HC Deb 10 March 1988 vol 129 cc504-5
1. Mr. Ron Davies

To ask the Chancellor of the Exchequer what estimate he has made of the revenue impact for the Exchequer of the removal of all special taxation provisions for forestry development.

The Financial Secretary to the Treasury (Mr. Norman Lamont)

The income tax forgone is currently estimated at some £10 million. No information on which to base an estimate of the cost of capital tax reliefs is available.

Mr. Davies

I am grateful to the Minister for his half helpful reply. Does he realise that most current commercial afforestation is carried out despite the objections of those who care for our landscape and wildlife and not especially for timber production but to provide tax dodges for the very rich? I do not expect the Minister to give away any Budget secrets, but will he at least confirm that there can be no social or economic justification for allowing the present tax regimes to continue?

Mr. Lamont

I note what the hon. Gentleman says, although some people would point out that forestry is important for employment in some rural areas and for the pulp and paper industries. The hon. Gentleman will be aware that we have introduced the broadleaved woodlands scheme so that there can be a better environmental balance in some of the forests that are being developed.

Mr. Bill Walker

When my right hon. Friend is considering matters affecting the taxation of forestry, will he bear in mind that the many thousands of acres of forest in Scotland and many hundreds of acres in my constituency are an essential part of the balance of the economy in many parts of Scotland, including my constituency, and will he not be taken in by all the noise of those who have never been near the forests?

Mr. Lamont

I note what my hon. Friend says. I said that forestry was important for employment, especially in remote rural areas. It is true that the industry operates on an extremely long time scale.

Mr. MacDonald

Is the Minister aware that inefficient use of public money on forestry does not stop with tax exemptions? Is he aware that, under the provisions of Wildlife and Countryside Act 1981, landlords are compensated not for planting trees but for not planting them? Is the right hon. Gentleman aware that one Highland landlord raked in almost £500,000 for not planting trees in a Caithness bog? When will the right hon. Gentleman put an end to this scam?

Mr. Lamont

I note what the hon. Gentleman says and shall draw it to the attention of my right hon. Friend the Secretary of State for the Environment.

Sir John Farr

Does my right hon. Friend recognise that in the October gales more than 1 million trees were lost and that they will not be replaced without suitable tax provisions for those engaged in planting forests?

Mr. Lamont

I note what my hon. Friend says.

Mr. Gordon Brown

Is it not true to say that, not only in forestry, but in business expansion schemes, enterprise zones, bed and breakfasting and executive share options, tax avoidance is mushrooming? Will the right hon. Gentleman agree that the money which is squandered for no real economic benefit on the tax havens of a few would be better invested in a better National Health Service for us all?

Mr. Lamont

I note that the hon. Gentleman takes advantage of a question on forestry to repeat his speech of the other day about tax breaks. I note also that the hon. Gentleman is not in favour of tax incentives that help small companies to raise capital or enable rundown areas of cities to be regenerated.