circumstances, inside or outside BL, require it.
As I have already told the House, there will be an opportunity for full debate in the context of the amendment
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to the NEB's financial limit in respect of BL in the Industry Bill, which I shall table for consideration on Report. Clearance from the European Commission will be needed for the Government's funding.
Finally, it is the Government's intention that the shareholding in BL should be transferred from the National Enterprise Board to the Secretary of State. This transfer will not, however, take place until the Industry Bill now before Parliament receives Royal Assent. Meanwhile, the Government will discuss with BL matters arising from the change of ownership in order to ensure continuity of BL's financial arrangements.
The Government wish the BL board and the company's employees well in their task.
Mr. Stanley Orme: The Opposition welcome the fact that the Government are to support the corporate plant to the tune of £1,000 million, because we believe, as obviously the Government believe, that this company is vital to the economy of this nation and to the 1 million jobs which are attached to BL in one form or another. Therefore, despite the opposition from the Government Benches, we think that the Government have taken the correct decision.
Secondly, will the Secretary of State assure the House that this money will not lead to cuts in other parts of the public sector?
Thirdly, we shall obviously want more details about the four sections which the corporate plan recommends, the powers under the Industry Bill which will enable the right hon. Gentleman to take control of the shares from the National Enterprise Board and the reference in his statement to private investment. I do not expect the right hon. Gentleman to answer these points today, but he has referred to the Industry Bill. Therefore, we should like an assurance, in the presence of the Leader of the House, that the House will be given a full day to deal with the British Leyland aspect when the Industry Bill comes before the House on Report.
As regards the key factor of labour relations in BL, I think that the right hon. Gentleman agrees that productivity on the new Metro has increased and that we want that to continue. Therefore, we need co-operation between the management and the trade unions. In a sense, it is regrettable that the corporate plan has not been brought forward on a joint basis. We would have liked to see that. We would also like the Secretary of State to use his good offices to ensure the improvement of industrial relations in BL.
Finally, as I stated at the beginning, we welcome the plan because, with the narrowing base of industry in this country, it is important that a major car-based publicly owned British company be maintained. We want to see it maintained as a publicly owned company. We do not want to see it broken up, divided or sold off. On that basis, we believe, and the workers and the management believe, that there is a great future for BL.
Sir Keith Joseph: I must correct one figure that the right hon. Gentleman gave in his over-enthusiasm. Nothing like 1 million jobs depend on BL, however important it may be for jobs.
The right hon. Gentleman asked for an assurance that the money would not come out of the public sector. But where does he think it will come from? Of course money of this order constrains the public sector. It is true that

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some parts of the private sector will benefit from the spending of this money, and that is welcome, but the rest of the money will come from the taxpayer, who will thus have less money to spend in other parts of the private sector.
Mr. Hal Miller: With many hundreds of thousands in the West Midlands, I welcome the Government's decision and statement, and the lie that has been given to Labour Party claims that the Government would not support British Leyland. Will my right hon. Friend confirm that the monitoring of BL will, in the main, be undertaken by the BL board rather than by the Government and that the Government also welcome and accept the need for collaboration with another major manufacturer?
Sir Keith Joseph: Yes, although, as I have said, the Government, as shareholder, will also watch closely the financial performance of the company. I have quoted a letter from the company chairman about collaboration.
Dr. David Owen: I welcome the decision to aid this key strategic industry, but will the Secretary of State say that in supporting competitive public enterprise he will also give it the same managerial freedom as the French Government have given to Renault and will allow what has happened with Renault, which has turned that company round—higher-than-average wages for car workers in that industry?
Sir Keith Joseph: I cannot believe that the right hon. Gentleman is giving us good advice. The decision about pay is for the board of BL and for the work force of BL
Mr. John Bruce-Gardyne: Will my right hon. Friend elaborate slightly on his reply to the right hon. Member for Salford, West (Mr. Orme) about where the funds are to come from? Are they to come from increased taxation on private enterprise businesses and those employed in them, from a higher level of borrowing, hence a higher rate of interest and a higher exchange rate, or from inflation?
Sir Keith Joseph: The Government have to obtain the money that they spend, as my hon. Friend well knows, from taxing, borrowing or printing. There is no other source. The allocation of this cannot be traced and identified, but certainly public spending of this order has an implication for the disposable income of the private sector—through which wages and taxable spending flow—and for the private citizen.
Mr. Geoffrey Robinson: Is the right hon. Gentleman aware that there is a great welcome from the Opposition for this decision, and also great sympathy for the agony that these decisions evidently cause him? What puzzles us is whether the right hon. Gentleman's continuance in office shows that he is a masochist or that the Prime Minister is a sadist. Can he specifically elaborate on the provision of funds? Is all of the £990 million to go to the LC10 programme in the first two years, or can he confirm—I have a direct constituency interest here—that the major new Jaguar model programme is also agreed and will be funded by the Government?
Sir Keith Joseph: I refer the hon. Gentleman to the BL report, which he will find in the Vote Office.
Mr. Robert Adley: Is my right hon. Friend aware that, although I have no objection to the principle of investing public funds in industries of this kind, I feel that there is a horrible sense of deja vu about this, in that the statement by the right hon. Member for Bristol, South-East (Mr. Benn) at the time of the Rolls-Royce carbon fibre affair and the euphoria which that engaged bore some similarity perhaps not to the euphoria but to the expressions of good will at least of my right hon. Friend today in relation to the future of BL? Will he, however, make one thing clear, namely, that the only reason why the Government have not agreed to break up BL into its constituent parts is that Sir Michael Edwardes threatened to resign if they did?
Sir Keith Joseph: I do not follow my hon. Friend's question.
The decision about the securing of private capital in different parts of BL is for the board, as is the timing and the extent.
Several Hon. Members rose—
Mr. Speaker: Order. I hope that hon. Members will make their questions as brief as possible, which will enable me to call far more hon. Members than otherwise would be possible.
Mr. David Penhaligon: In what way will the Government use their influence in this matter to try to consolidate recent improvements in labour relations? Or will they just continue to reply upon a policy of execution if it goes wrong?
Sir Keith Joseph: I do not think that Governments have a particular skill in affecting labour relations inside individual firms. It is for that that we have a board.
Mr. Michael Grylls: Does my right hon. Friend accept that everybody in the House wants and indeed prays that BL in the end will succeed, but does he agree that it is important to remember that the cost has been very high? It has been £10 for every second that Sir Michael Edwardes has been chairman of BL, or, to put it another way, £1,000 for every small business in Britain. Does he accept that money is not the cure-all for BL? What it needs is increased productivity and much more demanning, and then it can succeed only through its own exertions.
Sir Keith Joseph: I agree with that. It also needs good models and a healthy car market. We are witnessing the introduction of new models.
Mr. Greville Janner: When considering the number of people whose jobs depend on BL, has the right hon. Gentleman taken into account the hundreds of thousands of people who are not employed by BL but who manufacture parts and accessories and provide services in the East Midlands and elsewhere and who will welcome this decision quite as much as those directly employed by BL itself?
Sir Keith Joseph: Yes, but I think that the hon. and learned Gentleman would be misleading himself in referring to hundreds of thousands of people whose actual jobs depend on BL.
Mr. Alan Clark: Does my right hon. Friend accept that, while many Conservative Members recognise the need for an industrial strategy and

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for the diversion of some public funding in that direction, they are a little surprised to see him of all people talk of such enormous sums with such insouciance? We feel that BL can satisfy no criterion, save that of exerting social and political blackmail, to justify such an enormous diversion of funds from the private sector.
Sir Keith Joseph: My hon. Friend has some justification for his expression of surprise, but let him contemplate that there has been enough evidence over the past year to encourage a degree of hope that the progress already made, with a new model now introduced and with the acceptance of new working practices, together with a rundown of manpower in the key plants, will lead, as we hope, the market improves, to better results this year, provided that we do not witness a rise in the value of sterling as sharp as there was last year.
Mr. Robert Hughes: Can the Secretary of State tell us whether this is a planning agreement?
Sir Keith Joseph: No.
Mr. Robin Maxwell-Hyslop: Will my right hon. Friend avoid robbing Peter when he pays Paul this time round by not undercutting the BL recovery by pouring more public money into Chrysler?
Sir Keith Joseph: I am sure that the point made by my hon. Friend will be very much borne in mind.
Mr. Arthur Lewis: A little while back, it was officially reported, and has never since been denied, that BL, as an advertisement, gave a car to a very wealthy man, namely, the leader of the Liberal Party. If the company wants a good advertisement, why not give a car to every Member of Parliament at the taxpayers' expense? Why should BL give taxpayers' money to one selected Member of Parliament, as it has done? Should it not be told that taxpayers' money should not be given away in that manner?
Sir Keith Joseph: I do not know of the allegation to which the hon. Gentleman refers, but decisions about advertising are for the BL board.
Mr. Charles Morrison: Although not long ago the argument in favour of further funding of BL may have been growing a little thin, has not the success of the Metro put a totally different complexion on the situation? Does not that hold out high hopes for the prospects of the middle-range car in the future? Secondly, can my right hon. Friend say what benefit particularly will accrue from the transfer of BL from the NEB to his Department?
Sir Keith Joseph: There are certainly some signs for hope. The transfer of BL from the NEB to the Secretary of State reflects the wish of the NEB and BL, and the recognition that the sums involved are such that the Government cannot stand aside from decisions on them.
Mr. Ernie Ross: Does the right hon. Gentleman accept that if in his statement today he had accepted the need to support the total package sought in the corporate plan he would have given the company at least a minor breathing space for long-term planning and would have enabled it to expand, which is necessary if this country is to retain an indigenous car company?
Sir Keith Joseph: The company has been allotted the funds for which it asked for the period for which it asked for them.
Mr. John Stokes: Will my right hon. Friend confirm that these vast payments will be the last to be made to British Leyland? Are we, year by year, to fill the bath with the plug out?
Sir Keith Joseph: I can give no guarantees, but I very much hope that if sterling does not rise as it did last year, and the new models maintain the standard of the Metro, the company will, during the plan, be on its way to viability.
Mr. Ioan Evans: Will the right hon. Gentleman now concede that he is moving a little away from his monetarist policies, and that, although this package will cost the nation £1 billion, it would cost it far more if BL were allowed to collapse? How many jobs would be lost? If, as the right hon. Gentleman says, it is not 1 million, how many jobs are involved?
Sir Keith Joseph: There is no escape for the taxpayer from the costs flowing from the decision of the then Labour Government virtually to nationalise British Leyland all those years ago. One way or another, supported or not, the taxpayer would have a big bill to meet. The number of jobs directly dependent on British Leyland is about one in the supplying industries for every one job in British Leyland associated with output. I am trying to ignore the jobs which arise as a result of overmanning.
Mr. Archie Hamilton: Is my right hon. Friend aware that I welcome his commitment to introducing private capital into BL and into the new subsidiaries? Does he envisage that these will be controlling stakes before long, and does he agree that the sooner that happens the better?
Sir Keith Joseph: It is certainly the hope of the BL board to introduce private capital, but the degree and timing must be a matter for that board.
Mr. Tom McNally: Is it not time that the Secretary of State broke the news to his Back Benchers that he has made the right decision, and that it will be a plus for engineering, machine tools and volume car production? Instead of adopting his totally miserable approach, why does the right hon. Gentleman not bang the Dispatch Box and say that this is good news for British industry?
Sir Keith Joseph: The hon. Gentleman is ignoring the fact that the money has to come out of other aspects of industry. While this will be welcome news to those supplying BL, purchases which would have been made in other parts of British industry will, alas, not be made because all public spending is an act of choice.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call four of the hon. Members who are standing before we move on to the application under Standing Order No. 9.
Mr. Geoffrey Johnson Smith: Is my right hon. Friend aware that there is scepticism about the long-term viability of BL in spite of today's announcement? When my right hon. Friend talks about collaboration with another car manufacturer, may we be

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reassured that when that collaboration comes—and some of us believe that it will have to come—a foreign manufacturer not at present producing motor cars in this country will be considered?
Sir Keith Joseph: The scope for possible collaboration is for the BL board to pursue, and I must leave the initiative with it.
Mr. Nicholas Winterton: I have a vested interest in seeing a successful British Leyland, not least because I have just purchased a new Rover car. However, upon what criteria has my right hon. Friend decided to give this huge sum of public money to British Leyland when there are other industries that employ, directly and indirectly, far more people than British Leyland but whose pleas for assistance have fallen on stony ground and continue to do so.
Sir Keith Joseph: The answer is that British Leyland was taken virtually into public ownership by a previous Labour Government, and, as I have explained, there is no escape for the taxpayer from costs whether this plan is supported or rejected.
Mr. Ian Lloyd: Does my right hon. Friend consider that the directors, management and employees of British Leyland realise that they are rapidly acquiring the reputation of being the Corrievrekin, financially, of British industry? Are they aware that they will not cease to enjoy this reputation until their productivity per man hour matches that of their principal competitors? As that ratio is generally believed to be of the order of four to one, has my right hon. Friend been given any indication how soon that productivity will be matched? Until it is matched he will be asking the House again and again for millions.
Sir Keith Joseph: There is no difference between the British Leyland board, the rest of the people working in British Leyland and my hon. Friend about productivity. The new model, the new investment—that is, the Metro—is, I am told, at international, or, at any rate, European, productivity standards.
Mr. George Gardiner: Is my right hon. Friend aware that there will be disappointment in many quarters that substantial public investment is being made without any firm undertakings from the trade unions involved that it will not be jeopardised by the strike action that we have seen only in the recent past?
Sir Keith Joseph: I am not sure that my hon. Friend the Member for Reigate (Mr. Gardiner) would have been full of praise if I had arrived here, spending the same sum of money, with an assurance. The BL board has shown its willingness to insist upon good industrial performance, and the Government are leaving it to that board.
Mr. Orme: It is interesting to hear the Secretary of State defending BL and the production of new models with
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the arguments that have been used on the Labour side of the House. The success of the company lies in the new models and the development of the company. Will the Secretary of State explain his reaction to my statement that 1 million jobs would be at risk? I was talking about direct and indirect employment. I received the figures from the board of BL.
Sir Keith Joseph: I shall be grateful if the right hon. Gentleman will pass me the figures that he alleges support the figure of 1 million. I am sure that he is multiplying the correct figure by many times.
Following is the letter:
"Dear Secretary of State,
The Board believes that BL's 1981 Corporate Plan offers—subject to the risks and qualifications which are made clear in the Plan—the best feasible prospect of bringing about the recovery of the business.
As you know, recovery will take time, and during this period the risks to the survival of whole sections of the business will remain considerable. While it should be possible for the business to accommodate the normal trading fluctuations within the framework of the Plan, the achievement of competitive cost levels is essential to ensure our survival. As we have made clear in recent weeks, even the success of a particular new model such as Metro cannot allow us to relax the strict discipline which has to be exercised on all aspects of our cost structure.
Government approval of our Plan and funding request would not change this situation, because it is our own performance in the external competitive environment which fundamentally determines whether or not the business can survive. Dealers and customers would simply walk away from the company if there were a major strike. Moreover, they would desert us more gradually, but no less surely, if we allowed our costs to rise to uncompetitive levels—or indeed if it seemed to them that the necessary funds would not be sought from Government.
Circumstances may arise in which, through a substantial deviation in performance or an appreciable departure from the assumptions underlying it, the Corporate Plan is clearly not being achieved and it appears impossible to bring about recovery within the timescale envisaged. This could arise for external or internal reasons; an example would be a major strike which damaged or appeared certain to damage any substantial sector of the business. In such circumstances the Board would, in accordance with section 1 of the Plan, very quickly initiate a review (in consultation with the Government) of the Plan of the relevant business group, with consequent implications for continued Government funding.
The Board will, of course, be monitoring progress under the Plan regularly in the normal course of its business and in the context of the annual updating of the Plan towards the end of 1981.
In our recent discussions on the Corporate Plan, you also asked me to confirm to you the views of the BL Board on the importance of collaboration in our recent recovery strategy for each of our main business groups.
The Board sees collaboration with other manufacturers as an important part of its strategy for recovery and for reducing and eventually removing dependence on Government support. This might take the form of collaborations on major components or on particular parts of the business; but the Board would also welcome, and actively seeks, a relationship of a more comprehensive kind which might well grow out of such collaboration.
Yours sincerely,
Michael Edwardes"

Times Newspapers
Mr. John Smith: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"a reference of the proposed purchase of The Times and The Sunday Times by Mr. Rupert Murdoch to the Monopolies and Mergers Commission."
The matter is, I believe, specific. The present owners of these newspapers appear to have reached agreement to sell them to Mr. Murdoch, and that agreement in turn requires the approval of the Secretary of State under the Fair Trading Act 1973. I assume that an application for his approval has already been made.
This issue is also important. The acquisition of these newspapers by Mr. Murdoch will create a very large concentration of newspaper power in one ownership, precisely the circumstances that Parliament had in mind when it passed the newspapers mergers reference provisions of the 1973 Act.
I appreciate that assurances have been given by Mr. Murdoch, and I appreciate the concern over employment and the desire to keep both newspapers in existence. I believe, however, that if a reference were made, coupled with a request for an early report, proper examination of this large concentration of newspaper power could be made within the several weeks that have been set aside by the parties for negotiations.
I believe that the matter is urgent, because a decision must necessarily be imminent. The sooner a reference is made the sooner can a report be made available for the consideration of us all.
Mr. Speaker: The right hon. Gentleman gave me notice before 12 o'clock today—in fact, he gave it on Friday—that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"a reference of the proposed purchase of The Times and The Sunday Times by Mr. Rupert Murdoch to the Monopolies and Mergers Commission."
I listened carefully to what the right hon. Gentleman said, and I am satisfied that the matter raised by him is proper to be discussed under Standing Order No. 9. Does the right hon. Gentleman have the leave of the House?
The leave of the House having been given—
Mr. Speaker: The motion for the Adjournment of the House will stand over until the commencement of public business tomorrow, when a three-hour debate on the matter will take place.
Mr. Roy Hattersley: On a point of order, Mr. Speaker. May I take this opportunity, through you, to ask the Leader of the House to make a statement at the first possible opportunity concerning the rest of tomorrow's business? It would be intolerable if the British Nationality Bill, which raises fundamental constitutional issues—
Mr. Speaker: Order. The right hon. Gentleman should raise that matter through the usual channels. It is not a point of order for me. I remind the right hon. Gentleman that it is for me to answer points of order, not the Leader of the House.
Mr. Arthur Lewis: On a point of order, Mr. Speaker. While I appreciate that you have sole right to decide who shall speak in a debate, may I ask you to note that when you asked Members to give their support to the application under Standing Order No. 9 not one Conservative Member stood? Perhaps therefore, if a large number of Members want to take part in the debate, you will note that lack of interest among Conservative Members and you will not call them to speak.
Mr. Speaker: I should explain to the hon. Gentleman and to the House that, strictly speaking, it is not necessary for 40 hon. Members to rise unless there is an objection. It is only in the case of an objection that the agreement of 40 Members is necessary. I have taken note of the hon. Gentleman's comments.
Mr. Lewis: Further to that point of order, Mr. Speaker. I much appreciate your comments, but I wanted to get on the record that not one Conservative Member stood in support of the application.
Mr. Speaker: I think that I was not alone in understanding the motives of the hon. Gentleman.
Mr. Peter Bottomley: I am aware that I do not have the same substance in politics or in any other way as the hon. Member for Newham, North-West (Mr. Lewis), but many other hon. Members will have noticed that I stood, so he is wrong.
The motion stood over under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) until the commencement of public business tomorrow.

Orders of the Day

  Forestry Bill
  Order for Second Reading read.
  4.3 pm
  The Secretary of State for Scotland (Mr. George Younger): I beg to move, That the Bill be now read a Second time.
  The first objective of the Bill is to enable the Forestry Commission to dispose more freely of some of the forestry land placed under its management by Ministers. That is to be done by extending the powers of disposal conferred on forestry Ministers by section 39(2) of the Forestry Act 1967. The second purpose is to allow Ministers, with Treasury approval, to direct the payment of specified sums from the forestry fund to the Consolidated Fund. The third is to provide for the appointment of an additional forestry commissioner.
  Taken together, the proposals are a necessary adjustment to take account of a new stage in the operations of the Forestry Commission. They should also be read in the context of the statement that I made to the House on 10 December, when I announced the conclusions arising from our review of forestry policy. I am glad to say that my statement has been generally welcomed by the home grown timber advisory committee, which represents a wide spectrum of forestry and wood-consuming interests, and is the main statutory body advising the forestry commissioners. A similar welcome has been given by representatives of the private sector. In my statement I emphasised the Government's support for the continuing expansion of forestry both to reduce our dependence on imported wood in the long term and to provide employment in the forestry and associated industries. Forestry is a long-term business, and it would therefore be wrong to be unduly influenced by recent problems in the pulp and paper industries, which have been mitigated by the successful exploitation of export opportunities for wood hitherto processed at home. We believe that in the longer term our rising production will be absorbed by British manufacturing industry and that we are justified in encouraging new planting, broadly at the rate of the past 25 years. That should preserve an acceptable balance with other land use interests and take account of our long-term wood requirements. A faster rate of expansion could disturb that balance and might have undesirable consequences for agriculture, conservation and the environment.
  As I explained in my statement, we see greater scope for participation by private forestry, although we intend to maintain the successful partnership between the private sector and the Forestry Commission, for which we see a continuing role both as the forestry authority and as the forestry enterprise. However, we believe that it is right to make more active use of the capital invested in its assets over the years with the aid of public funds, by seeking private investment. That will by done by selling a proportion of the commission's woodlands and land awaiting planting. Clause 1 provides the necessary powers of sale.
  The Forestry Commissioners themselves had powers, between their establishment under the Forestry Act 1919 and the passage of the Forestry Act 1945, to acquire land
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  for forestry purposes and to dispose of land and other property not required for those purposes. The 1945 Act vested these powers in forestry Ministers, in whose names the Forestry Commissioners, for all practical purposes, continued to exercise them, and they were consolidated in the Forestry Act 1967. The limited nature of the powers of sale reflected the contemporary belief that the commission would need to dispose only of land surplus to forestry requirements.
  If the need should have arisen those powers of disposal were thought to be supplemented, in England and Wales, by those in section 90 of the Agriculture Act 1947, which provided general powers of management and disposal of land belonging to the Minister of Agriculture. In Scotland, the Forestry (Sale of Land) (Scotland) Act 1963 conferred powers on the Secretary of State to dispose of forestry land in the interests of rational land management. The Secretary of State's powers were consolidated in section 39(2)(b) of the 1967 Act, but have been found to permit only minor sales. Moreover, the commission's legal advisers take the view that section 90 of the Agriculture Act is not suitable for extensive sales of forestry land. In that event, the Forestry Act is the appropriate source of such powers. In consequence, very little use has been made of that provision for forestry disposals.
  The Countryside Acts of 1967 and 1968 gave powers to forestry Ministers to purchase land for recreation or amenity purposes. At the same time, those Acts amended section 39(2) of the Forestry Act to provide powers subsequently to dispose of land purchased for such purposes. Those powers of disposal are not subjected to the same limitations as those applying to land purchased for forestry. They will of course be subsumed in clause 1, and, in consequence, the provisions in the Countryside Acts will be repealed as shown in the schedule. Perhaps it is also appropriate at this point to say that section 39(4) of the Forestry Act will also be repealed. That provides that Ministers' powers of management and disposal in the Forestry Act are without prejudice to those in section 90 of the Agriculture Act which, as I have mentioned, have been little used and will no longer be required for forestry.
  Mr. Mark Hughes: I am led to believe that a large number of amendments to the Wildlife and Countryside Bill have been tabled in another place. What are the precise relationships between the provisions of the Bill and the amendments tabled in another place to another Bill? That may cause difficult problems for the Opposition in tabling amendments in Committee. Many of the amendments tabled in another place appear to overlap the provisions of the Forestry Bill. I should be grateful if the Secretary of State would advise the House how those relationships will work and the working of our Committee stage.
  Mr. Younger: I appreciate the point that the hon. Gentleman has raised. There is bound to be some overlapping in the subject matter when one is talking about two activities relating to the countryside. I am not aware that there is a direct or conflicting relationship in the amendments tabled to the Wildlife and Countryside Bill, which is at present in Committee in the other place. But I shall draw what the hon. Gentleman has said to the attention of my colleagues who are considering that Bill and make sure that they look into the relationships between

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  the Bills, if there are any, and explain them to the hon. Gentleman if he feels that he wishes to raise the matter again.
  Mr. Hughes: I am grateful to the Secretary of State for giving way again. I must turn to you, Mr. Speaker, on this matter, because the House is presented with a difficulty. Amendments have been tabled in another place to a Bill to which the Secretary of State's name is attached. Those amendments affect the content of the Bill before us and we want to know how far they inhibit or otherwise our ability to discuss the matters that are the subject of those amendments.
  Mr. Speaker: I look at amendments only when they come before this House. In Committee, the decision on amendments will rest not with me, I am pleased to say, but with the Chairman of Ways and Means. Only on Report will the matter be my responsibility. The hon. Gentleman is asking me to speculate, and I have always been opposed to gambling.
  Mr. Younger: I will speak to my right hon. Friends about the matter, and I hope that the hon. Member for Durham (Mr. Hughes) will be able to get answers to his worries about the relationship between amendments.
  I have traced the legislative background in some detail, so that the Government's reasons for providing a wider authority for the sale of forestry land may be seen in proper perspective. To sum up, Section 39(2) of the Forestry Act permits forestry Ministers to dispose of land required for forestry under the Act which, in their opinion, is not needed or ought not to be used for afforestation or any purpose connected with forestry. In Scotland the Secretary of State has the additional powers to which I have referred, and there are the powers under the Agriculture Act 1947 which I have also mentioned.
  None of those powers is adequate for our purpose, which is to give the commission greater commercial freedom to sell some of its land and plantations, and thereby reduce its call on the Exchequer for the future funding of the forestry enterprise. I should like to make it clear that it is no part of our policy to dismember the Forestry Commission, and there is certainly no question of our placing it at a commercial disadvantage by creaming off all its best and most productive areas. Nor are we engaged in pillaging the commission in order to line the pockets of the private sector. The commission will be in full control of the disposals programme, the scale and location of which will be at its discretion. The rate of disposals will depend partly on market demand but also on the need to maintain coherent and effective management. Some plantations will be for outright sale, but others will be leased back on a commercial basis for continued management by the commission.
  Mr. Geraint Howells: What if, after a period, the Forestry Commission is not self-generating?
  Mr. Younger: Is the hon. Gentleman asking what will happen if, after a period, the commission requires a further injection of public funds? If so, that is quite a long way ahead. Before the Bill was published, it was not expected to become self-financing until the mid-1990s. In the light of the provisions of the Bill, that will probably happen about 10 years earlier. I would not envisage a need for
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  injection of public funds in the future, because the commission will be able to continue financing its own operations.
  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 to wood-using industries, the effect on employment and special commitments to public recreation and amenity.
  An important stimulus to past investment in wood-using industries has been the Commission's ability to offer contracts that assured continuity of wood supply in the long term. We recognise that that will continue to be a key requirement in encouraging future investment in the new industries essential for the efficient processing of the increased wood production we expect in the years ahead.
  Of course, that is of special relevance in the Highlands where, in the wake of the closure of the Fort William pulp mill, we are giving priority to the search for major wood-using developments to preserve employment in forestry and associated industries, and to exploit our timber resources to the full. The Scottish Office and the Forestry Commission are working together in the search, although it may, of course, take some time. The efforts have recently borne some fruit in the expansion of the sawmill at Kilmallie. Similarly we shall be looking for alternative outlets in Britain to replace the processing capacity lost as a result of the unfortunate closure of the Bowater plant at Ellesmere Port.
  The disposals programme will be a limited one, and, on the scale envisaged and with the additional safeguard of lease-back arrangements where appropriate, the Forestry Commissions's ability to negotiate long-term supply contracts with developing wood-using industries should remain unimpaired. In that connection efforts to rebuild processing capacity in this country will be assisted by our recent expression of confidence in the future of forestry and the wood processing industries.
  As regards employment, the Forestry Commission will of course make every effort to minimise the effect of sales on jobs in the forest, particularly in those areas where it is the major employer. That is one of the purposes of providing the lease-back alternative to outright sale. In any case, we should not lose sight of the fact that the plantations will continue to require management anyway and work will have to be done whoever owns them.
  In addition to land under plantations, it is proposed to sell up to one-third of the commission's reserves of plantable land to the private sector for afforestation. The remainder, being essential to the management of the existing forests or of no interest to private investors, would be the basis of the commission's continued new planting. The commission will also continue to acquire and plant additional land where it is needed to improve the management of its existng forests, or in areas where the private sector is not interested and planting will help to provide rural employment or is otherwise considered to be desirable from the national viewpoint.
  Clause 2 authorises forestry Ministers, with Treasury approval, to direct from time to time that specified sums held in the forestry fund shall be paid into the Consolidated Fund. It also repeals section 41(7) of the Forestry Act 1967, which provides the commissioners with limited powers of investment. The repeal of section 41(7) is an overdue piece of tidying up. It was a re-enactment of

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  section 8(6) of the Forestry Act 1919, which was conceived under wholly different circumstances. At that time the forestry fund, although grant-aided annually by Parliament, was managed more as capital to be drawn on as required, and the investment of any money not immediately required for the commission's operations was consistent with that. Since the 1945 Act brought the commission's financial procedures more closely into line with those of Government Departments, the provision has not been used. Now that other arrangements are to be made for dealing with any surplus moneys, it is not required.
  The principal provision of clause 2 is for transfers to be made from the forestry fund to the Consolidated Fund. The need for those may arise from two causes. First, as the commission's forests mature and yield an increasing harvest, there will be a positive balance of income over expenditure in its operations as a forestry enterprise. Those comprise primarily the planting and management of trees and sales to the timber market. The break-even point may be a decade or more ahead, but in forestry legislation it is wise to look to the future, as it was in 1919 and 1945. Until then, while new planting continues and the recent plantations are not yet mature, there will still be deficits in the forestry enterprise's cash flow. Secondly, my right hon. Friends and I intend that the current cash flow deficits should be reduced by a new form of income, from sales of woodlands made possible under clause 1. So far as their financial effect is concerned, it will be clear that this is a new market to be explored and likely, as land transactions do, to flow somewhat unevenly.
  It is not our intention to allow short-term fluctuations in the property market to disrupt the long-term programmes of the commission. Therefore, to avoid difficulties arising from an uneven flow, we shall separate the commission's expenditure and cash limits from the proceeds of the sale of land and plantations, and of surplus assets, by transferring those proceeds to the Consolidated Fund as extra receipts. Notes on Supply Estimates and the public expenditure survey will show the effect of those receipts on the commission's net call on Exchequer funds.
  Clause 3 of the Bill amends section 2(1) of the Forestry Act 1967—
  Mr. W. Benyon: On 10 December, in reply to the hon. Member for Berwick and East Lothian (Mr. Home Robertson), my right hon. Friend said that some of the proceeds would be used for the commission's operations and some may be used to reduce the grant-in-aid. His statement now seems to be slightly at variance with that. Am I right in thinking that the entire proceeds of the sale of land and the sale of timber will go into the Consolidated Fund?
  Mr. Younger: We are concerned here with the powers necessary to achieve this. The carrying out of it will be a matter of negotiation between the Forestry Commission, forestry Ministers and the Treasury from time to time. We are concerned here with powers that enable it to be done. I have been trying to spell out those powers and their flexibility.
  Clause 3 amends section 2(1) of the Forestry Act 1967 to provide that the forestry commissioners shall consist of a chairman and not more than 10 other members. This has the effect of increasing the number of commissioners by one. It is the Government's intention that the additional commissioner should have business and commercial
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  experience outside the forestry and wood-using industries. This is not a reflection upon the quality of the deep and varied knowledge and experience of forestry and related fields which the present commissioners bring to their work.
  The present allocation of responsibilities, as the House will recall, was decided in accordance with the eighth special report of the Estimates Committee for the 1964–65 Session. Since then, the advice of the Government to Her Majesty upon appointments of commissioners has been based upon a structure with four full-time executive commissioners, and five part-time commissioners chosen for their knowledge and experience of commerce, the timber trade, trade union matters, and forestry and the countryside. It has not been the practice to specify all these criteria in previous Forestry Acts, although the relevant provisions, which were consolidated in section 2(2) of the 1967 Act, took the wise precaution of specifying a minimum proportion of persons with knowledge of forestry and the timber trade, and, in particular, with scientific attainments and a technical knowledge of forestry. Beyond this, the requirements have changed with the changing nature of the commission's operations, as was recognised in 1965, and it is prudent to leave future Governments room to deal with such changes as they occur. One such change will occur as the commission makes use of the powers given by clause 1 of the Bill. The additional appointment will give the opportunity to broaden the range of advice and experience available to the commission.
  This Bill forms part of the balanced approach to forestry policy in the 1980s, which was the subject of my statement. It is not inappropriate that it should be introduced shortly after the annual report of the Forestry Commission, which marked the sixtieth year of the commission's operations. The last 30 years have seen forestry in this country, while still pursuing the objectives set in 1919 and 1945, adopting the most modern technology and methods of organisation in both the public and the private sectors.
  These years have seen the institution and successful operation of the representative bodies of the timber growers and professional foresters, the establishment of forestry co-operatives and many groups of forestry consultants and managers. These now include several substantial companies, whose collective contribution to the national programme of afforestation has in some years closely matched that of the Forestry Commission. Their harvesting and marketing operations have also made great progress. With private forestry thus growing in size and capability, it is both feasible and desirable to encourage private enterprise to consolidate and extend its participation in the industry.
  The increasing role of the private forestry sector and the work of the commission itself have created a great interest in the future of forestry and in the special advantage of investment in the industry. My right hon. Friends and I therefore believe that the opportunities created by this Bill for private investment in the Forestry Commission's assets will be welcome.
  Mr. Dennis Canavan: The Secretary of State has not mentioned the great contribution that the Forestry Commission has made to the improvement of amenities in the coutryside, to recreational, educational and sporting facilities and

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  particularly the forest parks. Will he give a guarantee that on no account will any forest park or any part of a forest park be sold under the provisions of the Bill?
  Mr. Younger: The hon. Gentleman was not quite fair at the start of his intervention; I have mentioned the matter on several occasions. This is a responsibility that the Forestry Commission takes seriously. As the hon. Gentleman knows, it takes a lot of trouble to encourage people to come into the forest areas and enjoy the amenities. I made it clear in my 10 December statement that the choice of parts to be sold will be a matter for the Forestry Commission.
  Where amenity or access is an important consideration, the Forestry Commission will be able to ensure either that a certain piece of land is not sold or, if it is sold, to arrange that it is leased back so that it can still be managed by the Forestry Commission which can continue to see that the amenity aspect is properly looked after. I believe that that is a full reassurance for the hon. Gentleman. It is very much part of the Forestry Commission's responsibility to maintain the high priority which it gives to amenity. There is no reason why this should not continue after the Bill has been passed.
  Mr. Canavan: I should like to clarify this point. It appears from my reading of the Bill that absolute power is given to the forestry Ministers, so that no discretion is left ultimately with the Forestry Commission. It is Ministers, including the right hon. Gentleman, who are given the powers. If the Bill goes through unamended, they will have power to sell forest parks to private landowners who would not be able to compare with the Forestry Commission in terms of providing public access and improvement of amenity.
  Mr. Younger: One of the purposes of the Bill is to enable the Forestry Commission to sell off those portions of forest that it considers suitable for selling. I assure the hon. Gentleman that where considerations of amenity exist the Forestry Commission will be able either not to sell a particular area of forestry to which such consideration applies or to sell it in such a way that by lease-back or by some other means it can continue its amenity responsibility in managing that part of the forest. That goes a long way towards giving the assurance that the hon. Gentleman seeks.
  We believe that a general welcome will be given to the opportunities created by the Bill for private investment in the Forestry Commission's assets. As they are taken up, they will increase the scope of private enterprise in forestry, reduce public expenditure and assist the commission in responding to the increasingly competitive commercial environment, in which all our enterprises, public and private, must operate more effectively to restore this country's economy.
  In commending this Bill to the favourable consideration of the House, I emphasise that it does not signify a fundamental change in the role of the Forestry Commission. Those members of all parties who have taken an interest in forestry will recall the tributes to the work of the commission which were paid in a forestry debate in another place on 26 March last year, and in the Adjournment debate in this House on 3 April. In that debate my hon. Friend the Parliamentary Secretary to the
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  Ministry of Agriculture, Fisheries and Food expressed confidence that the commission would continue successfully to fulfil its dual role as both forestry authority and forestry enterprise. This Bill is intended to provide the additional powers which the commission in a changing commercial environment will require for that purpose.
  Foresty is, by its nature, a long term enterprise. All those concerned in forestry have for a long time been looking for a clear signal of the future trend in the industry to enable them to plan ahead. This Bill and its associated provisions will do exactly that. I am sure that this is the reason why those in the private sector have given a wide welcome to its provisions.
  4.28 pm
  Mr. Bruce Millan: To judge from the rather bland way in which the Secretary of State introduced the Bill one would not think that the powers available to Ministers under this measure will literally allow them to dismember the Forestry Commission. That is the reality of what is provided for in the Bill. I assure the right hon. Gentleman that the Bill will get its Second Reading. If, however, Ministers want us to take seriously some of the points that the right hon. Gentleman has made and the assurance that he has ostensibly given today, the Government will have every opportunity to prove their sincerity by accepting appropriate amendments to the Bill in Committee. Because of their record on other matters, I do not believe that there is a significant chance of their being willing to do that.
  What the Bill is about—and why the Opposition are utterly opposed to it—is the doctrinaire obsession of the Government with the public sector borrowing requirement and the need to reduce public expenditure and, in particular, with selling off as much as possible of publicly owned assets. That is the reality behind the Bill, whatever the Secretary of State for Scotland may say, and I shall come to the Bill's provisions later in my remarks. Before doing that, however, I want briefly to go over the forestry background to the Bill. It is a situation that will be known to all right hon. and hon. Members who take an interest in forestry matters, and obviously I include every right hon. and hon. Member present this afternoon.
  Looked at in terms of the national economy, the position is not satisfactory at present, despite the work of the Forestry Commission and private forestry owners over the past 60 years or so. We are still dependent to the extent of more than 90 per cent. on imported wood and wood products. The effect of that on the balance of payments is nearly £3 billion at present. What is more, we know from all the authoritative studies that have been done, whether it be by the CAS or the Forestry Commission—and it is difficult to make these projections and estimates of the likely situation in 25 or 50 years, but it is necessary to do it in forestry—that world demand in the twenty-first century is likely to expand very considerably and that there is little prospect of world supplies meeting the increased demand.
  If that situation arises and there are shortages, one of the inevitable consequences will be that the prices that we pay for the wood and wood products that we import are likely to be a good deal higher in real terms, even discounting for inflation and so on, than we are paying today. What is more, as the developing countries are more and more able to supply wood products, rather than the raw material, the manufactured content of our imports is

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  likely to increase as well, and that will impose a further burden on our balance of payments. As a country we shall be extrememly vulnerable. Indeed, we are vulnerable at the moment because we depend so largely on these supplies from abroad.
  I do not wish to draw specific parallels with oil supplies, because the situation is not the same. Nevertherless, there are similarities, and it is a matter of common prudence for this country, looking ahead, as we must, and in deference to the problems that future generations may face, to expand forestry activity.
  There are various ways in which that can be done, and various figures have been suggested. The Forestry Commission itself suggested three options, two of them involving an expansion in the recent planting programme, and four choices were suggested by the CAS study. I am attracted to the maximum figures suggested in the CAS study. I do not pretend that recent Labour Governments had an impeccable record in this respect. For the purposes of argument today I am willing, not to accept it as a desirable figure, but to take the figure of about 30,000 hectares a year, which is the Government's target at the moment. I do not think that the target is high enough. But, even on that basis, the proposals that the Government are making will make it very difficult to achieve that target except at considerable public expense in the private sector, quite apart from what may happen in the Forestry Commission sector.
  Even if we accepted the maximum planting programme suggested by CAS, all that would happen is that, by the year 2025, on its figures, this country would be about 26 per cent. self-sufficient in timber, compared with about 8 or 9 per cent. at present, and the area planted with forests would still be, at 16 per cent., less than the average percentage planted in Europe, which at present is 21 per cent., although it would be greater than the 8 per cent. that is under forest in the United Kingdom at present.
  The suggestions made by the CAS and the Forestry Commission are not wild and extravagant ones which would in any sense produce a surplus of wood and wood products in the twenty-first century. Even on the best calculations we would still be dependent upon imported supplies for about three-quarters of our requirements. With present planting programmes and what is likely to happen over the next few years—that will have its impact 40 to 50 years from now—the position is likely to be a good deal more serious.
  In terms of what we are doing for the forestry industry, I do not believe that this Government or past Governments have done enough. The rate of planting has not been high enough. What is more, the Government have not done enough for our wood-processing industries. The recent closures at Corpach in Fort William and Ellesmere Port are good illustrations of that. A number of my hon. Friends may wish to speak about Ellesmere Port. I put it on record that it has been catastrophic for the Scottish forestry industry that the closure at Fort William has gone ahead and that the projected newsprint operation is not to go ahead. The saw mill operation mentioned by the Secretary of State provides an additional 25 jobs. It does not in any way meet the reduction in capacity not to mention the reduction of employment, involved in the closure of the pulp mill at Corpach.
  Because of that closure the Forestry Commission has lost an outlet for 250,000 tons of wood per year, and 200,000 tons of that wood is now being exported. Most
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  of it is going to Norway and Sweden, where it is pulped and converted into newsprint, which is then exported back to this country at 10 or 20 times the cost of the raw product. However one looks at it, it does not make sense for that to happen. I do not believe that any other country of Europe would allow that situation to develop. Therefore I consider that what has happened at Fort William and Ellesmere Port to be disastrous from every point of view.
  That is part of the background. The other part of it is the record of the Forestry Commission. I need not say a great deal about it. It is an enterprise that was established at the end of the First World War. It is not a nationalised enterprise that was the brainchild of a Labour Government. It has had bipartisan support, obviously with differences of emphasis from time to time in its history. It is an efficient organisation, as the Secretary of State confirmed. From time to time it has done things that have upset agricultural and other interests, including amenity interests, but most of the criticisms that have been made in the past about the Forestry Commission in those respects are a good deal less valid, or not valid at all, in the recent history of the commission.
  We are not discussing an inefficient nationalised industry that should be disposed of to an efficient private enterprise. The Secretary of State has said that it is efficient. In terms of manpower, which is a great obsession of the Secretary of State, it has been reducing manpower while increasing plantation and wood production. If there are inefficiencies in the Forestry Commission, I wish to see them eliminated, but there has been no allegation of inefficiency, and the point has been made time and time again that it is an efficient enterprise. Therefore, in our opinion, there is no case for interfering with the activities of the commission as the Bill will do.
  As well as the support for the Forestry Commission, there has always been a general bipartisan view, politically speaking, that in forestry we need a partnership between private and public enterprise. Labour as well as Conservative Governments have provided the fiscal arrangements that have allowed private enterprise to be involved in this area. Through the Bill, the Government are breaking that partnership. They are also breaking the largely bipartisan attitude in the House and elsewhere towards the activities of the Forestry Commission. I say to the Government, and to all Conservative Members who care about forestry, that that is extremely dangerous and damaging, not only to the Forestry Commission, but to forestry as a whole.
  We do not disagree with the proposal in clause 3 for an additional member of the Forestry Commission. There is nothing between us on that. However, we disagree with the other two clauses.
  Clause 1, which allows for the disposal of land, is absolute. It contains no qualifications. It would be possible for Ministers to achieve the complete dismemberment of the Forestry Commission. The Bill does not say that a Minister may dispose of land with the agreement of the Forestry Commission, or after consultation with the Forestry Commission, or allow for a consideration of whether the proposal would be better from the point of view of the forestry management or for any other reason. The clause simply says:
  "The Minister may dispose for any purpose of land acquired by him under this section."

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  The Forestry Commission will not even have the power to dispose of the land. As the Secretary of State knows, the land is held in his name and in the name of the other forestry Ministers.
  At the end of the day, the Forestry Commission—I do not say this disparagingly—is a creature of the Government. The commission is appointed by the Government. The people who work for it are civil servants, they are ultimately responsible to Ministers and are subject to direction by Ministers. Therefore, one need not draw any distinction between what Ministers may want and what the Forestry Commission wants, because at the end of the day the Forestry Commission will carry out Government policy. I am not disputing that, because that is the nature of that body. Therefore, to talk about the Forestry Commission having discretion in this matter is wholly misleading.
  If this proposal were being made simply to allow the Forestry Commission to tidy up some of its estates, I should not disagree with it. From what the Secretary of State has said, I accept that the present provisions on land disposal are over-rigid and prevent the introduction of sensible tidying-up arrangements which would not involve a great deal of money. If the Bill were doing something to remedy that situation, there would be no disagreement between the two sides of the House, but it is not proposed for that reason. The Bill has been introduced, and the disposals will be forced through basically to save money.
  The Secretary of State made a number of contradictory remarks. First, he said that all decisions would be up to the Forestry Commission. He said that it would decide which land would go where and at what rate it would be disposed of. However, he gave the game away in answering an intervention. He said that although the Forestry Commission would in any case become self-financing as its sales increased over the next few years—by about the mid-1990s—the Bill would enable that figure to be brought forward by 10 years. In other words, the commission would be self-financing by about 1985.
  As soon as that is said, one begins to put figures on the disposals, because we know what the financing requirement for the Forestry Commission is now. In 1979–80 it was rather inflated for special reasons, and was about £43 million. That includes the forestry authority which is not part of the commercial Forestry Commission enterprise. Thus, the figure is less than that given and is reducing. However, as soon as one says that self-financing will be brought forward from the mid-1990s to the mid-1980s, one has a figure in mind. Before the end of the day we should like to know what figure the Secretary of State and the Government have in mind. What are these disposals to achieve over the next few years?
  As soon as a figure is quoted, it exposes the farce of saying that the Forestry Commission will be a free agent. It will be a free agent in the same way as local authorities are free to decide their own rents at present. They are free to decide their rents, but the Government take the money away by the housing support grant. The same will happen to the Forestry Commission. It is free to do what it likes, but the money will be taken away from it. Either the money will be made up by the Forestry Commission, by selling land or plantations, or new planting will virtually come to a halt. In any case, the figures for new planting
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  and land acquisition and so on are all being savagely cut over the next few years through the cash limits that are being imposed on the Forestry Commission.
  Thus, the Forestry Commission is told in effect that unless it gets the money from selling off its mature forests, whether it likes it or not, or whether it is good for management purposes, it will not have the money for new planting. If it does not have the money for that, it will not be able to continue on the present scale. It will not even be able to maintain its labour force or continue as an expanding enterprise in terms of the amount of land under forestry plantation.
  The Secretary of State let out another piece of interesting information today which we have not had before. He said that the Forestry Commission will dispose of one-third of its present plantable land. Presumably that is under Government instructions as well. The Secretary of State did not tell us how many hectares that would be, but I understand that land now awaiting planting held by the Forestry Commission—nearly all in Scotland—amounts to just over 70,000 hectares. Thus, 20,000 to 25,000 hectares of Forestry Commission land will be sold off, according to what the Secretary of State said. That information was let out in a rather casual way. That is a significant amount of land, and will inevitably cripple the Forestry Commission's planting programme over the next few years. However, that planting programme will be crippled by what the Government are already doing. The figures for that have been published.
  According to the figures given to the Forestry Commission purchases of land will be reduced to about 4,500 hectares a year. The Secretary of State will not dispute that figure. The total industry in Britain will, according to the Government, plant about 30,000 hectares a year, yet the Forestry Commission will have enough money over the next few years to acquire only about 4,500 hectares. What is acquired today, particularly when one-third of one's reserves of plantable land are sold off, very soon determines what one will be able to plant in future. In any case, the planting will be considerably reduced because of the Government's cash limits. I believe that the figure will be further reduced, according to the Secretary of State today. It will be 11,900 hectares in 1980–81, and that figure, even before today's announcement, was scheduled to drop to fewer than 9,000 hectares in 1983–84. Those are Forestry Commission figures. Yet, according to the Government, we shall need about 30,000 hectares a year.
  The Bill means that the commission will be squeezed in every possible direction. It will have to sell off a large part of its present plantable land. It will not get enough money to make up the stock of plantable land because of the cash limits. Therefore, it will not be able to plant at a level at which it is perfectly capable of planting at the moment and at which it wishes to plant. It will also be forced, by cash limits and the Bill, to sell off many mature or semi-mature forests to private enterprise. That is the reality of what the Government are doing, and all the Secretary of State's blandness cannot disguise it.
  The Forestry Commission faces other cuts at the moment. Its research activities are being cut, although the House of Lords Select Committee has said that more research is needed in forestry and that there should be a more coherent programme. Certain criticisms were made by the Committee, yet the research budget is already being cut. No new recreational activities are now being

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  undertaken by the commission. It is maintaining what it has, but it is providing no more forest parks, because the money has been taken from it.
  That money and that kind of activity cannot be made up by private enterprise. Whatever else, private enterprise does, it cannot make up for the loss of recreational facilities that will be involved in the sale of Forestry Commission land or the reduction of Forestry Commission activities. Yet the Government's line is that this can be made up, that there should be a great expansion of private activity.
  I have said already that I am not opposed in principle to increased activity by private enterprise. The Labour Government tried to encourage it, and I stand by that. But in does not have to be done, and it should not be done, at the expense of the Forestry Commission. In particular, it should not be done in such a way that private enterprise simply buys existing commission forests. That has nothing to do with the expansion of forestry; it simply transfers ownership from the commission to private enterprise. It provides no new planting and no expansion of forestry. Yet that is the main effect of the Bill.
  Even that would not be so bad if what the Government had in mind was genuine private enterprise, acting at its own expense. But private investment in forestry, particulary these days, depends almost exclusively on fiscal regimes. I am not talking now so much about the new grants, although the new system seems simpler than the old. I should not disagree with simplification, but we shall want to examine the figures in comparison with the present system.
  The new system of grants will itself require legislation, I understand, but the Government were so desperate to get through this Bill to sell off some of the Forestry Commission's forests and get some money that they dealt with this subject on its own.
  We can discuss the grants at a later stage, but they are less important than what happens over taxation. My hon. Friends will be able to go into that in detail in Committee, but those who are interested in forestry know that it is excluded from capital gains tax and is subject to valuable concessions on capital transfer tax—concessions introduced by a Labour Government. What particularly attracts private investment in forestry are the arrangements for income taxation, which in effect mean that those on high marginal rates of taxation can invest in forestry in the early years when losses are made and capital investment is involved, at the expense of other taxpayers, by electing to be assessed under schedule D and setting their losses against other taxable income. There are considerable tax benefits in that procedure. Then, when the forests are getting to the stage when they might begin to make some money, the investments are sold off so that those concerned do not begin to pay tax on the profits. The land and the forests revert to what was meant to be the normal schedule B taxation provisions, which are based not on profit, but on a third of the annual value of land concerned.
  I do not want to go into this in detail because, interestingly enough, it is dealt with in the eighth report of the Public Accounts Committee for 1979–80. Also interestingly, that report is to be debated on Thursday as one of the debates on the PAC. But this switch is going on. That is what is attracting private investment in forestry, and it is costing the taxpayer a considerable sum.
  In that report the PAC said:
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  "If the Government consider that additional forestry subsidies are necessary for policy reasons, we consider they should be granted openly through Votes subject to Parliamentary control rather than left to the fortuitous consequences of the exploitation of a tax loophole which depends more on the personal circumstances of the taxpayers concerned than on forestry merits."
  Those who are taking advantage of this loophole are not genuinely interested in forestry. There are many of them still around in the private forestry sector. They are concerned with forestry investment as a means of obtaining tax relief.
  Mr. Patrick Cormack: The right hon. Gentleman will acknowledge that the Chairman of the PAC, who put his name to that report, was also the Chief Secretary to the Treasury and administered the very system that the right hon. Gentleman now says the Government should change.
  Mr. Millan: I agree with that. I have said that the concessions on the CTT in particular were introduced by the Labour Government and that if we are to have private investment in forestry a fiscal regime must allow that to happen. But that exposes the absurdity of what the Government are doing, because that costs the taxpayer money as well.
  These loopholes, if they are indeed loopholes, which are presently comparatively limited, are already costing the taxpayer between £8 million and £10 million a year. That is brought out by the Inland Revenue evidence quoted in the PAC report. That kind of arrangement is already costing us more, in tax forgone and therefore in its effect on the PSBR, which obsesses the Government, than the reduction in subsidies to the Forestry Commission, which, at least in the earlier years, if we accept the Secretary of State's assurance, is likely to be the result of the Bill.
  The matter is, however, more important than that. If we are to expand private investment in forestry to make up for the shortfall in the commission's new planting, as will be the inevitable effect of the Bill and the cash limits that are already squeezing the Forestry Commission, the cost to the taxpayer is likely to be much more than the cost of allowing the commission to get on with the job, as it is able and willing to do. Therefore, at the end of the day, this absurd exercise is highly unlikely to save any public money.
  That is why I said at the beginning of my speech, and repeat now, that this action is being taken, ultimately, for doctrinaire reasons rather than for sensible reasons of public policy, either forestry or, indeed, financial.
  Mr. Cormack: What would be the cost to the taxpayer if private investment in forestry were not encouraged? The right hon. Gentleman talked about the tremendous import bill. We are anxious to increase and expand forestry.
  Mr. Millan: Whether the national target is 30,000 hectares a year or some other figure, the way in which it is broken down between the Forestry Commission and the private sector does not make much difference at the end of the day to the cost to the taxpayer. Private enterprise will not do the job without the incentive of expensive tax concessions. That point is brought out by the PAC report, which, as I say, fortuitously will he debated on Thursday.
  Incidentally, I have never seen a weaker Treasury minute in response to the recommendation:
  "The Treasury … note the views of the Committee and are discussing with the agricultural departments the issues arising

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  from the present provisions for the taxation of woodlands, bearing in mind the special factors necessarily applying to a very long term investment of this kind."
  Mr. Younger: I hope that the right hon. Gentleman appreciates the seriousness of the matter for the future of forestry. Does he remember that his right hon. Friend the Member for Heywood and Royton (Mr. Barnett), when he was Chief Secretary, was specifically asked to change the tax regime and refused because he believed that it was essential to the private sector? Is the right hon. Gentleman aware that any suggestion—and he has not quite said this—that he does not approve of the tax regime would be most damaging for expansion in private forestry, to which he has been paying lip service? Will he come clean?
  Mr. Millan: It is only the Prime Minister who discloses Budgets in advance. I shall not disclose the next Labour Government's Budget in advance. The point is unassailable and has to be accepted by Labour as well as Conservative Governments. I shall be interested to hear the reply. If we want private investment in forestry and a balance between private and public investment, tax concessions have to be made, which will still cost the public purse a good deal of money. I want to see a role for private enterprise and a leading role for the Forestry Commission. The balance is being upset by the proposals in the Bill.
  Some of the absurdities of the proposals were exposed in the Secretary of State's speech. For instance, under the lease-back arrangement the Forestry Commission will sell the forest, lease it back and continue with its management. The purchaser will not lease the land back to the Forestry Commission out of the goodness of his heart. He expects to make money. His net profit, whether through tax or in another way, will be a direct abstraction from the public purse. Lease-back has a certain attraction for the Forestry Commission management, but will be carried out at the expense of the public purse. No one will take the land from the Forestry Commission and lease it back without financial gain. Lease-back is an unnecessary process. The Forestry Commission is already managing the forests perfectly well. The Secretary of State seems to find it an acceptable way to get rid of public assets. It is totally unacceptable.
  Mr. Younger: Is the right hon. Gentleman suggesting that someone who has bought an area of land at a proper valuation should be expected to lease it back for nothing?
  Mr. Millan: I am suggesting the opposite. The money that could be made by the Forestry Commission will be made by a private owner. I cannot see the advantage of that when the Forestry Commission will have all the work of managing the estate. The Secretary of State's question merely confirms my point. There is no argument for the lease-back arrangement.
  There are also serious reasons of forestry management for maintaining a large Forestry Commission enterprise. Private enterprise in many respects cannot do the job. It cannot guarantee the supplies that are needed for the larger wood-using industries. That point is well made by the British Paper and Board Industry Federation in its extremely adverse comments on the Government's proposals and the announcement by the Secretary of State last December. It states:
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  "the wholesale selling of large tracts of Forestry Commission land, if this is the intention, cannot but damage the Nation's interests."
  Industries that consume a good deal of wood require assurance of supply. They cannot always get that from a multiplicity of private owners, who, when the price goes down, naturally want to hold back their supplies from the market. The Forestry Commission has a national obligation to maintain the viability and health of forests and the forestry industry. It is an illusion that selling off land to private enterprise will benefit the consumers. It will be a considerable disadvantage.
  A forestry programme tilted towards private enterprise and away from the Forestry Commission is not only bad financially, but extremely bad for the management of the Forestry Commission's assets and our forestry resources. That is one reason why the trade unions, who were not consulted about the proposals, bitterly oppose them. They are also concerned about the effects on rural employment. The Forestry Commission provides continuity and assurance of employment, which private enterprise, for perfectly legitimate reasons, cannot always do because of its dependence on casual labour and so on.
  The Bill could have disastrous effects on our forestry and mean the end of the bipartisan approach to forestry. It is a short-sighted, doctrinaire Bill. If we accept the Secretary of State's assurances, its effects will be only trivial, and the Bill is therefore not worth having. However, I fear that it will be implemented on a substantial scale and that its effect on our forestry industry—and I do not exclude the private industry—could be calamitous. We therefore oppose it.
  5.10 pm
  Sir Hugh Fraser: I have sympathy with some of the remarks of the right hon. Member for Glasgow, Craigton (Mr. Millan). That may be because my father was one of the progenitors of the Forestry Commission and its first chairman. In those days he was accused by some landlords and lairds of being what was then called a Bolshevik.
  I draw to the attention of my right hon. Friend the Secretary of State for Scotland the general danger of the Bill, that is, simply whether it is the Bill of forestry Ministers or the Bill of the Treasury. If it is merely a Treasury Bill, I must warn my right hon. Friends that to buy up the Forestry Commisssion at under £600 million—it is undervalued at that sum—would be a real snip for one of the international companies. In 20 or 30 years' time it would be worth about £2½ billion, even at present prices. It would be an extraordinarily good buy for the charitable trusts set up by Dr. Ludwig for the development of Brazilian forestry. It would be a comparatively small sum for a major oil company. I hope that my right hon. Friend will provide safeguards in Committee and that it will be made clear that decisions will be made by the commission, in the form of advice to my right hon. Friend and other forestry Ministers, and not by the Treasury.
  Mr. Canavan: Is there any truth in the rumour that Lonrho is interested in the Bill and possibly in buying the assets from the Forestry Commission?
  Sir Hugh Fraser: The hon. Gentleman had better refer that issue to the Lonrho board.
  I draw the attention of the House to the sums that we are talking about, which are not gigantic in international

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  finance. As I have said, I have some sympathy with the right hon. Gentleman, and I hope that my right hon. Friend will provide safeguards in Committee. For example, we do not know who will introduce the next Budget of a Labour Government. Heaven I think will forbid, but for all we know, it could be introduced by someone who would do a deal and be prepared to sell the whole damned thing.
  I agree with the right hon. Gentleman that it is necessary to consider the future of the forestry industry as a whole. We must bear in mind some of the arguments advanced by the CAS and the Forestry Commission. We all know that it is rather like using a crystal ball when we consider the likelihoods. However, a possibility is an intermediate position between the stance taken by the CAS and what the right hon. Gentleman has said.
  We must consider the figures that will emerge by the turn of the century for the importation of forestry products. There will be an enormous change over the next 20 years. In 25 years British oil will be depleted. At that time, too, the tropical forests will be almost totally exhausted. At that stage there will undoubtedly be great changes in agriculture and construction because of the end of a great many of the synthetics that are dependent on oil for their basic production. Beyond 25 years we shall get into a positively stratospherical ionospheric explosion of prices and shortages. We must bear in mind the size of forestry programmes that Britain really needs. We must consider an annual planting programme approaching the level reached in 1961, namely, 40,000 hectares. We must be considering a planting programme of that size over the next 25 years. That will mean an eventual addition of about 1.4 million or 1.5 million hectares of forestry compared with the 1.6 million advocated by the CAS to be made available to the national forestry programme in its forecast up to 2025.
  I know that such a programme will cause many problems. As everyone who is involved in forestry will know, it is a matter not merely of hectares but the productive use that is made of each hectare, including planting. That is on the assumption that the Secretary of State and other Ministers are thinking of a considerably increased forestry programme. I have been in touch with those such as the Duke of Buccleuch and Queensberry, who was well known in the House as Johnnie Dalkeith. He and others are talking of an increase to between 14 and 16 per cent. of the national acreage devoted to forestry compared with the present 8 or 9 per cent.
  If we have good Ministers in charge of it, the Bill will be useful provided that it is tightened up in some of the ways proposed by the right hon. Gentleman. However, there are other features that have to be borne in mind. One of the problems will be finding the land available for forestry. The danger is that the Forestry Commission will be pushed out into the most arid areas. If that happens, expenses will increase and the burden on the taxpayer and on agricultural and other departments will increase.
  When we consider the felling programme put forward by the commission, interesting and able though it is, should we be thinking of doing away with the grants for very small plantations? There is a great deal of in-filling to be done in forestry which should be considered. It must be remembered that since the war British forestry has probably lost about 8 million miles of hedgerow. It is possible that it has gained potentially about 8,000 miles of railway land. Some of my hon. Friends from the north
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  of Scotland—I do not talk about the islands, which have no railways, but the mainland, on which there are a few—know that it would be possible to make good use of embankments. When one travels down to Ayrshire, it is noticeable that there are abandoned railway lines that probably amount to several thousand acres. These are areas that could well be planted, and they should be considered.
  The first problem, then, is the availability of planting land. A second problem lies in the advice of the admirable Sherfield report on the scientific aspects of forestry which was produced by the scientific committee of the House of Lords. There are three interlocking and important spheres. First, there is the issue of deciding on the type of plant and rotation that should be used. There are new hybrids entering the market that are of great importance for acid soils. Secondly, there is the relationship of afforestation with hydrography. That is a concept that is becoming of great importance. Thirdly, we must consider the value of amenities and the relationship between agriculture and farming and how one can keep the other.
  At present, responsibility is fractionalised between three or four Departments.
  There is a great deal to be said for the recommendation of the Sherfield report that there should be a chief scientific officer attached to the Forestry Commission, and that the commission should be given not less money for research—I believe that it receives about £3 million at present—but considerably more.
  The CAS proposal is that roughly half the new plantings be done by the commission and half by private enterprise. One then finds that about £22 million more is needed for planting by the Forestry Commission than is being spent today. But what does one find? Cuts are proposed. Reference has been made to reductions in planting from 11,000 hectares to 9,000, 8,000 or 7,000 hectares.
  I have great confidence in my right hon. Friend, as a good friend of forestry. But I suggest to him, first, that he should amend the Bill a little in Committee to make clear that it is his Bill, not a Bill introduced by the Treasury to try to pull everything back, with disastrous long term consequences. There must be an expansion, and a major expansion, in forestry. I shall not go into the present problems, which I hope are temporary, but it is ridiculous that people in the North of Scotland should be sending timber to Sweden and then reimporting it. That is madness which it is difficult to understand.
  I wish greater power to the elbow of my right hon. Friend the Secretary of State and of forestry generally. When my father and others around him set up the Forestry Commission he hoped that the ratio between private and public afforestation would be about 60:40. That was in 1919, and there has been a war since. The targets that he set have been achieved, but the 60:40 ratio was never achieved, because of changes of Government, changes of Government policy. It has always amounted to about 50:50. I should like to see more emphasis on private enterprise, if that were possible. The one thing that must not happen is the destruction of the commission merely in the pursuit of the idea that the Treasury should be able to claw back money. That would be a national disaster.
  I hope that the answers to some of these questions will be made clearer at the end of the debate than they were in my right hon. Friend's opening speech. I refer to the questions of amenity, development by the commission for the good of the general public; the protection of

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  woodlands; and the contol and sale of assets by my right hon. Friend. I do not see why some of the assets should not remain in British hands. In the North of Scotland many farms are being bought up. Some of the buyers come from Norway, Denmark and other parts of the world. It is important that these assets should remain in British hands.
  Another factor to be examined is the ordinary individual. I am not particularly Left-wing, and nor was the late Dean Acheson, but I remember once having a conversation with him about the great problem of capitalism—that in 30 years' time the whole world would belong to foundations and insurance companies—in which he said: "Boy, I look forward to the day when, like the dissolution of the monasteries, some of the goddamn American foundations are dissolved!" When one makes projections one sometimes finds that everything will be owned by a Japanese company or a faceless pension fund. I am sure that the National Union of Railwaymen pension fund would do a great deal better if it went into forestry instead of buying Picassos and odd things that it shoves away in vaults. That would at least be a contribution to British productivity.
  I hope that at the end of the debate we shall have reassurance on these matters. We do not want to see the Forestry Commission robbed. I regard the Bill as what I believe is called in the City merely a scheme of financial rearrangement, by which some of the commission's capital assets can be put to better purpose in the further development of forestry, not clawed back into the Treasury maw or to reduce the public sector borrowing requirement. That is what the object of the Bill should be. If that be the object, I am happy to vote with my right hon. Friend. If not, I may have to join the Opposition.
  5.27 pm
  Mr. John Parker: It is interesting to look at the Government's proposals and to see how far the Bill carries them out. The Secretary of State for Scotland told the House in his statement on 10 December:
  "With the projected rise in demand for timber into the next century and with the world's forests likely to come under increasing pressure, the Government believe that long-term confidence in both forestry and wood-processing industries in this country is fully justified. We look for a steadily increasing proportion of our requirements of timber to come from our own resources. 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. 1405.]
  Those are brave words, and good common sense, but I question whether the Bill does anything to carry out those aims. As the right hon. Gentleman himself said, only 9 per cent. of our present timber requirements are produced in this country. The right hon. Gentleman further said that the figure might be 15 per cent. by the end of the century. All of us will agree that that is not good enough.
  Both the Reading report and the Forestry Commission's document "The Wood Production Outlook in Britain" set out the need to double the area under timber in the next 50 years. How was that to be achieved? The main point made by both reports was that it could be done only if there were continuing expansion, without the changes of policy that had followed changes of Government in the past. Changes were made by both the last Conservative Government and the last Labour Government, both of
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  which set back the planting programmes. If we are to achieve that expansion, the ideal is to have 50 per cent. planting by the State and 50 per cent. by the private sector.
  In a forestry debate on a minor Bill in 1978, I suggested joint talks to try to agree a common forestry policy between the two main parties, to avoid the continued effects of upsets following changes in Government policy. The right hon. Member for Yeovil (Mr. Peyton) was then leading on the Bill for the Conservative Party in Opposition. He welcomed my comments, and he said that he would pursue the matter with the then Minister of Agriculture, my right hon. Friend the Member for Deptford (Mr. Silkin). After long consideration, the Minister of Agriculture replied that he was awaiting the two reports before making a decision. Nothing came of that approach.
  The general feeling that there should be continuity in forestry policy has been widely welcomed throughout the industry. On 27 April 1980 I received a letter from Mr. Harris, secretary of the forestry liaison committee. He said:
  "There is no question but that all the organisations that make up the forestry liaison committee wish to see a continuation of the joint partnership in forestry between the State and private sectors. We are completely with you that a joint party policy that does not change with a change of Government is what is needed, and that a major cut-back in the Forestry Commission would be as deplorable as the setback in the private sector in the early 1970s. It is for this reason that all the organisations which we represent support you entirely over the need for a joint forestry policy in the next 50 years."
  That view was also supported by Mr. James Galbraith, who has recently become chairman of the Forestry Committee of Great Britain. He said in a letter dated 12 August 1980:
  "I hope … for a really constructive statement to be made by the Government in the near future which will command the general support of all parties to take the forestry industry out of the political arena so that we can get on with the job of doubling the area under trees to 16 per cent. of the United Kingdon area over the next 50 years."
  Those statements contradict the suggestion of the Minister that he had the full support of private enterprise on this Bill. The forestry industry as a whole wanted an agreed policy and a continuation of policy, despite changes of Government. Why have this Government moved away from any such policy?
  There was an interesting article in the Chartered Surveyor of 9 April 1980 by what I would call a silvicultural ignoramus, who knew nothing whatever about forestry policy or the need for continuity in forestry policy. His main criticism was that the State owned a large amount of forest land, and that that should not be so. He did not put forward any argument showing why that should not be so. He simply made an ideological assessment.
  By adopting this policy, the Government are destroying all chances of a long term agreement. That is a disaster from the national point of view. At the same time, the planting programme is at its lowest for 30 years, which will not encourage more planting. Some of the other actions that have been taken as a result of ideology are also extraordinary.
  The Forestry Commission has two functions. It is a research body, and a body that helps private forestry as a whole. It is also a nationalised industry, and its main activities are the planting and harvesting of timber. When the Government made cuts last year, they treated the Forestry Commission as a Civil Service Department, not

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  as a nationalised industry, and the commission therefore had to cut back on its staff. With increased reaping of timber and harvesting of the crop, more people are required as the years go by. Those people will have to be taken away from planting, maintenance and so on if the number of civil servants is to be kept the same. If any other nationalised industry needs additional labour, it is allowed to increase its staff for that purpose.
  Another peculiar thing has happened. The Forestry Commission was given the job of planting the motorways, but in order to cut back on the number of Government employees that job was taken away from it and put out to private contracts at a greater cost. That is a stupid ideological policy that is being carried through in order to reduce the number of civil servants.
  My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) asked how land would be sold. We do not wish land to be sold to foreign owners, whether they are oil companies or other companies in the timber industry. We do not wish large parts of our forests to be owned by companies in Norway and Sweden. We should like to know how the land will be sold, and to whom. We all agree that minor pieces of land can be disposed of without difficulty. The National Trust recently bought up certain land in North Yorkshire—hilly, rocky country that is pleasant for climbing and walking. Rightly, the Forestry Commission did not want it, and, in any case, it did not intend to plant it. The National Trust will arrange for easy access to the land.
  That sort of sale is perfectly justifiable. But what will happen to the proceeds from the sale of land and standing timber? That should be made clear. From what has been said so far, it seems that most of the money would go to the Treasury and would cut down the grants that are made to the Forestry Commission.
  I agree that there is a wide area for investment in forestry by private enterprise. My right hon. Friend the Member for Huyton (Sir H. Wilson) pointed out in his report on the City the interest that is now being shown in forestry by the pension funds. I cannot think of anything better, and it should be encouraged rather than discouraged. Expansion of private forestry should be part of a national plan in conjunction with action by the State sector.
  What will happen about sales? Will the Forestry Commission have to give permission for sales in every case? It has been asked whether it would be necessary, and whether it would be an obligation on the Forestry Commission when a sale is made to stipulate that the land remains under timber. If it is not, we shall not be building up the large forestry reserves that we shall need early in the next century.
  For example, Thetford Chase was planted mainly on sandy soil, but the barley barons may decide to buy it, cut down the timber, put fertiliser over it and in a good year they may get a catch crop of barley. On the other hand, a foreign group might wish to buy the whole forest as an economic unit. What will happen to old Crown lands such as the New Forest and the Forest of Dean? It would be a scandal if they were sold in any part. Not only are they used for timber producton, but they offer leisure amenities.
  What about Sherwood Forest that was planted with large trees under the Forestry Commission and is enjoyed by all the people of the Midlands industrial towns who go there for recreation? Cannock Chase is in the same
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  position. Much of the woodland in England is amenity land for the benefit of our industrial population. Hainault Forest, which is no longer just inside the boundaries of my constituency, is used widely as an amenity by people in my area. A few years ago the Greater London Council wanted to turn it into a caravan site for foreign tourists coming to London. There was an enormous outcry at the time, and it was stopped. That shows that forests are important from the point of view not only of timber products but of people enjoying them.
  The North Wales forests—for example, Bettws-y-coed—are widely used and enjoyed by Lancashire people who spend their Sundays and holidays in that part of the country. We must consider all these amenity forests. For example, are the forest parks in Scotland to be sold off? It is important that every amenity forest being enjoyed by the public should be very carefully watched. We should not allow sales if such amenity forests are widely used by the public.
  Some private owners like the Duke of Buccleuch encourage people to use their forests. Indeed, they have created pathways through them. But, on the whole, most private forestry is fairly new and has not yet been developed for amenity purposes. We hope that it will be, but there is no encouragement for it in the Bill. If we want to maintain the amenities created by the Forestry Commission, careful watch must be kept on any proposed sales.
  The Bill, by preventing any agreement between the parties—an agreement which has operated for some time—is a disaster for forestry. When we have another Labour Government, there will be another reversal of policy on this issue I stick to the point that I made earlier: the right thing in the long term is to have an agreement between the main parties that the policy shall operate irrespective of any change in Government. If the policy outlined in the Bill is pursued, there is bound to be a change when another Labour Government take office. We shall have nationalisation of land that has been sold. It is not good to have breaks in policy. It will revive party strife in an area on which there has been a consensus of policy in the past.
  I strongly oppose the Bill and shall vote against it.
  5.43 pm
  Mr. W. Benyon: Although the Bill deals entirely with the public sector, I propose to say something on the private side. Therefore, I declare my interest as an owner of commercial woodland.
  There is nothing more barren and depressing in politics than jobbing backwards. "If only" are the two words that can be written on the tombstones of most politicians. That may seem a curious introduction to this modest measure of only four clauses, but the question that I ask myself and my right hon. and hon. Friends is: will the Bill, in conjunction with the measures to assist private forestry which we shall be debating later this year, produce more trees in sufficient numbers to make a major impact on imports of timber and timber products? That is the crunch.
  I ask two subsidiary questions to that one. First, what degree of import substitution do the Government envisage on their projected planting programme of 30,000 hectares a year? Secondly, if the private sector does not fulfil its part in this bargain, will further funds he made available to the Forestry Commission to make up the balance?

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  I was most interested to hear the speech of my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser). As he rightly said, his father was one of the founding fathers of the Forestry Commission, which was set up to overcome the ravages of the First World War. Such were the ravages and decimation of our forests that the politicians of that day, who were no different from politicians today, were forced to come to terms with the dereliction of our forestry resources. They were so galvanised that they set up the Forestry Commission. But, even then, certain reservations were made—not least by my right hon. Friend's father. If those reservations had been heeded we probably would not have been having this debate today, because a far more ambitious programme was postulated by certain people at that time. What is more, at intervals since then, voices of a similar nature have been raised. Knowledgeable people have said that we must increase the planting programme if we are to have a real effect in future.
  We now stand at a moment of supreme opportunity. This country has had a stroke of luck. The resources of the North Sea have produced an asset of tremendous wealth. Indeed, it is the envy of most other nations, but that resource is finite. During the 25 years or so that we shall have that resource we must plan for future generations so that they have something when the oil and gas run out. The Government, to their credit, have already attempted to do this in respect of energy. They have looked far into the future and said "We must take certain decisions not in the short term, but in the medium and longer term".
  Industrial regeneration is on everybody's lips. This afternoon we witnessed further enormous sums being proposed for a British industry. Industrial subsidies and money being paid under the regional policy, the various Employment Acts, and so on, amount to a very large sum. Agriculture, too, has rightly had its share. Yet, when it comes to forestry, we seem not to care to the extent that we care about the other matters that I have just mentioned.
  About 9 per cent. of our timber requirements are produced from our national forests. We are told that if nothing else happens that figure will rise to about 15 per cent. when they reach full maturity. Our import bill, as has been said this afternoon, amounts to £3,000 million. If one accepts the forecasts in the Reading report, as I do, that figure is likely to soar despite the increase in the proportion taken by home supplies. The reason is that consumption is outstripping production and replacement throughout the world. These estimates and others have not been contested by knowledgeable people. They have been sniped at generally by people saying that the tropical and subtropical belts will be the panacea for the future, but those areas are some of the most disturbed and difficult parts of the world and are likely to remain that way for the foreseeable future. We are unlikely to get the stability necessary for a long-term forestry policy in those areas.
  In passing, I pay tribute to the Reading report, not only because of its comprehensiveness and clarity, but because it has no axe to grind. It is produced not by foresters, landowners or timber merchants, but by well-informed people with substantial research resources at their disposal. It is increasingly respected as a work of considerable importance in forestry.
  The resources at present going into forestry are derisory, even taking account of the point about taxation
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  made by the right hon. Member for Glasgow, Craigton (Mr. Millan). The resources going into forestry are minute compared with those going into energy, industry or, indeed, agriculture. The grant-in-aid in the last financial year was £43 million. I think that about £8 million went into the forest authority role of the Forestry Commission, of which only £2 million went in grants to the private sector. Even very modest additions to that would have a tremendous impact in future years.
  My hon. Friend mentioned the possibility that the forestry estate might be bought by some faceless fund or something of that nature because it was such a good investment. The fact is that a small investment now will yield the most tremendous dividends at the turn of the century and beyond.
  That brings me to clauses 1 and 2, which deal with the power to sell part of the forestry estate of the commission. I agree with those who have spoken. If that power were vested solely with the Forestry Commission and its recommendations were to be approved by the various Secretaries of State, I should have no objection. It would simply place the Forestry Commission in the same position as any other private concern in the business. It is a change that clearly needs to be made in the present law.
  As has been pointed out, however, this is a general enabling power for the three Secretaries of State. Perhaps I might interject a question here. Is it not time that we had one Minister, in these very small islands, responsible for the forestry industry? The present system involves a diversion of effort which confuses many people and causes difficulty. I do not like general enabling powers, no matter which Government are in power. I object to the principle. I hope that the suggestion of my right hon. Friend the Member for Stafford and Stone will be followed by the Government. I believe that this power must be restricted when the Bill goes into Committee.
  The real point at issue is what happens to the proceeds of the sales. That is why I intervened in my right hon. Friend's opening remarks to that question. If I understood him correctly, he said that the proceeds go into the Consolidated Fund. That seems a little more definite than the reply that he gave to the hon. Member for Berwick and East Lothian (Mr. Home Robertson) on 10 December, but again this must be spelt out in greater detail. Frankly, unless I have misunderstood the arrangements completely, I cannot see that there is any incentive for the Forestry Commission itself to sell. By and large, it would be selling mature plantations when it still has the expense of planting and maintaining immature plantations. The Forestry Commission appears to get nothing back from this. It seems to be simply a power to prevent its spending any more because, as I understand it, this would be set against its grant-in-aid for future years.
  This aspect must therefore be spelt out in greater detail. If it is to work, there must be some kind of incentive for the Forestry Commission to sell. Otherwise, our worst fears will be realised—that it is simply a power in the hands of the Secretary of State to enforce sales.
  We must consider this matter in relation to the changes to be made in the dedication scheme when we debate the consultative document later this year. The hon. Member for Dagenham (Mr. Parker) referred to a forest, which happened to have certain recreational facilities in it, being sold and leased back. He asked how those facilities would be safeguarded. Far more important, how does one ensure that that land remains under forestry after the sale? As the

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  hon. Gentleman rightly said, as the dedication scheme will disappear there will be no reason why a forest should not be cut down and ploughed up.
  I am prepared for the Forestry Commission to sell parts of its estate, provided that it can play its part in a continuing programme of expansion alongside the private sector. Frankly—and I say this direct to my right hon. and hon. Friends—I do not believe that the private sector can do this on its own.
  The solution that we have had up to now has been a peculiarly British one. So far as I know, it does not occur anywhere else in the world. It is a peculiarly British combination of public and private interests and investment in one industry, and it has worked well. It always seems to me to be a good adage that if something works well one should not change it, and one reaches for one's revolver if people produce reasons for doing so that cannot be substantiated in good enough terms.
  One of the difficulties of this industry is that so few people know anything about it. For example, oak being felled in this country today was planted at around the time of the Franco-Prussian war. Conifers in full maturity were planted when Ramsay MacDonald was Prime Minister. It shows a pretty good sense of confidence that they were planted at that time. Very few people understand how much must go into producing a commercial tree.
  Perhaps I might digress for a moment. A firm approached me the other day with what I thought was a very good idea for bringing the knowledge of trees to the notice of more people. I have put it to the chairman of the Forestry Commission. The idea was that instead of getting a little toy or gift after buying six packets of corn flakes, or whatever, one would get a tree. One would not receive it personally. The Forestry Commission would plant it in a particular forest, to be known as a public forest. One's name would be on a board, and one could go there and see one's tree growing over the years. I know that there are difficulties and that it might be impossible to carry out, but I thought that it was an excellent idea. I liked it because it would bring the facts home to more people and give them an interest in what is a very long-term affair.
  It has been said that great forests are like people. Their birthplace must be carefully prepared, and it is very expensive. When they are young, they are defenceless and have to be cosseted. They do not begin to earn their living until a relatively late age. They become infirm—known as "going back" in forestry parlance—and eventually they die. Throughout that long period, they are in jeopardy.
  The only caveat that I enter to the idea that pension funds and other organisations should invest in this longterm operation is that they should be aware that many things can happen. The forest may burn down. It may blow down. It may become diseased. Many things can happen to it. Forestry is therefore a difficult operation.
  Those who criticise tax concessions for forestry—and I was glad that my right hon. Friend pressed the right hon. Member for Glasgow, Craigton on this—should realise that nobody in his right mind would make an investment, the proceeds of which could not be reaped for 50 to 100 years, unless there were certain advantages in so doing and which involved some protection against natural and manmade hazards that might be encountered during those 50 years or more.
  The real trouble is that there are no votes in forestry. Relatively few people are employed in the industry, although there could be many more if we expanded the
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  national forest, and the results are not quickly apparent. Therefore, in a sense, the industry is a sitting duck for the fainthearted, for the politically expedient and for the vested interest. I have always thought that it is very difficult for politicians to be canonised, but if my right hon. Friend wishes to be known by future generations as "the blessed George", he should take his colleagues—and his civil servants and particularly the Treasury—by the scruff of the neck and insist that there should be greater investment in this industry and that more resources should be put into it. By doing that he will do more for future generations and for the happiness of this country than many of his freer-spending colleagues do at the moment. Most important of all, he will break the cycle of missed opportunities that have so bedevilled the industry over the past 60 years.
  6 pm
  Mr. Donald Stewart: The hon. Member for Buckingham (Mr. Benyon) put his finger on the matter which should concern us all in the debate when he asked whether the Bill will expand forests and reduce imports. I think that we may safely guess that it will not have that effect. I agree that reafforestation should be expanded and that the forestry programme should have continuity. However, at this stage, I shall confine my remarks to the Bill.
  I know that the Secretary of State for Scotland is not afraid to go over the top, but on this occasion he was at great pains to avoid any flak. He tiptoed along the trench below the parapet in an attempt to outflank the Opposition, trying to make it appear that no aggression was intended. But we all know that this Bill is another example of the Government's intention to reduce public expenditure and to restructure State enterprises.
  The Bill may well be a watershed in the management of forestry, since the commission is being asked to raise its own funds through the sale of land which it controls. At one stage, the Secretary of State seemed to suggest that the sale of land was a matter for the commission to decide. But the wording of the Bill is clear. The sale of land is entirely in the power of the Minister. The Bill says:
  "The Minister may dispose for any purpose".
  He is not required even to consult the Forestry Commission at that stage. It is interesting that the two Conservative Members who have spoken so far expressed grave reservations about the Bill's intention.
  The Bill makes no reference to the amount of land that can be sold, nor to the limitation. The Government should have learnt by now—the Labour Party is equally guilty—that the uncontrolled sale of land can lead to chaos. The best example of this is the farcical set-up at Portavadie, in the South of Scotland. My party is entirely opposed to this type of mismanagement of land—our greatest asset—and the Bill does nothing to allay the fears that Scottish land can be sold off like bars of soap at a church guild sale of work.
  It is naive to assume that individual or institutionalised holdings of forestry land will in any way guarantee suitable management and benefit' the community. No doubt the Government believe that there will be no shortage of likely investors, such as pension funds, because of the reasonable track record of similar institutions looking after agricultural holdings. But forestry is a different matter. It requires more in the way of back-up facilities such as communications, schools, and so on. That is particularly

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  true in Scotland, which holds most of Britain's forestry. In addition, there is the possibility—a likelihood—that private owners may restrict access to the woodlands. One particular asset that the Forestry Commission has brought to Scotland, and elsewhere, has been the availability of forest tracks for outdoor pursuits such as walking and orienteering.
  The Government believe that the Bill will attract additional investment from companies and individuals. But it is morally wrong to sell land in which so much public money has been invested. Theoretically, the Government believe that the channelling of resources to the Treasury is a method of guaranteeing the public interest. We all agree that when forests mature the Government should benefit from those funds, but not at this stage.
  However, there are two reservations here. First, the arrival of the funds in the Treasury does not guarantee reinvestment in the industry from the public purse. That is a matter that should be written into the Bill in Committee. It is logical to expand afforestation at a time when the import bill for timber is running at about £3,000 million per annum, but that major investment cannot be left to the whims of individuals and institutions.
  Secondly, forestry costs a great deal in terms of initial capital investment. As the enterprises develop, they become increasingly self-financing. According to the Whitley Council, 70 per cent. of the commission's expenditure was met by grants. That has now declined to 50 per cent. and will continue to decline until, by the end of the century, the nation's forests will be earning cash for the taxpayer. Thus, if the Bill goes through the taxpayer will be denied the fruit of his investment. The Bill is not so much cashing in an insurance policy as denying that the insurance policy ever existed.
  On the economic front, there is no guarantee that the investments envisaged by the Government will be attracted by this legislation. More attractive investments in forestry are offered by other countries. According to an article in The Scotsman, on 16 January:
  "If forestry is left to the private investors they will turn to America where comparable planting land prices are sometimes as much as six times lower, and where the sunbelt states can offer softwood plantations for pulping on 30–35 year rotations."
  The Government should not assume that there will be a similar wave of patriotic fervour among private investors.
  The Bill proposes—it is almost its only worthwhile proposal—that there should be an extra commissioner. I suggest that that commissioner should come from Scotland, given that Scotland has at least 50 per cent. of Britain's forestry industry.
  On the employment side, much concern has been expressed that jobs may be lost. A further loss of jobs in Scotland is something that we do not need. The unions fear that a wholesale redistribution of ownership of lands will not extend the amount of afforestation, or that land sold will even remain as woodlands. That is a real fear. In those circumstances, the unions are very doubtful about the employment prospects.
  Private owners already have substantial concessions on capital transfer tax and other taxes. Any benefits that the Government might expect from the sale to private owners will be diminished by increased amounts to be paid out in
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  those areas. In saying that, I do not criticise those taxes. I merely point out that the benefits will not accrue even to the Treasury to the extent that has been suggested.
  The other point concerns the valid issue raised by the right hon. Member for Stafford and Stone (Sir H. Fraser), who asked whether there would be any limitation of persons to whom the land could be sold by the Forestry Commission. Could it be sold to foreigners as has happened in the North of Scotland where it occurred and where the Government showed a total disregard for the ownership of land?
  It is generally agreed that the Forestry Commission, while not beyond criticism in some respects, has done a good job. If the Bill is enacted, the Forestry Commission's role will be diminished. The Bill is against the public interest. In my opinion, it should be abandoned.
  6.8 pm
  Mr. Peter Mills: I agree wholeheartedly with my hon. Friend the Member for Buckingham (Mr. Benyon) that the Bill concerns a matter of immense importance—an importance that will increase—and for that reason we must give the subject serious consideration.
  I welcome the Bill, but only just. I cannot say that I welcome it wholeheartedly because, having considered the matter, and having listened to the views of other people, particularly in the South-West, the area I come from, my welcome has become a little cool. The Minister will have to listen carefully to all that is said today and change some of the Bill's proposals in Committee in order to allay the fears that some of us have.
  I understand the Government's intention, but it would be dangerous if the proposals were carried too far. That could happen. Therefore, I am a little hesitant. I support the Government in trying to save taxpayers' money. It is easy to say that, and then have reservations, but forestry is a particularly difficult issue because everything in forestry takes years to mature. Damage can be done if there is the slightest loss of confidence.
  I pay tribute to the Forestry Commission. We in the South-West approve of most of what it has done. It has provided employment in some of the most remote and difficult areas, some of which I have the privilege to represent. The advice that it gives to private forest interests is of immense importance.
  Another important factor is that the Forestry Commission has helped in the maintenance of our countryside. Some of the very poor, wet land in the South-West has been planted by the Forestry Commission, when no one else has wanted it. That has been of immense benefit to the area and to the beauty of the countryside.
  There have, however, been problems with the commission. It is said that agriculture and forestry go together. So they do in many instances in terms of windbreaks, shelters, and so on. But when 45,000 to 50,000 acres of land disappear each year under roads and concrete it is necessary to make a careful judgment about whether the further planting of forestry is more beneficial to the nation than turning the marginal land over to food production. We must not overlook the clash in some areas between forestry and food.
  For all that, however, I pay tribute to the commission. The only row that I have had with it in the 16 years that I have been privileged to be a Member of Parliament has been about forestry houses. I was never happy that it sold

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  off its houses in remote areas. There was no question but that the communities in some of the remote parts of my constituency would have died without those houses. I believe that the commission has now made some adjustments in that respect.
  I have some doubts about whether the Government's action will create confidence in the whole of the forestry industry. Some years ago, as a junior agriculture Minister, I was responsible for forestry. I remember that the Treasury, which one might say is the enemy of many people, conducted an inquiry into the subject. The Ministry was able to squash it firmly, but even so it produced much uncertainty and caused much loss of confidence. I ask my hon. Friend to make clear in Committee and afterwards that there will be no loss of confidence because both sides of the industry will be assured that the Government mean to continue their support for forestry, with all that that means.
  I draw the attention of my hon. Friend to the brief that was sent to the Treasury by the Economic Forestry Group. The four points that it makes are all aimed at maintaining confidence in the industry. The Forestry Commission and the private sector have worked well in partnership. I want that to continue because the future of forests in this country depends on that and on the creation of confidence.
  I have received letters from the South-West expressing disquiet about these proposals. The region has small forests and woods, and if they were to be sold to any great extent the commission would be rendered unviable in the region. That would be disastrous, because I do not envisage many private investors buying some of the poor wet land in places like Halwell and Beaworthy in my constituency. I hope that my hon. Friend will take on board the expression of disquiet. It would be most unwise to sell land in some of these areas. Of course, the position is different where there is a large block with adjustment between private and State forestry, and where viable forests would be left after a sale.
  The Bill clearly gives freedom to dispose of assets that are managed by the Forestry Commission. That freedom should be given but I urge the Minister to exercise caution, care and selectivity about what is done. I do not like the term "any purpose" as it appears in the Bill. Do we want to sell the forests for "any purpose", which might mean that they were not planted again? The land might be put to all sorts of other uses. That is not what we want. I hope that my hon. Friend can clarify his intentions and spell out further safeguards.
  The Bill does not apply to Northern Ireland. I take this opportunity again to declare an interest in respect of a former position that I held, when I was the Minister at the Northern Ireland Office. If hon. Members on both sides want to see how to run forestry, I urge them to go to Northern Ireland, where there is properly integrated forestry system embracing farming, fishing and recreation, with participation by private interests and the State, the latter in the form of the Northern Ireland Ministry of Agriculture. We have much to learn from Northern Ireland about forestry and the amenities that go with it.
  The Bill says nothing about further planting. I referred earlier to the slight clash between agriculture and forestry in terms of the need for increased food production, but I do not doubt that much land exists that is unsuitable for producing food. Irrespective of how much money is poured into it by way of drainage, lime and fertiliser, it
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  will not become a viable proposition. I therefore hope that planting will continue in certain areas. I do not want the Forestry Commission to be denied that opportunity.
  It is important that some of the proceeds from the sale of assets should be put back into further planting in these areas. Such planting is of great importance to areas such as mine and to Scotland and Wales because of the work it provides for those who service the forestry industry—the haulage companies, the garages, the people with the heavy implements. The general life of a sparsely populated area is enhanced by the activities of the Forestry Commission and the private forestry interests, and it is important that planting should continue in those areas.
  I always try to read the briefs that are sent to me, and to prove that I shall make one or two points from one of them. The Country Landowners Association has sent us a small, useful and balanced brief. It feels strongly that the problem of taxation needs careful examination, particularly in respect of the deferment of CTT and the lack of CTT relief for let land. No doubt the Minister has read this brief and will take note of these taxation difficulties which, if not resolved, will deter the private sector from purchasing the land. I do not think that the Minister mentioned that in his opening speech.
  Lastly, there is marketing. I am not an expert in marketing timber, but if one considers the amount of timber that will come from our forests in the next 20 to 25 years, one cannot think that we are well prepared for that. Fortunately, in the South-West we have a chipboard factory in the constituency of my hon. Friend the Member for Devon, North (Mr. Speller) at South Molton. Without that we should be in serious difficulty. The supply of pit props has come to an end, and stakes and fencing are not in great demand. The provision of timber fencing for motorways is also coming to an end. I am fearful of the future of timber marketing, whether from private of State forests. If we add to my fears the closure of the pulp factory in Scotland, the situation becomes difficult.
  Much more must be done in that area. It is likely that a great deal of money will have to be spent, whether by grant-in-aid or by subsidy, to set up some system. The Government will have to look carefully at the costs of energy. Otherwise we shall have to continue to export our timber and pulp and buy it back again. The whole subject needs to be looked at carefully, I fear for the future of marketing and whether we can process or otherwise deal with the enormous amount of timber to come out of our forests. It would be a shame if other nations rather than ourselves were to benefit from our resources. I hope that the Minister and other hon. Members will turn their attention to that in Committee. It is an important matter.
  I have been rather long winded.
  Hon. Members: No.
  Mr. Cormack: Carry on.
  Mr. Mills: It is heartening to hear my hon. Friend say "Carry on". It is rare that one hears that when speaking in the House. I repeat, though I know that my hon. Friend the Minister is not deaf, that I welcome the Bill, but only just.
  6.22 pm
  Mr. Geraint Howells: I have thoroughly enjoyed listening to good speeches and a constructive approach by hon. Members on both sides. I hope that the

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  Government will take heed of what has been said. Many of us are worried about the future and the contribution that the Forestry Commission will make. We are looking for a means to safeguard the interests of the Forestry Commission.
  The history of forestry in this country has been one of steady, indeed rapid, progress, built on firm foundations. In the post-war years it has demonstrated how an industry can be transformed and improved by the application of technological advances turning the rural craft of pre-war years into a highly organised, efficient organisation. I am sure that we all agree that the Forestry Commission has been very efficient in past years.
  Industrialisation came comparatively late to forestry. It developed quickly and has inevitably placed a great strain on the professional and technical managers in keeping abreast of developments. Nevertheless, we have seen the average planting rate of the industry increase to three times the rate of the inter-war years and timber production has more than doubled.
  At the same time, the industry has steadily reduced its payroll and the call on grant in aid has been reduced from 79 per cent. to 47 per cent. by increased financing from receipts. I wonder what the Government's target is for the next two or three years.
  Mr. Marcus Kimball: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Member for Sheffield, Brightside (Miss Maynard) to read a newspaper in the Chamber?
  Mr. Deputy Speaker (Mr. Richard Crawshaw): I saw the hon. Lady, but I assumed that her actions were connected with the debate.
  Mr. Cormack: The newspaper is made out of trees!
  Mr. Howells: In 1950, 13,200 people were employed by the Forestry Commission, compared with 8,200 in 1980. The forest area has increased from 200,000 hectares in 1950 to 960,000 today. Thus in Great Britain the management of plantations is almost five times the level it was in 1950. The harvesting programme is also almost five times the 1950 level. That has been achieved with a fall in employee numbers of almost 40 per cent. The figures show steadily increasing efficiency in almost every Forestry Commission operation.
  The Government have expressed their commitment to the continuing expansion of Great Britain's forest area. They have given a vote of confidence to the industry at a time of severe recession. However, in their desire to see more planting by the private sector they are causing unease to the Forestry Commission, whose share is bound to fall in future. Private involvement can be stimulated by grant aid, tax and other fiscal concessions, but it is wrong to develop and support private investment in forestry with substantial grant aid from public funds and, largely, to the exclusion of the public sector. I welcome a certain amount of private investment, but it should stand on its own feet.
  The main provision of the Bill is to widen the commission's powers of disposal. It is intended to use those powers to sell a proportion of forestry land and holdings and to reduce the call on public funds for running the forest enterprise. We were told by the Secretary of State for Scotland that one-third of the land already in
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  Forestry Commission ownership would be sold to private enterprise, but he did not say which third or when the land will be sold. Will the Forestry Commission be forced to sell that land next year, the year after or within the next decade? Perhaps the Under-Secretary will tell us when he winds up.
  While it is right to welcome the opportunity to dispose of small, awkward or separated pieces of forestry estate which are difficult to manage—we all accept the need to sell small parcels of land, whether in Scotland, England or Wales—I am alarmed at the possibility that large blocks of forest, or whole commercial forests, may be sold under this policy. If the Government set a target that the grant in aid—the call on public funds—should be eliminated, it might force the Forestry Commission into large outright sales of forest areas which have been built up with difficulty, but with great care, over 60 years, and are now almost fully self-sufficient.
  Perhaps the Forestry Commission might even find it necessary to sell the plantable reserves that have been acquired with great difficulty and after full consultation with agriculture Departments, planning authorities, the National Parks Commission and so on. Certainly, wood-using industries are concerned that the commission should not be reduced or dismembered, because they are fully aware that continuity of supplies can be guaranteed only by a body such as the commission. Private woodland owners are affected in their management by their tax positions and continuity of supply is a secondary consideration to them.
  There is a need to reduce public expenditure wherever possible, but the commission is a trading body and there is every prospect of its breaking even fairly quickly as the immediate post-war plantations increasingly come into production. It would be criminal to sell such areas for doctrinaire reasons. I have lived in an area where trees were planted between 1929 and 1940. I remember my father telling me "When you cut trees, remember that they take 50 years to grow but you can cut them down in five minutes. So be careful when passing judgment, even on a tree".
  Another worry has been expressed by landowners, represented by the CLA. If large areas were sold, they would soak up investment money and would very likely depress land values too far and reduce the value of private estates. In addition, the commission is anxious that if it is forced to sell in order to raise cash it will have to sell on a depressed market, especially in the next few years.
  We are in a unique position compared with the rest of Europe, because we have a rapidly-increasing timber yield. However, we have seen our pulp and chipboard industries damaged during the past 12 months by an overvalued pound, which allows foreign pulp and board to flood the country, and by excessively high energy charges that our competitors in Europe do not have to suffer. However, I am hopeful that eventually new wood-using industries will be re-established in this country. They will need the raw material that can be provided here by the Forestry Commission.
  The private sector would not be able to match the State enterprise in that regard, because of the multiplicity of ownership and conflicting management policies. It therefore follows that it is essential to keep the State forest service in its present form, subject, of course, to adjustments for sensible estate management, in order to provide a springboard for new wood-using industries.

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  I share the view of others in the House and outside that there is an element of compulsion in the Bill and that the commission will be forced to sell assets in order to survive. In the long term, it is wrong to pursue such a policy. Therefore, my right hon. and hon. Friends will vote against the Second Reading.
  6.33 pm
  Mr. Patrick Cormack: My feelings about the Bill are somewhat mixed, but we can unite in saying that we are delighted that, at long last, we have a forestry debate. I have been an hon. Member for nearly 11 years, and this is the first time in my recollection that we have had a full day's debate on forestry, though another subject has done rather better.
  I echo the words of my hon. Friend the Member for Devon, West (Mr. Mills) who said that he welcomed the Bill, but only just. I am tempted to say that it is another case of a Government having been long in labour, but producing a hit of a mouse, though it is perhaps slightly more sinister than most mice. I am always suspicious of the Treasury—I fear the Treasury, even when it brings gifts—and the Bills smacks more of a Treasury Bill than a forestry Bill.
  As my hon. Friends have said, we must ensure that in Committee we make it plain that the Bill is about forestry. I have no doctrinal hang-up about the commission's being allowed to sell parts of its assets, but it is essential that the Bill is transformed into a measure that is unalterably for the good of forestry.
  We are dealing with the future of our only replaceable raw material. In many ways timber is one of the most versatile of our raw materials, but the sums that we devote to it are, as was brilliantly illustrated by my hon. Friend the Member for Buckingham (Mr. Benyon), derisory in the context of the national budget.
  We have had the Reading report, to which I add my tribute, and there was an erudite debate in another place last year when speaker after speaker indicated the importance of forestry to our future. I am saddened that the message does not seem to have got home, either in the content of the Bill or even in the consultative document, on which I hope that we shall have another full day debate before long.
  Most hon. Members will have received a document from Timber Growers Great Britain Limited which states:
  "Although the United Kingdom can never be fully self-sufficient, it must at least be prudent both economically and strategically to ensure a large increase in our stocks of growing timber. As a natural renewable resource of rising value and world importance, which also provides shelter and employment, it is a desirable national asset."
  Not only is it a desirable national asset, but it is a crucial national asset, and in a dangerous world the word "strategically" cannot be stressed too strongly. So much of our imported timber comes from vunerable or dangerous parts of the world, and that is a matter that we should not lightly dismiss.
  Referring to the Reading report, the timber growers' document states that while forecasting future shortages and high timber values, it
  "also examines several possible expansion programmes for the United Kingdom and propounds doubling the present woodland area over the next 50 years to a total of 16 per cent. of our land area. We believe that an expansion of this sort is entirely practicable and can be achieved without reducing total agricultural production while at the same time meeting any reasonable requirements for conservation and sporting interests."
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  Doubtless we shall have from my hon. Friend the Member for Gainsborough (Mr. Kimball) a robust questioning of those assumptions later in the debate. The House will listen with care to my hon. Friend, because he is an undoubted authority. In spite of the fact that I do not challenge my hon. Friend's knowledge and experience, my vote goes to the timber growers.
  The Father of the House the hon. Member for Dagenham (Mr. Parker) was right to point out that for forestry to survive there must be confidence and stability, and therefore in this industry, perhaps more than any other, we need a bipartisan approach. I do not think that Governments of either party over the past several decades have anything of which to be proud.
  Mr. Canavan: This sounds like the Gang of Three.
  Mr. Cormack: The hon. Gentleman is a Gang of One, and a somewhat vociferous gang. If he cared to listen to the debate and to take part in it, we might listen with more care to what he says.
  I think that I am speaking for hon. Members in many parts of the House when I say that I hope that the Bill can be so altered in Committee and shown to be a Bill so truly in the interests of forestry that the bipartisan approach is not disturbed. It is essential for Conservative Members to recognise the importance of the Forestry Commission as it is for Opposition Members to recognise the importance of tax and fiscal incentives. I am glad to see the hon. Member for Durham (Mr. Hughes) nodding so vigorously.
  I should like to emphasise the point made by the Secretary of State when he intervened in the speech of the right hon. Member for Glasgow, Craigton (Mr. Millan) and said that the present Chairman of the PAC, when Chief Secretary to the Treasury, was adamant that these concessions should not be abolished or significantly altered because without them there would be no private forestry. As has already been made clear in the debate—my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) gave a particurlarly vigorous and robust performance—the question arises: who is going to invest in a crop that does not come to maturity for 50 or 60 years unless there are proper incentives?
  Mr. Mark Hughes: Will the hon. Gentleman accept that very few Labour Members do other than recognise that this partnership between private and public forestry has been one of the great successes of a mixed economy? To destroy that for no good reason is an appalling proposal.
  Mr. Cormack: I associate myself entirely with the first part of the hon. Gentleman's remarks. This is a splendid example of a mixed economy at work. I do not believe—and so far as it lies within me I shall make sure it is not the case—that the Bill is necessarily an attack on the mixed economy. I do not believe that my right hon. and hon. Friends intend it as such. It is important that in Committee we make it plain that it is not such an attack.
  I should like to quote briefly from the trade union argument. The Forestry Commission Whitley Council paper says:
  "We support wholeheartedly the Government's firm commitment to the continued expansion of forestry and applaud their intention to maintain the long-standing, successful and harmonious partnership between the public and private sectors.".
  The council recognises that partnership, although it goes on to make critical comments about the Bill. I should like to try to defend the Bill to some degree. To defend it, the House needs to have certain questions answered.

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  I start from the premise that there is nothing sacrosanct about Forestry Commision land. I have no objection to certain sales taking place. It is important, however, that the land in those sales should be carefully and freely chosen. I should hate to think of vast areas of Cannock Chase on the borders of my constituency being sold off. Where land is sold, it should be in outlying areas. It is important that the Forestry Commission should be able to keep and to deploy the proceeds from those sales for the good of foresty.
  I would also argue that where land is sold it should not necessarily be sold to the highest bidder. A number of hon. Members have expressed apprehension about land being sold to foreign buyers. There is a limit to what can be done in placing restrictions on the sale of land, particularly to countries within the EEC, but one thing that can be done, and which can be stated specifically in an amendment to the Bill, is that the land need not necessarily be sold to the highest bidder. I shall give two examples where it would possibly be disadvantageous for that to happen. Much Forestry Commission land, including some in my constituency within a mile of my house, was acquired as a result of a compulsory purchase order from an owner who did not necessarily wish to sell it. If that land is to be sold, I believe that the previous owner should have the first chance of buying that land.
  I also believe that if land that is being sold is adjacent to a major private forest, the owner of that major private forest should be given an opportunity to acquire the land. Whether this is done by an amendment to the Bill, by directive, by circular or by advice, it is not necessarily for hon. Members to discuss in detail here and now. It would be against natural justice and the interests of forestry, agriculture, good husbandry and everything else if it were possible for land to be sold merely to the highest bidder without any regard to the way in which the land was first acquired by the commission.
  Mr. Mark Hughes: We are at risk, I recognise, of going into Committee points. I trust that the hon. Gentleman and I will be members of the Committee. Another problem is small parcels of land of 10 or 20 acres. Will the hon. Gentleman accept the need for the sale of such land to be restricted to the adjacent occupier?
  Mr. Cormack: In broad general terms I agree with the hon. Gentleman. We have to be careful precisely how the land is chosen and sold, and to whom it is sold.
  I should like to refer to a letter that I received from a former hon. Member, which makes that point. He says:
  "The private side of forestry, as much as the State side, needs a viable Forestry Commission. Some sale of woods which are uneconomic to manage, usually owing to the location, would be better disposed of, but the streamlining of the Commission should end at that point. The sale of critical elements of their estate would destroy the morale and the financial viability of the Commission."
  That point should be carefully borne in mind. We can debate ratios of 50:50 or 60:40, but we must not distort the ratio unduly. That is why I have been a little concerned about the lack of precision in ministerial statements on the Bill. I hope that my hon. Friend will be able to allay some of our fears and doubts and clarify the position when he winds uo the debate. We have had no indication of precisely what the Forestry Commission will be required to do. On the one hand it is said that the commission has
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  total autonomy and freedom, but, on the other, that it must sell something. I want to know where the balance is. What guidance, if any, will be given to the commission? What requirements will be made? What sort of land have the forestry Ministers in mind?
  I should like to emphasise a point that has already been made from the Conservative Benches. I should like to see one Minister responsible for forestry. It is unsatisfactory that there should be the present division. That is not said in any critical spirit of the Ministers concerned. I am glad to see the Under-Secretary of State for Scotland here, because he contributed a valuable Conservative Party policy paper on forestry before being elevated to his present position. I hope that he abides by the spirit of what he himself wrote two years ago.
  Mr. David Myles: In wanting one Minister, is my hon. Friend saying that forestry should be considered in isolation? I have strong feelings on that matter.
  Mr. Cormack: I am not sure about the words "in isolation", but I shall wait to be convinced by the persuasive arguments of my hon. Friend, who will doubtless have an opportunity, if he catches your eye, Mr. Deputy Speaker, of enlightening and entertaining the House later in the debate.
  Two factors that the commission should be instructed to take accout of in any sale are the public benefit and amenity aspect of its woodlands. My hon. Friend the Member for Devon, West referred to this, but it cannot be emphasised too often. I pay tribute to what the Forestry Commission has done to heighten public awareness of the countryside and to give people opportunities to enjoy it. I enter one caveat. I do not think that the Forestry Commission has always paid sufficient regard to wildlife; nor, until relatively recent years, has it been sensitive enough to the need to plant some of our native hardwoods around its vast plantations. To suggest that everything the Forestry Commission has done is perfect would be ridiculous. I believe that it should be instructed to take account of amenity and public benefit when it is disposing of woods.
  One comes back time and time again to the fact that what we are really debating is the future of a great national resource. We do not stand comparison in percentage terms with our neighbours on the Continent. When one goes to France and drives through miles and miles of beautiful woodland, one rather regrets that only 8 per cent. of our country is producing a resource of such enormous significance and importance.
  I had a letter from my predecessor as chairman of the Conservative Party's forestry committee, Sir Jasper More, who was well known and loved by many right hon. and hon. Members. He gave enormous delight to us by his speeches and knew more about forestry than most of us will ever learn. In his letter about the Bill and the general approach at the moment, he says:
  "I was shattered by the complacent tone about the planting programme."
  He does not believe that we have stressed the need for planting as much as we might have done.
  There is real and genuine disappointment among those who have contributed much to forestry and know a great deal about it that the Government have shied off any definite commitment to an expansionist target. I should like us to have a clearly defined target. I should like my

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  hon. Friend the Parliamentary Secretary to take us into his confidence and indicate clearly what the Government have in mind.
  The Bill is really no better than a Green Paper. A Green Paper can have many advantages, but it should not be presented to the House as legislation.
  Mr. Mark Hughes: It is a terrible Bill.
  Mr. Cormack: In my view, it is a Bill that is capable of infinite improvement, and I hope that together we shall have a chance to improve it, but the hon. Member for Durham need not think that, in seeking to improve it, I shall attack the basic strategy that land should be sold. I shall seek to point out that if this is to give a real impetus to forestry in the last part of the twentieth century, it has to give much greater encouragement than it does, and much greater protection than it does. It can only be part of a comprehensive policy on forestry, and we await those other parts with much interest. They must include even greater incentives to the private planter and owner so that they can be a real, expanding and fruitful partnership, for the good of us all.
  6.53 pm
  Mr. John Home Robertson: The House has just heard a helpful speech from the hon. Member for Staffordshire, South-West (Mr. Cormack), who obviously knows and cares a great deal about the forestry industry. It is interesting to note at this stage of the debate that, of all the eight right hon. and hon. Members who have spoken since the Secretary of State for Scotland sat down, not one on either side of the House has indicated wholehearted support for the Bill. The right hon. Member for Stafford and Stone (Sir H. Fraser) even went so far as to indicate that he might find it necessary to vote against the Second Reading. It is interesting that the Bill should have run into such difficulty at this early stage. If it receives a Second Reading, the Minister has been given fair notice of a rough passage in Committee.
  I have a certain constituency interest in forestry. There are 12,000 hectares of forestry land in the counties of Berwickshire and East Lothian, of which 10,000 are in the private sector and only 2,000 are owned by the Forestry Commission. What is interesting is that, besides that 12,000 hectares which are growing trees at present, there are about 30,000 hectares of rough grazing, much of which could and perhaps should be planted with trees in due course.
  A number of right hon. and hon. Members on both sides of the House have referred to the history of the Forestry Commission and have stressed the fact that we have had more than 60 years of a bipartisan approach to forestry which right hon. and hon. Members on both sides of the House agree has worked well for all concerned.
  Mr. Robert Hughes: I hope that my hon. Friend will not lay too much stress on the bipartisan approach. There may have been general agreement that the Forestry Commission should exist, but the practice of successive Tory Governments of giving money to the landlords contrasts greatly with their enthusiasm, or lack of it, for the Forestry Commission.
  Mr. Home Robertson: I do not want to make party political points in the debate. If we are to get anywhere on this issue, we need to prolong and develop the bipartisan approach and to encourage those Government supporters
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  who have indicated their opposition to some of the principles to be enshrined in the Bill to put their votes where their mouths are for a change.
  The Forestry Commission has co-operated well with its neighbours throughout the period that it has been operating. It has co-operated relatively well with agriculture, which has not always been easy for it because they are conflicting industries. The commission has co-operated well with private forestry interests, which must also have been difficult from time to time. As we know, the commission has achieved spectacular increases in tree planting and in the production of timber in the 60 years that it has been operating.
  As a number of right hon. and hon. Members have said, the commission is an extremely efficient organisation in terms of labour, capital and everything else. It is hard to find anyone who will criticise the principle under which the commission operates. In my opinion, it is one of the best possible examples of a State enterprise operating entirely beneficially within a mixed economy. I find it surprising and a little disappointing that any Government should be seeking to make life more difficult for a State enterprise which is operating as well as this, and I hope that it is not just pure spite that is motivating them to do so. We know that the Government do not like State enterprise. We hope that they are not setting out deliberately to make this State enterprise inefficient so that they will be able to decry it as they have decried other State enterprises.
  The question which has to be asked again and again of the Minister is why the Government want to set a time bomb ticking in the heart of State forestry in the form of clause 1 of the Bill. The Secretary of State has to accept that that is what the clause amounts to, in effect. It ends long-term planning in what has to be seen to be an extremely long-term industry, as the Secretary of State himself described it Under the terms of the Bill, it appears that literally no piece of the Forestry Commission's forests or plantable land will be safe from hiving off under this Government or under future Secretaries of State.
  It has been suggested that the provision will affect only small detached parcels of Forestry Commission woods which are difficult to manage. If that was all that we were discussing, I should not necessarily quarrel with the Minister, because I have a number of these small parcels of woodland dotted about my constituency which obviously are very difficult for the commission to manage. One which always strikes me as particularly anomalous is a few acres of woodland right beside Muirfield golf course. Whenever the commission decides to extract the timber from that piece of woodland, it will have to drag it across one of the fairways of the golf course. I hate to think of the repercussions that that could have.
  There are indications already that the Government are thinking of taking this hiving off exercise a great deal further than the small, irrational pieces of land to which I have referred. Some of my hon. Friends were present at a meeting with trade union representatives last week, and we have heard reports that already offers are being made to a Conservative in the South of England for parcels of planted land in excess of 1,000 acres. This may be an indication of what is to come.
  On 10 December, when the Secretary of State for Scotland made his original announcement, he tried to

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  assure the House that the Forestry Commission would have control over what it should sell and when it should sell it. However, clause 1 is perfectly clear. It says:
  "The Minister may dispose for any purpose of land acquired by him under this section."
  That is unequivocal and makes it clear that the Minister can do just that. He can direct the Forestry Commission to sell off as much land as he likes, wherever he may like or require.
  In today's debate, we discovered that the proceeds of those sales will not go into the budget of the Forestry Commission. They will not be available for buying or planting land, but will go back into the maw of the Treasury, into the Consolidated Fund. If that is not straightforward asset-stripping in an efficient public enterprise, I do not know what is.
  Some of my hon. Friends came with me to the Forestry Commission's headquarters in Edinburgh on 6 January, where we met the chairman of the Forestry Commission and other officials and representatives of the trade unions. We tried to find out from them a little more about the detailed effects of the Government's proposals. However, we did not get much information from them on that occasion. It is abundantly clear that there has been little consultation by the Government with either some of the officials of the Forestry Commission or trade unions whose members' jobs may be affected by the Bill.
  At one stage in our discussions, the chairman, Sir David Montgomery, admitted that sales could bite into the hard core of the forestry enterprise. He went on to say that he did not think that that was likely. However, under the terms of clause 1, it would be possible under the directions of a Minister.
  When some of us suggested that the Bill gave excessive power and discretion to Ministers, the chairman of the commission said that the Bill could always be amended. It can, and I hope that it will be amended in the coming weeks. However, now is the time to amend it rather than waiting for any anomalies or evils to emerge from the powers which the Minister is seeking under the Bill as drafted.
  The statement which the Secretary of State for Scotland made last month in the House said a certain amount about policy. He said:
  "We see a greater place for participation by the private sector in new planting, but the Forestry Commission will also continue to have a programme of new planting, in particular where it will contribute to the rational management of its existing plantations, and also on the more remote and less fertile areas, where afforestation will help maintain rural employment."—[Official Report, 10 December 1980; Vol. 995, c. 1405.]
  The Forestry Commission will be expected to carry on buying and planting difficult pieces of land, but why on earth is the private sector not buying up and planting land to the extent the Government want? That would be easy for it to do so. A good deal of land is on the market because hill farming is having a bad time. I have no doubt that a number of hill farmers would be happy to sell some of their land to the Forestry Commission or to private foresters, but, as far as I am aware, the private sector is not making any massive purchases. As a result of the Government's cash limits, the Forestry Commission has had to stop its buying programme. Thus, there is no one to compete with
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  the private sector foresters at the moment. However, there is not much sign of massive private buying and planting at this stage.
  With all the private capital that the Government seem to think is swimming around looking for forestry investments, why are not the owners of that capital coming to places such as the Lammermuirs in my constituency and buying up some of that 30,000 hectares? It is there for the taking if they want to buy it, but they are not doing so. Instead, the Government propose that they should get the opportunity to buy ready-made forests which have been grown at public expense.
  I believe that the Government are forcing the Forestry Commission to sell off blocks of good land—either planted land or land ready for planting—probably at a low price because much of that land will be put on the market at once and prices could be depressed. They intend to sell off the land to private investors. At the same time, the Forestry Commission will be required to go into the market and buy the more awkward pieces of land—in the hills, in the sourer land or wetter land—which will be more expensive to develop and plant in order to keep up the planting programme which the Government have set. That is a shuffling exercise between the private and public sectors. No new forestry land will be acquired as a result. The Government are doing no favours to the industry or to long-term timber production.
  Mr. John Mackie, a former Member of the House and a former chairman of the Forestry Commission wrote to The Times on 18 December. In particular, he made the point which I have just made, that if private investors want to buy into forestry they are free to do so now, without the need to cannibalise the Forestry Commission.
  My hon. Friend the Member for West Lothian (Mr. Dalyell) sent a copy of that letter to the Minister of State, Scottish Office, Lord Mansfield, who sent my hon. Friend an interesting reply:
  "Mr. Mackie suggests that if there is private money to invest it should go into new enterprises. We certainly expect private investment in new planting to increase, but it is evident that some potential investors have a preference for existing plantations."
  That is what it is all about. It appears that the Bill is being drafted in order to suit those private investors who prefer to buy bigger plantations, rather than for any long-term benefit to the forestry industry.
  The Minister of State went on:
  "I have no doubt that some of the sales will involve small peripheral areas such as those Mr. Mackie mentions, but I cannot discount the possibility that some larger areas will also be involved".
  Therefore, it is clear that the Government are thinking in terms of selling off large slabs of Forestry Commission woodland or planting land. Nothing is safe under the Bill.
  To add to our concern, we have heard rumours during the past week—I sincerely hope that the Minister will be able to refute those rumours—that the additional forestry commissioner, who is provided for in clause 3, could be a merchant banker, whose brief would be to flog off the woods to his friends in the City or elsewhere. That may not be idle speculation, because the Forestry Commission has no expertise in marketing land, so perhaps that is what the Minister has in mind. He may comment on that when he replies.
  The Bill is a cynical and unjustifiable ploy to suit the interests of private speculators at the expense of a respected, well-tried and efficient public enterprise. The whole exercise is being dressed up as an effort to reduce

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  the Forestry Commission's grant-in-aid, However, it is important to emphasise that the Forestry Commission's grant-in-aid will be phased out over the next 25 years anyway, as production builds up as a result of large-scale planting over recent years. However, as ever, the Government are content to sacrifice long-term national interests if their proposal will bring about a short-term reduction in the PSBR. It appears that that is what the Government are now suggesting.
  We have already seen that short-sighted policy in action in the wood pulp industry, to which a number of hon. Members have already referred. The Government have allowed the pulp mills in Corpach and Ellesmere Port to go under. As my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said, there is now the ludicrous prospect of a new export trade in timber for pulping being sent to Scandinavia—about 200,000 tons a year. That will be processed abroad and much of it will be reimported. That is the kind of short-sighted management which does not inspire much confidence among anyone who is concerned about the future or forestry of any other industry.
  Speeches by hon. Members on both sides have shown that the Bill is potentially bad for forestry. If it is bad for forestry, it is bad for jobs in rural areas. It is bad for timber production, because there is no guarantee that private buyers of planting land will plant as soon as they buy. It could take a long time for that land to come into production. It is bad for the timber supply, because there is nothing to compel private owners of woodlands to market timber in a regular fashion. It will come on to the market in dribs and drabs, when the prices are highest. That could make further difficulties for the building industry and other timber users.
  I was unhappy about the Bill when I first saw it. Careful analysis of it has shown that it has practically nothing to recommend it. It is right that we should oppose it, and I hope that others will carry their reservatons as far as the Lobby. If by any misfortune it should reach the statute book unamended, a number of us will have to start applying our minds to the question of what will be done by the next Labour Government about recovering land which is likely to be flogged off at any price by this Government.
  7.11 pm
  Mr. Marcus Kimball: Unlike the hon. Member for Berwick and East Lothian (Mr. Home Robertson), I welcome the Bill wholeheartedly. Like my hon. Friend the Member for Buckingham (Mr. Benyon), I should declare an interest in attempting to have a small commercial woodlands operation. The only trouble is that any mature timber that I have seems to be unsaleable because of transport difficulties, any that is growing well seems to be killed off by the pine beauty moth, and the balance seems to be destroyed by the red deer and the bad weather. Thus, I am an unsuccessful forester.
  The reason that we have a three-line Whip tonight—the "love-in" between the Labour Party and the Forestry Commission—is due to the fact that the Opposition have regarded it over the years as a back-door way of nationalising the land and getting their foot in the countryside. That is one reason why I welcome the Bill, because I want the Forestry Commission to withdraw from vast areas of the countryside.
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  I congratulate the Secretary of State for Scotland and the other two Ministers concerned because at long last I believe that true Conservative principles are coming through. Like my right hon. Friend the Secretary of State for Transport, they are beginning to realise that the only way to curb an organisation such as the Forestry Commission is to change its ownership. It is no good taxing Government Departments with cash limits. They always cheat. The only way to stop it spending too much money is to change its character by changing its ownership.
  In that vein, I want to examine two areas. First, I want to look at the sale of Forestry Commission land in the shire counties—by which I mean the real shire counties. Lincolnshire, Leicestershire and Northamptonshire—
  Mr. Peter Mills: Oh.
  Mr. Kimball: I mean the proper shire counties, as designated by Surtees and not the provinces—the shire counties of the East Midlands and East Anglia, the low rainfall areas and the heavy clays. Then I want to examine the problem of the sale of land in the upland areas of England, Scotland and Wales.
  These are two distinct problems. I am very conscious that my constituency, in the North-East, is overshadowed by Pelham's Pillar, erected by the Yarborough family to commemorate the planting of the millionth tree. In North-East Lincolnshire, we have on the Brocklesby estate probably one of the finest examples of private forestry in this country.
  The interesting thing about that private forestry is that the first, second and third thinnings are all consumed on the estate. They are not involved in any Government pulp mills or processing plants. They are all turned into fencing and other materials on the estate, and the final stands of timber are sold at public auction to the local timber merchants, mostly for the furniture trade. That is the kind of forestry enterprise for which there will always be a place.
  There are also three State forests in my constituency—one on the banks of the Trent at Laughton, one at South Willingham, both on blow-away sand, which even in the middle of Lincolnshire is not much good for any other form of production, and a rather exceptional Forestry Commission enterprise in the very south of my constituency, near Bardney near Southrey, perpetuating the regeneration of lime forest.
  I should like to look in particular at the blow-away sand forests and the way in which they were obtained by the Forestry Commission. I discovered that most of that land which the commission has is on 996-year leases, at half a crown an acre. How were those leases entered into? They were entered into by people, as my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) said, after the 1914–18 war, when our forests had been decimated, and after the last war, when the then Socialist Government put terrific pressure on landowners to snake land available for forestry. One was told that it was one's patriotic duty to see that the State had some land.
  With the powers of compulsory purchase which the Forestry Commission then had—and which it will still have after this Bill is enacted—people thought that it was probably easier to make a deal with the commission than to refuse to have anything to do with it. Thus, the forestry acreage went up with a bang because people's patriotism was touched.

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  I should like to ask the Minister for an undertaking that, where forestry land was made available under those leases, at least those estates will have the chance to buy out the leases at whatever is the correct market value, plus the value of the timber growing there. First refusal should be given to the original estates that owned those lands, so that it can come back into the normal estates scheme—bearing in mind the tremendous pressures that are put on landowners, particularly when Labour Governments are in power, to make land available for forestry.
  When I deal with the upland areas, I shall remind the House of the terrific pressure by the Highlands and Islands Development Board to make land available for forestry; it too has compulsory purchase powers for this purpose.
  My hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) pressed the Government on the subject of the sale of land. I am pressing the Government on the question of these patriotic leases. Can it be made absolutely clear that when the Forestry Commission decides to sell land, as in the case of Crichel Down, that land will be offered first at its economic value to the original owners?
  Hon. Members have paid a great deal of attention to the subject of hardwoods and the part that they play in amenity. Certainly, in Lincolnshire, the record of the Forestry Commission on amenity and hardwoods has been a total disaster. Only a Government Department which had planted a fairly large acreage of spruce and oak on bad clay, where they will not grow, would decide that the spruce was being killed by the undergrowth growing up and by the hawthorn and decide to spray all its plantations with scrub killer, thus killing the oak which was the amenity crop in the first place. That is what we get from a Government Department. That was in the area of Pickworth wood, in the south of the county.
  I do not find the Forestry Commission a very good neighbour either in the South or in the North of Scotland. I do not see why it should place restrictions on access to its forests which no normal landowner would place on the normal activities of the countryside. I do not see why, when it comes to deer control, the Forestry Commission in East Anglia should inflict on people who are interested in doing it a germanic form of stalking—namely, from a high seat—and insist that that should be the only way of shooting the deer in those forests. That policy was such a disaster that the commission had to rescind it after a short time.
  I have dealt with the activities of the Forestry Commission in so far as they affect East Anglia. I do not believe that there is a case for having a forestry programme in the counties of Lincolnshire, Leicestershire, Northamptonshire or Norfolk. That land is far better used for agriculture and there is a place to a certain degree for some amenity forestry planting.
  I turn now to the second part of the problem—the activities of the Forestry Commission in the upland areas. When my right hon. Friend made his statement, the hon. Member for Caithness and Sutherland (Mr. Maclennan), to whom I gave notice that I would raise this matter, quite unjustifiably accused me of obstructing the Forestry Commission in Scotland and the upland areas. I have had a letter from Mr. Mackie, whom the hon. Member for Berwick and East Lothian quoted. He wrote to me early in 1978, saying that he was very pleased to hear of the
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  negotiations in process with me for some more land for afforestation and thanked me most sincerely for my co-operation. Perhaps the hon. Member for Caithness and Sutherland is not here today because he is not sure where he should be sitting in the Chamber.
  I do not believe that in this day and age there is any case whatsoever for mass planting of the uplands in England, Scotland and Wales. I do not believe that that is what most people who want to enjoy those parts of the country want to see. They do not want to see a vast expansion of the Forestry Commission in the wilderness areas.
  What worries me is that much of the land that the Forestry Commission has in reserve is in the wilderness areas, but with luck the problem will solve itself. Transport costs are making it uneconomic to grow trees in the upland and distant areas. I am glad that the pulp mill at Fort William has closed down. It did not make sense. Wiggins Teape's annual report on the pulp mill at Fort William stated that the trouble with the mill was that the price having to be paid for the raw material was too high. It was never admitted that the wrong kind of mill had been installed. On the other hand, the Forestry Commission's annual report stated that the one way to makemore money was to get more money out of the pulp mill. I do not want to see the Government doing anything to create a bogus market for forestry in this country.
  It is marvellous that we are exporting our first thinnings from Scotland to Norway. That is the right way to do it and not to spend taxpayers' money on subsidising an industrial enterprise that is not economic.
  Mr. Geraint Howells: What are the hon. Gentleman's views on all the other mill closures?
  Mr. Kimball: The problem is the same as the one in the Liverpool area. The enterprises must stand on their own feet. I do not want more upland and uneconomic areas of Britain planted merely to subsidise an uneconomic end product.
  The hon. Member for Berwick and East Lothian said that in the present state of hill farming he was sorry that the Forestry Commission was no longer a buyer of land. We have a dangerous situation in the upland areas. How do people pay off their overdrafts on a hill farm? They persuade the Forestry Commission to buy a small acreage.
  Mr. Home Robertson: The Forestry Commission is not buying.
  Mr. Kimball: I know. It has been stopped. That is a good thing. A lot of harm is being done by the extension of forestry in the upland areas. If people cannot afford to keep their hill farms going, they should sell them as a good asset and not destroy that asset by putting a large number of trees on it. If people decide that they want to continue to live in those areas, we must examine the problems under the Wildlife and Countryside Bill, and pay them to leave the land alone instead of using the taxpayers' money for the Forestry Commission to destroy it.
  I wish to deal with the argument that the Forestry Commission creates employment in rural areas, creates amenities, helps with wildlife and supports the rates. I can only speak from my experience concerning employment in rural areas. I have always said that I would make land available to the Forestry Commission if it would give an undertaking to help with the local school and would put people in houses in the village communities.

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  In about 1975 there was a Green Paper on forestry in Scotland. It was decided to withdraw the workers from the really rural areas, move them to nearby towns and transport them out to the forests. We have not had co-operation from the Forestry Commission in maintaining the rural communities. It has been its deliberate policy to work the other way. Perhaps my experience is exceptional, but I have a feeling that it shows the general policy of the Forestry Commission.
  I also find that the Forestry Commission is extremely belligerent and bullying in its attitude about making muir-burn. Why does Argyllshire have no grouse left? Why is Argyllshire now such a miserable county? The reason is that people have not been able to burn the uplands properly because of the Forestry Commission. Let us face it, muir-burn is not very well done in Scotland today. There is a certain lack of supervision. People are inclined to light fires in the evening and let them go, although that does less harm than not burning the hill at all. The Forestry Commission is extremely bullying to employees and crofters over making muir-burn. It is up to the Forestry Commission to protect its own plantations; to run a bulldozer round the outside and keep up its firebreaks properly on the outside. In my experience, it certainly does not do that.
  I wonder whether the House realises the harm that the planting of our uplands can do—and the hon. Member for West Stirlingshire (Mr. Canavan) will agree with this—particularly to fishing. What provides the rateable value in Scotland? Good fishing provides much more money in Scotland than many other activities. People go to Scotland to enjoy good fishing.
  The first harm that the Forestry Commission does in planting uplands is to remove the sponge. We want good boggy areas to hold the water so that it is there in June in the dry periods to keep up the flow of the rivers. I can give one example of where, as a result of one-third of the watershed going under trees, a spate that would normally last 21 days is gone in 17 because the run-off has increased. Better drainage gets the water down to the sea. What is the effect of that? The run-off is horrid—sour, peaty, dirty, with a lot of filth suspended in it as a result of ploughing the uplands in order to plant trees. It has a disastrous effect on our rivers.
  Worse still, once the trees start to grow, the position does not get any better. They canopy over all the burns and spawning streams and kill all the bacteria and bugs on which the young parr and fry live. I could show hon. Members one burn where 10 years ago in October one could see the cock fish cruising about on the reds waiting to go up the burn to spawn. We shall not see one-fifth of that fish population waiting to go up the burn now because it has become sterile through the canopy of trees.
  Latterly the Forestry Commission has repented. It now plants 30 yards back from the streams and plants alders. It is beginning to learn, thanks to the influence of Dr. Mills of Edinburgh university. [Interruption.] I do not mean my hon. Friend the Member for Devon, West (Mr. Mills); he is on the other side of the argument. He finds the Forestry Commission an advantage. I am sorry, but I find it a disadvantage.
  One reason why I welcome the Bill is that I see it as a withdrawal of a Government Department from the countryside. I asked one well-known farmer in my constituency yesterday what his reaction was. He said
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  "Well, what I always find about the Forestry Commission is that the men get the same pay as ours, but they appear to do less work." That is a pretty genuine criticism.
  7.30 pm
  Miss Joan Maynard: Apart from the speech of the hon. Member for Gainsborough (Mr. Kimball), which was the true blue voice of Toryism—certainly the hon. Gentleman supports fishing, if not forestry—I have come to the conclusion that there is not much support for the Bill on either side of the Chamber. A number of Conservative Members have sought assurances from the Government on crucial issues. However, it is not assurances from the Government Front Bench that will count. What is important is what appears in the Bill.
  The Bill is entitled "Forestry Bill", but it should be known as a Treasury Bill. It can be described only as a rip-off. It removes restrictions on the disposal of land acquired for forestry. It is an obvious piece of public asset stripping.
  Clause 1 is an open cheque to sell any part or parts of the Forestry Commission's property. There are those who are in favour of selling outlying areas, but the Bill is not restricted to such areas. It gives the right to sell any part or parts of the commission's property for any purpose. That right rests not with the commission, but with the Minister. There is no guarantee that the land that is sold will remain in forestry. Many hon. Members have rightly expressed concern that some of the land might be bought by multinationals or large corporations. I am sure that that concern is general.
  We have heard forestry referred to as a great national resource. I agree with that. We have heard our land described as one of our greatest assets. I agree with that, too. It is because I agree with that that I have always been in favour of the public ownership of land. I hope that the next Labour Government will be committed to the public ownership of land. I do not want to do it by any form of creeping paralysis, as the hon. Member for Gainsborough suggested the commission has tried to do over the years.
  The Bill is merely another example of one of the things that the Government are good at doing. They are not good at doing many things, but they are good at public asset stripping. The Bill is a naked and unashamed piece of public asset stripping. The trade unions involved in forestry, including my own union, the National Union of Agricultural and Allied Workers, are opposed to the Bill. As my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said, they were not consulted. There has been a shocking approach to the workers in forestry, who object to the Bill for a number of reasons.
  Their first objection is that the Bill is an example of public asset stripping. Secondly, they do not believe that it will make for the expansion of forestry. It will merely split and divide the existing cake differently. The profitable part has been made profitable by public investment. Workers' skills will be sold off to private enterprises or, more accurately, to multinaltionals and large corporations, which do not come into the category of private enterprise. They are supporters of anything but enterprise.
  The unions do not believe and I do not believe that the Bill will create any more jobs. We think that labour is likely to be shed in rural areas, rather than more labour taken on or the present jobs maintained. Jobs are already in short supply in rural areas.

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  This is an enabling Bill. It will enable the Government to sell what they like of Forestry Commission property. They will be able to use the money for anything that they wish. If there is any money available for investment, it should be used for new Foresty Commission enterprises and for new planting, rather than for buying commission property.
  I should like to see a real expansion of forestry. I have wanted to see that for as long as the commission has been in existence. Although the Government say that they are committed to an expansion of forestry, I am convinced that the Bill will not achieve that. For example, the rate of planting in private forestry is only half of that in the public sector. Why should we have any confidence that if our forests are sold to the private sector there will be expansion?
  The Bill is a major attack on State forestry. The attack is being made at the time when State forestry is coming to the profitable stage. Forestry is a long-term business. Until now both major parties have been committed to State forestry. We have only a small forestry industry and Britain is less wooded than many other countries. The present size of the industry is at least viable. If it is made any smaller it will cease to be viable, especially if all the profitable parts are sold off. If that happens the public sector will be left with scattered and uneconomic pieces of woodland to administer and work. They will inevitably be unviable. Private owners will employ less labour because they will be less concerned about environmental and recreational aspects, which the commission has developed carefully and successfully in recent years.
  It is inevitable that the multinationals or corporations that buy forests will not consider it important to provide access for walkers. They will not be interested in the recreation of others. They will be interested only in the profit that they can make from the enterprises that they have bought.
  Mr. Myles: The hon. lady is speaking of State forestry having to be economically viable. Does she not think that in a long-term industry there are greater things to consider than immediate economic viability—for example, the environment and the countryside generally?
  Miss Maynard: I agree with that. We do not have a large forestry industry. If we reduce its size, it will become economically unviable. I am not saying that economics are the most important factor. I am arguing that if the Government take away sections of the forests, especially the profitable sections, they will make what remains unviable.
  I suspect that the farmers and the Ministry of Agriculture, Fisheries and Food—I have always seen the two groups as synonymous—will support this obnoxious Bill. Farmers have often been anti-forestry, especially anti-State forestry. The Bill is a blow to workers in rural areas, as it will mean fewer jobs. It is a blow to ramblers and to all who seek their recreation in the countryside. This is being done by a Government who are bent on public asset stripping. It is a bad Bill for those who live in rural areas, and a very bad Bill for the country. I shall vote against it tonight. I hope that Conservative Members who have been expressing their reservations will support the Opposition when the Division takes place.
  7.38 pm
  Mr. Ian Lang: I hope that the hon. Member for Sheffield, Brightside (Miss Maynard) will forgive me if I do not follow her down the same blood-red avenues of Socialism. On the whole, the debate has been moderate and reasonable. It is crucial that in debating issues such as forestry we avoid the party political shuttlecock, which can be so damaging to an industry that is dependent on long-term stability. I say in his absence that the speech of the right hon. Member for Glasgow, Craigton (Mr. Millan) was somewhat intemperate in that respect. His indignation must have been rather artificial because when he began his speech there were only eight Opposition Members in the Chamber, and five of them were on the Opposition Front Bench.
  It is important to have an awareness of the time scale of forestry if we are to put the debate into perspective. Trees grow slowly and perhaps that is why we debate them so rarely.
  Mr. Canavan: Is the hon. Gentleman aware that there are only eight Conservative Members present?
  Mr. Lang: I am grateful to the hon. Gentleman for that information, but the hour is well advanced, and it is the Opposition who regard the Bill as controversial. We regard it as merely the most common of common sense.
  If you cut open a tree, Mr. Deputy Speaker, you will find that the rings are there in intervals of one year, but if you cut open the Official Report of debates on forestry you will find that the time scale is somewhat wider.
  Timber is a raw material of infinite variety, adaptability and aesthetic quality, a natural and renewable resource of immense durability. One need only look at the great hammer beam roof of Westminster Hall, next door to this Chamber, to see an example of timber that has gone on doing beautiful and useful service for six centuries. It is suggested, although the evidence is lacking, that when it was damaged by Nazi bombs in 1941 the oak used to replace it came from the same estates—and indeed might even been growing when the original trees with which it was built were felled. Against that background, the doctrinal and party political squabbles seem massively irrelevant in discussing forestry. What is needed more than anything is stability, continuity and confidence.
  We should assess the Bill in the light, first, of how it will help the forestry industry to thrive, prosper and expand, and, secondly, of whether it will increase the stability and confidence necessary for that expansion. On that basis, I welcome the Bill, though not entirely without caution.
  It is a short Bill. On the face of it, it does not do much, but there is much that it does not do or say that could happen as a result of it. Against the background of the remarks of my right hon. Friend the Secretary of State for Scotland, which removed some of my reservations, and subject to further clarification of some points, I believe that the Bill can and will create a new impetus for expansion, which is badly needed in the industry.
  A great tribute is due to the Forestry Commission, not only to the dedicated and far-sighted conservators and commissioners of the present day but to their predecessors, right back to the sixteenth Lord Lovat and his colleagues who set up the commission in 1919. In 60 years or so they have built up a substantial and varied portfolio of large forests and small woodlands. They have developed great

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  skills of management and have moved through the unfortunate blanket plantation era, which I once heard decribed as "Scandinavian gloom", to the more enlightened era of landscaping and the introduction of recreational and amenity facilities.
  It is in the nature of forestry that the problems of this century can be traced back to earlier centuries, when such words as "depletion policy" would have been incomprehensible. In 1512 the famous Royal ship "Great Michael" is said to have laid waste all the timber in the Kingdom of Fife, and indeed required Norwegian imports to finish it. During the Napoleonic wars up to 30 hectares were required for a 100-gun ship. Already at the beginning of the seventeenth century King James VI had found it necessary to introduce the coal-burning habit to the households of London, starved of logs. In the next 200 years the oaks in the six Royal forests of England were reduced from 2·3 million to a mere 500,000. So there is nothing new under the sun in forestry.
  The First World War triggered off the creation of the Forestry Commission and the great new development of forestry that has taken place in this century. The Second World War inevitably imposed a major setback, but in the 60 years of distinguished work by the commission well over 1 million hectares have been planted, and they are worth hundreds of millions of pounds.
  I believe that the commission is now the biggest landowner in the country. It is therefore so dominant as to be effectively a monopoly. However benevolent a monopoly it is, it must to some degree impose a stultifying effect on the future development of forestry. That, too, is why I believe that now is the time to be moving on.
  The distinguished work of the commission, and the healthy partnership that it has developed with private woodland owners, should not be jeopardised, and I believe will not be, by the change in balance between these two complementary sectors that the Bill will bring about. But when Mark Twain said, "Buy land—they ain't making it no more", he did not mean that one should go on buying it indefinitely, and his advice was to individuals, not to public bodies.
  Now that the commission has built up its expertise and its dominant role in British forestry, it is reasonable to say that it is fully capitalised and should be allowed to run itself, mobilising its assets and freed from dependence on annual grant in aid. Provided the sale of land is sensibly and gradually introduced, and the market is not swamped, and provided the Treasury is restrained in its demands for payments into the Consolidated Fund—both important provisos—I believe that the commission should enjoy a measure of self-governed stability from which to continue to grow and prosper, and continue to play an invaluable role in the forestry scene.
  Like my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser), my hon. Friend the Member for Buckingham (Mr. Benyon) and others, I would prefer to see a safeguard to stop the accumulation of too much land in too few hands—especially in foreign hands. In addition, I emphasise that forestry is about building capital, not cash flow. Therefore, it is important not to force the pace of disposals for the wrong reasons. I hope that at the end of the debate we shall, learn the target for revenue from disposals and when the Government hope that target will be achieved.
  I believe that the commission would be keen to sell many small areas of forestry land. It accumulated many
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  areas in small amounts in the 1950s, when planting was urgently needed and the owners of the land could not see a viable way of planting it themselves. Subsequently the commission gathered up other small plantations, sometimes by commutation of estate duty. I hope that in disposing of those small unwanted parcels of land the commission will give first refusal to the original owner or to his successor in title, because fragmentation of estates is dangerous and damaging. This might be an opportunity to enable some private owners to consolidate and increase the size of their estates to a more economically viable size.
  I hope that the large plantations run by the commission—I think that I have one of the largest in my constituency, in Glentrool forest—will not be the prime targets for sale. I should welcome reassurance on that tonight, because we should not embark on the wholesale break-up of large forests, which might jeopardise the maintenance of supplies on a large scale to incoming industries. I do not think that private forestry can compete with the commission in this area, although I accept that under lease-back arrangements it might be possible to achieve the necessary accommodation.
  Equally, I hope that the commission will still be allowed to add to its stock where an appropriate opportunity arises: where economies of scale would make sense; perhaps where poor farmland suddenly becomes available and it would enable the farmer to receive cash with which to improve the rest of his farm; where there are key areas that would improve the management of a large forest; or where it might increase the facilities for many other activities that a large managed unit can provide for.
  In my own constituency alone the commission's land is used for Army exercises, Duke of Edinburgh Award activities, pony trekking, orienteering and a host of other recreational and social facilities. I cite only one example—Raider's Road in Galloway, which is an imaginitave tourist attraction, introduced by the commission and widely welcomed in the area. All these things can be done, and increasingly are being done, by the commission. It is important that we acknowledge its role. I was grateful when my right hon. Friend the Secretary of State did so, displaying a proper concern that those facilities should not be lost in any disposal of land and forestry resources that might take place as a result of the Bill.
  As regards clause 2 and what will be done with the proceeds of the sale, it is important not to milk the forestry industry. If cash is to be taken out of forestry under the provisions of the Bill, it should be used rather as a stimulus to bring still greater investment back into the industry. There is concern is some quarters that what happens as a result of the Bill may be merely the recycling of existing money. It is important that we establish our anxiety to attract new money.
  I hope that the Treasury will stimulate the attraction of new money with tax incentives and other forms of help, and involve a wide variety of new investors, institutional or individual, perhaps including the pension schemes of some of the more prosperous trade unions. This is important partly to reassure the work force that it has secure jobs in an expanding industry.
  I should like to see funds being used also for training schemes to attract young people and provide opportunities for them in forestry. I should like funds to be used to develop the processing of timber and to assist the

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  establishment of new timber-related ventures. For example, a reassessment is being carried out of the possible uses of softwood, so much of which goes to pulp. It is increasingly thought that some of it may be seasonable and usable for structural purposes. The development of stress-grading techniques and standards in areas such as my constituency could lead to the establishment of more jobs in forestry-related industries.
  I should like to say a word about agriculture, because although Dumfries and Galloway is the most densely afforested region in the country, with forestry up from 4 per cent. of the land in 1947 to 21 per cent. now, compared with 9 per cent. in the rest of the United Kingdom and 12 per cent. in Scotland, farming is undoubtedly a sector of extreme importance there. My right hon. Friends have already shown their unwavering commitment to the survival of the hill farming industry. One need only cite the sheepmeat regime, the suckler cow premium scheme and the massive increases in the hill livestock compensatory allowances as three examples of help that has been given in this area.
  But the pressures from forestry remain, and integration is the key word here. The Scottish National Farmers Union and the Forestry Commission should be congratulated on their co-operation in working to reconcile the sometimes conflicting interests of farming and forestry. In passing, it is worth noting that in Germany 87 per cent. of private forest holdings are integrated with farming enterprises. That is the route along which we must go in this country, and this Bill will help us to do so.
  I am encouraged that the mutual suspicions are dwindling, helped perhaps by the 1976 report of the Centre for Agricultural Strategy, which said that if the present rate of planting continued to the end of the century the loss of agricultural production would be only 1½ to 2 per cent. Because of the pressures on farming, productivity is improving far faster than that. We have a highly efficient industry, probably the most efficient in Europe, and it will remain so and become more efficient.
  During the decade since 1969, despite rapidly expanding forestry, the sheep population in Dumfries and Galloway rose from 1,030,000 to 1,092,000. The time scales of sheep and timber production are so disparate as to defy realistic comparison, but there is a need for the Government to find attractive ways of helping farmers to become increasingly involved in forestry as a cash crop, perhaps in partnership with institutional investors. The maintenance of the schedule D/schedule B option may help in that respect. This is a fertile area for imaginative and constructive schemes, and I hope that more research will take place in the future.
  The forestry grants scheme that was announced last month by my right hon. Friend will also give encouragement to farmers—tenant farmers as well as owner-occupiers—to plant some trees and to renew existing plantations, which will provide shelter for their stock, fence posts for the farms, fire wood for the farmhouse and enhance the landscape.
  Mr. John Brewis, my distinguished predecessor in this House as the Member for Galloway, who is now chairman of Timber Growers Scotland Limited, recently drew attention to a study of possible forestry integration with farming that was carried out by Edinburgh university last year on 13 hill farms totalling about 43,000 acres. The
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  report found that after 26 per cent. of the land surface had been planted skilful management led to an increased stock-carrying capacity. The number of lambs weaned rose from 8,678 to 11,321, and livestock units, including cattle as well as sheep, rose by one third. Still more important, although farm jobs fell from 35 to 32, an extra 26 jobs were created in forestry.
  As the recovery of agricultural employment cannot offer enormous potential for jobs, the importance of the extra jobs to be generated by forestry holds out a great hope for rural employment which it would be folly beyond belief to ignore. I am sure that farming productivity will continue to improve, given a fair wind, and forestry, far from hindering agriculture, can enhance it. I hope that the Bill will provide a new opportunity in that sector.
  I offer a few observations in a wider context, because it is crucially important to underline the strategic importance of forestry to this country, and the need to encourage and expand it. The world's tropical forests are now being devastated at a net rate of 16 million hectares per annum. When we set that against our total forestry acreage of 1·7 million, we begin to see the massive scale of that devastation. At the same time, the populations of developing countries, whose demands for timber can only increase, are growing rapidly. Already, those developing countries account for two-thirds of the world's population, and it is expected that their population will rise by 60 per cent. by the end of the century. That can only lead to a large increase in real terms in timber prices, and to scarcity and shortages. Already Ghana, Malaysia, Indonesia and Thailand have banned the export of some unprocessed wood.
  The European Community is vulnerable, being only 40 per cent. self-sufficient, but the United Kingdom is more so. As several of my hon. Friends have pointed out, 90 per cent. of our timber needs are imported, at a cost of about £3,000 million a year. If France can have 25 per cent. of its land under trees compared with our 9 per cent., and seven times as much forestry per head of the population as the United Kingdom, there must be scope for a rapid and large expansion in this country. It is not without significance that France has twice as much privately owned forestry as is owned by the State and public bodies. I say that not in criticism of the Forestry Commission, which has done a marvellous job in many respects, and I hope that my remarks have confirmed my belief that it will still have a large role to fulfill in the future.
  It is time for a change. A new dynamic is needed. Although trees grow slowly, time is short. Subject to the minor qualifications that I have voiced, I welcome the Bill as part of that change and as introducing a new dynamism. I also welcome the aims behind the consultative paper on the administration of felling control and grant aid, and the statements made today and last month by my right hon. Friend. We urgently need to achieve the optimum use of all the land in this country, the best possible management of our woodlands, the most effective deployment of our existing resources, the attraction of new resources into forestry and the continuaton, against a background of stability and confidence, of a close partnership between the public and private sectors. I hope that this Bill will bring closer the achievement of those aims.
  7.57 pm
  Mr. Dennis Canavan: I share the concern of the hon. Member for Galloway (Mr. Lang) that

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  the Forestry Commission might sell off large tracts of forest land, such as Glentrool forest in his constituency, but he does not seem to realise that by voting in favour of the Bill he will give power to the Secretary of State for Scotland to do precisely that. If the Bill is eventually passed the hon. Gentleman will have no opportunity, because of the lack of parliamentary accountability, to challenge the decision of the Secretary of State to sell off these valuable forest lands.
  The Forestry Commission is one of the most successful examples of public ownership and public enterprise in this country. It has existed for over 60 years, yet now its success—and possibly its very existence—is threatened by the Bill, which stems more from Tory Party dogma than from the interests of forestry and rural life in general. The Forestry Commission was set up just after the First World War because of the extreme timber shortage that prevailed. Things have changed much since then, but, nevertheless, the role of the commission is still very important. Indeed, it is essential. Forestry in this country accounts for only 9 per cent. of the total area, compared with the Common Market average of 22 per cent.—we have one of the lowest areas of forestry in the Common Market—and the world figure of 29 per cent. We import over 90 per cent. of our timber requirements, amounting to about £3,000 million a year. That is a considerable contribution to the deficit side of our balance of payments. There are reliable estimates of a world timber shortage within the next half century, but we have the opportunity to minimise the effects of that world shortage if we do something about it now—and with the right policies it is possible to do something about it now. Unlike coal, gas and oil, wood is a renewable resource, and it will become increasingly important as a chemical and industrial feedstock.
  Conservative Members often criticise the public sector of the economy by making unfair comparisons with the private sector, with the intention of putting the public sector in a bad light. They would be hard put to do that with the Forestry Commission because, by almost every standard of measurement, every criterion, the commission surpasses the private sector.
  Both the public and private sectors have about the same area of productive woodland—over 800,000 hectares apiece. On new planting, last year the Forestry Commission's record was 15,800 hectares—almost twice the private sector total of 8,600 hectares.
  On restocking, in 1973 the private sector was slightly ahead of the Forestry Commission with 4,100 hectares compared with 3,800 hectares, but by 1980 the Forestry Commission had overtaken the private sector on restocking, because it had 5,700 hectares compared with 3,100 hectares in the private sector. There was an increase in restocking in the public sector in those seven years compared with a decrease in the private sector.
  Comparing wood production by volume of timber removed by thinning and felling, in 1973 the Forestry Commission had 1,560,000 cubic metres, compared with only 790,000 cubic metres in the private sector. In 1980 the corresponding figures were 2,060,000 cubic metres for the Forestry Commission, compared with only 860,000 cubic metres for the private sector. The Forestry Commission's wood production is therefore more than twice that in the private sector, yet there are fewer people doing all that work in the Forestry Commission. The commission employs only 8,043 people, compared with 11,007 in the private sector.
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  Part of the reason for the greater productivity and efficiency in the public sector is that the Forestry Commission sends more of its employees on forestry training council courses. The latest report points out that the Forestry Commission had 14,906 trainee course days, whereas the comparable figure for the private sector was only 4,868. So, by almost any criterion that we pick, the track record of the Forestry Commission compares very well with—in fact surpasses—that of the private sector.
  During the Christmas Recess a deputation from the Scottish Parliamentary Labour group met representatives of the Forestry Commission and of some of the trade unions involved. The latter expressed grave apprehension about the damaging effect that the Bill might have on employment prospects. It is naive for the Secretary of State for Scotland to say, as he did, that there would probably be very few, if any, redundancies and that any redundancies would be taken up by the private sector. Things are not as simple as that, and the Secretary of State knows that—or at least should know it.
  More than 33,000 people are now employed in forestry and wood processing and there are literally hundreds of thousands of jobs in other related industries. Examples of that are the chipboard industry, which has a factory at Cowie in my constituency, and the paper and board industry which faces grave difficulties, mainly because of the Government's policies. The Paper and Board Industry Federation has expressed great opposition to the Bill because it believes that significant hivings off of forest lands will eventually interfere with the continuity and reliability of timber supplies which are so essential.
  The only reason behind the Bill seems to be the Government's doctrine of wanting to cut public expenditure willy-nilly, without any thought for the consequences or whether that public expenditure is a good investment or otherwise. Even if we confine ourselves to this aspect of public expenditure, I doubt whether there will be any net saving in public expenditure terms.
  The 1979–80 financial statement of the Forestry Commission indicated a total expenditure of £93 million. That was an extraordinarily high year in terms of expenditure, but we must remember that it includes VAT payments to the Treasury and the payment of several million pounds in grants and services to the private sector. The total Government grant-in-aid to the Forestry Commission for that financial year was about £43 million. Therefore, even in that year—which does not appear to be the best year to pick—more than half of the Forestry Commission's income was self-generated.
  If the Forestry Commission sells large parts of the land, not only will it lose a valuable, asset, but the purchaser might be a private landlord or financial institution with no expertise in the development and improvement of forestry. Even if there were lease-back arrangements, the Forestry Commission would have to incur further expenditure to fulfill the terms of those arrangements because it would have to pay rent to the new owner of the land.
  Again, in terms of public expenditure, we must take account of the additional millions of pounds in tax concessions that would have to be doled out to private sector interests, and that would mean a loss of revenue to the Treasury.
  It also appears to me to be very unfair that the proceeds from any sales could, if the Minister so directed, go into

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  the Consolidated Fund—the Treasury—rather than into the forestry fund, which would help to encourage more capital investment in forestry.
  I should like now to mention the importance of access to the countryside. The Forestry Commission has a very good track record—it may not be impeccable, but it is very good—compared with most private landlords, not only in terms of access, but in the provision of recreation, sporting and educational facilities. For example, there are camping facilities, caravan sites, holiday homes and log cabins. There are nature trails which provide a great deal of pleasure and education for schoolchildren and others in the study of local flora and fauna and other aspects of life in the countryside. The Forestry Commission provides opportunities for sports, such as angling, walking, orienteering and pony trekking.
  In the United Kingdom there are seven forest parks. Five are in Scotland. The Queen Elizabeth forest park lies partly within my constituency. It stretches from Loch Lomond to the Trossachs. It is an area of outstanding scenic beauty. Indeed, it would be no exaggeration to say that it is one of the most outstanding areas of its kind in the world. Many people, not only from that area, but from elsewhere, who visit it, would consider it to be an act of ministerial vandalism, an absolute tragedy and a national scandal if that part of our national heritage were to be sold, possibly piecemeal, to some of the neighbouring landlords, especially when we consider who some of them are—the Duke of Montrose, Sir Hugh Fraser and, not very far away, the estate of the Younger family, whose eldest son and heir introduced the Bill as Secretary of State for Scotland. The only possible beneficiaries from the Bill would be big landowners, multinational companies, financial institutions and other big business interests.
  It has been obvious from the start that the Government are hell-bent on hiving off as many public assets as possible. In my view, that is why one of the first things that they did when they came to office was to get rid of the previous chairman of the Forestry Commission, John Mackie, whose knowledge of forestry was respected in many quarters, and replace him with David Montgomery, a Tory Party hack from local government. The reason is now clear. The Government wanted an obedient puppet to preside over this sordid exercise in public asset stripping to line the pockets of their rich friends. They did not even consider the serious, long-term damaging effects upon forestry, wood processing and allied industries and the jobs of the thousands of workers involved. That is what the Bill is all about, and that is why the House should not give it even a Second Reading.
  8.11 pm
  Mr. Alex Pollock: It is always a pleasure to follow the hon. Member for West Stirlingshire (Mr. Canavan), in a purely temporal rather than a doctrinal sense. I certainly do not intend to follow him into the woods as he goes to explore the flora. I prefer to direct my remarks to other aspects of the debate.
  The House is correct in seeking to conduct this Second Reading debate against the background of three other factors: the present state of the nation's forestry assets, and its likely requirements for timber by the end of the century, together with the Government's statement on forestry at the end of last year in response to those two matters.
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  It is a well known fact, as has already been pointed out in the debate, that more than 90 per cent. of Britain's timber requirements are met by imports at a cost of nearly £3 billion per year. That staggering figure must also be seen against the background of a substantial fall in new plantings by both the Forestry Commission and private woodlands throughout the 1970s. Indeed, private woodlands had been reduced from some 20,000 hectares in 1972 to a mere 6,600 hectares in 1978.
  The United Kingdom's likely timber requirements by the end of the century are equally startling. The world as a whole will face a timber shortage by the year 2025. By that time, United Kingdom consumption is forecast to increase by 90 per cent. Fortunately, we have a climate which allows rapid timber growth, and with only 9 per cent. of land afforested there is considerable scope for expansion. Indeed it is estimated that with investment in an expansion programme we could supply up to 26 per cent. of our requirements by 2025 and rather more thereafter.
  The Government's response in their December statement was essentially twofold: first, a strong commitment to the long-term expansion of forestry, and, secondly, greater involvement by the private sector in achieving that expansion, together with no major change in fiscal policy. Again, if I understand the thrust of the Government's statement correctly, the clear implication at that time was that the long term expansion target was unlikely to be met without a significant injection of funds from the private sector. While the case for expansion has not been seriously challenged by the Opposition today, the greater involvement of the private sector is quite another matter—not least, I think, because the Government themselves acknowledged in that statement;
  "The main basis of policy for the future must remain the successful and harmonious partnership between the private sector and the Forestry Commission."—[Official Report, 10 December 1980; Vol. 995, c. 1405.]
  Yet it is now proposed to change the balance in that partnership.
  In those circumstances, it would seem incumbent upon the Government to persuade the House of the need for change and to allay the fears of those who, in no spirit of partisanship, feel considerable disquiet and unease about the scope of the powers being sought in the Bill. I should certainly be failing in my duty to the House and to my constituents if I did not say that I share a number of those feelings of unease and disquiet. I trust that the Minister will help to allay those fears when he replies for the Government tonight. I shall touch upon one or two of the fears. They have been mentioned in other speeches, but I wish to emphasise the seriousness with which they are felt by Members on the Conservative Benches.
  First, if the Government expect to rely upon private funds for the expansion programme and for some reason those funds are not forthcoming, are the Government still prepared to provide the necessary funding, out of the central Exchequer if necessary? In other words, is the commitment to forestry as strong in monetary terms as in the statement last December?
  On the other hand, if a large number of sales take place, how satisfied are the Government that they can impose relevant conditions upon the purchasers in order to ensure that progress is made towards the planting targets for the next century that have already been emphasised as a precondition for the country's very economic survival at

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  that time? Is there not at least a danger that institutions or multinational organisations will invest not so much for the sake of forestry, but rather to play the market in such a way as to suit their own financial advantage at any given time?
  My right hon. Friend the Secretary of State confirmed in his opening remarks that one-third of the plantable reserves could be offered for sale. If that is to be the case, is there not a real risk of new owners postponing viability dates? Further, I understand that there has been a trend in recent times to increase the sales of thinnings in middle plantings. That, again, may well not accord with the national targets that we seek to achieve by the end of the century. What is the fail-safe plan in the Government's mind to ensure that the targets will be maintained?
  Further, is there not a risk that in reducing the amount of public holdings there will be a denial to the public purse of what ultimately would be a very high return, in other words, selling plantations at a time when the greatest net discounted revenue will not yet have been reached? Can the Government give an assurance that the selling price will take account of the potential loss of profit to the nation?
  Lastly, in connection with the question of purchase by institutions and possibly multinationals, what safeguards do the Government propose for rural communities which are dependent on forestry for their employment? This matter has been mentioned by hon. Members on both sides. Can the new owners be relied upon to maintain staff on their payroll? If a commitment to forestry is not the prime motive of the new owners, might they try to cut corners en route to their profit and leave highly committed foresters abandoned in their wake? If that is a risk, it is not a prospect that I welcome.
  One idea floated earlier was that consideration should be given to the appointment of a Minister for forestry and forestry alone. I make another suggestion; the idea has grown in my mind with the development of the Government's actions since they came to power. There is an increasingly strong case for having a Minister for rural areas—not a Minister of Agriculture, not a Minister of forestry, but someone who has the task of monitoring the overall impact of those various parts of Government policy as they impinge on rural communities and their capacity to survive. I simply plant that thought in the Government's mind in passing.
  In raising those matters, I should not like it to be thought that I am necessarily hostile to any disposal of Forestry Commission land. It has become apparent to me in my constituency "surgeries" that there are a number of anomalies which could be removed by sensible rationalisation and disposal. Equally, it is imperative that the Government underline their wholehearted commitment to a major and continuing role for the forestry Commission. I dare say that the scare stories of total dismemberment of publicly owned land can be easily scotched. I accept, from what my right hon. Friend said at the beginning of the debate, that they are quite without foundation.
  However, other real worries remain among those who support the Government and those whose sole concern is the future well-being of the forestry industry trust that those fears will be allayed by the Minister when he replies. If not, those fears and that disquiet will persist throughout the remaining stages of the Bill.
  8.22 pm
  Mr. Robert Hughes: I apologise to the House for not being present for the whole debate. I had to attend to certain constituency matters.
  The Bill has nothing whatever to do with forestry. There is nothing in the Bill, nor in the background to it, that relates to forestry management or to the work done by the Forestry Commission. The Bill arises purely and simply because the Government are short of money. The Government's philosophy compels them to take public assets and hand them over to private industry wherever that appears right. If there had been criticism of the Forestry Commission for not having done its work properly over the past 60 years, there might be some reason for taking over the assets that it has built up and hand them to private enterprise, but I doubt whether anyone has any serious criticism of the Forestry Commission.
  I do not say that the Forestry Commission has been right on every single aspect of policy during its whole existence. I am not saying that is should not be criticised where there are deficiencies in its policy. People who know the commission better than I do doubtless have some pungent criticisms to make of it, though I sometimes wonder whether some of those criticisms are a little unfair. For example, the commission has done sterling work in deep ploughing in parts of the country where trees normally do not grow. It has sought by its policy on drainage and deep ploughing to plant trees where trees have previously not grown. Some people believe that, while the Forestry Commission ought to experiment, that kind of experiment at high levels is a waste of public money. That may or may not be true. In any case, it is a criticism of detail.
  Some people have criticised the Forestry Commission for the experimental planting that it has carried out, in particular in Caithness. If one goes to Caithness and looks at the planting that has been done along the coast, one sees that the trees have not grown at anything like the rate that might have been expected. Those of us who know Caithness know that it is a wind-blown area. The saplings—I think that it is correct to a call them that—do not grow because the wind stunts their growth. About eight or 10 years ago it seemed as though experimental planting in the area was doomed to failure. However, I was in Caithness about two years ago and I was surprised at the way the plantations, had taken hold and were beginning to grow. In a curious way they had formed their wind break. The trees nearest the coast were not growing to the extent of the saplings sheltered behind them which had taken a good hold and were growing strongly.
  I do not criticise the Forestry Commission for experimenting. With the price of timber going the way it is, perhaps the commission should have been more adventurous and planted more. There is a desperate need for timber in this country, but if it had been left to the private growers to meet our needs we should be in a much more serious position.
  The criticisms of the commission have been largely on points of detail. There has been no substantial body of criticism which over the years, since the establishment of the commission, has said that the industry ought to be in private hands and that the commission is unnecessary. There are only two reasons for the Bill. First, the Government are short of money. They are desperate to sell anything they can—although I should perhaps qualify that. They want to sell only the profitable parts of public

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  enterprise where the bulk of public money has already gone in to provide assets. That is why the British Rail hotels are to be sold and why private investment is to be introduced into some parts of British Airways. A pure accounting view of the commission does not give proper credit to the money it has had to pay to protect private interests.
  My father-in-law is often critical of the commission on points of detail, but strongly supports it, as the hon. Member for Perth and East Perthshire (Mr. Walker) knows. My father-in-law's view is that the commission has had to spend far too much on fencing simply to protect private deer interests. Whether in terms of its management policy, its nursery policy, its experimentation policy or even its accounting policy, the commission is an outstanding success. It does no service to the many foresters and conservators who have spent their lives in the industry to say, as clause 1 does, that the commission can dispose, without restriction or qualification, of land acquired for forestry purposes.
  The Bill arises, secondly, from the Government's desire to ensure that the interests that they represent—the private foresters—get their hands on the pickings. If there were a glut of timber at the moment or if its price was very low, the Government would not want to sell the commission's assets. However, they are making sure that their friends get their hands on the easy pickings and they have a nice neutral sounding word for that—privatisation. I prefer to use the word "piratisation" because that is what it is—pillaging the public purse. Throughout the whole spectrum of British industry the Government are simply pirating the nation's assets.
  I started by saying that the Bill had nothing to do with forestry or forestry management. With the experience of the Forestry Commission over the years, I should have thought that there would be something in the Bill which would be helpful to the commission and to those interested in afforestation. The commission has operated under great handicaps with the acquisition of land and planting. Private industry has not suffered from the same restrictions in taking land out of agricultural use and putting it into forestry use as has the Forestry Commission. The commission has been much more hemmed in by the policy of successive Governments.
  My hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) said that he did not want to disturb the bipartisan approach that had existed towards the Forestry Commission since its inception. I understand why he said that. Some Conservative Members, to give them credit, have expressed misgivings about the policy behind the Bill and my hon. Friend did not want to upset them, because when one wants to tempt a few reluctant rebels into one's Lobby the last thing to do is to insult them. I shall not insult them, especially not the hon. Member for Moray and Nairn (Mr. Pollock), who is nodding so agreeably.
  However, I do not go as far as my hon. Friend, who said that he did not want to make political points. The Bill is political, pure and simple. If it were not political, there would be more in it than simply the power to sell off the assets of the Forestry Commission. There would be more in it than increasing the size of the board to
  "a chairman and not more than ten"
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  instead of nine members. There would be more to it than the additional financial effect of £3,500. There would be more than the fact that any assets sold will not go to the Forestry Commission.
  As this is a political Bill, we are entitled to draw a political conclusion. Labour Governments try to put more money into forestry and encourage the Forestry Commission in its work. We have seen Tory Governments—although this is the last thing to which they would admit—try to hold back the work of the Forestry Commission. They have devised schemes whereby private forestry was encouraged. Some people are upset at the way in which private companies have grown up, some of them with fancy sounding titles. Instead of showing an interest in forestry, all they are interested in is the money to be made from it.
  The truth is that there has not been a bipartisan approach to the Forestry Commision except at a minimal level. Now we see the Tory Party's mask beginning to slip. The Minister will say that it is not the Government's intention that the Forestry Commission's assets will be liquidated entirely, that it will be only at the margins. I think that we shall find it will be more than that. The Government are saying that it is not just the best land that will go from Forestry Commission ownership to private ownership, that it will not be the best forests or the well-grown forests which will be transferred. There will be an even spread, they claim; the Forestry Commission will not be left with only the most arid and barren of land, it will be left a decent share of proper forestry. But private money will be put only where there is a sign of good, quick returns. There will not be a mad scramble among the private companies to take over the most difficult land—the forests which take longer than normal to grow to fruition. Only the most luscious land will be chosen.
  There has not been a bipartisan policy. Tory Governments have looked after the interests of private forestry and Labour Governments have tried their best to look after public forestry, though some of my hon. Friends who know the industry would quarrel with the way in which Labour Governments have put too much into private forestry.
  If the Bill had been concerned with the interests of forestry, we should have seen something in it to establish better training for foresters. Some time ago, I had correspondence with the Minister on whether there should be better training, taking foresters through to the higher national diploma. There is a channel through the universities into forestry, but there is no proper training scheme for those in the industry.
  It is a pity that a public enterprise that has served the nation marvellously should be messed about in this way. Not only will land disappear, but many people who have spent their lives in forestry and thought that they had a future in the industry may feel that the commission is not the place to stay. There could be a drift of manpower and a loss of morale in the industry and among the commissioners.
  The Bill will be resolutely opposed and I hope that it does not reach the statute book, but I suspect that the Government will use their majority to drive everything before them and will not allow proper discussion of the proposals. It is a disgrace that they have produced such a Bill. I live in hope that they will one day feel ashamed of themselves and realise that they are in Government not

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  simply to help those in the City or those who want to make a private profit out of a public asset and will occasionally give a thought to the needs of the nation.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. The Front Bench speeches will start at 9 o'clock. I have on my list three hon. Members who have been sitting in the Chamber all day and one hon. Member who has only recently come into the Chamber. I do not know how we will work out the arithmetic, but we shall start with Mr. David Myles and see how it goes.
  8.37 pm
  Mr. David Myles: If I had been asked to predict who would follow in the debate, I would not have chosen the hon. Member for Aberdeen, North (Mr. Hughes). I know his constituency well and pass through it on the way to my own. I have admired the rose beds and wonderful parks in his constituency and the efforts made to beautify Aberdeen, but I did not think that there was any Forestry Commission land there or that the commission had much relevance to his constituency. I congratulate the hon. Member on speaking for so long, though it means that we who have a constituency interest will have to curtail our speeches.
  Mr. Robert Hughes: I do not have any Forestry Commission land in my constituency. The only trees in the constituency are those that I slice or hook into when I am on the golf course. However, that does not mean that I do not have a deep interest in the forestry industry.
  Mr. Myles: That brings me to the speech of the hon. Member for Berwick and East Lothian (Mr. Home Robertson). The hon. Gentleman is a landowning farmer and it surprised me that he said that his only integration with forestry was on the Muirfield golf course. I wish to introduce a note of discord in relation to the hon. Members, on both sides, who are starry-eyed enthusiasts for endlessly increasing the planting of trees.
  In harmony, perhaps, with my hon. Friend the Member for Gainsborough (Mr. Kimball), I do not believe that forestry problems should be discussed in isolation. As I suggested to my hon. Friend the Member for Staffordshire, South-West (Mr. Cormack), too often forestry is examined in isolation, yet the effects of any forestry policy are widespread on other land uses in the countryside.
  It is difficult to discover the authors of a pamphlet called "British Forestry—Into the Next Century". It seems to be produced by the executive committee, State foresters section, of the Civil Service Union. It has a photograph on the front—I bow to the better pronunciation of the hon. Member for Cardigan (Mr. Howells)—showing Gwydyr forest. That is supposed to be a good example of forestry. To me, it is a horrific example, because it shows blanket forestry in the worst sense. It ignores the rest of the land use in that part of the countryside. It sterilises a great amount of useful land for a fairly long period.
  Where the dominant influence in forestry is a State body such as the Forestry Commission, it is important, as the right hon. Member for Glasgow, Craigton (Mr. Millan) said, that we get a balance. The balance, however, has to be correct. Who is to say what is the correct balance? The priority interest of the Forestry Commission is afforestation and the economic viability of that afforestation. It does not have much interest in the
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  considerable effect of afforestation on the major land use, which is agriculture. There is no requirement on the commission, to my knowledge, to further the integration or to ensure the interaction of forestry and farming in a way that is beneficial to the nation as a whole.
  I commend the document mentioned by my hon. Friend the Member for Galloway (Mr. Lang) "The Interaction of Forestry and Fanning" by W. E. S. Mutch and A. R. Hutchinson and produced by the East of Scotland College of Agriculture and the university of Edinburgh, dated October 1980, which says a great deal about the interaction that can take place between forestry and agriculture. This is a valuable document. I wish that the Forestry Commission had considered interaction a great deal more before planting such massive areas in the constituencies of my hon. Friends the Members for Galloway and for Argyll (Mr. MacKay).
  Forestry expansion has been the land use policy of successive British Governments since 1917. The three methods adopted to achieve that expansion have changed little in over half a century. The Forestry Commission, as the State forestry enterprise in this expansion has purchased and long-leased land on the open market to create State forests.
  It is interesting to remember that, in the days when the father of the right hon. Member for Stafford and Stone (Sir H. Fraser) was the first chairman of the Forestry Commission, the amount of land envisaged for planting was 715,000 hectares, whereas the Forestry Commission has achieved a planting of more than 1¼ million hectares. It appears that the balance spoken about originally has gone slightly in the direction of State forestry. In the name of economy, this has been done in massive blocks which have not always been in the long-term interests of the countryside and, as the Secretary of State himself said, forestry is essentially a long-term commitment.
  Despite the admiration of my hon. Friend the Member for Staffordshire, South-West of State forests in other European countries, I am reminded that on one occasion Humphrey Lyttelton described driving up the middle of a State forest as being rather like driving up the middle of a toothbrush. In my opinion, there is a certain truth in that comment.
  The hon. Member for Sheffield, Brightside (Miss Maynard) spoke of the employment interest in this Bill and of the danger to it if Forestry Commission land was sold. However, we should remember the amount of employment in these areas before some of these massive plantings took place. There was considerable employment in many of these glens and other afforested areas. People were employed in agriculture and other rural pursuits. That fact seems to be ignored.
  Forestry provides what is so often a transitional type of employment. It does not employ people who live in the area concerned. Instead, it employs squads of people who tend to go round a fairly large area, and it does not really encourage the growth of rural communities as does a real integration of all the other interests. Much more consideration should be given to that state of affairs. I am sorry that the Bill does not take account of this, although the consultative document on private forestry does to a limited extent.
  There is a great deal of talk about investment in private forestry and about grants to private forestry not being in the national interest and resulting in lining the pockets of wealthy landowners, or some such. I hasten to add that I

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  am but a humble tenant with a landlord who, with my co-operation and interest, has done a great deal of planting in areas which I thought were useful to me and also useful to him for his sporting interests. Incidentally, those sporting interests must not be ignored in terms of employment and wealth creation
  I do not understand the assumption by Opposition Members that any money which is generated by or goes into private enterprise is thereafter totally lost to the State. That is complete nonsense. There are any number of enterprises which are far better in private hands than in those of a monolithic State organisation. The Forestry Commission is moving into that category.
  I, too, have my reservations about the Bill. I have not yet said whether I welcome it, because I am not altogether certain that I do. If I express another reservation which I have about it, it will probably be seen as a slight compliment coming from my left hand to the past work of the Forestry Commission.
  My reservation is about the control of vermin and the control of pests—rabbits, hares, roe deer and so on—which often come out of the woods. The fencing which was seen to be such a waste of public expenditure is meant either to keep the rabbits and hares in or to keep them out—I am not sure which. I often wonder what would happen to the foxes that are bred and protected in forestry plantations if that sort of area were sold off. There would be no body such as the Forestry Commission to which I could complain. Although it has not done much about the complaints that I have made, I wonder if more might be done, if a mineworkers' pension fund or something owned the land. It might bring out the poachers in order to catch the vermin, but I am not sure.
  I welcome the power that the Bill will give Ministers in what I hope will always be a democratically elected Government. There is nothing wrong with taking power away from the Forestry Commission and giving it to the Minister so that he has the power sell off some of the forestry land or land that was waiting for forestry, if that is seen to be in the public interest.
  The document to which I have already referred says, in case study No. 13:
  "Under the Forestry Act of 1919, the Forestry Commission was given powers to establish and lease small holdings of land to persons who were fully employed in forest work. Initially, these forest holdings, as they were called were established to encourage agricultural workers who had been made redundant to take up employment with the Forestry Commission."
  I sincerly hope that it is not felt necessary to sell off these forestry holdings, which are a valuable first rung on the ladder for at least some agricultural workers—I have much concern for agricultural workers.
  I hope that the Bill will bring a greater flexibility into forestry policy and will release public money for further forestry integration in lands that are sold. There is no doubt that many hill farms—even lowlands farms such as the one farmed by the hon. Member for Berwick and East Lothian—could benefit from planted areas strategically sited for better land use.
  I plead that the extra commissioner proposed in the Bill will have a vision of this integration ideal, as forestry policy requires those who can see beyond the wood and the trees.
  8.54 pm
  Mr. Andrew F. Bennett: I make no apology for entering the debate at this point, because my constituents are particularly concerned about the Bill. Although I think that they would have preferred me to speak this week on Wednesday's business, if it had not been changed, I am sure that they are equally concerned that their views on the Forestry Commission should be expressed in this debate.
  Many of my constituents go into the countryside to enjoy it for their pleasure and recreation. For almost 50 years members of the Ramblers Association spent some of their time criticising the Forestry Commission for its attitude, because during that period it had two mottoes. One was to plant as quickly as possible, and the other was to keep people out.
  That disregard for the appearance of the countryside and the discouragement of access harmed the Forestry Commission, but very slowly, as a result of pressure from those who wanted to use the countryside, the commission changed its attitude. First, it began to take much more care with the appearance of its planting. In areas of outstanding natural beauty its recent policy of planting both hardwoods and softwoods, and of under-planting just before it starts to fell softwoods, has done a great deal to maintain the countryside's appearance.
  Gwydyr forest in Wales, which was mentioned by the hon. Member for Banff (Mr. Myles), shows how areas of scenic beauty are well looked after by the commission. However, the commission always points out that that is not a commercial activity. It is done for the nation at large, particularly those who enjoy the countryside, and it costs money. No profit is made.
  There have been steady improvements in the commission's attitude. Since it celebrated 50 years of existence in 1967 it has provided many opportunities for access by the general public, with forest trails, forest centres, information and forestry museums. I and many of my constituents applaud that development.
  However, my constituents fear that the Bill will mean that woodland will have to make a profit—a retrograde step. That will happen in two ways. First, the Forestry Commission will feel that it must look much more to profit than to access. Secondly, the private investors who move into forestry will have no concern with appearance or access. That is what disturbs many of my constituents. They would like the commission to continue to develop the countryside, increasing the planting and taking account of the natural beauty of the countryside.
  They would also like more access. As people get more leisure, so there will be more demand for access. Many areas in the national parks now suffer from overcrowding. The very peace and quiet for which people go to the countryside are destroyed by pressure of numbers. Vast areas of forestry could be opened up for people's enjoyment.
  The Bill puts almost all that at risk. I hope that it will not be given a Second Reading, and that if it goes through many more safeguards will be introduced in Committee to ensure that the amenity use of forests is maintained—whether by the Forestry Commission or by private developers. We must be given a guarantee that care will be taken of apppearance and that we will not see just the cheapest trees planted in straight rows.
  8.58 pm
  Sir Albert Costain: I am grateful to the hon. Member for Durham (Mr. Hughes) for allowing me a few minutes of his time. I will keep my promise to sit down by 9.5 pm.
  I have not been here for the whole of the debate, because I have had to spend three hours in the Public Accounts Committee, but after some of the speeches of Labour Members that I have heard I am glad that I have not been here all day. I have never heard so much exaggerated nonsense talked about any subject. One would think, from what we have heard, that any private enterprise in forestry was motivated only by the desire to make money and that everything the Forestry Commission did was done so efficiently that no one could better it. The hon. Member for West Stirlingshire (Mr. Canavan) gave a number of extraordinary figures about people employed which bore no relation at all to the Forestry Commission report.
  I have a private forest in your constituency, Mr. Deputy Speaker, which I have owned for a quarter of a century. When I took it over it was a wreck of derelict land. A local authority report now states that it is an area of outstanding beauty. I encourage the public to use the forest. They police it for me. I have put in three new lakes. In my innocence, I believed that even as a Member of Parliament I might have time to catch a few fish, but I have not done so in 25 years. However, the point is that others can enjoy the amenity.
  An Opposition Member said that as the Bill was short it must be political. That is a stupid argument. It is clear from the Forestry Commission report that the return on forest is 3 per cent. If the Government have to borrow money at 15 per cent. and earn only 3 per cent. on it, it is not good business; it is darned rotten business. It takes 40 years for a forest to mature. The increase in value, with a difference of 12 per cent., over that period has to be enormous. Why should anyone want to buy such forests? Pension funds are the most likely bodies. They want in 25 or 30 years time money that has some relation to the cost of living, taking inflation into account. It is a good investment for them.
  One of the best reports on forestry has been published by John Clegg, a firm that specialise in the field. As time is short, I shall quote from it only briefly. The review deals with what happened in 1980 and explains why the Forestry Commission has not been buying land, although that has not made the value of land drop. One sentence at the end is particularly interesting:
  "But the prospect of opportunities to buy State woodlands may also bring forward a wider range of buyers."
  The Forestry Commission, with its expert knowledge, can buy derelict land, develop it, and sell it to make a profit, as can private investors. What is wrong with that? The Minister explained that some of the money from the sale of Forestry Commission land will be used to redevelop plantations. That is right.
  One mistake that the Forestry Commission makes is that it has one non-industrial worker for every two industrial workers. In private enterprise the ratio is about 4:1. Another mistake is that the Forestry Commission runs its own aeroplane, which is stupid. Is the pilot paid Civil Service rates or private pilot rates? I have hired planes to photograph or spray my woodland. The time to do that is in the early morning. There is a great difference between
  714
  the pay of a private pilot and a Civil Service pilot. The Forestry Commission also uses its own road gangs. Private enterprise gets such work done at a time to suit the contractor and therefore at a lower price.
  I said that I would sit down at 9.5 pm. Like all prepared speeches, the best parts remain unsaid.
  9.5 pm
  Mr. Mark Hughes: I am grateful to the hon. Member for Folkestone and Hythe (Sir A. Costain) for his brevity.
  Given the debate, especially in another place and in this place, as well as the country at large, over the future requirements of the forest industry for the next 50 or 70 years, the Bill is a pitiful response to the requirements of forestry policy in 1980. In pursuance of that I quote Lord Ferrers in another place in December 1977. He said:
  "Forestry is … important to Britain, as a money saver and as a money spinner, as a job producer, and as a conserver and indeed promoter of both our heritage and our environment … I should like to make a plea to Government"—
  —this was when the Labour Party was in Government—
  "whether it be to the last few weeks of the present Government or to the successor Government … My plea is to think big … about forestry; think long term."—[Official Report, House of Lords, 14 December 1977; Vol. 387, c. 2127–28.]
  Anything less big and less long term than the Bill would be hard to imagine.
  In the debate in March 1980 Lord Mansfield, again in a debate in another place, said:
  "From the time when we took office, we have been actively engaged, with the aid of the Forestry Commission, in a searching and fundamental study of these questions. Although we are pursuing this with vigour, it is something that we cannot skimp, as we want to be certain that the quality which emerges is positive and constructive, and provides an acceptable balance, given the limited land and other resources available to us."—[Official Report, House of Lords, 26 March 1980; Vol. 407, c. 886.]
  Those words came from the mouth of a member of Her Majesty's Government and represent what the Government envisaged for forestry policy, but they have produced a pitiful, pettifogging little Bill, which does nothing to deal with the long-term requirements of the forestry industry, whether private or public, with the national economy's requirements for forestry products or with balance of payments problems. It does nothing to deal with a range of fundamentals that have been mentioned by hon. Members on both sides of the Chamber. The Bill is inadequate.
  Let us consider the relationship between private persons, institutions, institution owners and the Forestry Commission, one of the most complex relationships in the proper management and creation of a woodland estate. It is clear that there is an advantage to an institution because of the gestation period of forestry investment which is not available to ordinary human beings, except the most long-lived. Unless one invests with the lifelong expectations of a two-year old, one is not likely to recoup the benefits in one lifetime.
  Therefore, any transfer from the State to privatisation inevitably tends to move towards institutional arrangements, because, given present taxation, the lifetime of any individual makes forestry ownership a problematic capital investment. Those who have read the report of Professor Bowman and his colleagues at Reading will know how, at page 49 and elsewhere, they isolate the fact that the absence of a requirement for day-to-day management and detailed involvement make forestry much more attractive

  715
  to the institutional investor than it can be under any circumstances to the private owner, whether he be occupier, landlord or renter.
  Next we come to the possible competition or incompatibilities between forestry as one form of land use and use for sheep farming, deer, grouse, water resources, recreation, visual amenity and so on. These problems have been mentioned by hon. Members on both sides, including the hon. Member for Banff (Mr. Myles). To what extent can the House insist upon a private individual securing the visual amenity of the other 50 million inhabitants of these islands if it transfers the capital resource of forestry to him? We have not yet acquired the necessary mechanics, the legal framework, the arrangement.
  I am led to believe that in the other place today 400 or 500 amendments to the Wildlife and Countryside Bill were tabled. Many of them overlap this Bill, being involved with planning controls over forestry. In Committee on this Bill there will no doubt be great difficulty for the Chairman in determining those amendments that are apposite to the Committee stage and those that are precluded because they are already the subject of debate in another place.
  Mr. Myles: Why does the hon. Gentleman think that a planning authority, a State organisation, any form of State control, has more of a feeling for the environmental beauty of the countryside than someone who has lived there and hopes that his successors will live there for generations?
  Mr. Hughes: I have no doubt that those whose souls are in the intimacy of the countryside in which they live have that depth of feeling. I am not satisfied that a pension fund has it. Under the Bill it is not the individual that may be the purchaser, but an institution that is soulless and lacks such amenity values. I see no evidence that the pension funds of many of our great industries look to the visual amenities of the mass of the public when they determine their investment or management policies.
  Mr. Peter Mills: The hon. Gentleman really must not make such sweeping statements. I can give a whole list of institutions that take great care—the Church Commissioners, the Crown Estate Commissioners, and many more.
  Mr. Hughes: If the hon. Gentleman wishes to see where the Church Commissioners are the largest landlord, let him look at County Durham and at the desecration of the countryside that has been carried out in their name. I have bought too much property from the Church Commissioners on long lease to be told that they are the ideal landlords.
  Let us now look at the next stage—at rural depopulation. There is no doubt that the major reason for the massive afforestation programme is to halt rural depopulation. Whatever the balance of payments problems, there is an overriding reason—as declared in the Conservative Government's 1972 White Paper—that we cannot do other than start from the requirement of reversing rural depopulation in areas which, without major planting programmes, would not provide adequate population levels in difficult areas of the countryside.
  What does this regrettable Bill provide? Does it provide anything to stem rural depopulation or to assist in this
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  area? Does it do anything to improve the visual amenity? Does it do anything to improve the recreational facilities of the great mass of the urban population? Does it do anything for the red deer or for the sheep farmers? The answer to all those questions must inevitably be "No". As speaker after speaker on the Tory Benches has intimated, in terms of the good management of land, of forestry and of resources, this is not a Bill that should commend itself to the House.
  I turn now to the active proposals in the Bill. If it is passed, the House must ask itself to whom the Forestry Commission is likely to sell and under what controls. First, I advise the House that if the Bill is passed in its present form it will be available to the several Ministers—Scottish, English, et al—to authorise and instruct the Forestry Commission to divest itself of every square yard that it owns.
  There is no time span. There is no recourse to this House. There is no coming back to the House for a statutory instrument. If that fit of madness overtakes them, we in this House have no come-back. As it stands, the Bill is asking us to sequestrate our rights as Members of the House of Commons to control the Executive. We are asked to transfer inalienably that power to the Ministers of the Crown so that they may, as they see fit, involve themselves in a reversed sequestration of Crown lands to private owners. If they do that, who will be the likely purchasers, and what are the likely types of land or forestry assets that will be purchased?
  In order that they should purchase, there must be some palpable advantage to the purchaser. No one will buy to lose money, or I see no evidence that that is the probability. If it is a private individual, we get into the mare's nest of tax avoidance, schedule B, schedule D, and the whole range of problems raised in the eighth report of the Committee of Public Accounts. Reporting on 14 February last year the Committee said:
  "16. The combined effect of these provisions is to make it advantageous for an occupier of commercial woodlands with a high personal rate of tax to elect for assessment under Schedule D during the early years of a new plantation. The heavy costs of planting and maintenance will then give rise to losses and allowances which can be set against his other income for tax purposes. He can avoid tax under Schedule D on the profits from the eventual sale of timber by selling his interests in the woodlands to a new occupier. The standing trees will then be treated as part of the land, and not as stock in trade, but their value will not attract any charge to capital gains tax. Under the new occupancy the woodlands automatically revert to asessment under Schedule B and remain so over the perhaps lengthy period when the profits from the sale of mature timber are being realised. The cycle can then be repeated by a fresh election for assessment under Schedule D before the land is subsequently replanted.
  17. The C & AG's examination suggested that these provisions were being exploited by syndicates of high rate taxpayers. The Inland Revenue Department confirmed this. They explained that the syndicate might have a score or more members and they moved in as soon as woodlands had been felled and needed replanting. They remainded in occupation only for the comparatively short period while expenses were heavy and resulted in losses which they could set against their income from other sources."
  The chairman of the Inland Revenue, Sir William Pile, in reply to the question,
  "we see that there is no central record of the tax lost because of this manipulation, but can you give us some indication of the order of magnitude of what is going on?",
  said:
  "We think possibly, £8–10 million of tax."
  That is per annum.

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  The House is being asked to give a Second Reading to a Bill which, with intent, increases the opportunities for tax avoidance. If the Government want to save £5 million of the PSBR by adding that opportunity for tax avoidance, so be it, but do not tell the country or the House that that is in the public interest. To rob the general taxpayer to provide a tax haven for a private few is not part of the tradition of the House. I hope that we shall reject the Bill on those grounds, if on no other.
  The Bill is an offence to the powers of the House. It provides an untrammelled power for Ministers whether of Scotland, Wales or England to instruct the Forestry Commission to transfer as much as they—the Ministers—wish. It has nothing to do with the good management of the forestry estate. If that had been the purpose, if the Government had said that they wanted the powers so that the Forestry Commission could shed small parcels of land that are difficult to manage, that would be a different matter. But that is not what the Bill is about. The Bill provides that Ministers shall instruct the Forestry Commission—with no reference to the long-term requirements of the forestry industry, and with no recourse to the House to do anything about it.
  The Bill is an offence in its failure to measure up to the challenge and the requirements of the forestry industry for the next 50 years. It simply does not begin to do that. It skates over a minuscule area. There is a word game in one of the popular papers which leads people to look through dictionaries, and, as I discovered last week, there is a word for a niggard, a mean person of narrow mind. It is "scrunt". This is a scrunt's Bill. It is a Bill of niggards, of persons of narrow mind and narrow concepts, bent on introducing dogmatic proposals.
  In their narrowness, however, the Government have provided the Opposition—and, I hope, many of their fellow Conservatives on the Back Benches—with a little hope. In their wisdom they have chosen a long title for the Bill, which enables any amendment whatever to the 1967 Act to be moved, because the long title says that it is a Bill, to
  "Amend the Forestry Act 1967, and for connected purposes."
  The Government may therefore rest assured that, not merely will we vote against the Bill tonight, but that in Committee we shall seek to change its obnoxious content and to add to it in such a way as to make it a proper vehicle for dealing with forestry in the next 20 years.
  9.28 pm
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Jerry Wiggin): In reviewing today's business on the radio this morning, an LBC commentator said that the Forestry Bill was more important than it might appear at first sight. She was absolutely right, certainly for the hon. Member for Durham (Mr. Hughes), whom I congratulate on his maiden appearance on the Opposition Front Bench. I hope that we shall see him there more often.
  More importantly, perhaps, if the hon. Gentleman will forgive me, the Bill has given the House the first opportunity for a full day's debate on forestry for 30 years—since 1951. Perhaps in a sector whose production cycle is between 50 and 80 years that is not inherently odd. Both the Government and the industry need to look well ahead in all their decisions. I am not sure whether, in considering these matters, a gap of 30 years is quite short enough. I am glad that in the range and variety of their
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  contributions to today's debate, hon. Members have in fact looked well ahead. We have had a wide-ranging and helpful debate.
  The Government have considered the future strategy of the industry in the light of the way that forestry has developed since the war. That period saw a firm emphasis on expansion, the increasing importance of commercial and social aims for forestry and the growth of private commercial afforestation.
  The Government's policy statement, setting out our commitment to continued expansion, our belief in a greater share of this for the private sector, and our commercial approach to the management of the public funds invested in the Forestry Commission over the years, is the logical culmination of the post-war development of forestry. The Bill is a necessary and practical measure towards the achievement of these objectives, because it remedies the odd situation in which, while Ministers can now sell land going out of forestry, we cannot dispose of land which will continue to form part of the national forestry estate.
  I want to underline this point, because it goes to the root of many hon. Members' interventions today. Any land which the Forestry Commission chooses to offer the private sector under the Bill will remain in forestry. It will continue to contribute to the development of our resources of timber, to the benefit of the industry and the nation.
  Forestry must, of course, be seen not only in its historical context but in its relation to other sectors of the economy. Forestry does not exist in a vacuum. It has inter-relationships with the wood-processing industries which are its market, with the farmers with whom it must coexist, with the environment, and with the expanding leisure industry anxious to enjoy the beauties and amenities which woodlands can offer.
  Mr. Robert Hughes: The Minister stated quite categorically that any land disposed of by the Forestry Commission will remain in forestry. That is not what the Bill says. Clause 1(2) says:
  "The Minister may dispose for any purpose of land acquired by him under this section."
  I hope that the guarantee that it will remain in forestry will be written into the Bill.
  Mr. Wiggin: I shall discuss that matter when I answer some of the points that have been made. I hope that the hon. Gentleman will forgive me if I do not answer him at this moment.
  The Government had to take into account these factors in reaching their conclusions, and nothing in our strategy statement or the Bill is intended to detract in any way from the balanced—and I hope symbiotic—relationship between these interests in which the Government and the Forestry Commission firmly believe. Against that general background, I want now to respond to the individual points which hon. Members have made.
  The right hon. Member for Glasgow, Craigton (Mr. Millan), who spoke in his usual impeccably honest manner, granted the point that the record of the Labour Government in forestry—I think I quote him correctly—was not impeccable. I have no wish to make further party points. Private sector planting during the period of the last Labour Government was not good, for reasons which may become clear during the rest of my speech.

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  The right hon. Member spoke of a target for planting. I remind him that almost every planting target that any Government of whatever colour have produced over the past few years has almost never been fulfilled for one good reason or another. Therefore, I propose to resist, without much persuasion, the temptation of stating a target. However, I can say that it is our firm intention that, however far the swing may be to the private sector, there will be a minimum planting rate, an absolute minimum, some time in the future for the Forestry Commission of not less than 5,000 hectares a year. But I should add that this year's programme will be over 20,000 hectares. The private sector appears now to be expanding. At the moment, applications for grant aid are being received by the Forestry Commission at a rate in excess of 20,000 hectares a year. It does not take much arithmetic to see that the immediate future looks extremely good. The hope is that the trend will go away from the Forestry Commission and to the private sector.
  Mr. Mark Hughes: Why should the Minister express that hope?
  Mr. Wiggin: Simply because if the Forestry Commission plants trees it has to pay the full cost. If the private sector plants trees the Exchequer provides only the grant aid. In the interests of the taxpayer it seems sensible that we should seek to protect the revenue where private capital is available. We make no pretence. That is the basis of our legislation.
  The right hon. Member for Craigton mentioned the Fort William and Ellesmere Port schemes. I think that he accepted to some extent, as he must, that the Government fell over backwards to try to help both these operations. An investment package was offered as were advantageous prices. In the case of the Forestry Commission those prices were scarcely profitable, if at all. Britain has had a newsprint pulp industry for only about 25 years. It is a world product which can be produced profitably at times of recession only in certain parts of the world. This does not happen to be one of those, and the more is the pity. The sooner we can get that industry back the better. However, the Government cannot be blamed for not making every possible effort to keep it here.
  Furthermore, the suggestion that we should decry our export trade which has so rapidly and competently been built up in small round wood seems a great pity because we have been able to maintain employment in the forests, even opening one or two small harbours to expedite the business. It has happened very quickly and it is quite profitable.
  When the right hon. Gentleman went on to deal with capital transfer tax and claimed with some pride that the Labour Government had made great concessions to forestry, I felt compelled to remind him that it was his Government who brought in the wretched tax. I suppose that one could claim credit for not beating one's wife as hard as before, but that seems a strange philosophy.
  I remind the right hon. Gentleman that on 9 December my right hon. and learned Friend the Chancellor of the Exchequer made clear that he proposed to continue the tax concessions given by the previous Government for the same very good reasons that they gave. Without suitable tax incentives private individuals will not plant trees, the return from which is not harvested for 70 or 80 years. In
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  spite of what the right hon. Gentleman said, I do not believe that this is a bad investment for the British nation. It is a way of helping private forestry, a way that works, and a way that we intend to continue.
  Let me say a word now about the quantity of sales and the figures that the Forestry Commission has devised. We must be clear that to a large extent these have to be guessed because the commission is testing a new and untried market. The commission has to take account of a number of precautions that I shall describe. It is estimating that sales in the forthcoming-year will be about £10 million and about £15 million in the following two years. That must be set in the context that every £10 million of sales represents only about 1¼ per cent. of the available assets of the commission.
  As for the handling of the sales, it will be in the interests of the Exchequer and the commission that they should be optimised—that is, that they should take place at the best price and that the commission should not seek to spoil the market to the detriment of its assets and those of the private owners. I believe that perfectly good common sense will prevail, under market pressures, to ensure that the process does not get out of hand.
  Mr. Cormack: Will my hon. Friend give the House an assurance that there will be no obligation in all circumstances to sell to the highest bidder, for the reasons mentioned during the debate?
  Mr. Wiggin: I shall be dealing with what my hon. Friend said in his speech in a moment. The final matter raised by the right hon. Gentleman is of great importance. It concerns the labour force that might be associated with any transfer.
  Mr. Millan: Will the Minister give us more information about where the sales will take place? That matter worried some of his hon. Friends as well as myself. He has given us no indication of where the sales will take place. We are drawing small bits of information from the Government as we now have the figures. They could have been given by the Secretary of State earlier. But we are still no nearer knowing where the sales will take place.
  Mr. Wiggin: I assure the right hon. Gentleman that my speech—if I am allowed to make it—is packed with useful information in response to the debate. He asked me about the labour force. May I deal with that?
  Mr. Millan: If the hon. Gentleman's speech is packed with all that useful information, will he answer my question?
  Mr. Wiggin: The answer is simple. The Forestry Commission has instructed its staff to draw up a programme of sales, the conditions for which I propose to tell the House shortly. The precise locations of the proposed sales will depend on those condiditons being fulfilled in each given area. The answer to the question whether wood A or wood B would be sold is not for me but for the commission and will become public knowledge as soon as the commission has made its decision.
  We have to give consideration to the work force and its future. If a wood or a forest is sold, management and labour will be associated with that sale, in exactly the same way as when a business or a farm is sold. It is to be reasonably assumed that the new ownership will take on that labour force. If that is not done, redundancy payments will become available to the staff in the ordinary way. If

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  the suggestion is that the private sector will employ fewer people than the Forestry Commission—which is what I think the right hon. Gentleman is intimating—one should ask why that should be so. I do not think that it will be.
  My right hon. Friend the Member for Stafford and Stone (Sir H. Fraser)—whose position is well understood and respected and whose father's contribution is one of history, but well-valued history—mentioned the value of the Forestry Commission. It is a rather better bargain than he thought. The way in which the commission values its trees is not the way in which my right hon. Friend or I would value them, but it satisfies Government accounting. The value stands in the books at £840 million. However, it is not unreasonable to assume that in market terms the value of the land and the trees on that land could be half as much again. We are talking about a considerable asset, built up with the help of taxpayers' money over 60 years.
  My right hon. Friend also asked me about sales to foreigners and the amenity considerations that we would take into account when making sales. The Government, and anyone else selling land in this country, have no powers to prohibit the purchase of land by foreigners from the Community. But in this context we do not expect there to be any great interest. The returns are not likely to be sufficiently attractive to foreign buyers. I can give an assurance that if there is substantial trend to buying by foreigners or multinational companies, which might have undesirable social consequences—bearing in mind that most of the sales will probably take place by tender—the Forestry Commission will take that into account when it consults Ministers.
  Mr. Donald Stewart: That is the point which we are trying to get clear. The Bill says that the Minister will have power. There is no reference to the commission even being consulted.
  Mr. Wiggin: Since 1945 the ownership of the land on which the commission operates has been in the names of Ministers. The purchase and sale of that land has always been decided by the commission. That is a fact of law and the way in which Governments have operated. There is nothing new here.
  Amenity is a more difficult problem. The concept of covenanting access to land that is sold is complex. Of course, in the first instance the commission will not seek to sell land that is used considerably for recreation and access. We shall go for the more remote woods. I do not accept that sales will take place only to those who will not maintain access. Plenty of private owners are anxious to maintain access and will do so. All such matters will be taken into account.
  My right hon. Friend asked about the benefit of the Bill for forestry. I hope that he will not consider it improper if I quote a letter sent to him by the Duke of Buccleuch, a former long-time Member of this House and, whatever Labour Members may say about him, an extremely knowledgeable forester, who has given much time and knowledge to improving the nation's forestry. I know that my right hon. Friend will hold his views in high regard. He wrote:
  "As you probably know better than I do, the future of forestry probably depends more upon long term faith in the future than upon anything else, and that this has been bedevilled for the last twenty years by a running battle with the Treasury which detests anything that must inevitably involve some degree of crystal gazing."
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  It is not proper for me to say at the Dispatch Box whether that is correct.
  Sir Hugh Fraser: I am glad that my hon. Friend quoted that letter. The danger of the Bill is that it is a surrender to the Treasury. It would be a different matter if it were a Bill devised by Ministers interested in forestry, but it could be read as a straight surrender to Treasury Ministers.
  Mr. Wiggin: Far from it. The object is to allow the commission the independence that its wealth should give it. The concept that a body worth more than £1,000 million should need investment by the taxpayer to keep it going—this year the figure will be about £35 million—is an utter nonsense. If, by selling some of its surplus assets, the commission car maintain its planting programme and its independence, far from being in the hands of the Treasury it will be out of the Treasury's hands. I hope that I carry my right hon. Friend with me on that point.
  Concern has been expressed about the possibility of too much land being sold. However, if the commission were to seek to sell too much it would be its own worst enemy, because the price would collapse and the commission would not be able to get the money that it wanted.
  As for the expansion of planting, we shall have to wait and see. I hope that the private sector will take up the challenge that we have offered it and will understand the expressions of good faith in my right hon. Friend's statement in December. So far, all the indications are that it has done so and that we are set on a better path for forestry than for many years.
  The hon. Member for Dagenham (Mr. Parker) said that he thought that there was to be a division in the mythical all-party policy on forestry. I believe that he is mistaken. I do not see the Bill as a destruction of the commission or of the partnership between the commission and the private sector. Indeed, I see the Bill as a strengthening of that bond. His call for the Forestry Commission to stand on its own feet is exactly what we are seeking.
  My hon. Friend the Member for Buckingham (Mr. Benyon), whose deep knowledge of the industry is well known, asked whether the private sector could deliver the goods. I think that he wishes to know whether we shall be satisfied with the planting programme that the private sector is likely to produce. Only time will tell. I believe, however, that we have set the scene. I believe that the confidence is there. I am hopeful that my hon. Friend will be proved right.
  My hon. Friend also asked about the enabling power for Ministers to sell land. I remind him that at the momemt Ministers have the enabling power to buy land. The anachronism that we cannot sell forestry land is the raison d'etre for the Bill. The concept that the whole Forestry Commission should be sold off is patently ridiculous. No one would be able to find that sort of money.
  The question of the forestry fund has been misunderstood. The money from sales will not go straight into the Consolidated Fund. That is a misconception. It will go into the forestry fund. If and when there is a surplus in the forestry fund, that may be paid into the Consolideated Fund with the approval of forestry Ministers. It is true to say that the Treasury sees, after 60 years of paying out, some right to the rewards of that investment. Equally, if we were to pay the result of sales straight to the Treasury, the Forestry Commission would have an insuperable problem in trying to manage its

  723
  enterprise. The fluctations of the market from one year to the next would make its programmes, planning and financing impossible. This compromise, which is new and a step forward in these matters, will, I believe, insulate the Forestry Commission against these fluctuations.
  Mr. Millan: How will the cash limits be affected by the proceeds from sales?
  Mr. Wiggin: It is by this device that we hope that they will not be affected. In other words, the cash limits will be calculated without respect to the fluctuating sales by the use of the forestry fund as a balancing operation. This matter will be debated fully in Committee. Perhaps the right hon. Gentleman will forgive me for going no further at this time.
  My hon. Friend the Member for Devon, West (Mr. Mills) rightly raised the question of the conflict in land use between forestry and farming. I do not wish to go into that matter in great detail except to say that those who preach the unbounded expansion of forestry must appreciate the constraints that exist. That is the point, I believe, that my hon. Friend was seeking to make. My hon. Friend the Under-Secretary of State for the Environment, who looks at these matters from the other side, and I, are acutely conscious of the pressures and on occasion we seek to resolve them personally.
  The management structure of the Forestry Commission has deeply considered the criteria for disposals. The instructions given by the Forestry Commission to its staff are, first, financial considerations; secondly, the maintenance and development of the wood processing industry; thirdly the maintenance of employment and viability of local communities, especially the socially fragile areas; fourthly, the use of forests for public access and recreation; fifthly, the interests of conservation, research and education; sixthly, the effects on management; seventhly, the market preferences having regard to other criteria; and, lastly, the rationalisation of the forestry estate. These are the criteria being used.
  My hon. Friend the Member for Staffordshire, South-West (Mr. Cormack) spoke about the Forestry Commission not selling to the highest bidder. That raises considerable problems of public accountability. Sales of land, whether by this Department, the Forestry Commission or any other Government Department, are conducted, as my hon. Friend will know, under strict rules. How these sales are conducted and what the land fetches are matters for scrutiny by the Public Accounts Committee. My hon. Friend has raised a difficult point. I understand fully his concern. There has been only one case of compulsory purchase by the Forestry Commission in its history. That was many years ago. Nevertheless, that point raised by him and by my hon. Friend the Member for Gainsborough (Mr. Kimball) occupies my attention. At the moment, there is no easy solution.
  My hon. Friend the Member for Moray and Nairn (Mr. Pollock) talked about replanting rates. I hope that he will forgive me if, for reasons of time, I do not go into what is in effect a hypothetical question. Where there are existing trees, anyone who wishes to fell them to use the land for some other prupose first will have to obtain a felling licence. It would seem that, where the land is likely to be suitable only for trees, that would be grantedon condition that replanting took place. Therefore, there is
  724
  already a substantial inbuilt protection. As for the sale of plantable land—that is, land available for the reserve—which is clear, bare land, and it will be sold at a forestry price.
  The hon. Member for Berwick and East Lothian (Mr. Home Robertson) was kind enough to suggest that we might have a merchant banker as a Forestry Commissioner. Certainly I shall look into that. My hon. Friend for Folkestone and Hythe (Sir. A. Costain) spoke some very good sense about finance.
  The private sector makes a very valuable contribution to the diversity of our forests. It provides 95 per cent. of the broad-leaved woodlands. But, in recent years, for every two trees planted by the Forestry Commission, the private sector has planted only one. Private planting rates look like going up to 20,000 hectares a year, and this seems to be a commendable change. While grant aid and fiscal reliefs provide only a proportion of the cost of planting by the private sector, the Exchequer bears the full cost of Forestry Commission plantings.
  It has been observed, rightly, that expansion in forestry depends on confidence. That is why the Government made their policy statement. I recognise that our need to carry out a full review may have made some private woodland owners hesitant about the Government's commitment to forestry. There was also the recommendation of the Public Accounts Committee to change very substantially the tax treatment, and, of course, owners were aware that a Rayner investigation was under way.
  All these doubts have now been swept away. The Government have made a firm commitment to the continued expansion of forestry. We will enable a new element in the private sector, through this Bill, to invest in the existing forestry estate. We have made it clear that we intend to continue the present very favourable income tax arrangements for forestry. Lastly, we shall be maintaining the value of private woodland grants but simplifying the administration very considerably. In future, instead of the complex legal formalities of the dedication schemes, there will be a simple contract between the applicant and the commission.
  The private sector is assured of the Government's backing for an expanding industry, in improved access to land, the continuance of its tax concessions and simpler but equally valuable grants. I have no doubt about the willingness of the private sector to play its full part in the future expansion of forestry. However, it will still be a part and not the whole. The Forestry Commission will still be the forestry authority and will still have its own programme of new planting. As it always has been since the First World War, forestry will continue to be a partnership between the public and the private sectors.
  The Government believe that a sensible attitude to the management of the Forestry Commission's capital assets, their own public expenditure objectives and the commercial interests of private investors all justify some shift in the balance of this partnership towards the private sector. The Bill will facilitate this process and so enable the expansion of the nation's timber resources which we are all looking for to take place on a wider basis. Therefore, I commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes, 301, Noes, 240.

  Division No. 52]

  [9.59 pm

  AYES

  Adley, Robert

  Fairgrieve, Russell

  Aitken, Jonathan

  Faith, Mrs Sheila

  Alexander, Richard

  Farr, John

  Alison, Michael

  Fell, Anthony

  Ancram, Michael

  Fenner, Mrs Peggy

  Arnold, Tom

  Finsberg, Geoffrey

  Atkins, Robert (Preston N)

  Fisher, Sir Nigel

  Baker, Kenneth (St. M'bone)

  Fletcher, A. (Ed'nb'gh N)

  Baker, Nicholas (N Dorset)

  Flecher-Cooke, Charles

  Beaumont-Dark, Anthony

  Fookes, Miss Janet

  Bendall, Vivian

  Forman, Nigel

  Benyon, Thomas (A'don)

  Fowler, Rt Hon Norman

  Benyon, W. (Buckingham)

  Fox, Marcus

  Bevan, David Gilroy

  Fraser, Rt Hon Sir Hugh

  Biffen, Rt Hon John

  Fraser, Peter (South Angus)

  Biggs-Davison, John

  Fry, Peter

  Blackburn, John

  Galbraith, Hon T. G. D.

  Blaker, Peter

  Gardiner, George (Reigate)

  Body, Richard

  Gardner, Edward (S Fylde)

  Bonsor, Sir Nicholas

  Garel-Jones, Tristan

  Boscawen, Hon Robert

  Gilmour, Rt Hon Sir Ian

  Bottomley, Peter (W'wich W)

  Glyn, Dr Alan

  Bowden, Andrew

  Goodhart, Philip

  Boyson, Dr Rhodes

  Goodlad, Alastair

  Braine, Sir Bernard

  Gorst, John

  Bright, Graham

  Gow, Ian

  Brinton, Tim

  Gower, Sir Raymond

  Brittan, Leon

  Gray, Hamish

  Brocklebank-Fowler, C.

  Greenway, Harry

  Brooke, Hon Peter

  Griffiths, E. (B'y St. Edm'ds)

  Brotherton, Michael

  Griffiths, Peter (Portsm'th N)

  Brown, M. (Brigg and Scun)

  Grist, Ian

  Browne, John (Winchester)

  Grylls, Michael

  Bruce-Gardyne, John

  Gummer, John Selwyn

  Bryan, Sir Paul

  Hamilton, Hon A.

  Buchanan-Smith, Hon Alick

  Hamilton, Michael (Salisbury)

  Buck, Antony

  Hampson, Dr Keith

  Budgen, Nick

  Hannam, John

  Bulmer, Esmond

  Haselhurst, Alan

  Burden, Sir Frederick

  Hastings, Stephen

  Butcher, John

  Havers, Rt Hon Sir Michael

  Butler, Hon Adam

  Hawksley, Warren

  Carlisle, John (Luton West)

  Hayhoe, Barney

  Carlisle, Kenneth (Lincoln)

  Heath, Rt Hon Edward

  Carlise, Rt Hon M. (R'c'n)

  Heddle, John

  Chalker, Mrs. Lynda

  Henderson, Barry

  Channon, Rt. Hon. Paul

  Heseltine, Rt Hon Michael

  Chapman, Sydney

  Hicks, Robert

  Churchill, W. S.

  Higgins, Rt Hon Terence L.

  Clark, Hon A. (Plym'th, S'n)

  Hogg, Hon Douglas (Gr'th'm)

  Clark, Sir W. (Croydon S)

  Holland, Philip (Carlton)

  Clarke, Kenneth (Rushcliffe)

  Hooson, Tom

  Clegg, Sir Walter

  Hordern, Peter

  Cockeram, Eric

  Howe, Rt Hon Sir Geoffrey

  Colvin, Michael

  Howell, Rt Hon D. (G'ldf'd)

  Cope, John

  Howell, Ralph (N Norfolk)

  Cormack, Patrick

  Hunt, David (Wirral)

  Corrie, John

  Hunt, John (Ravensbourne)

  Costain, Sir Albert

  Hurd, Hon Douglas

  Cranborne, Viscount

  Irving, Charles (Cheltenham)

  Critchley, Julian

  Jenkin, Rt Hon Patrick

  Crouch, David

  Johnson Smith, Geoffrey

  Dean, Paul (North Somerset)

  Jopling, Rt Hon Michael

  Dickens, Geoffrey

  Kaberry, Sir Donald

  Dorrell, Stephen

  Kimball, Marcus

  Douglas-Hamilton, Lord J.

  King, Rt Hon Tom

  Dover, Denshore

  Knox, David

  du Cann, Rt Hon Edward

  Lamont, Norman

  Dunn, Robert (Dartford)

  Lang, Ian

  Durant, Tony

  Langford-Holt, Sir John

  Dykes, Hugh

  Latham, Michael

  Eden, Rt Hon Sir John

  Lawrence, Ivan

  Edwards, Rt Hon N. (P'broke)

  Lawson, Nigel

  Elliott, Sir William

  Lennox-Boyd, Hon Mark

  Emery, Peter

  Lester Jim (Beeston)

  Eyre, Reginald

  Lewis, Kenneth (Rutland)

  726

  Lloyd, Ian (Havant & W'loo)

  Rifkind, Malcolm

  Lloyd, Peter (Fareham)

  Rippon, Rt Hon Geoffrey

  Loveridge, John

  Roberts, M. (Cardiff NW)

  Lyell, Nicholas

  Roberts, Wyn (Conway)

  McCrindle, Robert

  Rossi, Hugh

  Macfarlane, Neil

  Rost, Peter

  MacGregor, John

  Sainsbury, Hon Timothy

  MacKay, John (Argyll)

  Scott, Nicholas

  Macmillan, Rt Hon M.

  Shaw, Giles (Pudsey)

  McNair-Wilson, M. (N'bury)

  Shelton, William (Streatham)

  McNair-Wilson, P. (New F'st)

  Shepherd, Colin (Hereford)

  McQuarrie, Albert

  Shepherd, Richard

  Madel, David

  Shersby, Michael

  Major, John

  Silvester, Fred

  Marlow, Tony

  Sims, Roger

  Marshall Michael (Arundel)

  Skeet, T. H. H.

  Marten, Neil (Banbury)

  Speed, Keith

  Mates, Michael

  Speller, Tony

  Mather, Carol

  Spence, John

  Maude, Rt Hon Sir Angus

  Spicer, Jim (West Dorset)

  Mawby, Ray

  Spicer, Michael (S Worcs)

  Mawhinney, Dr Brian

  Sproat, Ian

  Maxwell-Hyslop, Robin

  Squire, Robin

  Mayhew, Patrick

  Stanbrook, Ivor

  Mellor, David

  Stanley, John

  Meyer, Sir Anthony

  Steen, Anthony

  Miller, Hal (B' grove)

  Stevens, Martin

  Mills, Iain (Meriden)

  Stewart, Ian (Hitchin)

  Mills, Peter (West Devon)

  Stewart, A. (E Renfrewshire)

  Miscampbell, Norman

  Stokes, John

  Mitchell, David (Basingstoke)

  Stradling Thomas, J.

  Moate, Roger

  Tapsell, Peter

  Monro, Hector

  Taylor, Teddy (S'end E)

  Montgomery, Fergus

  Tebbit, Norman

  Moore, John

  Temple-Morris, Peter

  Morgan, Geraint

  Thatcher, Rt Hon Mrs M.

  Morris, M. (N'hampton S)

  Thomas, Jeffrey (Abertillery)

  Morrison, Hon C. (Devizes)

  Thomas, Rt Hon Peter

  Morrison, Hon P. (Chester)

  Thomas, Dr R. (Carmarthen)

  Mudd, David

  Thorne, Neil (Ilford South)

  Murphy, Christopher

  Tinn, James

  Myles, David

  Torney, Tom

  Neale, Gerrard

  Townend, John (Bridlington)

  Needham, Richard

  Townsend, Cyril D, (B'heath)

  Nelson, Anthony

  Trippier, David

  Neubert, Michael

  Trotter, Neville

  Newton, Tony

  van Straubenzee, W. R.

  Normanton, Tom

  Vaughan, Dr Gerard

  Nott, Rt Hon John

  Viggers, Peter

  Onslow, Cranley

  Waddington, David

  Oppenheim, Rt Hon Mrs S.

  Wakeham, John

  Page, Rt Hon Sir G. (Crosby)

  Waldegrave, Hon William

  Page, Richard (SW Herts)

  Walker, Rt Hon P. (W'cester)

  Parkinson, Cecil

  Walker, B. (Perth)

  Parris, Matthew

  Walker-Smith, Rt Hon Sir D.

  Patten, Christopher (Bath)

  Waller, Gary

  Pattie, Geoffrey

  Walters, Dennis

  Pawsey, James

  Ward, John

  Percival, Sir Ian

  Warren, Kenneth

  Peyton, Rt Hon John

  Watson, John

  Pink, R. Bonner

  Wells, Bowen

  Pollock, Alexander

  Wheeler, John

  Porter, Barry

  Whitelaw, Rt Hon William

  Prentice, Rt Hon Reg

  Whitney, Raymond

  Price, Sir David (Eastleigh)

  Wickenden, Keith

  Prior, Rt Hon James

  Wiggin, Jerry

  Proctor, K. Harvey

  Wilkinson, John

  Pym, Rt Hon Francis

  Williams, D. (Montgomery)

  Raison, Timothy

  Winterton, Nicholas

  Rathbone, Tim

  Wolfson, Mark

  Rees, Peter (Dover and Deal)

  Young, Sir George (Acton)

  Rees-Davies, W. R.

  Younger, Rt Hon George

  Rhodes James, Robert

  Rhys Williams, Sir Brandon

  Tellers for the Ayes:

  Ridley, Hon Nicholas

  Mr. Spencer Le Marchant and

  Ridsdale, Julian

  Mr. Anthony Berry

  NOES

  Abse, Leo

  Allaun, Frank

  Adams, Allen

  Archer, Rt Hon Peter

  727

  Armstrong, Rt Hon Ernest

  Garrett, John (Norwich S)

  Ashley, Rt Hon Jack

  George, Bruce

  Ashton, Joe

  Gilbert, Rt Hon Dr John

  Atkinson, N. (H'gey,)

  Ginsburg, David

  Bagier, Gordon A. T.

  Golding, John

  Barnett, Guy (Greenwich)

  Gourlay, Harry

  Barnett, Rt Hon Joel (H'wd)

  Graham, Ted

  Benn, Rt Hon A. Wedwood

  Grant, George (Morpeth)

  Bennett, Andrew (St'kp't N)

  Grant, John (Islington C)

  Bidwell, Sydney

  Hamilton, James (Bothwell)

  Booth, Rt Hon Albert

  Hamilton, W. W. (C'tral Fife)

  Boothroyd, Miss Betty

  Harrison, Rt Hon Walter

  Bottomley, Rt Hon A. (M'b'ro)

  Hart, Rt Hon Dame Judith

  Bradley, Tom

  Hattersley, Rt Hon Roy

  Bray, Dr Jeremy

  Haynes, Frank

  Brown, R. C. (N'castle W)

  Healey, Rt Hon Denis

  Brown, Ronald W. (H'ckn'y S)

  Heffer, Eric S.

  Buchan, Norman

  Holland, S. (L'b'th, Vauxh'll)

  Callaghan, Jim (Midd't'n & P)

  Home Robertson, John

  Campbell-Savours, Dale

  Homewood, William

  Canavan, Dennis

  Hooley, Frank

  Carmichael, Neil

  Horam, John

  Carter-Jones, Lewis

  Howell, Rt Hon D.

  Cartwright, John

  Howells, Geraint

  Clark, Dr David (S Shields)

  Huckfield, Les

  Cocks, Rt Hon M. (B'stol S)

  Hudson Davies, Gwilym E.

  Cohen, Stanley

  Hughes, Mark (Durham)

  Coleman, Donald

  Hughes, Robert (Aberdeen N)

  Concannon, Rt Hon J. D.

  Hughes, Roy (Newport)

  Conlan, Bernard

  Janner, Hon Greville

  Cook, Robin F.

  Jay, Rt Hon Douglas

  Cowans, Harry

  John, Brynmor

  Craigen, J. M.

  Johnson, James (Hull West)

  Crowther, J. S.

  Johnston, Russell (Inverness)

  Cryer, Bob

  Jones, Rt Hon Alec (Rh'dda)

  Cunliffe, Lawrence

  Jones, Barry (East Flint)

  Cunningham, Dr J. (W'h'n)

  Jones, Dan (Burnley)

  Dalyell, Tam

  Kaufman, Rt Hon Gerald

  Davidson, Arthur

  Kerr, Russell

  Davies, Rt Hon Denzil (L'lli)

  Kilroy-Silk, Robert

  Davies, Ifor (Gower)

  Kinnock, Neil

  Davis, Clinton (Hackney C)

  Lamborn, Harry

  Davis, T. (B'ham, Stechf'd)

  Lamond, James

  Deakins, Eric

  Leadbitter, Ted

  Dean, Joseph (Leeds West)

  Lestor, Miss Joan

  Dewar, Donald

  Lewis, Arthur (N'ham NW)

  Dixon, Donald

  Lewis, Ron (Carlisle)

  Dobson, Frank

  Litherland, Robert

  Dormand, Jack

  Lofthouse, Geoffrey

  Douglas, Dick

  Lyon, Alexander (York)

  Douglas-Mann, Bruce

  Lyons, Edward (Bradf'd W)

  Dubs, Alfred

  McCartney, Hugh

  Dunn, James A.

  McDonald, Dr Oonagh

  Dunnett, Jack

  McElhone, Frank

  Eadie, Alex

  McKay, Allen (Penistone)

  Eastham, Ken

  McKelvey, William

  Eills, R. (NE D'bysh're)

  Mackenzie, Rt Hon Gregor

  English, Michael

  Maclennan, Robert

  Ennals, Rt Hon David

  McNally, Thomas

  Evans, Ioan (Aberdare)

  McNamara, Kevin

  Evans, John (Newton)

  McTaggart, Robert

  Ewing, Harry

  McWilliam, John

  Faulds, Andrew

  Magee, Bryan

  Field, Frank

  Marks, Kenneth

  Fletcher, Ted (Darlington)

  Marshall, D (G'gow S'ton)

  Foot, Rt Hon Michael

  Marshall, Dr Edmund (Goole)

  Ford, Ben

  Marshall, Jim (Leicester S)

  Forrester, John

  Martin, M (G'gow S'burn)

  Foster, Derek

  Mason, Rt Hon Roy

  Fraser, J. (Lamb'th, N'w'd)

  Maxton, John

  Freeson, Rt Hon Reginald

  Maynard, Miss Joan

  Freud, Clement

  Meacher, Michael

  728

  Mellish, Rt Hon Robert

  Smith, Cyril (Rochdale)

  Mikardo, Ian

  Smith, Rt Hon J. (N Lanark)

  Millan, Rt Hon Bruce

  Snape, Peter

  Mitchell, Austin (Grimsby,)

  Soley, Clive

  Mitchell, R. C. (Soton Itchen)

  Spearing, Nigel

  Morris, Rt Hon A. (W'shawe)

  Spriggs, Leslie

  Morris, Rt Hon C. (O'shaw)

  Stallard, A. W.

  Morris, Rt Hon J. (Aberavon)

  Stewart, Rt Hon D. (W Isles)

  Moyle, Rt Hon Roland

  Stoddart, David

  Newens, Stanley

  Stott, Roger

  Oakes, Rt Hon Gordon

  Strang, Gavin

  Ogden, Eric

  Straw, Jack

  O'Neill, Martin

  Summerskill, Hon Dr Shirley

  Orme, Rt Hon Stanley

  Taylor, Mrs Ann (Bolton W)

  Owen, Rt Hon Dr David

  Thomas, Dafydd (Merioneth)

  Palmer, Arthur

  Thomas, Rt Hon G. (C'diff W)

  Park, George

  Thomas, Rt Hon Peter

  Parker, John

  Thomas, Dr R. (Carmarthen)

  Parry, Robert

  Thorne, Stan (Preston South)

  Pendry, Tom

  Tilley, John

  Penhaligon, David

  Tinn, James

  Powell, Raymond (Ogmore)

  Torney, Tom

  Prescott, John

  Varley, Rt Hon Eric G.

  Price, C. (Lewisham W)

  Wainwright, E. (Dearne V)

  Race, Reg

  Walker, Rt Hon H. (D'caster)

  Radice, Giles

  Watkins, David

  Rees, Rt Hon M (Leeds S)

  Weetch, Ken

  Richardson, Jo

  Wellbeloved, James

  Roberts, Albert (Normanton)

  Welsh, Michael

  Roberts, Allan (Bootle)

  White, Frank R.

  Roberts, Ernest (Hackney N)

  White, J. (G'gow Pollok)

  Roberts, Gwilym (Cannock)

  Whitehead, Philip

  Robertson, George

  Whitlock, William

  Robinson, G. (Coventry NW)

  Wigley, Dafydd

  Rodgers, Rt Hon William

  Willey, Rt Hon Frederick

  Roper, John

  Williams, Rt Hon A. (S'sea W)

  Ross, Ernest (Dundee West)

  Wilson, Gordon (Dundee E)

  Ross, Stephen (Isle of Wight)

  Wilson, Rt Hon Sir H. (H'ton)

  Rowlands, Ted

  Wilson, William (C'try SE)

  Ryman, John

  Winnick, David

  Sever, John

  Woodall, Alec

  Sheerman, Barry

  Woolmer, Kenneth

  Sheldon, Rt Hon R.

  Wrigglesworth, Ian

  Shore, Rt Hon Peter

  Young, David (Bolton E)

  Short, Mrs Renée

  Silkin, Rt Hon J. (Deptford)

  Tellers for the Noes:

  Silkin, Rt Hon S. C. (Dulwich)

  Mr. Ron Leighton and

  Silverman, Julius

  Mr. George Morton

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  Business of the House
  Ordered,
  That, at this day's sitting, the Motion relating to Ways nd Means may be proceeded with, though opposed, until any hour and the Motions relating to Landlord and Tenant may be proceeded with, though opposed, until half-past Eleven o'clock.—[Mr. Mather.]

  Business of the House

    WAYS AND MEANS
    Resolved
    That any Act of the present Session to amend the Forestry Act 1967 may make provision for payments to be made out of the Forestry Fund into the Consolidated Fund.—[Mr. Younger.]

  Business of the House
  The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): With permission, Mr. Deputy Speaker, I should like to make a short business statement.
  The business on Tuesday will now be the debate on the application under Standing Order No. 9, which Mr. Speaker granted this afternoon, followed by a debate on the Armitage report on a motion for the Adjournment of the House. It will be proposed that the 10 o'clock rule will be suspended for one hour.
  Motion on the Imprisonment (Temporary Provisions) Act 1980 (Continuance No. 3) Order.
  On Wednesday, Second Reading of the British Nationality Bill.
  Motions on the Judgments Enforcement (Northern Ireland) Orders.
  Mr. Michael Cocks: I thank the Leader of the House for his statement and for the way in which he has responded to the Opposition's representations. I am most obliged to him.

  Rents (Scotland)
  10.17 pm
  Mr. Donald Dewar: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Increase of Rent Restriction (Housing Associations) (Scotland) Order 1980 (S.I., 1980, No. 1668), dated 30 October 1980, a copy of which was laid before this House on 11 November 1980 in the last Session of Parliament, be revoked.
  The two orders that we are praying against—
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. I take it that the hon. Gentleman is suggesting that we debate at the same time the following motion:
  That an humble Address be presented to Her Majesty, praying that the Increase of Rent Restriction (Scotland) Order 1980 (S.I., 1980, No. 1664), dated 30 October 1980, a copy of which was laid before this House on II November 1980 in the last Session of Parliament, be revoked.
  Mr. Dewar: I believe that that would be for the convenience of the House, Mr. Deputy Speaker.
  Mr. Deputy Speaker: I gather that that is so. Therefore, we shall take the two motions together.
  Mr. Dewar: I doubt whether anyone would shout "Nay" to that suggestion, Mr. Deputy speaker, as it will shorten the proceedings considerably.
  We are dealing with rents in the private sector and with housing association rents. Both orders were spawned, if that is the right word, by the Tenants' Rights, Etc. (Scotland) Act. Private sector rents are a matter on which we are perhaps apt to give rather short measure. There is on occasion so much publicity and anxiety about what is happening in the public sector, under this Government's vicious policies, that we forget how important the private rented sector is and how many people are at risk if the Government get their policies wrong, as we believe they have.
  I should have expected the Minister to approach the subject with a great deal of confidence, because there is an old myth that those in the private sector, whether owner-occupiers or people who rent, are more likely to be
  730
  politically favourable to the Conservative Party. It is an old Tory principle to look after the lads. All that I can say is that that myth is no longer believed. Whether there ever was such a political allegiance, I imagine that it has been heavily eroded for many people who buy or rent in the private sector, in terms of the short tenancy and the fate of those who are marginal home owners with mortgages. The agony and recrimination about Conservative housing policy must be real.
  This is a limited debate, but it allows us to draw attention to what I believe are very unsatisfactory provisions introduced by the Government—provisions that will lead to some difficulty for many people who already have enough problems to face.
  On the surface—no doubt the Minister will make this sound as plausible as he can—the raising of the limit on private sector rents, the maxima by which a rent can be raised, from £78 to £104 in any one year, does not sound desperate. After all, the Minister will argue, and we are all aware, that the figure of £78 was set as far back as 1975. Bearing in mind inflation and what has happened to the value of money since then, one may say that an increase of about one-third is perhaps not a matter to become overheated about. But that is a simplistic view. There are a number of good reasons why the House should give careful scrutiny, perhaps with a somewhat cynical eye, to what is being done.
  I shall return in a moment to the two principal arguments that lie behind this short debate, but, first, there are one or two points of detail that I should like to raise, which no doubt the Minister will be glad to deal with when he replies. In both orders there are references to traditional arrangements, and I hope that the Minister will say a word or two about the details. As I understand—I had it from a reasonably good source—there are particular arrangements for housing associations, in that originally the maximum increase for any one year was £39. It is the Government's intention to raise that amount to £104, but there is some sort of tapering or staging arrangement that allows the system to rest at £78 for an intermediate period. Will the Minister clarify that and put it on record? It would be useful to have the information in an easily accessible form.
  At the same time, on the housing association side, perhaps the Minister will say a word or two about the phasing of rent increases for housing association properties. I raise that matter because, as we are all aware, these orders derive from section 37 of the Tenants' Rights, Etc. (Scotland) Act 1980, and they specifically repeal sections 7 to 9 of the Housing Rents and Subsidies (Scotland) Act 1975. But section 7(3) exempts the housing association properties, which are covered by a completely different statute. Will the Minister say under which statute the phasing is abolished?
  As I understand it, charges for variable services—I think particularly of sheltered housing built by housing associations, which are the principal supplier, or almost the principal agents, of local authorities—are not included in the rent control that is embodied in these orders. Again, I should be grateful if the Minister would say a word or two about that, and whether he sees it as a problem. It may not apply in a large number of cases, but, by coincidence, I looked today at rents for fully sheltered housing built by a housing association and saw that the monthly rent was about £75, and that in addition there was a variable payment of over £35—about 50 per cent.—for various

  731
  services. There was also a heating element, over and above that. In that respect we may find ourselves in a position where the rent limitations do not apply to a high percentage of the monthly outgoings on fully sheltered housing that appear to be covered by this order.
  I should like to mention one technical point—technical in the sense that it involves the minutiae of calculation. As I understand it, when a registered rent has been fixed it will exist for a period of three years. We are all familiar with the fact that under the old system, because of phasing, as well as the £78 maximum, at the end of the three-year period we had fallen short in terms of tenant payments on the registered rent. Let us assume that that is the position and that under the new machinery a landlord registers a new rent, the maximum that will apply is either £104 or 25 per cent. of the previous rent limit, whichever is the higher.
  Will that 25 per cent. be calculated on the old registered rent, which had never been paid, or on the final step of the phasing, which might be considerably below the old registered rent? I am sure that the Minister follows that fairly self-evident point. However, when he was discussing hypothetically the arrival of the order under the Tenants' Rights, Etc. (Scotland) Act, I do not think that he dealt with that point. It would be helpful also if he would take the opportunity to make clear that any phasing arrangements presently in operation that will be abolished in future under this machinery will be allowed to run their course and will not be interrupted and put at hazard by any of the provisions of these orders.
  Perhaps the Minister will also say something about rent agreements, which I understand are exempt. This was the subject of amendment during proceedings on the Tenants' Rights, Etc. (Scotland) Bill and was pressed very hard by, among others, my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). I appreciate that a rent agreement, even if exempt, does not preclude a dissatisfied tenant from going to the rent officer and asking for a registered rent. That often does not happen. I hope that the Minister will reconsider the possibility of including rent agreements under the cover of the general rent restriction machinery.
  Having raised these detailed points, I turn briefly to the matter of principle and go back to the conundrum that I set myself on the question why we should object to this machinery when an increase from £78 to £104 in the maxima is not out of line and is perhaps generous in terms of the inflationary pattern in the years since 1975.
  The first point will come as no surprise to the Minister.
  The £104 is now qualified by the vital phrase
  "one-quarter of the existing rent, whichever is the greater".
  That means that many tenants, subject to the upper limit set by the registered rent—I accept that point—may face substantial increases.
  I asked a parliamentary question—to which I got the answer today—about registered rents in Scotland. I asked how many fell into bandings, how many were less than £100, how many were between £100 and £200, between £200 and £300, and so on. It is clear to anyone who looks only superficially at the housing statistics that rents are now escalating very fast in the private sector. It may be that the £104 will become an academic consideration in the practical application of these orders.
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  For example, houses of the cottage-type four in a block owned by Western Heritable, about which my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) knows, and in Edinburgh those that are of particular interest to the East Pilton Ratepayers' Association, owned by McTaggart and Meikle or the Cockburn Building Company, are modest, not in any sense palatial, properties have registered rents of £550. The last increase was from £370 to £500 for a three-apartment house. That is an increase of about 30 per cent.
  Mr. John Maxton: In general, I accept what my hon. Friend said about Western Heritable rents. However, one small group has been victimised during the past five years by Western Heritable. The people concerned are now having to pay an increase in rent from £370 up to £900 a year. It is a small group, but there are some in that group.
  Mr. Dewar: My hon. Friend obviously knows his constituency and its problems very well. I take his word for that. Taking an extreme example underlines my general proposition that many people living very modestly face substantial increases in private sector rents. The result is that the £104 becomes unimportant and what rules the roost is the 25 per cent. That 25 per cent. can be a substantial sum, which escallates very quickly. On a modest rent of £500, 25 per cent. represents an annual possible increase of £125, leading up towards the maxima. In the second year, of course, it becomes 25 per cent. not of £500 but of £625, and so it goes on. The Minister, of course, will say that the rent officer puts an end to it by setting the ceiling of the registered rent. But in this day and age, as I am sure that he will accept, rents are rising very fast. Very substantial increases are therefore occurring which I believe will affect a large number of people.
  The simple point has been put to me, by a number of people who will be affected, that 25 per cent. on their basic housing rent costs is not a very generous or acceptable matter in the current economic situation, even given the Minister's claims about the Government's likely record on inflation over the next two or three years. I accept that if, through economic mismanagement, the country is plunged into an ever-deepening recession, it is likely that inflation will ultimately be slowed up. If one assumes that inflation will continue at its present rate, however, the 25 per cent. provision clearly means that these people will be paying considerably over the odds during the period when they are catching up with their registered rent. I believe that that situation will, understandably, lead to a good deal of frustration and heart searching.
  It is not just the 25 per cent. or £104, whichever is the greater. It is the new maxima combined with the abolition of phasing. That will also have a very considerable effect. Phasing is abolished under section 37 of the Tenants' Rights, Etc. (Scotland) Act 1980, with the repeal of sections 7 to 9 of 1975 Act. I am not thirled to schedule 2 of the Act, which set out the details of the way in which the phasing was managed. It is all too mathematical for me. There are too many equations and other formidable thickets of figures. But the effect at the end of the day was clear enough, and it was an important safeguard for many people at the lower end of the scale.
  I have referred to the way in which private rents have escalated and registered rents have risen. Referring back to the parliamentary question that I mentioned earlier, it

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  is still fair to say that between October 1979 and September 1980 there were 3,884 registered rents of between £200 and £300 for unfurnished tenancies. Those tenants are at the bottom end of the scale and almost certainly would have benefited from the retention of phasing. To take a simple mathematical example, under the old system an increase of £150 was phased over three years at £50 per year and the £78 maximum became academic. Now that phasing is out of the way, the increase would be from £50 to £104, not just £78. I could cite many other examples to demonstrate that phasing was important because it lengthened the period over which the increase was staged. On a rent of £300 rising to £500, for example, under the new arrangements the increase in the first year would be £104, and in the second year £95. Under the old system it would have meant three rises of £67. The climb would have been far more gentle and the graph more acceptable to the tenant.
  I know that the Under-Secretary will say that these are comparatively small sums of money and that the rent allowance system should mop up any hardship. As he knows, however, the take-up of rent allowances is very poor, particularly in the private sector where—perhaps unfortunately, perhaps misguidedly—through mistaken pride, people do not like asking for rent allowances. I suspect that a significant number of tenants—I put it no higher, but the House should be concerned about significant numbers of people, not just people in the mass—will be faced with an imposition as a result of the abolition of phasing, and will not know or will not wish, or for one reason or another will not be in a position, to claim the kind of allowance that would meet this addition to their monthly budget.
  I am not trying to pretend that these are matters of enormous importance measured against the whole complexity of the housing system or the private sector rent structure, but for significant groups who have often in the past been victimised or overlooked they represent a considerable deterioration in the safeguards that our housing legislation provides. It is wrong to let that go unchallenged, and it should be tested and reconsidered by the Minister, because it would not cost a great deal in terms of ingenuity, parliamentary time or finance, and it would not seriously erode the position of landlords if at least some action were taken to remedy these anomalies, which I fear will be allowed to slip into our system. It is on that basis that I draw the attention of the House to and pray against these orders.
  10.36 pm
  Mr. Gordon Wilson: I shall be brief. I congratulate the hon. Member for Glasgow, Garscadden (Mr. Dewar) on the way in which he has managed to tease out a lot of the detail in the orders, brief as they are. I think that he is correct in saying that although these do not affect a large number of people, or involve large sums—it is well known that the numbers of private sector tenants have been declining for a number of years—to individals this is an important matter.
  As Members of Parliament we all get visits from constituents who are private tenants and who complain about the substantial rent increases with which they are faced at the instigation of the landlord through the rent officer or the rent assessment committee. It was a matter
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  of regret that under the tenants' rights legislation the Minister did not accept my amendment making it mandatory for certain repair work to be done.
  One of the greatest complaints by tenants who have been through the rents system is that they pay the increases in rents but they do not seem to get anything back. The rotten sash cords are not replaced. The whole object of the legislation, however, in relaxing the regulations and restrictions placed on rents from the First World War onwards was to enable more money to be spent on the improvement of property.
  Good landlords most certainly do a lot of work to improve their properties, but many others do not. They merely pocket the rents. Many tenants will find the increases suggested here going straight into the pockets of their landlords, with no return on them in terms of improvements to amenities. The 25 per cent. maximum increase that may well apply is swingeing. Will the Minister say what the real limit will be if the abolition of phasing is taken into account? Undoubtedly private sector rents are about to be sent rocketing at a rate far in excess of the rate of inflation. We are given very little ground for confidence in the Government's economic policies when they are prepared to consider 25 per cent. increases in rents while they are trying to force down wages and salaries. They claim that they now have wage rises in the public sector limited to under 10 per cent., and that they will be limited to 6 per cent. The people who might be affected by that limit will find they have to pay 25 per cent. more in rents.
  The order relating to the housing associations contains a reference in the explanatory note which states:
  "It also provides that there shall be no limitation on increases in any charges included in the rent for services provided by the landlord if such charges are registered by the Rent Officer as variable."
  Is that an entirely new provision? Will the Minister explain why the limitations placed on rents are not applied to those charges? It seens anomalous that such charges have been singled out for decontrolling while there is still to be some vestigial control over the size of rent increases.
  A 25 per cent. increase is an excessive sum. It puts the smaller figure of £104 into perspective. The Minister may have to apply both a fixed sum and a percentage, but the percentage seems far in excess of any reasonable sum that could be imposed by a Government who claim to be bringing down the rate of inflation. Do the Government believe that the rate of inflation will keep going down, rather than, as many of us believe, be inclined to go up in a year or two, when the Government start pumping money into the economy in a despairing effort to be re-elected?
  10.40 pm
  Mr. Robin F. Cook: There may be only a small number of people affected by the orders, but they include a large number of my constituents. I represent significantly more private tenants than council tenants, and I am grateful to the Opposition Front Bench for having prayed against the orders and given us the opportunity to debate them.
  I am particularly grateful to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) for having nailed at the outset the falsity of any attempt to compare the £104 in the orders with the £78 set by the 1975 statute. Any attempt to pretend that all that we are confronted with

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  is a modest uprating of the £78 in line with inflation would be misleading. Such a comparison is meaningless, because the phasing to which the £78 referred has been abolished.
  In Committee on the Bill from which the pernicious orders stem we established that the average increase in regulated rents in Scotland last year was £113. The effect of rent phasing was to cut that figure into three, giving an average increase per annum of only £38. Under the orders, the £38 in the first year would soar immediately to £104. Only at that level does any protection enter into the consideration of the rent to be paid by tenants. That is not a 25 per cent. or 33 per cent. increase, but a threefold increase.
  What matters to the tenant is not what was the theoretical maximum before the orders and what will be the theoretical maximum after them, but what he was likely to have paid before the orders and what he is likely to pay after them. That is the difference between £38 and £104.
  It was pretended to us in Committee, and will no doubt be pretended again tonight, that the orders are intended to give the Scottish tenant equivalent protection to that given in the law for England and Wales, where rent phasing has been preserved, though admittedly concertinaed into two years instead of three.
  No doubt it will be put to us that the orders represent compensation to tenants in Scotland for the abolition of rent phasing in its entirety, but if it were intended that the maximum set by the orders should give the same protection to the tenent in Scotland as is given to the tenants in England by the preservation of phasing over two years it would have been necessary for the figures set by the orders to be half the average increase. That would have the effect of spreading the increase over two years rather than one. Bearing in mind the figures that I have quoted, half the average increase would be £55. In practice, we are confronted not with a figure of £55 but with a figure that is well-nigh double, rendering nugatory any protection to the tenant of the restriction on rent under the orders.
  The order prescribes that the increase shall not be £104 in every case but £104, or 25 per cent. of the existing rent, whichever is higher. That means, for a number of tenants, a considerable increase in excess of £104. Since we debated the matter in Committee during the passage of the Bill, I have had a public meeting in my constituency at which I met a number of private tenants to explain the provisions of the Tenants' Rights, Etc. (Scotland) Act 1980, or as we prefer to know it within my constituency, the Landlords Rights, Etc. Act.
  One private tenant has been to see me several times at my surgeries to complain that his landlord will not carry out modernisation and repairs. The last time he was before the rent assessment committee a rent of £452 was struck for him. He faces an increase in rent, in the first year, of £113, an increase in the second year—because the 25 per cent. is compounded—of £141, and an increase in the third year of £176, at the end of which he will have had a total increase up to £882, nearly double the figure from which he started only three years before—all in payment to a landlord who, consistently over the years, has refused to spend a penny on the property and who has no obligation under the statute or the orders to spend a penny of the increase on repairs.
  736
  The Minister may object that it is not known what rent the rent assessment committee will strike for this property. It may not fix on a figure of £882. In that objection is exposed the whole hypocrisy of the orders. The Minister would essentially be saying that the only protection for the tenant against such an increase is at the discretion of the rent assessment committee and should it choose to impose a rent of £882 there is nothing in the orders to protect the tenant against the increases that I have described.
  The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I am sure that the hon. Gentleman will appreciate that the purpose of phasing, as introduced by the previous Government, was never intended to be a protection against unfair or unjustifiable decisions by rent assessment committees.
  Mr. Cook: Indeed, it was not. It was intended to spread the increase evenly over the period concerned. If the rent assessment committee had decided on £882 before the Act that we considered last year and before the orders before us, the maximum increase that the landlord could have recovered would have been one of £78 in any one year, which is substantially less than he will be able to claim under these orders. In the last year he will be able to claim an increase of £176, which is well over double the level that he would have been able to claim before the Minister altered the law.
  My hon. Friend—I may extend that courtesy at this late hour—the Member for Dundee, East (Mr. Wilson) has already put this point to the House. The Minister is, in effect, telling my constituent that annual increases of 25 per cent. a year for three years are acceptable to the Government at the very same time when the Government are asking my constituent to settle for a single-figure increase in his wages and, if he is a teacher, to settle for an increase of only 4 per cent. for all we know, for the next three years. The harsh reality is that the bulk of the private tenants who will find themselves in this position are not employed at all. Most of them probably are pensioners.
  The Government have already declared that those pensioners, this year, will face a cut in their real standard of living as a result of the failure fully to index their pensions. They will face a further cut as a result of the increases in their rent under the orders. I cannot do better than refer the Minister to the sterling words of the East Pilton and District Ratepayers' Association, to which many references were made in Committee. The Minister will be aware that the association wrote to him on 11 November. I should like to quote the words of the association's secretary on this matter:
  "I would also point out that the increase in Old Age Pensions will be delayed by two weeks this year. The Prime Minister stated that pensioners would have to share in the cuts in Government expenditure. Commercial landlords should surely be able to afford to participate in the cuts that have been imposed on all sections of the population."
  I believe that that states the position precisely and succinctly. As a result of the Act and these orders we are seeing a deliberate step that will increase the money received by commercial landlords and increase the payments to them from their tenants.
  The explanatory and financial memorandum to the parent statute to these orders estimated that there would be an increased expenditure of £1 million in rent allowances as a result of the increase in private rents following from these orders. That is a substantial increase in public expenditure. But underlying that substantial increase in

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  public expenditure is a much greater increase in the payments that will be made by private tenants to their landlords. In answer to parliamentary questions from me, the Minister confirmed that for every 60p increase in rent allowance there will be a 40p increase in rent. Therefore, even among those claiming rent allowance there will be an increased payment of £400,000 to match the £1 million increase in rent allowances.
  We know, pathetically and tragically, that uptake of rent allowances is one of the lowest of any benefit that is available, largely because some elderly people do not wish to take up that form of allowance and would rather be independent. Only half of all those eligible for rent allowance claim it. In other words, if there is an increased expenditure of £1·4 million by those who claim rent allowance there will be another increase in expenditure of £1·4 million by tenants eligible for rent allowance who will not claim it. In total, we can conclude that £1·8 million will flow from the pockets of tenants who are eligible for rent allowance to their landlords as a result of the statute and these orders.
  One can only conclude that these orders embody, more precisely than many other measures that we have seen go through this House in recent months, the new text of the Conservative Party that "From those who have not shall be taken even that which they have."
  The Minister is not an unreasonable man. On occasion he has shown himself flexible, sensible and open to reasoned argument. Therefore I beg him, even at this stage, to withdraw these orders and not ask the House to pass measures that mock those whose rents they purport to restrict.
  10.53 pm
  Mr. John Maxton: I am a fair-minded man, so, before getting to the main tenor of my remarks, I say that we should be at least partially grateful to the Minister for laying these orders. During our debates on the Tenants' Rights, Etc. (Scotland) Bill in Committee, Opposition Members said that the legislation provided that the Secretary of State "may"—and not "shall"—introduce orders imposing this sort of restriction. We should be grateful that the Minister has not left the matter open. As I read the Act—I am not sure that I do not disagree with my hon. Friend the Member for Edinburgh, Central (Mr. Cook)—if these orders had not been introduced, even though the increases in them are far too large those increases would not have been restrained at all and landlords could have pushed much faster.
  I am a little surprised that the hon. Member for Renfrewshire, East (Mr. Stewart) has remained silent in this debate. Even though the Opposition object because these rises are far too high, I expected the hon. Gentleman, as the defender of free enterprise and of landlords' rights to increase their rents as much as they like, to be on his feet attacking the Minister for introducing these orders at all. In Committee the hon. Gentleman suggested that there should be no rent controls on landlords.
  Mr. Allan Stewart: Hear, hear.
  Mr. Maxton: Even now, the hon. Gentleman says "Hear, hear". Perhaps he will seek to catch your eye, Mr, Deputy Speaker, so that he can make his points and attack the Minister for introducing the orders.
  Like my hon. Friend the Member for Edinburgh, Central, I have a great deal of private rented property in
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  my constituency—property of two basic types. The first is that owned by the Western Heritable Insurance Society, referred to by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). That is the four-in-a-block type of property, which is reasonably modern, although the necessary modernisation has not always been done by the landlords. The second consists of the tenemental old red sandstone blocks, most of which are now decaying. The second largest group of people who come to my surgery with complaints are tenants of these properties, complaining about landlords' failure to carry out repairs, despite the fact that many of their rents have risen and, under the order, will rise even more.
  It is a myth that in the past the private landlord in Scotland has not received enough rent to ensure that he keeps his buildings in proper repair and that if the order and the rent increases go through he will do so in future, so that more property will become available to rent. The figures suggest that when private landlords raise their rents, and rent control is at least slackened or abolished, the reverse happens—the number of properties available for rent declines. As the rents rise, so tenants, who do not take up rent rebates in the proportion that other social benefits are taken up, cannot afford the rents and are forced out of the properties. Local authorities must then try to house them. Only a few people will be able to afford the rents of the properties that they have left, so the number of houses available could fall into disuse.
  But the local authorities to whom these people must turn because of the Government's action can no longer build new houses, and may have fewer houses available because of the sale of council houses. So those tenants will be in a very difficult position.
  Many of us opposed, and still oppose, the sale of council houses, but at least if a council tenant faces huge rent rises he may calculate that buying will cost the same as renting. But the private tenant does not have that option. If this Government are so keen on home ownership, it has always seemed grossly unfair that the private tenant did not have that same right to buy.
  The Minister will probably reply that these are private properties and that the State cannot insist that people sell them, but the Western Heritable houses in my constituency were built with public money, with State subsidy under the Housing Act 1924—not by private builders—and rents had to be controlled for a period. They are, in a sense, public housing from which private landlords now get enormous benefit.
  Many other tenants are in privately rented properties that have received local authority grants for redevelopment—for instance, for new plumbing and wiring. There has been a large input of public money to the privately rented sector. The Minister could at least perhaps introduce, even at this late stage, an amendment to the Tenants' Rights, Etc. (Scotland) Act to ensure that if there is to be a right to buy, private tenants will have the same right to purchase their property, with the same or perhaps even larger discounts. The houses built by Western Heritable originally cost £350. The company now gets well over 200 per cent. per annum on that investment, with rents of over £700 a year.
  The rent increases may not affect a large number of people but they affect the poorer people, including the proud old-age pensioners, who do not willingly claim State benefits, which they consider to be charity. They struggle. Their lives will be made harder as a result of the

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  orders. I appeal to the Minister to withdraw the orders and introduce new ones, containing considerably smaller increases.
  11.1 pm
  The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I agree with the hon. Member for Glasgow, Cathcart (Mr. Maxton) that if I were to accede to the request of his hon. Friend the Member for Edinburgh, Central (Mr. Cook) to withdraw the orders there would be no limit on the amount of rent increase implemented at any one time. I know that that was not the consequence sought by the hon. Gentleman.
  The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked about the transitional arrangements for housing associations. The advice that he has received is correct. The limit of £104 that applies to other private sector tenancies will ultimately apply to housing association tenancies. However, because we were starting from a base of £39 it was considered appropriate that there should be a transitional arrangement whereby for the first rent increase a maximum of £78 should apply. Only thereafter would the full figure of £104 apply.
  Mr. Dewar: The Minister says that the first rent increase will be limited to £78. Is that a once-only concession, or will it be the first rent increase in the three-year period of a newly registered rent?
  Mr. Rifkind: The hon. Gentleman's first proposition was correct. The increase of £78 applies only on the first occasion. Once a maximum of £104 had been in operation for two years it would be absurd to revert to an increase of £78 simply because three years had expired. That would be a curious form of logic, which I do not believe the hon. Gentleman would wish to pursue with any great ardour. It would take him into somewhat uncharted territory.
  The hon. Gentleman went on to ask on what basis the arrangements regarding housing associations were reached. He said that he could not find that in the Tenants' Rights, Etc. (Scotland) Act. That is correct. It is not there. The provisions are in the housing association order made under section 14 of the Housing (Financial Provisions) (Scotland) Act 1978, which inserted a new section—section 63—in the Housing (Financial Provisions) (Scotland) Act 1972. I should mention in passing that there is a minor drafting error in the order, which will require to be amended.
  The hon. Gentleman's next question related to phasing for housing associations. He asked me to confirm that as with the private rented sector it is the effect of the tenants' rights legislation and other legislation that for both housing associations and houses in the private rented sector that phasing will come to an end and will be replaced by a maximum rent increase in any one year. I am happy to confirm that observation.
  The hon. Gentleman and the hon. Member for Dundee, East (Mr. Wilson)—I am not sure whether the hon. Member for Dundee, East is the hon. Gentleman's hon. Friend now—asked about services charges and variable charges as provided for by the orders. These charges do not come within the limits that the orders provide. This is not a new principle. It was the previous Labour Government who provided that services charges should not be included in the maximum rents that can be paid in
  740
  any one year, for the simple reason that these charges represent direct outlays by the landlord, whether it is a housing association or a private landlord, and that service charges and other comparable charges are sums that the landlord has had to expend in a given year. It seems reasonable that whatever restrictions are placed on rents the landlord should be entitled to cover costs such as those reflected in service charges. We are following the practice of the previous Labour Government in excluding them.
  Opposition Members made great play of the 25 per cent. provision, which is alternative to £104. The hon. Gentleman asked me specifically whether the 25 per cent. relates to the actual rent that the tenant has paid or to the fair rent that has been indicated by the rent officer or rent assessment committee. I refer the hon. Gentleman to the terms of the order. I am sure that these apply to both orders, but I refer him to the Increase of Rent Restriction (Scotland) Order, which deals with the private rented sector. Under article 2—the interpretation article—the previous rent limit is specifically defined. It states:
  "where the increase is the first to be made since the date of registration of the rent, the amount payable by way of rent on that date or in all other cases, the amount payable by way of rent on the relevant anniversary of that date."
  It is the amount that the tenant is required to pay. It is the actual figure that is covered by the order.
  As for the general principle of 25 per cent., I urge strongly on Opposition Members that the purpose of the law is to ensure that there is a fair balance between landlord and tenant. The previous Labour Government acknowledged that landlords, including the vast majority of responsible landlords who are seeking to maintain their property and to get a reasonable return on their investment—Opposition Members rarely make any reference to the reasonable landlords or to the housing associations that are covered by the orders, which need these reasonable incomes if they are to continue much of the good work that they do—should receive a fair return. The 25 per cent. and £104 provisions seem perfectly sensible, as there is a rent allowance system.
  Conservatives take great pride in the fact that it was a Conservative Government who first introduced rent allowances. That was done in the teeth of opposition from Labour Members. That was a regrettable opposition on their part, and one that they have never adequately explained to private tenants in Scotland or elsewhere in the United Kingdom. When tenants were given the opportunity to claim from the State significant sums to help pay the rent, the Labour Party fought that proposal tooth and nail and opposed it in a rather disgraceful fashion, which I am sure it now regrets for good reasons.
  The hon. Member for Edinburgh, Central commented on the comparison between Scottish provisions and those south of the border. He suggested that when the Bill, which is now an Act, was in Committee I pretended—these are the hon. Gentleman's words—that the Scottish and English provisions were the same. I pretended no such thing. I indicated that there were differences between the two sets of provisions and indicated the reasons for those differences. I am happy briefly to comment on them. There are two basic differences. In the Scottish provisions phasing is abolished and replaced by a maximum limit, in any one year, of £104, as the House is aware. In England the phasing is

  741
  limited to two years rather than three. Indeed, the rent can be reviewed after two years, whereas in Scotland the three-year minimum is maintained.
  It is difficult to draw conclusions as to which system is preferable for the tenant or the landlord, but the Scottish provisions ensure that while a tenant whose rent increase may be relatively small will pay it all at once, whereas in England it will be paid over two years. If the increase is large the maximum that he will be required to pay in any one year will be £104, or 25 per cent. In England the increase, however large, will have to be paid in full, at least over two years. That does not apply in Scotland. It is for hon. Members to come to a conclusion about which system they prefer on balance, but they should be aware of these distinctions between the two systems.
  Mr. Cook: I am happy to withdraw anything that I may have said to suggest that the Minister said that the systems were the same. I tried to say that the Minister suggested that this was a balancing provision to give protection equivalent to that provided for England and Wales. If he reads his speech, as I did earlier today, he will find that this is so.
  Under the statute as drafted for England and Wales, the tenant with the average increase will pay half that increase in the first year and half in the second year. If an equivalent protection were extended under this procedure to the Scottish tenant, the maximum increase would require to be half the average increase, which would give a figure of £55 per annum, and not £104.
  Mr. Rifkind: The hon. Gentleman is correct in saying that if we are talking about average rent increases it could be argued that the tenant in England will be slightly better off than the tenant in Scotland. However, the whole tenor of the hon. Gentleman's argument was not on the question of average rent increases, which are relatively low, but on the spectacular examples that he gave of dramatic increases. The hon. Gentleman even speculated on rent increases that had never been agreed by the rent assessment committee but were simply being proposed by the landlord. The only reason for introducing them into the debate was to suggest that there might be occasions on which rent increases were very large.
  If there is a good case for protecting the tenant, it is to protect him not from the average rent increase but from the large one. The hon. Gentleman must concede that if there were a large increase the tenant in Scotland would be considerably better off than the tenant south of the border. Instead of having to pay the increase altogether, in two years, in two lots, he would have a strict maximum for the total increase that could be paid in any one year, however long it took to reach the figure laid down. Therefore, if the hon. Gentleman's prime concern is, as his original remarks indicated, with above-average rent increases, he should concede that these Scottish provisions are considerably to the tenant's benefit.
  I am sure that the Opposition, appreciating as they now do what would be the effect of revocation of the orders, will not, if they wish to act logically, divide the House. The orders carry out an undertaking that I gave in the Committee, as the hon. Member for Glasgow, Cathcart (Mr. Maxton) was good enough to recognise, that we would introduce orders to ensure a maximum rent increase in any one year.
  The figure that I mentioned in Committee, some months ago, is the figure now to be found in the orders,
  742
  although it could be argued that the passage of time might justify a slightly larger figure. We have not suggested that. The £104 is a modest increase, even taking into account all the qualifications of the hon. Member for Edinburgh, Central, compared with the £78 fixed six years ago. It is on that basis that I have not the slightest doubt that the orders are defensible and fair, and reasonable to tenant and landlord alike.
  11.14 pm
  Mr. Dewar: I am always amused by the way in which the Under-Secretary tries to draw virtue from the most unlikely circumstances. I suppose that we should be grateful that he has introduced orders at all, but that does not put us under any moral obligation to endorse their contents, and we do not do so.
  The hon. Gentleman slid past most of the arguments about the 25 per cent. It was clear from my remarks and those of my hon. Friends that what worried us was not the £104 written into the order. If it were merely a question of that figure I think chat the hon. Gentleman would have the better of the argument. Indeed, he would not have to advance an argument on that point, although he probably would still have to do so on phasing.
  We have only to examine the Scottish housing statistics in the most cursory fashion to see that the sort of figures that my hon. Friend he Member for Edinburgh, Central (Mr. Cook) was advancing are in no way exceptional and unfair, but are now the norm for undramatic and rather unromantic property, inhabited by people of ordinary means who will be caught by the 25 per cent. provision, and will suffer as a result. The Under-Secretary of State made great play—I have heard him doing so before—of his surprise at the opposition that was originally put up to the introduction of rent allowances.
  In a sense, I well understand the suspicion, and I am sure that those who were listening to the debate had it in the back of their minds that rent allowances would be used as a cover for all sorts of strategies and mechanisms that would drive up rents in the private sector. We are seeing an example of that tonight, and we do not welcome it in any way. I accept, as the Under-Secretary of State said, that if there were no order there would be no maxima, and if that were permanent it would be totally unsatisfactory and we would be in great difficulty, but he has already conceded that there will have to be a minor amendment to the drafting of the order.
  We suggest that the Under-Secretary should consider the possibilty of doing something a little more radical and sensible. It will always be a matter of balance between rent restriction and a fair return for the landlord but, given the present economic climate and the particular category of tenants with whom we are dealing and all the circumstances of the case, the Minister has typically managed to get the balance a little wrong. It is not unreasonable to ask him to reconsider the possibility of using the amendment to put right a real, but not glaring or dramatic injustice.
  I shall not recommend my hon. Friends to divide the House on this matter, but it was important that it was ventilated and brought to the attention of the House. I hope that even at this late date, given that the matter is not closed and that the Minister will have to return to it, he will turn to the arguments and recognise, in the privacy of

  743
  his Department, in a way that he was a little blate to do on the Floor of the House, that he has got it wrong, and act accordingly.
  Question put and negatived.

  Electro-convulsive Therapy (Broadmoor Hospital)
  Motion made, and Question proposed, That this House do now adjourn.—[Lord James Douglas-Hamilton.]
  11.18 pm
  Mr. William van Straubenzee: I am grateful for the opportunity of a short debate in which I can raise the matter of what is generally called unmodified ECT, and its use at Broadmoor hospital, in my constituency. I say a "short debate" without a note of complaint. I am grateful for the opportunity to speak on this subject, and for the presence of my hon. Friend the Under-Secretary of State for Health and Social Security at this late hour in his busy day. It is not always understood that these are brief debates, with 15 minutes for the hon. Member who is raising the matter and 15 minutes for the Minister to reply. I shall naturally try to watch the clock carefully, to adhere to that, so that I divide the time fairly between us.
  This matter derives from public accusations made on 19 December 1979 by the organisation MIND. It made a large number of allegations at that time. I shall not touch on the others; there will be other opportunities for me to do that. The accusations were widespread. MIND accused the medical and nursing staff of brutality and worse, against patients at Broadmoor hospital. But it also—and this is the reason for the debate—referred specifically to what it regarded as the widespread improper use of unmodified ECT.
  I am anxious to establish clearly my viewpoint in these matters where anything improper is concerned. I use words that I used when I was guest speaker at the annual conference of the special hospitals division of the Prison Officers Association on 29 October. I said:
  "Throughout recent controversies affecting the special hospitals, in which I am proud to have taken a prominent part, I have always stressed that you are in a position of special trust in relation to the patients in your care, and that if at any time any one of you falls from the high standards of professional conduct which you expect of yourselves and which the general public expects of you, then retribution must follow. I shall never be a party to any cover-up."
  I may say that those words were received with acclamation by the conference. I was able to add:
  "Incidentally, it has been my experience throughout the years"—
  and they are now 21 years—
  "that it is the doctors and nurses themselves, caring for the mentally ill, who feel strongest about their own standards of conduct."
  I say that at the outset to make it perfectly clear that I do not believe in any kind of cover-up in matters of this sort. I believe very firmly in the highest possible standards of professionalism in the care of the mentally ill—
  The particular accusations of which I speak—those generally and those connected with unmodified ECT—were spearheaded by two young former nurses at the hospital—Mr. Colin Byrne and Mr. Tony van Roon.
  My case has always been—and remains—that essentially the motivation behind these accusations was political, and not professional. Tonight, I can offer some firm evidence to back my assertion.
  On 12 March 1980 the all-party mental health group met to hear these two young nurses make their accusations.

  745
  The minutes of that meeting were prepared by MIND. Therefore, presumably they will not be challenged by that organisation.
  Perhaps by way of background I may say that when I saw Mr. Byrne something stirred in my memory. I thought at the time—though I felt that I must be mistaken—that I recognised him. The minutes record:
  "Mr. van Straubenzee asked Mr. Colin Byrne if he had ever sold or distributed copies of Militant newspaper. Mr. Byrne said that he had not done so."
  This, in itself, is a trivial matter. This is a free country. Anyone can sell or distribute a newspaper, or anything of that kind. There is no reason for any of us to be ashamed of doing that. But it is on record that that was the reply given to me by Mr. Byrne at a meeting in one of the Committee Rooms of this House.
  I can now tell the House that I have in my possession two affidavits sworn by two members of the nursing staff. I have interviewed one of them very carefully. I have not had an opportunity to interview the other. However, with some experience, I can say that the one that I interviewed was a very good witness. Both swear that on two separate occasions they have seen Mr. Byrne selling the newspaper Militant—in fact, in Bracknell, in my constituency. On one occasion one of those affirming was accompanied by his wife, and on both occasions they spoke to Mr. Byrne.
  As I say, that is not important in itself—in a free country, what Mr. Byrne did is something that any one of us is free to do—but when one discovers that the evidence given by a witness in one particular is at least suspect, one is, I think, entitled to be very questioning about the rest of the evidence that he has given.
  Let me deal with one other point before I come to the main question of ECT. It might be said that I should have put that matter to both these young men. The answer is that I have tried to do so. I have tried to do so in the most obvious way—that is, to write to them, to make contact with them through MIND. This is the reply that I received from Mr. Smythe:
  "I shall inform Mr. Byrne and Mr. van Roon that you wish to contact them, and no doubt they will get in touch with you if they are agreeable."
  That is typical of the offensive way in which he normally conducts his correspondence.
  My understanding of the matter of unmodified ECT is that it is governed by the statement formulated by the council of the Royal College of Psychiatrists and endorsed at a meeting of that council in May 1980 at which Dr. Anthony Clare, the medical adviser to MIND, was present. I understand that it lays down that it is always desirable that the treatment should be modified with an intravenous anaesthetic and muscle relaxant. It goes on to say that nevertheless there are certain rare situations when it is both correct and necessary to give it unmodified, and the statement sets those out.
  My understanding—this is the question that I ask my hon. Friend—is that that is precisely what is followed at Broadmoor hospital. I should be grateful if my hon. Friend the Minister could tell me whether that is also his understanding. As a result of inquiries that I have made, it is certainly mine, but in order to try to resolve the matter, I have sought to bring all the parties round a table. On more than three occasions, in writing, I have offered to act as the chairman, the catalyst--whatever term one cares to use—to bring round one table the professionals. I am speaking not of the agitators or the paid men who do these things; I am talking about the professional medical
  746
  advisers. I have sought to bring them round a table, at Broadmoor or anywhere else, in order that these matters may be further examined, but I have totally failed. I believe that a body that was motivated by professional understandings would have responded to that.
  I remember very well that when my right hon. Friend the Secretary of State increased to no less than £275,000 the grant to MIND, he made some cogent comments about the attitude of a voluntary body. This is what he said:
  "Where a voluntary body chooses to accept public money in aid of its work, it has, I believe, a duty to act with the utmost responsibility, particularly in its relations with Government. A body which wishes to be free from this constraint would be much better advised not to accept public grants."
  It is my charge that the organisation MIND, under its present professional leadership—I am talking not about the admirable voluntary people who serve it but about the full-time professionals--has not applied that criterion to its work. Let me give the very latest example in the work of Mr. Smythe.
  Like everyone else, Mr. Smythe is fully entitled to his political views, and I do not for one moment seek to suggest otherwise. He turned up in the constituency represented by my hon. Friend the new Minister for Social Security as part of a deputation of the Hornsey Campaign for Nuclear Disarmament.
  I repeat that Mr. Smythe is entirely entitled to take a personal view. This is what he was quoted in the local newspaper on 2 January as saying:
  "Like everyone else we are worried sick', said Tony Smythe, Director of MIND, the Mental Health Group who was in the delegation. 'Working in social welfare we are constantly told that there's no money for decent services. It's all going on bombs and missiles. Mr. Rossi's Government has a lot to explain."
  Yet Government this year increased the grant to that remarkable organisation.
  I believe that at the circumference MIND does splendid work. It has worked devotedly for those who have been in mental hospitals and the like. But in the International Year of the Disabled it is handicapped by the professionals at present in charge of it, and no self-respecting Tory ought to subscribe a cent to its central funds, while still, of course, supporting its work at the circumference. Part of my complaint lies in the matters that it has raised on the subject of unmodified ECT which, for 15 minutes, I have been privileged to raise tonight.
  11.31 pm
  The Under-Secretary of State for Health and Social Security (Sir George Young): My hon. Friend raised a number of very important issues concerning the activities of MIND, which I hope to deal with later on, but I would like to address the bulk of my remarks to the question of the administration at Broadmoor of the use of unmodified electro-plexy, which is the subject of the debate. This has been the subject of a good deal of correspondence between MIND and the Department and has been discussed in the professional press and within the Royal College of Psychiatrists.
  The House may find it helpful if I explain that electro-plexy is a synonym sometimes used as an alternative to the more usual term "electro-convulsive therapy", or ECT. This has been used extensively in this and other countries for more than 40 years and is widely regarded as being of value to many patients with certain forms of mental illness. Over the years it has been the subject of a considerable volume of research, and this is continuing.

  747
  The use of ECT was considered in depth in 1978 by the Royal College of Psychiatrists and it concluded that amongst other things, there was clear and substantial evidence that ECT was an effective treatment in severe depressive illness.
  Over the years there have been great improvements in the method of administration of ECT. and a number of studies have indicated the types of mental illness for which ECT is most effective. The Medical Research Council has advised that ECT, given in a proper manner and with proper safeguards, has not been shown to cause serious side effects; in its view the risks involved in modern ECT treatment are small and well known to the doctors who administer it. ECT is said to be given in an unmodified form when it is administered without the use of muscle relaxant and without the use of an anaesthetic.
  The correspondence and discussions to which my hon. Friend referred have their roots in a speech made by a former Broadmoor nurse in the summer of 1979, in the course of which he described an occasion at which he had been present when one of the Broadmoor consultants prescribed and supervised the administration of ECT to a patient without the use of a muscle relaxant or an anaesthetic. In the course of an article in the November/December 1979 issue of the MIND journal MIND OUT, the nurse's description of this occasion was reported and discussed in the context of guidelines issued by the Royal College of Psychiatrists concerning the use of ECT. This section of the article ended with the sentence:
  "We"—
  and in the context I take this to mean MIND—
  "cannot think of any possible clinical justification for this—even in an emergency".
  It is not disputed that on a few very exceptional occasions ECT has been administered to patients at Broadmoor hospital without the use of either a muscle relaxant or an anaesthetic. On, these rare occasions this treatment has been given because on each occasion it was the clinical judgment of the consultant concerned that this exceptional measure was the best course of treatment at the particular time in the particular circumstances prevailing. I will explain why in a moment.
  The House will, I am sure, recognise that the choice and application of medical treatment to a particular patient at a particular time is primarily a matter for the professional judgment of the doctor concerned. Management—and by this I mean local hospital management, health authorities and the DHSS—has, of course, to ensure that the service is within acceptable professional standards. The consultant psychiatrists at Broadmoor are in this respect in no different posxerition from consultant psychiatrists working elsewhere. They have a clinical responsibility for their patients and in the exercise of this responsibility are answerable to their professional disciplinary body and, where appropriate, to the court in precisely the same way as their psychiatrist colleagues elsewhere.
  In January 1980 my right hon. Friend the Secretary of State was asked by my hon. Friend the Member for Cheltenham (Mr. Irving) about the allegations that had been made against Broadmoor. In his answer, and in particular in the supplementary letter, a copy of which he placed in the Library, my right hon. Friend explained that because he recognised that there could be a fear and
  748
  misunderstanding about ECT, and because he was concerned that the publicity at that time might make the public uneasy about this important and useful clinical treatment, he had gone into the matter in some detail.
  The memorandum—this is hememorandum compiled by the Royal College of Psychiatrists—provdes guidelines on the use of ECT. It makes no direct mention of unmodified ECT, as it was rightly assumed that under all normal circumstances the treatment would be given with anaesthetic and muscle relaxant.
  The Royal College of Psychiatrists has, however, recently set out its views in greater detail on the use of unmodifid ECT and has made these available to my Department. It states:
  "It is conceivable that there could be medical contraindications to the use of anaesthetics and/or muscular relaxants and yet the ECT be urgently needed to control the patient's behaviour. In these circumstances it would of course need the clinical judgment of the psychiatrist in charge of the case to decide whether to proceed after due consultation. There might also be situations in which anaesthetists are not available at short notice or even a second psychiatrist experienced in anaesthetic techniques. Again it would be a matter for the clinical judgment of the consultant whether in those circumstances he would be justified in going ahead without the modification."
  Here I respond to my hon. Friend's direct question. My Department is satisfied that the use of ECT at Broadmoor is in line with current practice and that use of unmodified ECT takes place only in exceptional circumstances where, in the clinical judgment of the doctor, this is the best course. My Department will, however, continue to keep the question of ECT in general under review. As was explained in my reply, published in the Supplement to the Votes and Proceedings for 14 December to a recent petition, my Department is sponsoring research by the Royal College of Psychiatrists into the present use of ECT in England.
  At about this time, as my hon. Friend and the House may recall, there was some correspondence in the medical journals about this subject, and on 9 February last year the British Medical Journal published a letter from Professor Pond, now Sir Desmond Pond, the president of the Royal College of Psychiatrists, in which he explained the views of the Royal college in terms broadly similar to those that I have just quoted. At about the same time the medical adviser of MIND, who had been concerned about these cases, was, I understand, invited by the Royal college and attended a meeting of its council for a discussion on the matter.
  I understand that subsequently the registrar of the Royal college reported the outcome of these discussions at the spring quarterly meeting, in May 1980, of the Royal college, which by coincidence happened to be at Broadmoor hospital, in the following terms:
  "A draft memorandum entitled Ethical Consideration of Electroplexy prepared by the joint ethical working party was discussed by Council. After careful consideration Council decided not to publish the memorandum at this stage, but it was agreed that the new Memorandum and the 1977 College Guidelines on ECT would be reviewed when the results of the current ECT research project were available. In view of correspondence in the medical and national press Council discussed whether a statement on the use of unmodified ECT should be published but decided that there was no need to add to the President's statements in the medical press."
  That report, I am told, was accepted without comment by the meeting at which the MIND adviser, as well, of course, as a number of the Broadmoor consultants, was present. Both parties seemed therefore to be content for the time being to let the matter rest on that basis.

  749
  I hope that in the light of what I have said my hon. Friend will accept that the issue of professional propriety of the use of ECT in what is termed the unmodified form has been fully aired by the appropriate medical experts in the appropriate forum, namely, the Royal college. He will note that the Royal college will be giving further thought to this when the results of the current ECT research project are available, and that it will consider then whether its existing guidance should be amended or supplemented. This seems to me to be the right way to proceed in matters of this kind, my hon. Friend suggested that a further meeting between the Broadmoor consultants and representatives of MIND might be arranged. Whilst I will certainly do all I can to foster good relations between the hospital and MIND I doubt whether a further meeting on this point—that is, the use of ECT—could take us any further, at any rate at present.
  Perhaps I could here say that I share my hon. Friend's concern about the way in which some of these matters were commented on at the outset. Some of the comments made in this case—as has happened in relation to allegations about other special hospitals and, indeed, other institutions of all kinds—seem to have been made on the principle that if an allegation is made about staff behaviour it must be true unless the staff can prove without a shadow of doubt that it is not.
  I fully agree with my hon. Friend that this is grossly unfair on staff who have a difficult and, at times, dangerous or disagreeable task to perform. They are entitled—as is everyone else—to a presumption of innocence or of acting in good faith unless there is clear evidence to the contrary. That is not to say that their actions and judgments should never be questioned. Of course they should he, and the Broadmoor staff recognise and accept this. Wherever detained patients are treated, it is to be expected that from time to time there may be questions and debate about their treatment.
  MIND's role in this matter raises fundamental questions which my hon. Friend touched upon towards the end of his remarks. One concerns the propriety of Government support for voluntary organisations whose campaigning activities may lead them at times to be critical of the Government or public authorities and institutions. My right hon. Friend the Secretary of State for Social Services spoke at Redbridge on 14 June 1980 about this, and my hon. Friend quoted from parts of his speech. In connection with MIND's activities he said
  "That where a body chooses to accept public money in aid of its work it has a duty to act with the utmost responsibility, particularly in its relations with government"
  and
  "especially must this be so when allegations of impropriety are being made."
  He went on to say that
  750
  "Governments should be exceedingly slow to allow disputes of this kind to influence the question of grant-aid".
  On the value of MIND's work, I fully share my right hon. Friend's high regard for the wide range and considerable volume of services provided under the umbrella of MIND by local MIND groups or associations of mental health, and I pay tibute to the devotion and skills of all those who have contributed to their development and help to maintain them today. I also fully appreciate and endorse the value of many of the services for the mentally ill which are provided on a regional and national basis by MIND.
  Mr. David Ennals: I much appreciate the tributes that the hon. Gentleman paid to MIND. Does he agree that the continued vendetta by the hon. Member for Wokingham (Mr. van Straubenzee) against Tony Smythe, the director, and many of his officers cannot help but do harm to an organisation that is clearly doing a fine job, sufficiently so to warrant an increased grant by the DHSS?
  Sir George Young: Over the past 18 months my hon. Friend has certainly spent a lot of his energy and talent on this matter. I know that senior staff at MIND have also spent a lot of time dealing with it. Both parties have the interests of patients and staff at heart. But I think that it would be in everyone's interests if the matter could be laid to rest as soon as possible.
  Perhaps I may ask my hon. Friend the Minister for Social Security, who has responsibility for the disabled, to deal with the specific point that my hon. Friend made about an event that took place in Hornsey, the constituency of my hon. Friend the Minister.
  Grants to all voluntary organisations, including MIND, are based on the merits of the work done by the organisation in question. To return to my right hon. Friend's Redbridge speech; he said,
  "it would indeed be a sad day if it were ever thought that this Government was trying to silence its critics by cutting off public funds. To be frank I have never for one moment contemplated letting the incident influence in any way my decision on grant-aiding the work of MIND … the decision has been taken, as it has been in the past, entirely on the merits of MIND's admirable work for the mentally ill".
  Those principles still apply.
  I am grateful to my hon. Friend for enabling me in this debate to set out formally the Government's position both on the particular question of the use of ECT at Broadmoor and on two general issues that have become linked with it; the place of clinical judgment in its professional context in the health services and the relationships between Government and voluntary organisations in receipt of grant aid.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes to Twelve o'clock.