THE FORESTRY INDUSTRY

HL Deb 14 December 1977 vol 387 cc2119-72

2.52 p.m.

Lord TAYLOR of GRYFE rose to call attention to the state of the forestry industry; and to move for Papers. The noble Lord said: My Lords, in introducing this debate I have to declare an interest. I am chairman of a forestry company and was, until 18 months ago, chairman of the Forestry Commission. Through several debates on this subject I have sat with the sealed lips that are laid down by the Addison rules for Members of this House who hold public office, but today I am happy to be able to shed these inhibitions and to speak freely about a subject for which I have a deep concern. At the end of this debate I hope to have your Lordships' acceptance of three propositions: First, that an expansionist forestry policy is good for Britain; second, that since forestry investment is long term, confidence and continuity of policy can come only from all-Party commitment; finally, that private and State forestry should work together in a healthy partnership which accepts that both sectors have a rôle to play in achieving the first objective.

I have said that there have been many debates on this theme in this House, and, as so often occurs, there is a great deal of knowledge and experience available. I am delighted that a number of distinguished foresters will follow me in this debate. However, going back over the records of the House, so far as I can discover this is the first occasion when a debate on forestry has been initiated from these Benches. Yet members of the Labour Party should be concerned about this subject and, indeed, should be very proud of what is probably the least publicised and certainly one of the most successful of our State enterprises. I refer, of course, to the Forestry Commission which is the largest landowner in this country, with its 3 million acres.

Sometimes when land nationalisation is being debated in this country it is forgotten that this vast estate of 3 million acres is already in public hands. The Forestry Commission's research establishment has an international reputation and its advice is freely available to all private growers. It has taken the lead in directing EEC combined research on the blight of Dutch elm disease. The Commission provides substantial opportunities for rural employment. Its forest trails and picnic sites open up the countryside for millions of people to escape from the noise and squalor of large cities.

The Forestry Commission was the pioneer of national parks. Last year, 1½million camper nights were spent in the State forests and over 15 million day visitors were welcomed to this national estate. There were 17,000 night occupancies in the newly-developed family log cabins, and one of the last refuges for the country walker and hiker is provided in the 10,000 miles of forest roads from which the motor car is banned. The Commission controls the inevitable pressures of the mass invaders to areas like the New Forest with a sensible concern for wildlife conservation and amenity. It protects the remnants of the ancient Caledonian Forest in the great valley of Glen Affric. It has planted up the slag heaps of the Rhondda and brought back green vegetation to the valleys which Richard Llewellyn assumed had gone for ever. It protects the flora and fauna of the Lake District, with its millions of visitors every year. All of this adds up to a very substantial social contribution to the quality of life in these islands.

In all of these ways the Forestry Commission, a State enterprise, has been the pacemaker, but enlightened private owners and forestry companies have been quick to follow. Public access agreements, wildlife conservation, camp sites and forest trails are now common features of private estate management, but these social benefits are peripheral to the main objective of forestry which is to grow more trees. We are virtually the least afforested nation in Europe, with only 8 per cent. of our land surface under trees. That statistic should be kept in mind by those people who are afraid of forestry's encroachment on agriculture or on our protected wilderness areas. Only 8 per cent. of the land area of the United Kingdom is under trees. At the same time, of course, we are one of the largest importers of wood and wood products, for 92 per cent. of our needs are met from abroad. The import bill for timber and timber products last year was £2,154 million. The EEC imports only around 50 per cent. of its consumption. In this country we concentrate a good deal of attention on export performance—we make awards regularly for contributions in that area—but we sometimes neglect the equally important business of import saving. Timber production must be a priority in these terms.

For too long we have assumed that other countries will be prepared to export to Britain their logs for processing here in our wood using industries. Indeed, a number of industries exist on that assumption. But as happens with other raw materials, every exporting country wishes to add value to improve its exports and to create jobs at home, and the failure to secure an indigenous supply of timber can endanger our pulp mills and our saw-milling industries, with serious consequences for employment. There are already warning signs in this regard.

Yet strangely enough we are good at growing trees in Britain. In fact, modern technology can create, very efficiently, man-made forests, and in Scotland—and particularly in West Scotland—we grow conifers twice as fast as they grow in Scandinavia. So there is nothing foreign to our growing trees in the United Kingdom. We are good at it. I have always believed that a healthy society requires a balance which provides opportunities for rural employment. I believe that many of our social problems arise from too great concentrations of people in large conurbations, and I thank God that there will always be people who prefer the satisfactions which come from living and working in the countryside.

Forestry can be a major agent in creating employment in the villages. There are at the moment 23,000 people employed in forestry and 14,000 in related industries. Perhaps these are not large figures by British Leyland standards but they are significant in terms of creating a living countryside. At a time when we are crying out to put more people into production, forestry should not be overlooked in these terms. I hope these facts may convince your Lordships of the first proposition, that forestry is a good thing for Britain.

This has been common ground in this country since 1919 when the Forestry Commission was established to restore the woodlands of this country which had been devastated by three centuries of warfare. In these 58 years from 1919, which is a comparatively short time in tree-growing terms, the State has acquired 3 million acres and matched the private sector in size and in annual planting programmes of around 45,000 acres a year. But they have never regarded themselves as competitors in any ideological sense. They were partners, respecting each other's achievements with a mutual desire to help in attaining targets which were obviously in the national interest. Indeed, forestry is the perfect example of a mixed economy in action; an example which might be copied in some other sectors of British industry.

We have on the one hand a large nationalised sector in the Commission's forestry enterprise, but as forest authority it has the responsibility also for good management of private woodlands. It provides advice and approves planting programmes in the private sector within the dedication schemes which are the basis for paying grants. This dual role, the responsibility of a State sector and responsibility for the private sector, is a difficult one and the Commission itself must always be reminded of its responsibilities as forest authority to speak for forestry as a whole, State and private, particularly when advising Governments.

Governments have not always been wise, and particularly in recent years. First, in 1972 we had the Conservative Government's consultative document. This was followed by a now somewhat discredited cost benefit study from the Treasury. The next blow was the Labour Government's capital transfer tax legislation in 1975, which seemed to have forgotten the special situation of forestry. Then we had the subsequent Green Paper on wealth tax, which I gather is still hovering around. Forestry is a long-term investment and private owners who dedicate their land in perpetuity assume some continuity of policy. If the fiscal rules are changed or uncertain there will be few investors—that is natural—-and the uncertainty created by these events has had disastrous consequences.

In Scotland, where most of the new planting takes place, in 1976 the figure of planting trees fell to one-third of the 1973–74 total. In the United Kingdom as a whole the reduction was 57 per cent. These cut-backs in the private sector coincided with reductions in the Forestry Commission planting because at that time there was a reduction in public spending, so its planting programme fell by 19 per cent.

There are no votes in forestry. Its constituency is nationwide and its electors are scattered. The result of these events will not be felt for 20 or 30 years—beyond the lifetime of any Government which may have been responsible. Yet we as a nation frequently get concerned about planting trees, and I see the columns of The Times carry a great deal of correspondence on the subject of replanting in order to offset the tragedy of the Dutch elm disease which is so far beyond our control. Yet at the same time as we get excited about this matter which is beyond our control at the moment, during these first two years millions of young trees died unplanted in the nurseries when they should now be cladding our hills. This was done by man-made decisions and not by the effect of some disease over which so far we have no control.

These two years meant that the confidence which had been built up over half a century had been undermined, and I am delighted that the situation has been retrieved to a large extent by the new grants scheme of October 1977 with the capital transfer tax amendments which recognised the special nature of forestry with its long growing cycle of a tree crop which can span several generations. All this is good news and I get the impression that there is a restoration of some of the confidence which existed prior to 1975. But I wonder whether the Government could go one stage further and look at the possibility of CTT being levied on the crop value at date of death. That might be a more sensible treatment for taxation purposes. For anyone who invests in an industry with an anticipated return of 3 per cent. per annum—that is the Treasury assessment of the return on forestry investment—and gets his first revenues after 20 years when he takes his first thinnings out of the forest, some incentives are required in the form of appropriate tax treatment, in order to induce people to invest in that kind of industry when they might earn 12 or 15 per cent. in gilts.

I have sought to establish the case for expanding forestry. But at the moment there are two limiting factors: one is the availability of land and the second is delays and frustrations in approving planting programmes. Inflation, taxation and improved returns on sheep farming have reduced the flow of land quite substantially. Even the Forestry Commission confess that their reserves may imperil their future planting programme. Strangely enough, at this time a large company with a healthy cash flow from North Sea oil approached me the other day. They said, "We want to replace a depleting asset (North Sea oil) with a growing asset by planting trees which, unlike oil, is a renewable resource.- Very large sums were available for the purpose but I had to tell the company that there was little or no land on the market to satisfy their needs.

Pension funds and institutions also are anxious and interested to invest in forestry. It is surely much more in the national interest that they should invest in making land productive instead of, say, purchasing works of art or expanding their American property portfolios, but again land is not being released. I would welcome the Minister's comment on this situation.

What forestry needs is marginal land. It is not a competitor with good agricultural land; it could not afford to buy good agricultural land. Indeed, studies carried out by the noble Lord, Lord Dulverton—who, I see, will speak today—indicate that a closer integration of agriculture and forestry can provide for an increased sheep stock alongside production of timber. I think what we need is a closer integration of forestry and agriculture, rather than regarding them as competitors. It is, therefore, a matter of urgency that land use studies should be encouraged so that appropriate areas for forestry could be clearly identified. Land which is not productive—through lack of interest or cash flow on the part of the owner—should be released so that the funds which are available can be employed in turning Highland deserts into estates which will increase the national wealth and provide employment.

I turn now to planning constraints. The requirement for consultation with local authorities over plans of operations where Forestry Commission staff have to prepare for every conceivable view of landscaping requirements is time-consuming and causes inordinate delays. The built-in prejudice against conifers and the assumption that only broad-leaves are beautiful is neither true nor silviculturally sound, since it takes no account of soil types and appropriate species for certain upland areas. The district councils, who are now the planning authorities, have seldom trained staff or councillors knowledgeable in these matters. The inevitable delays cause frustration and lack of interest on the part of the people who are prepared to sell, and land is frequently lost because of these delays.

In the early days of the Forestry Commission it is true that it planted trees furiously without adequate regard for their effect on the landscape. It was simply asked to produce timber. But today foresters are a new breed who are very sensitive indeed to their environmental responsibilities. They are guided by internationally respected landscape architects. I recall the noble Lord the Leader of the House, Lord Peart, when Minister of Agriculture, standing with me on a hilltop overlooking Haresceugh Fell in Cumbria and agreeing with me that it was ideal for forestry. But the so-called environmentalists of the area frustrated our intentions and the area still carries a few sheep, with practically no employment, when it might have been brought into useful production.

I think we have to get rid of a lot of the prejudices about growing trees on our landscape. This country used to be covered with trees. As I say, the planning authorities are not always without prejudices in these matters. Today in forestry there are no square blocks of dark sitka being planted. Planting follows the contours of the hills and dark plantations are frequently relieved by a sprinkling of larch, while roadsides are often edged by the brightness of beech. The forest authorities should be trusted more; they should be trusted to do the right thing by the Department of Agriculture and the local planning authorities. Unless this is done more and more, land will remain idle in private ownership. I am not asking for complete freedom. But I am asking for more understanding and more expeditious handling of plans.

My Lords, this is the year of the tree, and I saw recently on my TV screen the Prime Minister and the Leader of the Opposition symbolically and actually planting trees in London parks. That is a pleasant gesture, but what is required is their support for the planting of many trees in suitable sites with continuity over many years, as part of a continuing and expanding forestry policy. My Lords, I beg to move for Papers.

3.15 p.m.

Earl FERRERS

My Lords, it has been a treat to listen to the noble Lord, Lord Taylor of Gryfe, this afternoon. Over the past few years we have been accustomed to having the noble Lord being involved with our debates on forestry, but, regrettably, from a sedentary position. The cares of office of chairman of the Forestry Commission effectively gagged him from participation in our debates, although, of course, it did not prevent him from benefiting, were that possible, from the knowledge which your Lordships placed at his disposal. I often wondered then what he thought of our debates and what he thought of the views which were expressed. Today we have had the pleasure of hearing him, and we in turn can only have benefited from the robust and informed speech which he has just made, and from the experience which he has had in that office which he held. He said that it was an unique occasion because it was the first time that a Member from the Benches on which he sits had introduced a debate on forestry. I think that is a credit which he could justly take. Whether or not it is a credit which his own Party could take, I am not quite certain.

I ought to declare an interest, but only a small one. I am not a forester as such; nor am I an owner of vast woodlands. But I have an interest in some woodland and have undertaken a very modest—a peculiarly modest—amount of planting. As the noble Lord, Lord Taylor, said, forestry is an important subject; it is far more important than people or public opinion usually care to admit. But it is not a politically sensitive subject. As the noble Lord said, there are no votes in it. He is quite right. The effects on forestry of Government action are not immediately visible, and politics is too often nowadays about immediacies. Those with an interest in or a knowledge of forestry are considered to be, as the Chancellor might put it, at the "pip-squeaking" end of the socio-economic scale, and their interest might, therefore, be considered to be self-interest.

But, my Lords, this is not so. Forestry is hugely 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. It affects us all and so does its prosperity. If we could put the matter into perspective, a week ago today we had a debate on defence, where the Government were invited to restore defence cuts of £267 million, which they said was impossible. Yet we spend annually not £267 million but over £2,000 million on imports of timber and timber products alone—nearly one-third of what we spend on the whole of the defence of the United Kingdom. I do not draw any conclusion from that; I merely state it as a comparison. This is in a time of recession. If one considers the joint effect of inflation and a return to normal economic activity, it does not require a great genius to realise that forestry could have a substantial part to play, on an import-saving basis alone, in the years to come.

The noble Lord, Lord Taylor, said he wanted agreement on three points: first, there should be a flourishing forestry industry; secondly, he wanted confidence and continuity; and, thirdly, he wanted to see a healthy private and State partnership. I would agree with all three of those points. But are we really achieving at least the first point, which is to have a flourishing forestry industry? The future crop of timber which will be available to the country depends entirely on the number of trees being planted. In 1972 plantings in the United Kingdom totalled 24,000 hectares, and in 1977 they were only 9,000. According to my calculation, that is a drop of about 62 per cent.

I think that the noble Lord, Lord Taylor of Gryfe, referred to Scotland and said that the crop was 57 per cent. No doubt many noble Lords will ascribe various reasons for this, but I should like to put forward two: first, a general lack of certainty and confidence in the future; secondly, the effects of CTT, which the noble Lord, Lord Taylor of Gryfe, mentioned. I recognise and welcome the concessions made in this connection, but I venture to suggest that we should not under-estimate the effect which CTT has had on the confidence of the industry, for one simple reason: its philosophy is that private enterprise, where it is found, must be on a small scale. That, of course, runs directly counter to the facts of forestry life.

I should like to make a plea to Government in general, whether it be to the last few weeks of the present Government or to the successor Government, because I think that probably both Parties are to blame. My plea is to think big enough about forestry; think long term. I accept the difficulties of any Government to think 50 or 100 years ahead. Life is not long enough for that, and politics certainly is not long enough. However, it takes 35 years before a trend in planting has a noticeable effect on output. One cannot afford to put the machine in and out of gear to suit short-term economical or political considerations.

A proper forestry policy must be reasonably consistent because it is a unique industry. It is unique because anyone who lays the foundation for the next crop knows full well that he will receive probably no financial return from it whatever. He has to be quite a public-spirited person to do that sort of thing. If one asks any industrialist or business person to invest in a business from which he will get nothing during his lifetime I think that most such people would send one off to the doctor with the instruction "Get your head examined", unless, of course, they happen to be an institution: like an insurance company, pension fund or, as the noble Lord, Lord Taylor of Gryfe said, even an oil company, where their motivations are entirely fiscal and where they are not subjected to the same system of taxation as the private forester. Silviculture can, by no stretch of the imagination, be considered to be their prime interest. It would be detrimental if the system of taxation were to encourage the large institutions to march into the market at the expense of the private forester. A little mix is probably a good thing, but it is a question of degree. I suggest that the trend should be watched.

Oddly enough, the traditional foresters are, in the main, prepared to invest in the future with no return from their investment for themselves, provided that there is at least a sporting chance of there being a future for a successor generation to enjoy. That is the simple message which I hope the noble Lord, Lord Peart, will try to get over to those who advise on forestry. It is so utterly obvious and so entirely elementary that it might not seem worth saying, but it is because it is so utterly obvious and so entirely elementary that it requires to be said.

I should like to refer to three other matters. First, I share the concern of the noble Lord, Lord Taylor of Gryfe, as regards the dual role of the Forestry Commission. Is it fair to ask it to be responsible for the management of the State's forestry affairs and at the same time to make it responsible for administering Government policy over private forestry, which may well be in direct competition with and competing for the same funds and land as their own State affairs? Many would say, and with justification, that this has worked well in the past and therefore why alter it. It has worked well; but whether it does or does not work well is, I suggest, largely dependent on the calibre of the chairmen and senior executives of the Forestry Commission. I would merely question the wisdom of such a structure.

Secondly, I question the sense of permitting into forestry affairs the gradual but substantial seepage of the influence of the chairman and senior executives or those who feel that the afforestation of large tracts of land, or even small ones, affects the lives and interests of others, apart from those doing the afforestation, and therefore some element of constraint or discussion should be imposed on their complete freedom of action. However, I do not think that the fact of being a planner accords to anyone, still less to a body of planners, a superiority of knowledge, wisdom or even common sense.

The noble Lord, Lord Taylor of Gryfe, has referred to the difficulties sometimes encountered when planners demand one species. I, in turn, think that it seems to be relegating the purpose of planning to the area almost of farce when one has to obtain—as in a case in which I happen to be involved—planning permission to replant the interior of a part of a wood which was blown down in a gale. The intrusion of planners necessarily involves delay, frustration and bureacracy. That is a price which we all have to pay where the interests of the community as a whole are possibly concerned and where the interests of other people are affected. However, the trouble with all bureaucratic involvement is that there is no limit set on the degree of its interference. The Government could do worse than to address their minds to redressing that imbalance a little.

Thirdly, I should like to refer briefly to the problems caused or about to be caused by devolution. As I understand the situation—the noble Lord, Lord Peart, will tell me if I am wrong—the Forestry Commission in both its roles of enterprise and authority is to retain its unified structure, while the private sector is to be split into three, and responsibility for private forestry in Scotland and Wales is to be devolved to those Assemblies. If that is so, it seems to me to be a perfectly crazy idea. I cannot think of one advantage to be derived from it. The industry is small but it must work in harmony. There is an obvious requirement for bodies involved with forestry to work together. If I am right, here we have the Government deliberately splitting the industry into pieces: State forestry not devolved; private forestry devolved. Private forestry devolved; agriculture—with which forestry is so involved—not devolved. I do not wish to comment any further on that other than to say that it shows the absurd mess and bureaucratic muddles into which these Bills will get us. I hope that the noble Lord the Lord Privy Seal will be able to explain very clearly the situation with regard to forestry and devolution. I had given him notice, albeit short notice, of this matter.

As a country we are living, as regards forestry, on the foresight of our forefathers. Future generations will be living on our foresight as regards the quantity of afforestation, the availability and the value of timber, landscaping, the type of environment and even the conservation of wildlife.

I believe it was my noble friend Lord Dulverton who once said that what may be termed the practicalities of our generation will become the treasured heritage of another. I hope that we shall ensure that by not constraining the practice and art of forestry by inevitable short-term considerations, future generations will have a heritage which will be a valued and valuable adornment to their culture. If the debate on the Motion put forward by the noble Lord, Lord Taylor of Gryfe, contributes even a little to that, or even a little to the recognition of that fact, then it will have achieved quite something.

3.30 p.m.

Lord MACKIE of BENSHIE

My Lords, like the two previous speakers, I must declare a slight interest. Like the noble Earl, Lord Ferrers, I plant one or two trees and I have a slight connection with the chairman of the Forestry Commission who succeeded the noble Lord, who happens to be my brother; but no brotherly interest, in fact, comes into my speech. I greatly enjoyed listening to the noble Lord, Lord Taylor of Gryfe, who put the case absolutely clearly and said a great many things extraordinarily well, which everyone really believes.

We all know that the planting of more trees is greatly in the interests of the nation. It is good for the nation to spend its money on planting trees and good for private individuals to do so as well, because it means that they cannot spend their money on diversions of the rich, which might do great harm. To spend money on trees does nothing but good because it preserves our forests for a future generation, and they can either waste them or use them wisely.

However, I want to talk on something about which I know a little and which is very closely integrated with forestry and the future of planting in this country. I refer, of course, to the integration of farming or agriculture with forestry. It is not at all integrated at the moment. A great many farmers are still very much anti-tree. For example, I have a neighbour who bought his farm from an old estate and the first thing he did was to cut down all those trees he was allowed to cut down and to turn the land over to arable farming. Of course we need arable land, but most farmers—and I include myself because at one time I farmed—do not really appreciate the value of the mixed countryside of trees and, indeed, of hedges in, for example, East Anglia and elsewhere. I think that much education is needed in the highlands, the hills and the lowlands on integration of forestry with agriculture. Certainly where sheep farming is carried out on the hills a great deal of ill-will has been engendered especially by private forestry companies coming in, buying estates and planting them holus-bolus, and at the same time leaving a great deal of highland, which was useful as summer grazing for sheep, totally inaccessible; the whole area of ground that would grow trees was planted and the highland was wasted, even for grass, sheep or anything else.

That lack of integration is common throughout hill farming today. There are examples which could be followed. One was the East Area Conservancy of Scotland where the Conservator in Aberdeen was very anxious to obtain the co-operation of the farmers on the former Richmond Gordon estates—the Crown lands—in Glenlivet. He held a public meeting in Tomintoul, which was an absolute disaster and ended in a total breakdown. He returned to his hotel in despair and went into the bar for a large whisky, where he met the farmers. He came out with agreement to plant something like 1,000 acres in blocks so that one or two roads could be provided. I understand that from this evolved a great deal of co-operation in that area, which is of immense value. That example could be followed in the hill areas of England and Scotland.

I suggest that much more could be done with a little more money. If we provide a hill farmer with roads to remote parts of his grazings, then without doubt he will be more than willing to sacrifice some land, which will really benefit him because the shelter will more than make up for the lack of grazing area for his sheep and cattle. A great many other factors could be taken into account. For example, the opening of mature woods as shelters for cattle in winter. Shelter for cattle is worth quite a lot of food; it has a very high economic value. Anyone who has suddenly gone into a wood from a bare hillside will realise that the temperature rises a great deal. Obviously, I shall not go into great detail on the co-operation necessary, but it involves the Forestry Commission spending rather more money on fencing. I do not think that they could spend it on anything better. I also think that the Forestry Commission should be allowed some more money in order to make the roads—which take quite a high proportion of their budget—useful for hill agriculture as well as for the extraction and maintenance of trees.

The position in the lowlands is sometimes even worse. I have already referred to people who cut down plantations and turn them back into arable land. I have also mentioned hedges. The noble Earl, Lord Ferrers, referred to planners, but he forgot that we had some extremely good country planners on a great many of the old estates; and the larger the estate, very often the better the planners. Those planners laid down rules and produced landscapes and a total environment which was to the benefit of the country as a whole.

We should look at the cost of this. Figures have already been mentioned, and a very significant one is that of 92 per cent. for our imports. But no one has mentioned the actual cost of the Forestry Commission. The total cost is £50 million and they take in £26 million. Many people—for example, the Crown Agents and others—regard £26 million as pure sweeties. We could spend an enormous amount more—I mean an enormous amount—on forestry, with great benefit to our country and people. We have fewer trees than any other Continental country, even including Belgium. We should do something about that. We have 1½ million people unemployed; we have to keep them. We should be planting a great many more trees. We should be planting trees in urban areas. When I go about the country I see a great deal of wasteland which could well be planted. We should plant more oaks—they grow—and we may need them for naval planting yet; you never know. Desiduous trees of all sorts should be planted to beautify our countryside. It would be money enormously well spent. This is a subject on which I think all Parties can agree, whether in the short or long term. In the long term it is absolutely essential, and I am delighted to support the Motion of the noble Lord, Lord Taylor of Gryfe.

3.37 p.m.

Viscount HAMPDEN

My Lords, some 25 years ago my grandfather made one of his rare appearances in your Lordships' House. The House having divided at the end of the debate, he went through the appropriate Lobby. He then received a communication asking him to visit the Lord Chancellor the following morning to explain why he had voted without having taken the Oath. I believe that the Lord Chancellor was very gracious to him—I am sure that all Lord Chancellors are very gracious. Having read my Standing Orders, I only hope that I shall not have to tread the same penitential path tomorrow morning.

I very much welcome the action of the noble Lord, Lord Taylor of Gryfe, in initiating this debate, and the few minutes of your Lordships' time which I shall take up I do so in order to explain what is going on in the woods and woodlands in the part of the world where I live, because it is quite an instructive story. I am fortunate enough to live below the Downs in East Sussex, a beautiful part of the world whose beauty has not exactly gone unnoticed by many distinguished members of the present Government and, indeed, previous Labour Administrations. Unfortunately, a great part of that beauty very much depends on the elm tree.

As noble Lords are aware, elms have been a disaster area for a number of years. Indeed, I have a very beautiful landscaped park of elms—it was landscaped some 200 years ago by a previous Bishop of Durham—and in the last four or five years I have watched it virtually disappear completely. This has been happening throughout the country and I am sure in other parts as well. However, I am lucky to come under the East Sussex County Council. Here I must declare a non-interest in that the only relationship I have with that county council is that I am a rather reluctant ratepayer. Some five years ago, the county council took the decision that, notwithstanding whatever Government laws were, or were not, or what powers they have or might not have, they would try to defend the elm and treat it, cut out the dead ones and try to keep as many elms as possible in the area. Luckily, it was quite a suitable topographic area because to the South there is the sea, to the East there is a treeless marsh and to the North the Weald which mainly comprises oak, not elm. So the area was quite suitable for this scheme, which has now been going on for four or five years.

The county council, together with the Countryside Commission, took complete charge of the programme. Naturally, to co-operate did not cost them anything. For the last three or four years they have been trying to stop the disease. Whether they will be successful or not no one will be able to tell for some years, but nature plays one or two dirty tricks, like blowing a North-East wind throughout last summer instead of the normal prevailing South-West wind. But more important than the programme for the elm disease is the replanting programme which has been going on in the area. The authorities have taken two very beautiful river valleys: the Cuckmere valley, which is totally unspoiled countryside, and the Ouse valley which runs down to the important port of Newhaven, where so many tourists come when they visit the country for the first time. I believe that a first impression is important to visitors to this country. There has been a scheme—this is its first year and there will be another year of it—for replanting these two valleys, not only replacing the elm trees but planting something more suitable, highlighting other features and hiding the less attractive ones. None of us will see the benefits of this programme, but our grandchildren will. On the whole, it has been an encouraging sign of what one authority in this part of the world has been doing.

Can I throw a couple of points into the discussion? First, I wonder whether the Government can help in encouraging the keeping down of rodents. The planting of trees is a very expensive business but trying to stop them being eaten is even more expensive. I know that, with the terrorist situation, there is a problem over firearms, but can there be some encouragement for keeping down rodents? Secondly, I know that the Historic Houses Association have talks with the Government on houses and so on, but can the Government look at the question of landscaped parks? They are extremely attractive things, and, while one needs a certain amount of education and knowledge to appreciate other beauties, no one really needs any education to enjoy beautiful woodland. Can that be put into the plate, so to speak? My Lords, thank you very much.

3.42 p.m.

The Earl of BRADFORD

My Lords, it is very pleasant to be able to welcome a notable addition to the ranks of the protagonists of forestry in your Lordships' House in the person of the noble Viscount, Lord Hampden, and to congratulate him on a most excellent maiden speech. It was pleasant for me in addition to find him next to me on the same Bench—especially as my hearing aid has indulged in one of its periodic fits of non-co-operation—so that I was able to hear a good deal of what he said to your Lord-ships. It was also good to see him put away his notes and speak from the heart. He showed great knowledge and enthusiasm, and I am sure that your Lordships will be glad to hear him when he speaks to us again on other subjects.

Your Lordships' House has always provided a good forum for subjects like forestry. It would be one of the great tragedies if abolition were to come about as advocated by some circles close to the present Government, because the other place has never really shown the same enthusiasm for this subject. It is most important that forestry and allied subjects should have a good forum of this kind. I think that the last full debate in the other place was some 30 years ago.

It was pleasant too to hear my noble friend Lord Taylor of Gryfe—if I may call him that across the Chamber; that is the way I look upon him, as a personal friend and a great friend of forestry, and private forestry in particular—and I should like to congratulate him on the excellent work he did during his years as chairman of the Forestry Commission, and on the great help he gave to all of us who work in private forestry. I should like to wish him equal success now that he is carving out a new career on the private side as chairman of the Economic Forestry Group. I heartily support him in all the sentiments he expressed, which will help me to cut down my own remarks, as I was going to mention some of them myself.

Forestry, and particularly private forestry, has suffered five years of being battered and clobbered, and the cause is the lack of understanding of the real nature of forestry among politicians, civil servants, and particularly Her Majesty's Treasury. Before 1972, private forestry in particular pursued the even tenor of its way. It was administered under a tax system which was specially devised for the peculiar circumstances of forestry. It had special treatment for estate duty, which was of considerable advantage in perpetuating fine woods, and surely this is a case where inheritance must be right.

I think I know no one who has become wealthy through forestry operations. This, I am sure, is backed up by the surveys conducted by Oxford and Aberdeen Universities, which showed that very few estates actually operated profitably in their forestry operations. The motivation of most of those who plant trees is purely and simply a love of trees and a wish to build up an asset which is of national importance and which can preferably be handed over to successors in the family.

For the last five years, forestry has been treated as a kind of political shuttlecock, with a battledore wielded alternately by both Parties. The Conservative Government started it, as the noble Lord, Lord Taylor, told us, through the consultative document and its supporting document of ill-fame, the cost benefit study. In these, some extraordinarily obtuse proposals were made and decisions taken, such as the abolition of the dedication scheme. These have fortunately fallen to the ground. But the battle has continued under the present Government, with a mass of legislation. Much of it has been extremely well-intentioned but it has placed many new burdens on the private employer, particularly in industries such as forestry, with its long term programmes and, in particular, its reliance on a very high intensity of labour. But the real disaster came with the subjection of forestry to the capital transfer tax and the threat of the wealth tax.

Here I should like to support the noble Earl, Lord Ferrers, in expressing a wish that private forestry should have a reasonable crack of the whip as against the Forestry Commission and the institutions, which are favoured by being supposedly immortal as against the mortal estate owners. Admittedly, there has been some alleviation of the initial burden, but it is still doubtful whether private forestry can continue for another generation under the present burdens that have been placed on it.

The case for forestry has been argued long and often, and has been argued again this afternoon. It is based on a vast and growing import bill and the impending world shortage of timber; on the suitability of our climate for growing trees; on the fact that timber is our only self-renewing raw material, and a material of infinite utility and flexibility. But there is much further potential, particularly in the energy field, where fuel wood alone could be immensely expanded. There is also the use by trees of solar energy through transpiration and photosynthesis, which could provide us with a source of energy which has so far not been explored, or not to any great extent. Also, through timber, we have a source of chemicals which will continue to be with us long after our oil has been finished. Nearly all countries are wisely building up their forest resources, but the United Kingdom is the main exception, and I feel that we ought to learn a lesson from that fact.

In addition, as we have heard, forestry is a special case. We hear a good deal about special cases, but surely the length of the time scale and the high labour element make it a special case. This is a small industry but one of vital importance for its raw material, its landscape value and its place in the national economy. It is easy to speak of a long time-scale but I think it is difficult of comprehension, especially by civil servants and Her Majesty's Treasury. It is perhaps best illustrated by an actual example. Most owners have saleable timber which they can reinvest in new planting. It is, however, a very expensive and lengthy task building from scratch, as I have found to my cost.

I acquired a small estate in the Highlands, which I believe is the loveliest country in the world, in 1952 with a very nice house and nearly 8,000 acres of land, some improvable hill and some in-bye land, the only snag being that 420 acres of trees had been felled during the war. I am glad to see my noble friend Lord Lovat in his place because it originally belonged to his family, and I might mention that I was able to acquire that 8,000 acres for about the price of a cottage or bungalow built today. It presented me with a wonderful opportunity, as I thought, for the integration of hill farming and forestry and I considered that the vast plantings that were being, and have been, made in the Highlands would undoubtedly lead to processing plants in that part of the world and that therefore the thinnings which I anticipated in between 20 and 25 years would find a good market.

I started planting at about 80 acres a year. I had to fence against deer and, although I had much enthusiasm, I was short of cash and the bank had to provide it. I was, of course, able to get some tax relief, but not as much as I should have liked owing to the absence of other income. I had built houses for staff, roads for extraction and bought machinery, all second-hand, for that extraction. We were hit by every kind of plague, like a plague of voles in 1958 or 1959 when the whole hillside squeaked and rustled until a remarkable invasion of short eared owls appeared from Scandinavia, gobbled them all up and then disappeared. Serious frost damage ensued after an early spring in May 1961, further damage in the 1962–63 winter and still more from fires in the recent droughts, and some from deer as well. I started thinning in 1972, and that was when the clobbering started; confidence and markets alike dried up. In 1976 I resumed thinning and sales and for a while things seemed reasonable, but then unfortunately Scottish Timber Products, the main market and the biggest chipboard factory in the country, closed down. The Fort William pulp mill, in sympathy, lowered its prices.

In my view, the present outlook is gloomy. The banks are somewhat unforgiving, as my noble friend Lord Taylor of Gryfe will be aware, being himself a merchant banker; the pound of flesh at compound interest soon becomes worth more than the forest on which it was initially secured. I can see no hope of recovering my costs after 25 years of work, my son will have to fell to pay the debt to the bank and capital transfer tax and the whole of the assets that have been built up will be destroyed. The forestry industry is not a goose laying golden eggs. There are no golden eggs in forestry. It is a very marginal industry and it is being destroyed.

This country is well-known for its skill in plantation forestry which, as I see it, is largely even-aged monoculture. But is this the only form of sylviculture that is practicable, especially in areas of high landscape value? I believe there is great interest at present in what is popularly called irregular forestry. In my case, I have experimented for 25 years in what I call continuous cover forestry, which could perhaps otherwise be called uneven-aged mixed selection forestry. This has many advantages in terms of the landscape, wild life, the prevention of erosion, from the point of view of frost damage and many others. I believe I can demonstrate that it can also be of economic advantage and I would express the hope that within the Forestry Commission some similar experiments might be started.

I very much agree with Lord Taylor in expressing the wish for a long-term policy for forestry. Surely it is possible to work one out, and how much better if it were an all-Party policy and perhaps even part of the general policy for land use in this country. Landowners and farmers of the past created the countryside as we know it now. Despite elm and beech disease, the grey squirrel and other pests, it could be done again, provided the circumstances are right. Capital taxation makes it extremely difficult for private forestry to operate. I have mentioned my disability in hearing; this makes it very difficult to hear the human voice. I can, however, still hear the song of the trees and I hope that I may continue to hear it for a long time, but as I hear it now that song has a very doleful note to it.

3.57 p.m.

Viscount INGLEBY

My Lords, I too wish to express my sincere thanks to the noble Lord, Lord Taylor of Gryfe, for initiating this debate and for the telling speech he made. I also wish to congratulate the noble Viscount, Lord Hampden, on his maiden speech and to offer congratulations on the interesting speech which we have just had from the noble Earl, Lord Bradford. I have personal experience of some of his Chilean beech which are growing with remarkable vigour on the North Yorkshire moors.

As Lord Taylor told us at the beginning of his speech, the primary need at present is to restore confidence, and I wonder whether, even now, the Government realise the extent of the damage which was done by the introduction of capital transfer tax. Those who plant trees, in so far as they plant them for financial reasons, do not plant for themselves. As other speakers have said, nobody gets rich by planting trees. One plants them, in so far as one plants them for financial reasons, for one's children, grandchildren and even possibly for one's great-grand-children. So long-term confidence is an essential part of any forestry programme.

The evidence for the damage done by the introduction of capital transfer tax is still with us as we look around and see fewer people employed in private forestry, fewer acres planted and, this season, a distinct shortage of plants. This may indicate that we have reached the bottom and that things are moving up a little, and I very much hope this is the case. The present Government have done much and are to be congratulated for it. I am thinking of the improved grants and the changes in the capital transfer tax rules. With a little care the position regarding capital transfer tax could be got exactly right. I would ask the Government if they would give an assurance that the private sector will be consulted before the publication of the Finance Bill in the spring.

The other great need at the present time is for an improvement on the marketing side. There is a great need for a new market for small roundwood. After the war there was a big increase in planting both by the Commission and by the private sector, much of which is coming or indeed has already come to the thinning stage. But what is going to happen to this great production of small roundwood? A new chipboard and pulp mill in the North-East is a great need, and possibly with the forecast closure of the British Steel Works at Hartlepool this might provide a possible site. I realise that this is not an easy problem, bearing in mind the recent experience of Scottish Timber Products, and it would call for a co-operative effort by the Government in helping with money, and by the Forestry Commission and the private sector in ensuring a regular supply of timber. I would ask the Leader of the House, having in mind his sympathy for the North of England and his experience at Workington, whether he would take a personal interest in the possibility of a new pulp and board mill for the North-East.

The only other matter which I should like to mention briefly is the subject of public access. Almost every woodland owner would not regard his woods as being entirely his own. I do not regard mine in that sense. I regard them as belonging to the Creator, and I am reminded of the words of an Indian chief when he was asked by some settlers in America to sell some of the land occupied by his tribe. He replied with amazement: You might as well ask me to sell the sea or the sky or the air". Indeed, I think in a sense our woods belong to everyone. They are part of our national heritage. I realise that public access is not always practicable and that there may be good reasons against it; but where it is practicable and where the public can be allowed free enjoyment and free access, I wonder whether such woods could not be exempted from capital transfer tax and from any possible wealth tax in the future? I would end by expressing my very real appreciation to the noble Lord, Lord Taylor of Gryfe, for introducing this debate.

Lord WELLS-PESTELL

My Lords, I hope your Lordships will forgive me for intervening but I am required to remind your Lordships that this is a short debate, and that under our regulations the Minister replying is required to be on his feet at 5 o'clock. There are still six noble Lords who have put down their names to speak.

4.03 p.m.

Lord BURTON

My Lords, may I add my thanks to the noble Lord, Lord Taylor of Gryfe, for introducing this debate and also offer my congratulations to the noble Viscount, Lord Hampden, for his maiden speech? First, I must declare an interest. Since the war, I have been responsible for planting over 4,000 acres of trees—or, if I am to be up to date, perhaps I should say 2,000 hectares.

"Ye may be aye sticking in a tree; it will be growing when ye're sleeping". That is the motto of the Royal Scottish Forestry Society. But I should like to say, "Yes, it may be growing, but it has cost you money to stick it in; it is going to cost you money to look after it; it is going to take 20, 50 maybe 80 years before it is ready for selling, and you will be paying interest on your expenditure throughout that time." Then what are we going to get when we come to sell it, if we can sell it at all? Indeed, by the time we have to sell it, we may well have lost its total worth in taxation during its life-time, or, with a Scottish Parliament, we may have it confiscated altogether. There is already that threat upon us.

Twenty to 30 years ago we were given tax incentives, grants, encouragement and sweet words as to how profitable it would be to plant trees. We were told that we import such vast quantities of timber—well over 90 per cent. of our consumption— that forestry must be a good investment. But what happens now when we want to sell some of these trees? We are told that there is a timber recession. How long is this timber recession to last?—it seems to be interminable. Now that we have timber for sale we cannot sell it, and timber is still being imported in something like the same quantities as in the past. Indeed, the quantities may well have risen, because, at this moment, the Swedes are selling pulp into this country at prices lower than it has cost them to produce it. I believe they had a subsidy on their overdrafts or loans to hold this stock for a time and that that subsidy has now been removed so they must get rid of the stock.

Some of your Lordships may say that the fact that we cannot sell our trees is nonsense. May be. I can sell timber in the middle of England. I sold some rubbishy stuff recently in Staffordshire. That is near the market, but most of 'timber should be coming from the rough hills in the remoter areas where food production is either completely non-viable or only marginally viable. What has happened in the Highlands of late? At least two sawmills have closed down because they could not sell their timber. One of these is among the biggest and most modern of such mills. It is of course the mill at Sterling. I understand that the Forestry Commission has subsidised the Annan Mills by dropping the price of wood they are supplying below the price for which they contracted to sell it. Until recently, we were even exporting thinnings to Sweden—coals to Newcastle—presumably undercutting the Swedish market.

The noble Lord, Lord Taylor of Gryfe, has already mentioned that there are warning signs. Indeed, I would say there are very black clouds hanging over the industry. My noble friend Lord Bradford mentioned his problems in selling. I should like to emphasise this position because I think it is a very serious one. Maybe if we sent our timber to the south of Scotland or the north of England we could sell it, but the road haulier would charge us nearly as much as we should be getting for the timber. What incentive is there to grow trees if at the end of the day one gets only as much for them as it costs to drive them across Scotland? Something is fundamentally wrong with marketing in this country. Take one small example: the women folk complain that they can no longer get wooden clothes pegs for their washing and have to make do with inferior plastic ones; we should be delighted to supply wood for pegs but no one seems to make them. Another example—I recently went into the pet shop in Inverness to find a big bale of sawdust. I inquired where it came from and I was told it had been sent all the way from Holland. I do not know why we cannot supply it. I did contemplate getting in a baler—because of course it was baled—but then I wondered how much I should get out of it. This is one of the problems which could perhaps be sorted out but it is difficult for the small individual to sort it out for himself.

This malaise in the forestry industry does not affect only the owner of trees, whether it be the State or a private owner. It affects all those who work in the woods, most of them now being skilled men. Wages have recently risen and I may not be quite up to date, but I would hazard a guess that the average wage for a labourer in the woods does not exceed £50. If you go to the pulp mill, you will find that the chap who sweeps the floor is getting £60 and the chap who rolls up the paper £70. The man who hammers in the nails later on—the carpenter—will probably get 50 per cent. more than the man who is working in the woods, yet the man working outside in the woods is the one who has all the dirty work to do in the wet and the cold while the others sit in the warm though he is getting far lower wages. How can the lot of the woodworkers be improved if timber does not fetch a higher or more reasonable price?

In Austria or Switzerland, where the trees have to be brought in off the steep mountainsides, the producers seem to fare far better than we do. The steepness of the terrain makes their harvesting far less efficient than is possible in this country. Why, therefore I wonder, can they do better? I suggest that this is a problem which must be dealt with urgently. Our agriculturists still look to the planting and growing side of forestry, and there is a tendency to look for incentives to plant trees. I suggest that the biggest incentive to plant would be a good return on the product which we produce. Indeed, the biggest deterrent to investment in forestry at this moment is the very poor return available. One's investment should be shown to be growing while one sleeps, and not only the trees.

4.10 p.m.

The Earl of PERTH

My Lords, Dr. Johnson said, When a man grows old he begins to plant trees. I started growing old 30 years ago, in that I started planting trees 30 years ago, and to that extent I declare an interest. All I would say to your Lordships is that it is a most satisfying thing to do; and to those who are young I would say, "Do not wait until you grow old; start now".

My Lords, I should like to congratulate Lord Taylor of Gryfe, not only on his speech and the three principles which he enunciated, with which I am in entire agreement, but also on his good fortune in winning the ballot so that this subject could be debated. But, having said that, I think it is disgraceful that this should be the subject of only a mini-debate. I blame the Whips, the Government and the Opposition. There is no excuse, particularly, I think, for the Opposition, who have had more opportunity with (as is generally the rule) Wednesdays at their disposal. Instead, we have had to wait five years, which is when we had our last full debate on forestry. Believe me, my Lords, that has not been for the want of many of us pressing that we should have had a debate a long time ago—and a full-blooded debate, not this mini-debate. What is the result? Several of the most eminent foresters who are to speak after me are limited to a few minutes in giving us their immensely valuable views, and I am equally sure that there are others who have refrained from speaking just because they realise the problems that a mini-debate brings. So, well done Lord Taylor; badly done the Whips and the Government and Opposition Benches! Then, my Lords, this debate is memorable because we have had a maiden speech from Lord Hampden. All I would say about that is that his father, his uncle and his grandfather were all friends of mine, and I know they would have been proud to hear what he said.

My Lords, the fact that we have not had a debate on forestry for five years would not have mattered, perhaps, if during those five years things had been going smoothly; but they have not. We have heard already of all the upset of the last five years—changes in taxation, and the drop in forestry planting to a third, or perhaps between a third and a half, of what it used to be. Not only that, but, as Lord Taylor said, we have also lost millions and millions of young trees because the growers of young trees in the nurseries just had nobody to buy them, and they had to be dug up and burned. What a shameful story! All right; things are looking a bit better. The Government have at last listened, not to the blandishments or the criticisms of the Treasury but to common sense and to the representations, be they of the Forestry Commission or others.

But there is still one point, as Lord Taylor brought out, which would make a great deal of difference; namely, that the cost value should be at the date of death for the purposes of capital transfer tax. I hope the noble Lord the Leader of the House will think about this and will make representations that we should get it changed. I recognise that, if we get it changed, the private forester will do somewhat better, but he will still be at a disadvantage probably. If he is not, do not be afraid if he is planting a lot. That is just what we are aiming for. What happened before? The private forester was really going places, and the upturn in planting was steady. Who got cold feet? The Treasury said, "This will not do", and the Government said, "This will not do; we must 'clobber' the private forester". Let us net be afraid; let us do the thing right and let us have continuity.

The other day the Minister for Energy told us how he was going to use some of the oil revenues for house insulation purposes. That is splendid. But also, surely, it would be a very wise thing for some of the oil revenues to be used to encourage forestry. At this moment we are suffering from unemployment. Doing this would provide employment. About 30 years' time, when the oil runs out, will just be the time when the trees are requiring either to be thinned or something even further than that. In other words, in every way it is the right thing that we should plant now, and in 30 years there will be an outcome which will give employment just when it is needed.

The problem if that course were followed would be, perhaps, the problem of finding land. Of course, one way is to pay a lot for it, but that is not very satisfactory, not beyond a point. I think that it would be a very wise thing if the Government, the landowners and the Forestry Commission put their heads together to consider the best way to get more land for forestry purposes. Perhaps there should be some small inducement. That is not a principle which has not already been accepted in other respects. We have seen it in the case of works of art, particularly if it involved public access. Perhaps those owners who can make land available and plant, and who can allow public access, should get some special encouragement. I think the thing which often makes them very frightened is the risk of fire. Perhaps the Government can help them on the insurance side of that. Then, I am sure, many landlords would feel much more ready to open their woods to the public. My Lords, I must sit down. All I want to say in ending is that the aim of all Governments should be to get us up from the present level of only 8 per cent. of our land to double that in the next 10 years.

4.18 p.m.

Earl BATHURST

My Lords, I too, must declare an interest as a forester and sawmill owner, and also as president of the Royal Forestry Society. We have, I suppose, some 4,000 members in all branches of the forestry industry, and also many outside the industry who just have a lot of trees. I join with all your Lordships in thanking Lord Taylor for initiating this debate, and especially for the delightful way, which is entirely fitting to him, in which he brought this subject before your Lordships' House. We must deplore, as Lord Perth has done, the fact that this is the subject of (is it?) a guillotine come 5 o'clock. I think there are Members of your Lordships' House who have come a very long way, at great inconvenience to themselves, to discuss this industry—a small industry but, I believe, a vital industry in national affairs. They have come a long way, and they will probably not be able, in the interests of the industry, to express their views. Nor, indeed, probably, will the Minister or Lord Taylor, at the most vital point, at the end of the debate, be able to wind it up satisfactorily.

On behalf of the industry—and I believe I can fairly say that—I want to say "Thank you" to Lord Taylor for everything that he did as chairman of the Forestry Commission. He was at one time during his chairmanship really the only friend of the forestry industry in any Government Department. Could I, too, now that Lord Mackie is back in his seat, say that his brother (and here, again, I feel I may fairly say so on behalf of the forestry industry) is treading the very same path that Lord Taylor trod with such care on behalf of the industry. Whether or not in the eyes of the Minister they were good chairmen of the Forestry Commission, I do not know, but they were good friends of the forestry industry and we owe both of them a great debt of gratitude.

The noble Lord, Lord Taylor, said that we import £2,000 million of timber. I think he did not say that we ourselves produce 8 per cent. of that sum; and that that is extra. My pocket calculator will not go that far and I did not have the chance to borrow my son's, but I think I am right in saying that that is £160 million of home-produced timber—a large amount; and one that I believe could be improved upon. It could be increased if there was a Government forestry policy. We have seen it advertised widely. M. Giscard d'Estaing has been over here and has agreed a policy with the noble Lord's right honourable friend the Prime Minister that we are short of power and that a new cable will go down between Dungeness and Calais. That is policy to get over the shortage of power. If we are short of timber, and I believe that we are, and every expert in the business, world-wide, maintains that there will be a shortage of timber, we must have a policy laid down to get over that shortage.

My Lords, I beg to draw to your attention three reports. In view of the shortage of time, I am not going to quote from them. But I hope the noble Lord and his advisers will take these reports out of their mothballs or from their shelves or from where-ever they may be. A Shropshire member of the Royal Forestry Society, on his initiative, produced a booklet entitled The Forestry Strategy of Great Britain and sent it to all the members. The name of the member who produced the booklet was Mr. Norman Forbes. The first report that he mentioned was the Acland Report of 1917.

I shall have to go back on what I have said about not quoting because the noble and gallant Lord, Lord Lovat, is in the House and this report refers to a reservation by his noble and gallant father, who was the father of modern forestry in this country and of the Forestry Commission which is renowned throughout the world. The reservation the noble and gallant Lord's father made to that Acland Report in 1917, shortly, was this: Enquiries and reports have been made, Royal Commissions and Departmental committees have sat, money has been voted … yet Great Britain remains the only country in Europe without a forest policy. It goes on to add: … without a State forest and, above all, without a forest authority. Through his foresight, that has been remedied and, for that reason, the noble Lord, Lord Taylor, is initiating this debate. The next report referred to by Mr. Forbes is the Robinson Report of 1943, and the next report is that of the noble Lord, Lord Zuckerman—he was not so then—in 1957.

I would only suggest that those three reports should be looked at by all concerned with the forestry industry, for every word written therein is as if written yesterday. May I keep your Lordships for one moment on the people who wrote those reports. Sir Francis Acland, Parliamentary Secretary of the Treasury, in 1915, Privy Counsellor in 1915, Parliamentary Secretary of the Board of Agriculture and Fisheries 1915–1916, and one of the first Forestry Commissioners. The late Lord Lovat, I have already referred to as the first Director General and then chairman of the Forestry Commission from 1919 to 1927. Mr. R. L. Robinson, inspector of the Board of Agriculture and Fisheries in 1910, and inspector throughout the first World War for the Ministry of Agriculture and then Ministry of Munitions, one of the first Forestry Commissioners on the technical side in 1919, and then director and chairman, from 1932 to 1952, throughout the last war.

Finally, the noble Lord, Lord Zuckerman. If your Lordships will direct yourselves to the 1977 Kelly's in the Library and look at the last entry but three, you will see that Lord Zuckerman is credited with being Professor Emeritus in 1974 of the East Anglia University. There are not many trees in East Anglia, noble Lords might say; but if you direct yourselves to the 1971 Who's Who? on the last page and trouble to read the full half page, I think it would be agreed that there could be no better person in this country, if not in the whole world, to insist upon a forest policy to be put into operation by the Government today and to go on for many years in the future.

My Lords, right through it is policy; it is a forest policy and that is what all bodies of the industry require. This has been put forward by the Royal Forestry Society, by the Forestry Liaison Committee; and the noble Lord has written a letter to that Committee stating that he appreciates the lack of confidence within the industry. That was in 1976. I will not weary you with the contents of that letter; they are well known and referred to by the Forestry Society of Great Britain in their evidence to the Committee looking into forestry taxation. I hope that the noble Lord will be able to look at that letter and that he will be able to draw the attention of his right honourable friend the Minister of Agriculture to that letter to see if something can be done to put right the matters which his letter acknowledged are wrong with the forestry industry.

My Lords, in the time available I can only plead, on behalf of all in the industry, that a forest policy is what is needed, that such people as the noble Lord, Lord Taylor, and the brother of the noble Lord, Lord Mackie, Mr. John Mackie, Lord Taylor's successor, are the people to help the industry to design a real policy, outside politics, which will last for the next 200 years. That is what is required.

4.28 p.m.

Lord INGLEWOOD

My Lords, time is short and there is certainly none for any long arguments. I shall restrict myself to making one point and one only. Before doing so, I must congratulate the noble Viscount, Lord Hampden, who set us an example not just of clarity but also of brevity, which is so important in these short debates.

My point is fiscal and I have declared my interest many times in your Lordships' House. I am a woodland owner, not on the scale of several others who have declared very large interests; but, if we foresters must admit that the greatest quantities of timber must be looked for in the large woods, I would also claim that some of the best quality hardwoods are found in the smaller woods. They are a very valuable national asset.

Because forestry is a long-term industry, it has been accepted as needing special treatment. Little by little, a code was built up which recognised that character. Taxation, I submit, should discourage early felling and the quick exploitation of immature woods. Instead, it should encourage owners, in the national interest, to take the long view and encourage them to achieve maximum stocking and an ever-improving average quality of their growing stock. All of that leads towards the most valuable yield at the end of the day—and a yield in perpetuity, which no North Sea oilfield or any other oilfield can rival.

Until recently, the taxation of woodlands in this country pointed that way, but then decisions were taken which put matters into reverse. The Conservative Government are certainly not free from blame. I know that the Treasury has always disliked special rules and has been unsuccessful in trying to get a number of different Chancellors since the war to iron out what it would call "anomalies". But, if the Conservative Government are not free from blame, their successors, the Labour Government, took the decisions which undermined the confidence of woodland owners in this country and brought about the halving of the planting rate. I think that I am right in saying that the noble Lord, whom we all respect as Leader of the House, was Minister of Agriculture during that time. I hope that when he replies he will tell us what reasons he had for coming to those decisions which I am sure he deplores just as much as the rest of us.

I should like to support the noble Lord, Lord Taylor of Gryfe, and not just thank him, for the admirable speech in which he put so clearly the point that forestry is an example of an industry and a mixed economy where the State and the private sectors ought to be able to work in complete harmony and set an example to many other industries in this country where labour relations, economic difficulties and so on are plaguing our lives.

4.32 p.m.

Lord DULVERTON

My Lords, it is less than two years ago since your Lordships had a forestry debate. That was also a short debate on a Motion by my noble friend Lord Lovat. On that occasion, the purpose was to examine the drastic effects on private forestry activity occasioned by the Government's taxation policy and the fall-off in planting which resulted. At that time I had to tell your Lordships that the fall-off in private planting since 1972 (that was four years before) had indicated a decline of 46 per cent. The figure has been referred to again today, showing that in Scotland and Wales, where most of the new planting was taking place, that was an underestimate and it had fallen by 60 per cent. Today, thoughts are running rather wider than the fiscal considerations, although that comes into it.

During that debate in 1976 the voice of one who could have thrown light on the whole situation and its causes had, perforce, to remain silent. Today, the noble Lord who moved this motion must surely be heard with very special attention. As he has reminded us, he was then chairman of the Forestry Commission. In the course of my many contacts and discussions with him over some eventful and worrying years with foresters, I developed the very highest regard—which I know many of your Lordships share—for Lord Taylor's wisdom, fairness and courage. As President of the Timber Growers Organisation, I must declare an interest in this debate. I also have other involvements, and I welcome the noble Lord's initiative and the forthright statements which he can make with so much more authority than I can hope to command.

My colleagues and I have experienced and known the truth of what the noble Lord, Lord Taylor of Gryfe, has told the House. I hope and pray that this House and those in another place will heed what he said, and that appropriate action may be taken as and where this is needed. I could easily fall into the mistake on this occasion of pouring out to your Lordships a whole list of forestry problems and discourse upon them. I will certainly avoid doing so. I am grateful to so many noble Lords who have made the points that I might otherwise have felt necessary to make in this debate, and among them were those raised by my noble friend Lord Hampden. I join others in congratulating him on his fresh and interesting maiden speech and welcome him to the brotherhood of foresters in your Lordships' House.

Some of the subjects that I should like to touch upon which are of concern to us timber growers are as follows. First, I can report to your Lordships that, step by step, the Government have made a number of alterations to the CTT rules in ways that are of practical application to forestry. We are grateful for that. They still need to be further amended, and private forestry will not quickly regain, if it ever does, the lost momentum. The top rate of tax is still terribly high. But we have this matter still under discussion at high level.

But enough about that. There are other matters of which your Lordships should know. Devolution is one of them. Noble Lords have explained that point very clearly. Because it is so important, I should like to add a word. The British forestry industry is very small by European, let alone world standards, and to divide it into three would be something like a disaster, especially as, at this very moment, English, Scots and Welsh foresters are working on plans to draw even closer together. I know Members of another place are aware of the danger and I hope that your Lordships will give thought to this important matter. The present depressed state of the home timber trade is another matter for very serious concern. Over-production, particularly of pulp, paper and chipboard in Europe and Scandinavia is causing a flooding on the market. At the moment the recession in trade and devaluation of foreign currencies has had something to do with it. Our own modern timber processing plants, saw mills, pulp-mills and chipboard manufacturers, comprising a very young industry, one which is seeking to establish itself on what might be termed the fringe of the world market, is in real danger. It could collapse. One could truthfully say that it will collapse unless there is some form of protection at this stage from cheap imported products.

Now I should like to look to the future. Forestry has gone, as noble Lords have said, through some years of choppy seas which hit it just as it had set its sails as preceding Governments had encouraged and even chided it for years to do. The choppy seas, though somewhat abated, have not subsided, and the ship which almost hove to will not quickly take out the reefs (to continue the nautical metaphor) in its sails and regain its course or its lost momentum. Politics are influenced so often by immediate or short-term desiderata. They chop and change. Forestry cannot conform with such meterology. It is such a long-term consideration and, as other noble Lords have said, forestry is for the next generation of Britons for whom all indications point to a growing shortage of ever more expensive timber.

So I enter the plea that the long-term and stable policy that forestry needs should be worked out for 50 years ahead. My noble friend Lord Bathurst wanted it for longer than that. It should be a long-term policy. Figures have been mentioned: £2,000 million is the bill for our timber imports. We only supply 8 per cent. of our present requirements from home-grown sources. The Forestry Commission think that will rise fairly soon to 12 per cent. On the other hand, production will double so I am not sure where that fits in. However, I do not want to confuse your Lordships with figures; but it could go up. Could the figure be pushed up to 20 per cent. or even 25 per cent.? If so, how? As the noble Lord, Lord Taylor, said, it will need full partnership between public and private sectors if these higher figures are to be achieved. They can be achieved without impairing agriculture production, and I hope they will.

I am told that the Centre for Agriculture Strategy at Reading University, which is the agricultural arm of the Think Tank, is undertaking a look in depth at the forestry scene in the coming year. My Lords, let us wait for their report, which I am told may be out in September, and by then let us be ready to work out together a stable course on which the State enterprise and the private sectors may sail together with better defined goals than we have today. Dare I also suggest that a very modest investment of the oil money in the primary products of the land, of which we have so limited a resource, could be one of the best things we ever did?

4.41 p.m.

Lord SKELMERSDALE

My Lords, other noble speakers have taken to heart so much the advice and warnings of the noble Lord, Lord Wells-Pestell, that I can hardly do anything else than to prune—or perhaps I should say in the context of this particular debate to brash up—the remarks that I was about to make. So I shall not take up your Lordships' time for any longer than is necessary.

I have listened very carefully to this debate but have heard very little, if any, mention of the problems of the nursery industry. That is obviously quite a point to be considered in the whole context of this very long-lived crop. I venture to suggest that it has the longest production line of any of the industries that we have, and indeed of any in the world. I must first make it clear that I have no interest to declare, unless it be right to declare that I am, by training and profession, a nurseryman. But I must confess that it is a very long way from the bulbs, by which I make my living, to the trees that we are discussing today. I wish to report to your Lordships the situation on the nurseries which I have discovered from a certain amount of correspondence I have received since I expressed an interest in this debate.

As has been said already, there was relative stability between 1950 and 1970. The nurseryman sees himself still as providing the raw material for the forestry industry—the very beginning of the 60-odd year chain from seed to useable timber. In his contention, instability means upset throughout the life of the forest and ultimately, of course, an irregular supply of mature timber: nobody wants that. At the moment there is no stability. The nurserymen's problems are very real, and my correspondents have detailed them much more fully than I am going to expound them today to your Lordships.

We have heard of the drop in plantable trees between 1972 and 1976. I do not know what the figure of saleable trees will be next spring, but I know that the Forestry Commission are placing vast orders for transplants on the Continent because the few that were available from private nurseries this winter have already been contracted for. I should like to look at this and find out the reason for it.

The nurseryman has problems common to any small business and added to those are the difficulties of perishability of the crop and the vagaries of the weather. The selling price of their trees averages four times—and I would ask your Lordships to think of that—what it was 20 years ago. Therefore it has only just kept up with the rate of inflation. However, they are not allowed to trade off the profits of the good years against the lower yields or even the losses of other years. With fiscal drag in the form of income tax, it is becoming increasingly difficult to service the capital required for expansion and replacement of equipment. What they want is exactly the same as the agricultural industry—and reference has been made to this today—has been crying out for: that is, the facility of averaging out their profits over three years. There are other factors which I contend are at least as important.

We debated the Employment Protection Act for many weeks over the last Session and your Lordships no doubt understand its provisions much better than I do; but all of us, I am sure, who work on the land contend that 12 weeks is insufficient for a man to find out whether he has a liking for the work, or for an employer to find out whether a man has an aptitude for it or the necessary sticking power during unpleasant weather conditions. Six months before the provisions of the Act come into force is the least that is required in the agricultural and sylvi-cultural industries. As it is, there is a strong temptation to employ old-age pensioners part-time rather than to employ new full-time labour. I am convinced that this militates against the successful working of this Act.

The impoverished state of sterling has enabled our nurseries to compete with continental suppliers and supply plants to the home market when they were previously bought on the Continent. They can, and do, export to the Continent on competitive terms, but they have a hidden and ever-increasing cost which will soon make them uncompetitive again whatever the rate of the pound. That is the apparently ever increasing burden of National Insurance contributions—an area where stability is badly needed throughout all our industries and not just in the one we are discussing today.

Another thing which militates against exports has been mentioned time and time again during the European Community debates in your Lordships' House. The marketing regulations for forestry seeds and plants are applied to the letter here by the Ministry of Agriculture but are used only as guidelines, it would appear, by continental Ministries. It is the feeling of our nurserymen that on the Continent this provision is largely ignored and therefore makes the competition unequal. As I said, not only does this militate against exports but it has an effect which is directly opposite to the stated intention of the Treaty of Rome: that is to equalise trade among all nations in the Common Market.

To go back to the situation this winter, as I have said, there are not enough transplants coming from the nurseries. I am told that that is because the nurserymen are being very cautious about sowing more seed. They do not want a repetition of the 1972–73 wholesale bonfire "epidemic" when so many transplants were unsold and therefore had to be burned to make room for the following year's crops. Last summer, 1976, saw decreased germination due to the drought. There were also large losses of mature and semi-mature trees in forests and parks, due partly to the drought, partly to Dutch elm disease and partly to the noticeable increase in pests, especially rabbits and deer.

I have an unconfirmed report of a revived interest in forestry. If that is so—and I have certainly heard nothing to confirm it from the speakers in this debate—I believe it can only be a flash in the pan. But I accept that the reintroduction of the small woodland grant, ungenerous though it is, has something to do with it.

I should like to make one further point. There is one area in which I feel successve Governments have failed. The original dedication scheme stated as its object, if I understand it correctly, the reinstating of woodlands after the depredations of the two world wars; but that does not appear to have happened, as is seen by the large number of old, unproductive, semi-scrub woodlands, vis-à-vis the large new plantations which have in part been encouraged by the dedication schemes. What is wanted is a grant specifically for clearing unproductive woodlands and also for felling dead trees in hedgerows. However, I expect it is too much to ask the Government at this late stage to do anything about reversing their policy and to give financial help to landowners over the felling of dead elms. But I do call on the Government for a long-term stable policy, like all others who have spoken in this debate, and I would urge them to start at the beginning of the chain rather than part of the way through. Planting, I contend, is not the beginning.

4.49 p.m.

Lord LOVAT

My Lords, I shall not waste very much of your time but I should like to bring out three points on which other speakers have touched but possibly not faced up to entirely. They are three points which I think could draw answers from the Minister, on one of which he could be helped out by the noble Lord, Lord Taylor of Gryfe, himself, who made such an admirable speech this afternoon. The first concerns home-grown timber and the marketing thereof. Several speakers have pointed out that the price of timber has not moved with the times. Has anybody sufficiently emphasised the balance of payments in this country, which are surely creating a problem? I do not think that the Government are giving their full support to home-grown timber.

Perhaps they do not know the problems involved. Having been a county councillor for many years, I know what their answer will be; that is, that local builders and anybody in local government who is connected with the building trade—certainly, in the North of Scotland—say that timber is too green, and is therefore unsuitable for housing and all the other things for which it could well be required. Our traditional markets are shrinking all the time. The railway sleeper trade was of immense importance for mature Scots fir, and we now find that, even in the mines, pit props are no longer serviceable. I suggest to the Government that they think seriously of kiln drying, which would obviate this danger. It is something which must be thought about very seriously, if home-grown timber is to be seen at its best and profitably used by public bodies.

May I illustrate the situation in the North of Scotland, where most timber is available and should be grown in greater quantities? My estate is only 70 miles from the pulp mill in Fort William, but, owing to the difficult nature of the terrain, the cost of transport to get my pulped wood 70 miles down the Great Glen, on what is a very good road, is prohibitive, and to sell at a profit I have to send it to Gothenberg in Sweden. There it makes a very small amount of money, which pays for the thinning of large woods which would otherwise be left lying on the ground. This can hardly be right, and I beg the Government to consider that timber is one of our greatest imports. I do not think that they fully understand this, although I made the point two years ago when I inaugurated a debate.

On the second point that I want to make, I cross swords with the noble Lord, Lord Taylor of Gryfe. He rightly said that there are vast areas of desert in the Highlands. That may be true, but two years ago I asked for guidance on a grant for getting timber to grow in those desert areas. There was a very generous grant on Caldedonian pine—that comprised the ancient forest which covered the whole of the North, in which only wolves and bad men lived—but in 18 months I have had no reply on how to get that grant, although I can buy the plants which constitute Caledonian forest fir. This is an example of the topsy-turvy and uncoordinated state of the timber industry in this country.

My third point was made by, I think, the noble Lord, Lord Mackie. He made a very good speech and told of how cattle and sheep depend on warmth and shelter belts, which put up their temperature and help them through a severe winter, especially when there is wet weather and sleet, which are worse for cattle and sheep than snow or hard frost. The Forestry Commission are very grudging about this. Private landowners accept the fact that when trees reach a certain stage they can be opened. At 40 years old, after the second thinning, it is perfectly safe to put cattle and sheep under trees even if the natural regeneration may to some extent suffer. To a forester, natural regeneration means too slow a growth in this competitive age of timber growing. You have to make a clean fell and plant again.

The last days of thinning are in sight; it is clean felling now and a fresh crop. When you have trees which are 40 years old, and you cut them at 60 when they should be reasonably mature, I see no reason why the Forestry Commission should not open their fences and let in cattle and sheep, and red deer as well. I do not mention red deer because of any sporting interest, but because they are now more profitable than sheep farming. The fat stag shipped to the Continent in September is worth £250, if it weighs more than 15 stones, and that is almost as much as 20 sheep in the same market. The deer have suffered from the work of the Forestry Commission. They are kept out and live on the hill in the summer, and they have nowhere to go in the winter, so they become nomads and thereby destroy farming, which illustrates that farming and forestry must go closely together. I hope that the Government will consider those three points, because they are all important.

4.55 p.m.

Lord ENERGLYN

My Lords, I shall occupy your Lordships' time for precisely two minutes. I must first declare an interest. I have been working for the last four years with Hungarians who have been processing materials which some would call coal, others would call brown coal and the Scots would call peat. We are now able to show that, by certain processes utilising these materials, we can control the pests that are wiping out many of our trees; in particular, the Dutch elm.

But of greater significance is the fact that we have now had our tests going sufficiently long to be able to claim—and I say this to the noble Lord, Lord Lovat, who has just sat down—that the growth rate of conifers can be accelerated three times by the use of this fertiliser. This could create in this country, particularly in the Highlands, a new way of processing peat and low-grade coal to accelerate the growth rate of trees, and, at the same time, to have trees which are not subjected to pathogenic fungi.

4.56 p.m.

The LORD PRIVY SEAL (Lord Peart)

My Lords, I think that this has been a good debate, despite what the noble Earl, Lord Perth, said, if he will forgive my saying so. Even though the debate has been short, we have had some fine speeches, I think because there are so many noble Lords in your Lordships' House who know the industry and speak with authority. If the noble Earl wishes to have a larger debate, then it is up to him to put his name down and speak to some of his colleagues. Naturally, I shall then look at the matter and see whether we can find time. But, at least, your Lordships have had one debate in my time.

The Earl of PERTH

My Lords, if I may just comment on that, many people have tried—I know that the noble Lord, Lord Taylor, and various others have tried—with no result. The only debate that we have had in the five years was a short debate which paid particular attention to taxation. There is no doubt in my mind that, if we had been able to have a full debate today, we should have been able to get very much greater advantage out of it.

Lord PEART

My Lords, that is problematic. Sometimes, short debates can be extremely effective, and this has been an effective debate. I wish to thank my noble friend Lord Taylor of Gryfe for giving us the opportunity to discuss forestry. I believe I am right in saying that this was a maiden speech on forestry for him, who, when Chairman of the Forestry Commission, was precluded under the Addison Rules from speaking on this subject. Therefore, I am grateful that we should have had the benefit of his experience not only in the public sector, but also, more recently, in the private sector. He certainly served the nation well, and under his leadership the Forestry Commission did some splendid things, despite criticism.

I should also like to congratulate the noble Viscount, Lord Hampden, on a delightful maiden speech. We wish him well. I hope that he will continue to participate in our debates on agriculture and forestry. I was pleased that he raised some important points in relation to the replanting programme, as a result of elm disease, and also in relation to the control of pests. Only the other day I was down at Chequers looking at some of the woodlands there, and I could see where pest control was needed in certain parts. It is a problem for many foresters. The noble Viscount also put forward the interesting idea that we should think about landscaping our parks, and should include this in our education system. The noble Viscount showed that he has new ideas, and I hope that he will pursue these with the Forestry Commission. I shall inform not only the Forestry Commission of this debate—they are represented here and are watching—but also the Ministers concerned in the different Ministries; for example, the Secretary of State for Scotland, the Secretary of State for Wales, and the English Minister of Agriculture as well.

At the outset, I should like to stress that both private and public sector forestry have an important part to play in the economy of the country. We have seen a steady expansion and the establishment of forestry since the war. There have, of course, been peaks and troughs but British forestry is now firmly based and can, I think, look forward to the future with optimism.

The Forestry Commission has been working steadily to fulfil the objectives set for it by successive Governments. Since 1972, it has been given as its commercial aim a target rate of return of 3 per cent. in real terms, after taking subsidies into account. I am happy to say that in their next annual report, the Commissioners will be reporting that this target has been marginally exceeded over the last five years. Harvesting revenue has, of course, made a most important contribution, mainly due to increased prices in the world wood market; this has compared with the relatively lower increases in the cost of forestry operations.

The Commission works to an annual programme set by the previous Administration and endorsed by this Government of up to 55,000 acres of planting and restocking combined. It has achieved an average of 53,200 acres a year over the past five years, of which more than three-quarters has been in Scotland. The noble Earl, Lord Bathurst, raised with me the question of reports. His speech was, I found, extremely interesting and effective. The Acland Report of 1918, the White Paper on Post-War Forest Policy of 1943 and the 1957 Zuckerman Report, to which the noble Earl referred, were important milestones in the development of British forestry policy. Indeed, the Government's present policy relates to the past but rests on the foundations laid by those earlier reports. The target of 5 million acres of woodland by the end of the century set by Acland and endorsed in the Forestry Commission's 1943 White Paper, although never officially adopted by the Government, is likely to be achieved well before that date. In earlier days, areas were expressed in acres, but as forestry is now metricated, from here onwards I shall refer to hectares.

The level of new planting by the private sector has fluctuated more widely, and although the Government do not attempt to set targets for private planting—this would not be appropriate as it is the accumulation of many individual management and financial decisions—they carefully watch the position. I know that over the past five years the trend has been downwards, with a very sharp fall in 1974–75 and 1975–76. But the Government are alive to the implications and are anxious that the private sector should play its proper part in the production of timber for industry.

Certain questions were raised about taxation by the noble Lord, Lord Taylor of Gryfe, and, indeed, by the spokesman for the Opposition, the noble Earl, Lord Ferrers. The Government have tackled this problem, and noble Lords have paid tribute to what they have done, but it will be against the background of the important changes that have been made that my right honourable friend will have to consider whether any further relief of the kind suggested by noble Lords is justified. I think that the points which have been raised on taxation should be carefully and sympathetically considered by the Government, and I shall certainly make the necessary representations. In this connection, I understand that the Forestry Commission of Great Britain have written to my right honourable friend welcoming the changes he announced in October but asking for further modifications.

The interdepartmental review of forestry taxation and grants set up by my right honourable friend the Minister of State at the Treasury, led to a decision being taken, and the Government's announcement, to which I have referred, has helped. This will be welcomed by all involved in forestry. The changes that were made then have already had a beneficial effect on confidence and I think that confidence should be further increased by the substantial improvement in the Schedule 9 arrangements announced by my right honourable friend the Chancellor of the Exchequer in his October Statement. He stated that the CFI business relief should in future apply to deferred charges under Schedule 9. This means that in most cases the eventual charge on disposals of timber will be reduced by 50 per cent. or more. This radical improvement should remove any justification for fears that CTT will have an adverse effect in the future.

Forestry programmes depend at the end of the day on suitable land becoming available for planting, and this rough grazing land is in the hills and uplands, especially of Scotland. I have noted carefully what the noble Lord, Lord Lovat, has said, and I shall take up his point with the Minister. I thought that the noble Lord made a very constructive contribution to the debate; he knows the industry so well. I was intrigued by the noble Lord's export of timber to Gothenburg in Sweden. We shall have to look at that. If an export of that kind is profitable, why should it not take place? However, I shall not develop that argument.

Lord BURTON

My Lords—

Lord PEART

My Lords, if the noble Lord will forgive me, my reply to the debate must be kept short.

Lord BURTON

My Lords, perhaps I may be allowed to say that I gather that the market has now dried up.

Lord PEART

My Lords, then I shall have to speak to the noble Lord, Lord Lovat. There is scope for the further expansion of forestry in England and Wales, although it is much more limited. The Forestry Commission is currently studying future planting prospects in these countries and trying to form an estimate of the proportion of land which might be transferred to forestry over the years ahead. Until these studies are complete, one can only speculate that visual amenity considerations and the agricultural requirements, together with such problems as those of common land, are likely to restrict the land available to a small fraction of that which might become available in Scotland.

In Scotland, the Forestry Commission has made an assessment of the extent of the land which is technically suitable for planting. At present, much of it is used for upland grazing and there has been a great deal of discussion about the desirable total forest area, the likely future new planting rate needed to achieve it and its impact upon agricultural production from the hills. Some of the calls for very large total forest estates, involving forestry programmes of hundreds of thousands of hectares a year, are clearly far too grandiose and, on examination, prove to be unrealistic on almost every count.

On the other hand, prophets of doom about the future of forestry are likely to be proved wrong by the resilience of the forestry industry and the flexibility of our Government's policies towards their needs. I shall not put forward estimates of my own, because public discussion of this matter by experts is still continuing. As all foresters know, we are dealing with very long time-scales, in which circumstances and economic forces, as we have seen in the last few years, can rapidly change.

It is vital, however, that forestry expansion takes account both of the agricultural circumstances and the environmental needs, and it is most important that the procedures which have been carefully formulated for transferring land from agriculture to forestry are given a chance to work. Your Lordships will perhaps forgive me for stressing what is perhaps an obvious point; namely, that good land use must be the main aim in determining the allocation of land between forestry and agriculture.

Arguments have been put forward for expanding forestry in this country so as to reduce our dependence on imported timber and timber products for which we are paying some £2,000 million a year. Within the constraints of land availability and the need to maintain food production, it is the Government's policy that forestry should continue to expand at a reasonable rate. Such an expansion will, in due course, help to reduce imports, but new planting now will not affect production until the beginning of the next century.

Until that time, output will be determined by production goals from our existing forests. Hardwood production is expected to remain at about 1 million cubic metres a year for the rest of the century, and although the value of this production is by no means negligible the expansion will be in softwoods. Latest forecasts show that output capacity of softwoods will more than double by the turn of the century, by which time the Forestry Commission itself will be producing nearly 75 per cent. of British softwood. Expansion will be so rapid that both the public and private sectors will face a major challenge to harvest and market this timber.

To achieve the full potential production will require the close co-operation of the Commission, private growers and trade and industry which I know the Forestry Commission will be encouraging to the fullest extent. This is important if we are to achieve the maximum possible increase in timber production to feed the wood using industries. In this context I welcome the recent decision by the Government to support the expansion of the Workington mill of the Thames Board Mills Company. I know that it is in my old constituency but I did not influence the decision. It was an honourable decision taken by the Department.

In view of my interest in the Thames Board Mills Company at Workington, the noble Viscount, Lord Ingleby, asked me whether I would use my influence to secure a mill in County Durham, and especially at Hartlepool, which he mentioned. I used to go to school at Hartlepool and I saw the area quite recently when I was looking into another matter regarding the use of dispersal policy to provide work for people on Teesside. I will take note of what the noble Viscount has said, but he must realise that large quantities of wood are required to make a pulp-mill viable, and I am advised by the Forestry Commission that we shall not be in a position yet to establish any new ones, perhaps even for a decade or so. For the present, increasing timber supplies can best be utilised in extension of existing mills. I mentioned one in Cumberland, but nevertheless I will bring to the attention of the Ministers the point raised by the noble Viscount.

No debate on forestry would be complete without a reference to the wood market, with which the noble Lord, Lord Lovat, dealt, and to recent developments which have affected United Kingdom processors. The duration and intensity of the recent recession has presented problems not experienced previously and many wood processing industries have been forced to reduce their production level and their wood intake. The Government are concerned to reverse this trend and the measures announced by the Chancellor of the Exchequer in October included special emphasis on increasing activity in the building and construction industry. I hope that these measures will help to increase the demand for wood and wood products.

I have concentrated up to now on forestry's role as a producer of timber, which is, of course, its ultimate objective, but it also has an important part to play in the rural economy. In national terms forestry's contribution to employment in rural areas, while comparatively modest is nevertheless significant. There are some 21,000 jobs in forestry in Great Britain (split almost evenly between the public and private sectors) and over 14,000 jobs in industries using homegrown timber. While increasing mechanisation decreases labour demand, forestry is still relatively labour intensive and can increase local employment with advantage to the local economy. In addition the creation of new forests and, later, harvesting the timber, often bring to rural areas with extensive pastoral farming, a diversification of the local economy in which a number of families become dependent on an altogether different industry from agriculture.

Another contribution to the rural scene is the development of the Forestry Commission's recreation schemes on which the Government places special emphasis. These provide employment and other benefits to the local communities and also afford new opportunities for the millions who each year visit the Commission's forests, often staying at its camping and caravan or cabin sites.

I know that the subject of devolution is one that is very much in your Lordships' mind and I know that the noble Earl, Lord Ferrers, warned me that he was going to raise this matter. We shall shortly be considering the Government's proposals for the devolution of certain matters, including forestry, after they have been considered in another place. Under the proposals contained in the two devolution Bills, forestry and afforestation, both public and private, are devolved subjects. I know that the House will understand that it will not be appropriate for me to enter into a debate at this stage on the details of these proposals or how they affect forestry.

Earl FERRERS

My Lords, may I just ask the noble Lord whether he can say whether or not my interpretation of this is correct, because the forestry industry is very concerned about it.

Lord PEART

I know, my Lords; that is why I thought the reply I gave would satisfy the noble Earl. I understand that he thinks it is crazy, but I cannot go beyond that.

Earl FERRERS

My Lords, it is only crazy if what I thought was correct. What I want to know is whether what I thought was correct.

Lord PEART

My Lords, I am sorry, but I cannot go further than what I have said, much as I would like to. I know that the private forestry sector is very interested in possible developments in the EEC. We had a slight reference to this. The House will be aware, however, that there is no common EEC forestry policy, and one could not be introduced without an amendment to the Treaty of Rome. I do not think I need go into detail about that. But a number of our colleagues are interested in this matter, and, of course, your Lordships' Scrutiny Committee had a report which was debated in this House on 6th February 1975 when the Government took a view on the special Directive which came out of Brussels. That is all I can say on that aspect.

Finally, I might perhaps answer calls which have been made for a definitive statement of long-term forestry policy by the Government. Naturally, we recognise that there is a need for long-term confidence as the basis of investment by the private woodland owners. The nature and time-scale of forestry activity form a unique combination and although much of Great Britain is specially favoured for growing trees in the temperate zone we are talking about a crop rotation of about 50 years for softwood. The time-scale for broad leaved trees is considerably longer.

Any change in policy therefore takes several years to produce any perceptible effect and this is why full-scale reviews for forestry have occurred and should occur only infrequently. It is however accepted that within the framework established by the major reviews there is a need to consider at suitable intervals and in the light of development the emphasis given to various aspects of the task.

The Interdepartmental Review of Forestry Taxation and Grants was such an examination, and as the Government said in announcing the outcome of that review these measures should provide a suitable framework within which the industry can operate and we shall want to see how they work out before contemplating any further changes or any further reviews of policy. The purpose of the new measures which we have introduced is to restore a measure of confidence to the private forestry sector. This, I am sure, is already happening.

The Forestry Commissioners are about to report on their first five years of operation since the review in 1972 and I believe that the results are likely to suggest that the policies set out for the public sector are workable and effective. As I said in my opening remarks, I think that British forestry can look to the future with a good deal of optimism.

The noble Lord, Lord Taylor of Gryfe, referred to delays in clearing the land for forestry. The Government rightly attach great importance to the need to examine carefully the impact of forestry proposals on agriculture and the environment. The procedures therefore involve consultation with the agricultural Departments and local authorities. The conditions of entry to the dedication scheme recognise that assessments cannot be made overnight by allowing up to three months in normal cases for consultation with local authorities. In the vast majority of cases, clearance can be given within that time limit. My Lords, I am afraid my time is up. I cannot reply to every point, but I promise noble Lords who raised valid points, like the noble Lord, Lord Energlyn, that I will take note and will write to them.

5.20 p.m.

Lord TAYLOR of GRYFE

My Lords, like other noble Lords who have spoken I should like to pay tribute to the noble Viscount, Lord Hampden, for his maiden speech and particularly his encouraging references to the work being done by his local authority in conservation and replanting. The noble Earl, Lord Perth, indicated that growing trees tended to be the pursuit of old men, and I think he must have been encouraged by the presence of the noble Viscount, Lord Hampden, and the speech of the noble Lord, Lord Skelmersdale, who are the younger Members of this House who have spoken this afternoon. I should like to say thank you again to noble Lords who have made kindly references to myself and to my work with the Forestry Commission, and to say that I very much enjoyed everything I did and was grateful for the opportunity of doing something so worth while and so rewarding in its effect.

We were fortunate to have in the House today the experience and knowledge of practising foresters, and I am quite sure that the debate we have had will contribute greatly to the wisdom of the Government in looking at forestry in the future.

The noble Lord, Lord Dulverton, and the noble Earls, Lord Bradford and Lord Bathurst, are not only active practising foresters in their own right, but they also daily engage in the politics of forestry, if you like, and I wish them well in the structuring of the private forestry sector so that their voices may be more effectively heard. The noble Lord the Leader of the House may not welcome reference to the fact that I would hope that forestry one of these days will become as effective a lobby as is the NFU, and I wish them well in their efforts towards that end.

May I also wish well my successor, John Mackie, who has all the qualities, and has already gained tremendous respect in the industry as leader of the Forestry Commission. Finally, may I say that when chairman of the Forestry Commission I always had support and encouragement from the noble Lord, Lord Peart, when he was Minister of Agriculture. He had some decisions to take during his period of office which were perhaps not the most acceptable decisions for the forestry industry, but I can speak personally in saying that my relations with him as Minister were always on a very happy, friendly and encouraging basis. I am quite sure that the House will very much welcome the assurance he gave this afternoon to the effect that forestry can look forward to the future with a good deal of confidence. In so far as the debate this afternoon has contributed towards that end, I am happy now to beg leave to withdraw the Motion standing in my name.

Motion for Papers, by leave, withdrawn.