HL Deb 15 June 1967 vol 283 cc1141-58

9.2 p.m.

LORD MACPHERSON OF DRUMOCHTER rose to ask Her Majesty's Government what action, if any, they intend to take to safeguard the chipboard industry in Scotland. The noble Lord said: My Lords, I have tabled this Question in order to draw your Lordships' attention to the worsening position in the wood chipboard industry. I must say at the outset that I am not an expert on this product, and that my principal concern is the effect that this position has on Scottish forestry. There are two types of particle board used in the United Kingdom: flaxboard, which is not produced in this country, and wood chipboard, which is a composite board made up of small particles of wood bonded together by synthetic resin, and which is used mainly by the building and furniture trades.

During 1966 the United Kingdom consumption of particle board was 237,000 tons, of which 37 per cent. was from imports; and although there is an annual growth rate of 18 per cent., a large share of this increase during 1966 was absorbed by a greater volume of imports. In 1965 Eastern European countries increased their share of our import market from one-third to one-half. The complaint of the industry is not foreign competition but the unfair trading from Eastern European countries, which no doubt is a direct result of trade treaties negotiated at Government level. It is virtually impossible to classify this unfair competition as "dumping", since in Communist countries selling prices do not necessarily have to be related to cost, and quite often the quality of this board is below standard, which means that the chipboard industry as a whole suffers adversely.

This comparatively new British industry was started only after the war, with the enthusiastic support of the Board of Trade. It has some of the most modern equipment in the world, but admittedly our industry has mainly young forests to supply its raw materials, which are not as economical as mature forests. The British price, which has remained stable for the past five years, is between £40 and £45 per ton ex-factory—and this price compares favourably with the prices from other Western European countries—as against the Russian landed duty-paid price of £30 and the Roumanian price of £31. These imported prices include 20 per cent. duty, and freight and insurance of around £10 per ton. For instance, this brings the Russian price back to approximately £15 per ton ex-factory. Lastly on the question of price, Roumania, one of the largest overseas suppliers, charges higher prices to our European neighbours. Her prices to Belgium, for example, are about 38 per cent. higher than the United Kingdom price. In fact, the United Kingdom market appears to be used to dump surplus stocks. Eire, another supplier, charges 20 per cent. import duty on British wood chipboard, but is allowed to send her chipboard duty-free into this market.

All these facts have been made known to the Board of Trade, which unfortunately is not prepared to take any action against this unfair method of international trading. We have in this country a national programme to encourage homegrown timber, and present afforestation plans involve an investment of £400 million by private woodland owners and the Forestry Commission. This vital industry used to depend mainly on the mines to use up its small round wood, including thinnings, but wooden pit props are no longer used in modern mines. It is therefore essential to have an outlet for thinnings.

In the development of a successful forestry business we must have our own wood processing industry, but because of low-priced imports one-third of the United Kingdom capacity has been unused since 1965, and one factory has already closed down in Scotland, that is, Bonawood in Inverness, despite the efforts of the Highland and Islands Development Board which has done its best to keep the factory open and, when this failed, to try to interest others in taking over the business. The prime reason for this closure is the depressed condition of the wood chipboard market.

Forestry is the only suitable crop for vast tracts of Scotland—districts already depressed and scheduled as development areas. I am sure it must be small comfort to the redundant skilled forestry workers to know that the present difficulties are stated to be only temporary, and that as a result of current discussions something may well emerge. But once labour from the countryside is lost to the towns it is well known that workers never return to the rural areas.

I should like to suggest a way in which the Government could help the forestry contractors. I believe development area grants do not cover the equipment used in the forests, and it would be of some help if this machinery was covered by the present 45 per cent. grant for the purchase of new equipment. Would the Minister consider this small point? The wood chipboard industry is already handling 35 per cent. of the softwood sales and is filling the vacuum left by the loss of the traditional outlets in the mining industry, in which the consumption of softwood is now down to 4 per cent. Chipboard factories are having to handle an over-large proportion of thinnings and must be given some protection until we have more mature forests and thus more profitable raw materials.

My second suggestion is that the imports of wood chipboard and flaxboard be placed on a quota. I do not know of any other product from Iron Curtain countries which is on open general licence, which is certainly the case with chipboard from Roumania. I know that our policy to-day is towards the liberalisation of trade, but this case must be classified as a special one and I am sure that the industry and the Government could work out a fair quota system.

Lastly, immediate action is necessary as the situation has been saved only temporarily by switching contractors from handling thinnings to larger timber. The noble Duke, the Duke of Atholl, drew the attention of the House to the fact that the S.W.O.A. alone has over 150,000 cubic feet of chipboard thinnings waiting to go to market. On the same day, May 3, in reply to the noble Earl, Lord Dundee, the Minister said that the pulp mills at Fort William and Workington will provide an outlet for thinnings. I would point out that when Workington is fully operational the mill's requirements will be 75 per cent. spruce, whereas there are large quantities of larch and Scots pine to be disposed of in the area. Pulp mills use the larger diameter softwoods, and therefore most of the thinnings are not suitable. I regret that neither Fort William nor Workington can offer an immediate solution; nor can they in the long run offer a complete alternative to the wood chip board factories. I therefore strongly urge Her Majesty's Government, in consultation with the industry, to take some immediate action before it is too late.

9.12 p.m.

THE EARL OF DUNDEE

My Lords, I raised this question a month or two ago and asked a number of supplementaries on it, to which the noble Lord. Lord Hughes, replied as well and as fully as he could. I do not want to add much now, except to say that I am glad that the noble Lord, Lord Macpherson of Drumochter, has raised this question, quite independently, with so much knowledge, and, if I may say so, in such a very well-informed manner. I would ask the Government to pay particular attention to what he has said.

There are two or three points which I should like to highlight. First, on the question of dumping I should like to ask the noble Lord what procedure has to be followed to establish the fact of whether or not dumping has taken place under our anti-dumping laws. Is the initiative entirely with the industry which desires protection against dumping, or is there any duty incumbent upon the Board of Trade, when they have information, to examine it and see whether or not they can establish if dumping has taken place? It seemed to me that the Roumanian figures which the noble Lord gave are very difficult to explain, except on the assumption that chipboard from Roumania is being sold in this country at less than cost prices. That is what I understand dumping to mean although I do not know exactly how, under the anti-dumping laws, steps are taken by the Board of Trade to ascertain whether the selling price in this country is, in fact, below the cost of production or not. But I should like to be assured on this. What is being done to ascertain this?

The Russian figures, too, which the noble Lord, Lord Macpherson of Drumochter, gave, were I thought impressive. The noble Lord also mentioned flaxboard. I am not sure whether he pointed out that there is a difference between our duty on flaxboard and our duty on chipboard. Flaxboard is charged at only 10 per cent., whereas on chipboard we have to pay 20 per cent. Since I understand that all the Belgian material coming in is flaxboard and that it is undercutting our product, then, so long as we are out of the Common Market, it would be reasonable to put the two things on the same basis.

The noble Lord, Lord Macpherson of Drumochter, also mentioned the case of Ireland. I am all in favour of having a free trade area with Ireland, but apparently we do not have it; it is a one-way traffic. We pay a 20 per cent. duty on what we send there and they pay nothing on what they send to us. I do not know whether the fault lies with the industry in not being active enough in presenting what happens to the Board of Trade, or whether the Board of Trade is at fault in not taking action on the representations which are being made to it by the industry.

But I would say this. First, we cannot do entirely without chipboard on our present forestry economy of the 1960s. It is not quite true to say that all the small thinnings can be absorbed by the pulp mills. For example, the whole of Workington's needs for the next two years will be supplied by the Forestry Commission, and what we are told very often by the Forestry Commission and the Government is: "Well, you ought to wait a year or two. Do not sell to the chipboard market the particular kinds of thinnings that you have to dispose of. Concentrate for the next 12 or 18 months on other types of wood."

What does that mean as far as the Forestry Commission is concerned? It means that the country is losing a great deal of money from the thinnings of the type which are being held up in the meantime. Those thinnings, you may say, are getting a little bigger; but when the wood gets too close its total increment is prejudiced. If it is thinned in good time, the whole increment increases much more year by year than if it is left a long time to grow up close like asparagus. Then it does not have a good crown and does not put on so much extra girth. So the Forestry Commission, and consequently the Revenue, by delaying this class of thinnings which ought to be going to the chipboard market, is losing increment as well as the immediate cash receipts for the thinnings which it would be getting. These are things that we ought to look into if we want to make our forestry policy a success, which is something I know we all want to do.

Finally, my Lords, I would point out that the chipboard industry in Europe is a growing and expanding industry. It is distressing and a cause of unease that it should be contracting in Great Britain when it is expanding in the rest of Europe. There, again, I do not know what difference would be made by our accession to the Common Market if that should happen within a foreseeable period. But we must proceed on the assumption that we are, at any rate, not in yet. The Board of Trade ought to consider very urgently what action it can take, either by way of preventing unfair imports or encouraging production to maintain the growth of this industry, which is of importance to our general economy as well as simply to the expansion of forestry in the Highland areas.

9.20 p.m.

THE DUKE OF ATHOLL

My Lords, I am particularly grateful to the noble Lord, Lord Macpherson of Drumochter, for giving us a chance to discuss this problem of the chipboard industry, which is an industry of great importance to Scotland. We all had a great deal of faith in it, and thought that many of our less saleable thinnings would go to it. In this we have been severely disillusioned. I believe, as I gather the noble Lord, Lord Macpherson of Drumochter, does, that in the long run it will probably turn out all right. I regard it as a short-term problem, and therefore, although I should like to see legislation enacted to stop Eastern countries and Finland selling chipboard at below market value in this country, I think we must do something rather more immediate and more quickly. If we do not, the problem will be on us: foresters will have left the woodlands, trees will not be thinned, and it will be impossible for us to catch up.

My Lords, the noble Lord, Lord Hughes, when the Questions which have already been referred to were asked on May 3, said that the demand of Fort William was growing more rapidly than had at first been expected. My information is somewhat different. I have been told that they have been having great "teething" difficulties with the machines, and that this has definitely reduced the amount of wood that they have been able to take. As a result, they still are not taking timber from anyone except the Forestry Commission. My first suggestion is to ask whether, during this period of difficulty, the Forestry Commission could not give up or sub-contract to private owners some of its quota for the Fort William pulp mill, so that they could send some timber there straight away. This would not help everyone, but it would help some people.

The main difficulty about pulp timber, as opposed to chipboard timber, is that on the whole pulp demands spruce and not larch or pine; and it also demands a somewhat higher quality produce than chipboard demands. But I think that it would help a little, and I gather from what was said by the noble Lord, Lord Hughes, on May 3 that he feels that the increased consumption of the Fort William pulp mill will in the long run have quite an effect on this problem. I would therefore ask him very seriously whether he will request the Forestry Commission to allow private owners to get in on this market straight away by taking up some of the Commission's quota.

Secondly, my Lords, the best use for chipboard timber which is not required for the chipboard factories is for round fencing posts. Without any shadow of doubt it is best suited for this. There are many thousands of miles of main roads still unfenced in Scotland, on which the death of lambs and ewes during the year is absolutely enormous. The sheep also cause accidents which could well be avoided. I would ask the noble Lord whether he, the Ministry of Transport and the Scottish Department, could not have a crash programme of fencing these roads. This would be a great help, in that not only would it use up much of the timber which was designated for the chipboard factories and which now cannot go there, but would also help to prevent accidents, particularly where the roads have been improved but still left unfenced. I agree that there would be difficulties about who should pay for the maintenance of the fences, but I think that in this emergency we could well put up the fences first and then argue about maintenance afterwards. I would ask the noble Lord to consider this suggestion very carefully.

Finally, my Lords, I think part of the trouble is that the full potentialities of chipboard are not appreciated. I would therefore ask the noble Lord whether Government Departments could not use chipboard more than they do at the moment. I feel that this would help; it would show that the Government have faith in chipboard as a building material. One of the difficulties in a somewhat conservative country is to persuade people to use new building materials. I think that the Government and Government Departments could easily give a lead in this.

9.25 p.m.

LORD INGLEWOOD

My Lords, I intervene primarily to make the point that, though the noble Lord who introduced this debate spoke largely about Scotland, this is really a United Kingdom problem. It is just as serious South of the Border as it is North of the Border. I am not sure whether the noble Lord thinks that Workington is in Scotland. It is in a part of the country which was once claimed by the Kingdom of Strathclyde, but the modern boundary is just to the North of it.

To illustrate my point, the Novaboard factory, which was so important to East Anglia, in using small-scale thinnings in that area, has closed down. The Cellotex factory, which was not so far from us here, has closed down. The Tyboard factory, in the Tyne Valley, near Newcastle-on-Tyne, is working at much below its capacity. I think that I have said enough to show that this is not a problem centred on Fort William.

When I listened the other day to the noble Lord, Lord Hughes, answering the noble Earl's questions, I thought that he underestimated the seriousness of this problem. No doubt the Forestry Commission gave him his brief. I think it is fair to say that this is a much less immediate problem for the Forestry Commission than for private growers. Whether their sales be £250,000 or £500,000 more or less makes little difference to the annual accounts of the Forestry Commissioners, whereas on the private side a reduction of that amount in sales could bring large sections nearly to disaster. Chipboard is never going to be a high-priced material, and it ought not to be transported halfway across the globe and sold. The fact that that happens is surely prima facie evidence that the price, such as described to us this evening, must be an unfair price.

Lastly, may I support what the noble Duke has just said? Will the noble Lord, Lord Hughes, make representations to all his colleagues in the Government to press them to use more home-grown timber of all natures, not just chipboard? I know that his predecessors have done this every few years. It has had very little effect, because it is easier to get a level supply of timber through the ports than from home sources. We must try to get away from that established habit. The evidence which has been laid before the noble Lord this evening is, I think, conclusive.

9.28 p.m.

LORD HUGHES

My Lords, although the Question relates to the chipboard industry in Scotland, the debate has become a miniature forestry debate. With all due respect to noble Lords, this was not the subject raised by my noble friend Lord Macpherson of Drumochter, although it was one of the points which he brought in and it will be one of the points to which I shall refer, because of the effect that increased foreign competition has on the chipboard industry and its requirement of home-grown timber. That is the aspect to which the noble Earl, Lord Dundee, referred when he put a Question to me recently.

In some of the things that have been said on this Question, there has been an emphasis in certain directions. For instance, the statistics which I have been given do not lead me to accept the figures of imports from Roumania, one of the countries against which an allegation of dumping has been made. Whatever the prices involved, their imports are a minor part of the total. For instance, in 1966, out of a total of a quarter of a million tons used, 90,000 tons were imported; and of that quantity 9,164 tons came from Roumania. So the proportion was approximately one-tenth of our total imports. We have to keep this matter in perspective, and we have to remember that we are partners in EFTA, who are considerable producers of this material, and that considerable quantities come from EFTA. One of the objects is to stimulate trade between ourselves and EFTA countries, and to that end we have eliminated duties. Secondly, we are seeking to enter the Common Market, and again the object will be to eliminate duties between ourselves and the Six. It would be inconsistent with either of these objectives, even as a short-term measure, to seek, even if it were possible—which it is not —to have duties on chipboard coming from these countries, in particular.

I should like to say something about the industry as a whole. First of all, as the noble Lord, Lord Macpherson of Drumochter, said, the chipboard industry is a comparatively new one, not only in Scotland but anywhere. The material can be made either from industrial wood waste, such as the shavings from sawmills and joinery factories, or from small sized roundwood which is subsequently converted into wood chips. The industry is thus a particularly suitable one for Scotland, where it provides one of the outlets for the increasing quantity of forestry thinnings which are now arising.

Chipboard is a very versatile material. It is already widely used in the furniture industry, as has been said, with more hopeful prospects. After all, we know that the furniture industry is not as prosperous at the present time as it has sometimes been in the past. But chipboard is being used in increasing quantities in building, for such purposes as floorings and partition walls. Rapid technological advances in the manufacture of chipboard have resulted in improvements in the production and have widened its range of applications.

Its success in establishing a market in Britain can be judged by the steady increase in consumption in recent years. This has grown from less than 70,000 tons in 1960 to nearly 250,000 tons in 1966. I would point out that in 1960 half of the total quantity was home-produced; that is, 35,000 tons out of slightly under 70,000 tons. But in 1966 the British production provided 162,000 tons, out of a total of 250,000 tons. Notwithstanding the many advantages which some of the foreign producers have, the industry has made considerable strides inside the United Kingdom and has had considerable success in getting a substantial and, up to 1966, at any rate, a growing share of the market.

It is against this background, therefore, that the increase in imports to which the industry attributes its present problems should be considered. Imports of chipboard and of other types of particle board, such as flaxboard, to which the noble Earl, Lord Dundee, referred, have risen from 34,000 tons in 1960 to 90,000 tons in 1966. This is another reflection of the rapid expansion of the market, to which I have already referred. Manufacturers in some of the overseas countries are able to produce this material at a lower cost than British manufacturers, because they can integrate their production with other forest industries and so obtain their raw materials at a substantially lower cost.

They use very much more than we do the wood residues from sawings and so on, rather than the chips from thinnings, and it is an established fact in this country that where wood residue is used it forms a much lower proportion of the total cost of the chipboard than if wood chips from thinnings are used. I realise therefore that Scottish and other British manufacturers are working at a disadvantage in comparison with overseas competitors and one which the manufacturers cannot easily overcome, since British Forestry resources are not yet able to sustain large-scale integrated production of this type.

The cost of transport of raw materials to British chipboard factories is consequently a significant factor in the total costs. On the other hand, of course, there are the foreign producers. Some figures have been mentioned in relation to these costs, and they have the additional cost of transporting their materials to British markets. This does not mean, however, that the British industry cannot compete effectively with imported particle board. Although many foreign manufacturers have the advantage of lower production costs, the home industry is much closer to the domestic market and is thus much better placed to keep in touch with the user industries and better placed to meet their requirements quickly.

LORD INGLEWOOD

Would the noble Lord allow me to intervene? Can he easily reconcile that with the fact that, in spite of these advartages, several of our factories actually closed down?

LORD HUGHES

I do not know that I want easily to reconcile it. I do not accept that the closure of all of these factories is related to the question of dumping. I have pointed out that some of these European factories have lower production costs. They are more massive timber-using industries.

I think it was the noble Lord, Lord Macpherson of Drumochter, who said that since 1960 the price of chipboard in this country had remained stable. But the position on the Continent is not that it has remained stable; it is that the index of price in 1961 was 100 and the index in 1965 and 1966 was 78.3. This is a reflection of the greater extent to which they have grown and where, by a much bigger production, they have been able to reduce their costs to a greater extent than we have been able to maintain our prices over a period of six years. They have been able to go from that and reduce their prices. We shall in due course get these advantages also, but we are newer in this than they are, and we have not, as the noble Earl, Lord Dundee, has pointed out more than once in your Lordships' House, made the same efforts to produce timber, and therefore to have timber-using industries, as some of these other countries have done.

References have been made to widespread dumping of chipboard in the British market by foreign manufacturers. I understand that during last year the chipboard industry made representations to the Board of Trade about imports from Roumania. That was the only one of the Iron Curtain countries, so far as I know, about which representations were made. It is true that these imports were low in price, but they were such a small and, up to last year, declining proportion of the total imports of particle board that it would have been idle to pretend that they had other than the most marginal effect on the situation. For example, if I may quote the figures which I was given, from Roumania we took 6,700 tons in 1964, and in 1965 (the year in which the representations were made) the substantial figure of 17,800 tons. In 1966 the figure had fallen to 9,000 tons.

It is difficult to prove dumping, and particularly, for the reasons stated by mole than one noble Lord, in respect of imports from Communist countries, because of the different nature of their economy. It is difficult to prove that they are in fact selling abroad at a price lower than in the home market, because where they are not necessarily selling at a price in their own home market which bears relation to the cost of production, one of the basic essentials of establishing a case for the provision of anti-dumping measures is so very much more difficult to ascertain.

LORD MACPHERSON OF DRUMOCHTER

My Lords, may I, with respect, draw the noble Lord's attention to one point? When he said that the only complaint that had come to the Board of Trade related to Roumanian chipboard, I must disagree with him. I have here in my hand a document which was submitted to the Board of Trade by the Wood Chipboard Manufacturers' Group and the British Plastics Federation, which names all the other countries that were allegedly dumping on the British market. It is not only Roumania. All these details have been submitted very fully to the Board of Trade.

LORD HUGHES

What is the date of that submission?

LORD MACPHERSON OF DRUMOCHTER

My Lords, I cannot give the noble Lord the date of the submission, but the document was also covered by a Press conference, held on May 23; so it was prior to that date.

LORD HUGHES

That may be so. But I would point out that the information I was given was that the only representation which had been made was that made in 1965, when these Roumanian figures were so very much higher than those of the year before, and there was an allegation of dumping made at that particular time. But by the time it really came the figures were going down substantially. I have, however, confirmed the difficulty which exists in establishing that dumping, in the international concept of dumping, has in fact taken place.

One of the difficulties about this, of course, is that perhaps the genuine price difference is such that you do not serve much useful purpose by making representations. What happens is that the price is increased appreciably, still enabling it to come into the country, and you bring in the same quantity but pay more for it. It does not seem to help either the chipboard industry or the firms. I would point out also that the removal of the temporary import surcharge and of the remaining duties on imports from our EFTA partners has naturally resulted in increased competition for the growing market for chipboard in Britain.

We note, for instance, that in 1966 we took 14,000 tons from Finland, as against 4,700 tons in 1964, and we took, from outside either EFTA or the Iron Curtain countries, 22,000 tons from Belgium, as against 12,000 tons in 1964. We see the extent to which there is competition from areas where the dumping allegation just does not arise. A considerable part of the difficulties arises as a consequence of the removal of barriers to international trade, which, after all, is one of the cornerstones, and has long been one of the cornerstones, of our overseas trading policy; and which is generally recognised to be in our best long-term commercial interests.

While I appreciate the industry's concern about this growing competition, nevertheless an increase of imports is not in itself evidence of dumping, even although most of those imports may be cheaper than British chipboard. After all, a great part of our success as a commercial nation is that we are able to sell manufactured goods to countries—sometimes after transporting them over considerable distances—at a lower price than those countries can produce them themselves. The fact that we can sell more cheaply than they produce we will never accept as evidence that we are dumping our goods on them at uneconomic prices. I am not saying that there is no dumping; I am saying that the fact that something comes in more cheaply than we can produce it is not in itself evidence of dumping; and the industry are not maintaining that a great part of the imports come into the category of "dumped goods".

The industry are aware of the situation, and it may be that the document to which the noble Lord, Lord Macpherson of Drumochter, referred shows a more recent awareness of the need for activity on their part. But I should like to emphasise that if the industry have evidence—and this brings the answer to the noble Lord's question about how the machinery comes into operation—that the imports of particle board are being dumped, and that such imports are causing them, of threatening them, with material injury, they can apply to the Board of Trade for anti-dumping action under the Customs Duties (Dumping and Subsidies) Act, 1957. These two things are of particular importance—they must believe that dumping is taking place, and they must be able to show that they are causing material injury to the industry at home, or threatening material injury. That is why the Roumanian allegation in 1965 could not get very far. It was so small in relation to the total that it was virtually impossible to prove that it was causing material damage to the industry.

I can assure noble Lords that any such application from the industry would be carefully considered, because the Government are of course not indifferent to the chipboard industry's problems. In this connection, your Lordships may care to take note of what was said yesterday in another place by the President of the Board of Trade, which indicated that imports of particle board from Eastern Europe will be discussed with the countries concerned. Noble Lords will not expect me to go further than that. Various suggestions were made as to different ways in which this could be dealt with, and I think at this stage my right honourable friend has perhaps gone as far as he can be expected to go but your Lordships will note that it is a wider answer than merely a reference to seeking to deal with the dumping which might in fact be impossible to prove. It is the question of imports from those countries which will be discussed.

May I say that I am particularly conscious of the contribution which the factories in Annan and Irvine make to employment in Scotland? It is unfortunate that among those factories which are closed there is one at Inverness, but with the best will in the world I do not think this can be attributed solely to the effects, of competition from imports. I also recognise that the chipboard industry, relying as it does on indigenous wood and industrial wood residues, is responsible for valuable import savings of timber and other wood products, a field in which we are traditionally dependent on imports for such a large part of our requirements. We are, therefore, anxious that this industry should develop, and that its production capacity should be fully utilised. But I think it must be clear from what I have said that this development depends mainly on the ability of the industry to counter its competitors' advantages as regards raw materials' costs by making the best use of its proximity to the British market.

It has been suggested that the Government should give particular consideration to the need for making greater use of this particular material in our industry. We do in so far as we can; but, after all, the greater part, indeed almost the whole, of the users of these materials are private-enterprise companies, and this is not a case where the Government can say to the furniture industry, or even the building industry, "You must use this form of material in preference to another". They can encourage it; they can draw attention to the advantages of it, but they cannot compel people to use it if in their commercial judgment they want to do something else. We have also to take account of individual tastes, and most people, in a house for instance, are still working on the basis that an ordinary whitewood flooring is natural and that chipboard is an inferior substitute. It is not an inferior substitute, but until it becomes more commonly used too many people will continue to regard it as a substitute for the real thing. In certain varieties of use (I know this from my own past business experience) it is much more satisfactory. If you are going to put down hardwood block flooring, you get a much more satisfactory surface if chipboard is used.

We will give such encouragement as we can properly do, particularly by allowing its use to be approved in tenders for housebuilding. But some of the other suggestions made were more appropriate to the forestry side than to the chipboard industry. I cannot be expected to go too far in connection with that at a time when the Government are constantly being told that they are spending too much money; that they extort too much from the taxpayers and ought to be looking for ways of reducing taxation, and that the easiest way to do that is to reduce Government expenditure. The noble Duke suggests we should have a crash programme of fencing in everybody's land which is within sight of a roadway which may occasionally have a sheep or lamb on it. I know that I am exaggerating slightly what the noble Duke said, just as I think he exaggerated the contribution which the Government could be expected to make in this direction. But he glossed it over by saying, "I know there might be problems about maintenance once it was up". The problem, in fact starts earlier on. Whose responsibility is it to put up the fences in the first place? We cannot at one stage be discouraged from increasing our expenditure and at the same time be told that a diminution of a quarter of a million pounds in the revenue of the Forestry Commission is of little importance and that a crash programme of road works and fencing is a good thing to do.

I agree that it would be a good thing from the point of view of those people who wish to dispose of the thinnings. I think that when the noble Earl raised his Question about the use of thinnings last month I mentioned that a meeting was to take place between representatives of the Scottish woodland owners to consider ways and means of improving this situation. I understand that a meeting has been held, and that certain suggestions were made—which may or may not be acceptable to the owners—under which, for instance, the timber trade would take off their hands the 4,000 tons of thinnings presently surplus to market requirements. But of course there is a sting in it: the timber trade want a guarantee that they will get them all in the future, and this would mean that the co-operative marketing arrangements which the owners have at the present time would be abandoned.

But this is not the final meeting. Another meeting is to take place, I understand, in July. I hope that something will emerge from this, because I agree with what has been said, that the problem of the forestry side in relation to losing business which might have gone to the chipboard industry is a short-term one. Even in the medium term the prospects for forestry are good, and if they can get over this short-term problem then they will have solved the difficulties which exist at the present time.

I must apologise, because that is going on to the difficulties of forestry owners, and the noble Lord has raised the question of the difficulties of chipboard manufacturers. I know that he and other noble Lords will not necessarily be satisfied with what I have said, because they have called for certain things to be done, and to be done immediately. I hope, however, that they will accept that what I have said, and particularly drawing attention to what the President of the Board of Trade said yesterday, is an indication that the Government are conscious of the importance of the chipboard industry in this country, and of the need for its continued expansion in conditions of prosperity, and that the President and the Board of Trade will take all action that they can properly do to help this industry.

BARONESS ELLIOT OF HARWOOD

My Lords, before the noble Lord sits down, can he reply to the point about Eire? We have to pay 20 per cent. for our chipboard coming from Eire, and they get theirs in for nothing at all; they pay nothing.

LORD HUGHES

My Lords, one of the unfortunate features of trade agreements is that if you single out particular items there may be an advantage to one country and a disadvantage to the other, but in their endeavours over the whole field of activity, no doubt the Irish could point to other spheres where they say: "If only you would alter this around the other way we should be doing a great deal more." It is impossible to single out any one single item of trade between countries and to say, "This is unfair on us". It would, of course, be better if we had exactly the same conditions. It would be a great deal better for us all if there were no duty at all between ourselves and Ireland. Unfortunately, that is not the position at the present time, and when the agreement was negotiated it was felt that there was considerable advantage in the aggregate, both for the Irish Republic and for ourselves.

House adjourned at two minutes before ten o'clock.