Forestry

HL Deb 23 February 1981 vol 417 cc895-967

3 p.m.

Lord Sherfield rose to move, That this House takes note of the report of the Select Committee on Science and Technology on the Scientific Aspects of Forestry (2nd Report, Session 1979–80, H.L. 381).

The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. This report on the scientific aspects of forestry in the United Kingdom, of which I am asking your Lordships to take note, is the 2nd Report of the Select Committee on Science and Technology which was set up about a year ago. The Select Committee has two sub-committees, and each has now completed a report. The first report, on electric vehicles, was debated in November. The second report was published in December. It was prepared under the shadow of a policy Statement on forestry which was thought to be imminent a year ago, but which, by coincidence or design, was made on the very day that the committee's report came out, and the report and the policy Statement are being taken together in this debate. The noble Lord, Lord Dulverton, is to speak to a Motion on the Statement after I sit down.

The committee in fact anticipated that there was likely to be approval for an increase in the amount of afforested land in the coming decades, and we recognised the need for the United Kingdom to reduce its dependence on imported timber. This can be done in two ways: by increasing production, and by reducing the predicted rate of increase in demand by better utilisation. To each of these tasks science can make a contribution. The focus of our inquiry was scientific, but the evidence and the subject matter inevitably drew us on to issues of economics and policy. We pursued them only as far as was necessary. We say that policy on research and development must be largely dependent on national policies for forestry and other uses of the land, and that policy should be capable of reacting to the findings of research and development.

But we did not, for example, suggest what the size of the forest area should be; we did not make recommendations on finance, though we suggested sources from which finance might come; and we obviously made no reference to the disposal of Forestry Commission land to the private sector. Those broad policy issues will be dealt with by the noble Lord, Lord Dulverton, and I shall try so to frame my remarks as to lead naturally up to his Motion.

I now direct your Lordships' attention to the report. It is a fairly slim volume, but it is backed up by a fat volume of nearly 400 pages of oral and written evidence. The sub-committee was reinforced for this inquiry by the co-option of the noble Lord, Lord Dulverton, and the noble Earl, Lord Lonsdale, who are both leading forestry authorities and practitioners; but other members of the sub-committee also had some practical experience of forestry management. In the sifting of the evidence and the production of the report we were greatly indebted to our specialist adviser, Professor Duncan Poore, Professor of Forestry Science in the University of Oxford, and to him I record our warm thanks.

I take this occasion to thank our witnesses for their assistance, and perhaps I may mention in particular the Forestry Commission, which spared no effort to help us, and the representatives of the Centre for Agricultural Studies at Reading University, whose 1980 report, together with the Forestry Commission's 1977 review of the projected demand for timber, provided an excellent background to our inquiry. But to all our witnesses, including the noble Earl, Lord Mansfield, who is to reply to this debate, we are most grateful.

The committee identified three main areas for inquiry: the role of fundamental research; the adequacy of current applied research; and the environmental impact of current forestry practice. It was our purpose to investigate the inter-relation of research and development with practice and policy in these three fields: what was being done; whether this was satisfactory in quality, originality and coverage; and whether the results of the scientific effort were being sufficiently utilised.

A Bill at present before your Lordships' House defines forestry as The growing of a utilisable crop of timber". We defined forestry more broadly, to include plantations and woodlands, hedgerow trees and shelter belts. During our inquiry we kept constantly in mind the fact that the current import bill for timber in the United Kingdom is nearly £3 billion; that we import 92 per cent. of our domestic requirements; that the European Community as a whole imports 60 per cent. of its requirements; that the amount of afforested land in the United Kingdom is about half of that in the Community; and that tropical forests are being depleted at an alarming rate. We then went on to analyse and assess the evidence on research and present knowledge, relating to forest production, including pests, windblow and ecological sustention. We dealt with end use, with the ecology of woodlands and broad-leaved plantations, with the problems of land use and extension of the forest area, with water and fisheries, with landscape and recreation, and with wildlife, especially deer.

We included tropical forestry principally in order to lay stress on the importance to the United Kingdom and to tropical countries that the level and quality of British research in this field should be maintained and encouraged. Productivity in tropical forests will have a direct effect on British timber markets and therefore on British forestry.

From there we move on to the functions of the departments and other bodies which contribute in one way or another to forestry policy and practice, and to the dissemination of information, which the Forestry Commission does well. Then we deal with the funding of research, and finally, since so many of the scientific questions raised by the evidence bear strongly on forestry policy and practice and the best use of the country's resources of rural land, we deal with policies for forestry and land use. We conclude with our opinion and recommendations.

My Lords, considering the national importance of the forestry industry in the light of our huge import bill for forest products, the committee was struck by the absence of a well-co-ordinated policy-making system and the lack of a coherent approach, especially to research. Three Ministers share the responsibility for forestry policy, including research and development. They are advised by the Forestry Commission, of which more later.

In the research field the Forestry Commission is concerned only with applied research. Basic research is the responsibility of the Natural Environmental Research Council and its institutes terrestrial ecology, hydrology and virology; but only 3 per cent. of the NERC's resources are allocated to research in any way connected with forestry. The research councils and their advisory board come under the Ministry of Education and Science. The exceedingly important problems of the end use of timber come under the Building Research Establishment, which is part of the Department of the Environment. Other departments which have an interest in forestry are the Ministry of Agriculture, Fisheries and Food, the Department of Industry and the Department of Energy, and among statutory authorities there are the water authorities, the Nature Conservancy, the two Countryside Commissions and the Red Deer Commission, all of which undertake or commission some research. So do the Royal Society for the Protection of Birds and the Agricultural Research Council.

The situation in regard to the universities is not reassuring. Only four have forestry departments, and there are very few courses which integrate forestry and agriculture. The total amount of research done in universities is not great, partly because of a shortage of funds and partly because of the essentially long-term nature of forestry research. Liaison with the Forestry Commission is weak, partly because the commission has no Rothschild money for commissioned research. We were also struck by the divide between forestry and agriculture. If you cross a fence from a farm into a plantation, you move from the jurisdiction of the Ministry of Agriculture (or the Scottish or Welsh Agricultural Departments) to that of the Forestry Commission—two completely separate entities linked only by a Minister. The advisory services for agriculture and forestry are completely separate, yet the importance of integrated land use increases year by year.

There is a sense in which forestry is nobody's child; it falls between all stools. Apart from some very emphatic evidence on the point, the committee stumbled across some significant illustrations of this. They received evidence that the advisory board of the research councils has not, in the eight years of its existence, specifically considered the scientific aspects of forestry. Secondly, forestry was not even mentioned in the advertisement for the secretaryship of the NERC, though fortunately the choice fell on Professor Bowman, formerly of the Centre for Agricultural Strategy in Reading. It is perhaps symptomatic that on the 26th January last the other place held its first full-dress debate on forestry for 30 years. Your Lordships' House, however, has done a good deal better than that.

The position really is that nearly everything to do with forestry is left to the Forestry Commission. They are Pooh-Bah, and they do a good job given the circumstances, their resources and their terms of reference. But the committee did not find the situation satisfactory. The responsibility for forestry research and co-ordination of land use is too fragmented, and it was to this point that the committee principally addressed itself. The committee was assured that in practice this apparent fragmentation was repaired through the excellent personal relationships of all concerned. My Lords, nobody has a firmer belief in the merits of the "old boy" net than I, but in this case my credulity was strained to breaking point.

Turning to the recommendations, I shall leave the detailed questions relating to various aspects of research, including its organisation, to later speakers. But on organisation I must mention two matters to which I attach particular importance. First, in order to give the Director of Research in the Forestry Commission more authority, and to encourage him to go out and promote research elsewhere, we recommend that the commission should have on its establishment a chief scientist, advised as at present by a research advisory committee. But rumour now has it that the post of chief scientist in the Ministry of Agriculture, Fisheries and Food may be abolished. It is a matter of serious concern if the position of chief scientist in departments is to be called in question. I may say in passing that this whole question of the provision of scientific advice to Governments is now under consideration by the sub-committee of the Select Committee under my chairmanship, and that the chief scientist system will be one of the matters for early scrutiny.

The second point relates to research in the end use of forest products. The committee found that this was at present inadequate, that putting the Princes Risborough Laboratory (formerly the Wood Products Research Laboratory) under the Building Research Establishment had been a step in the wrong direction, and that since then the Princes Risborough Laboratory has been forced to reduce its research effort in wood products to a dangerously low level. We consider that it should be removed from the control of the Building Research Establishment and associated more closely with the Forestry Commission, while keeping up its links with the building industry on the customer/contractor relationship.

I now turn to the funding of research and its adequacy—a subject on which the committee received much conflicting evidence. The total from all sources spent on forestry-related applied and basic research is rather under £5 million a year, and is broken down and analysed in our report. The Forestry Commission was reasonably satisfied with its own level of research—a satisfaction not shared by any of the other organisations concerned. The committee concluded that the present level of funding is not generous, and the weight of the evidence suggested that further research was required in many fields. Certainly the amount spent on research is small in relation to the value of the forest estate—it is under 1 per cent., in fact—and if the size of the import bill is taken into account it is much smaller. The committee indicate areas in which they consider more ample provision should be made, and in particular they recommend that more research should be commissioned in universities and make suggestions as to how this should be done. The committee felt that the improved co-ordination of forestry research and development, which they recommend, should enable a better appraisal of research requirements to be made in relation to the national importance of forestry.

As I have said, the committee also indicate ways in which further research money could be raised. In particular, they recommend that the Rothschild principle should be applied to forestry research, with the Forestry Commission as the main, though not the only, customer. It is again perhaps symptomatic that forestry science was left out in the first place.

Had the committee been aware that parts of the Forestry Commission's estates might be sold off, they would, I am sure, have been concerned about the impact of this policy on the research effort of the Forestry Commission and other bodies, which, as I have suggested, is already too low. Without expressing any opinion on its merits, it is clear that the new policy could adversely affect a number of the committee's recommendations. To give a couple of examples, how will the new policy affect the committee's recommendation that the Forestry Commission should diversify the species and age classes of forests and the Forestry Commission's stated intention of doing so? Secondly, the Government say that they want a steadily increasing proportion of our resources of timber to come from our own resources. Enough research on end use must therefore be supported to ensure that our timber in the United Kingdom is useful. For example, sitka spruce is a reasonable structural timber if grown slowly, but it can be too weak if grown vigorously in some of the more fertile parts of the country. I hope that the Minister can confirm that this new policy will not lead to any reduction in Forestry Commission research but that, as forest authority, the commission will still be able to carry out research for the whole industry This is an important matter and I hope that in his exposition of the policy the Minister will be able to reassure the House upon it.

Before concluding my remarks, I wish to call your Lordships' attention to two suggestions which have emerged from the committee's deliberations and which have already attracted some favourable notice. The system of tree preservation orders is a negative control which is quite often abused by local authorities. The committee suggest that they should be replaced by tree management orders which would be positive in their operation and likely to be much more acceptable to the owners of the woodlands in question. The second suggests that experiments in community forestry should be undertaken. Many of us know of areas of copse or woodland too small for exploitation which could be managed and improved by local bodies on nominal lease or purchase. There are a number of ways in which this activity could be arranged for local benefit, amenity and even profit.

The Forestry Commission bulks large in this report. As forestry enterprise and forest authority, they dominate the forest scene. The committee found that some aspects of their management objectives and statutory terms of reference are becoming out of date in the context of present conditions and the way in which forestry practice is evolving in the Forestry Commission itself and elsewhere. The committee recommends that consideration should be given to the amendment of the commission's management objectives and terms of reference. A convenient opportunity to update these terms of reference will occur when the Forestry Bill reaches your Lordships' House. But this is a more general question which might better be elaborated in the context of the Motion of the noble Lord, Lord Dulverton, as might some of our other recommendations relating to integrated land use and conservation.

In its conclusion, the committee ended on a confident and optimistic note. We say: …with a sensitive lead from the Forestry Commission and the private sector, Britain's forests can be productive, varied and beautiful. The yield from existing forests can increase and an extension of the forest area should be possible without damage to or conflict with other land uses". It goes without saying that this desirable result would be furthered by acceptance of the committee's recommendations. Obviously, I have been able to mention only a few of these. Later speakers will, I hope, be able to fill some of the gaps; but many of the recommendations in the report can hardly be expected to receive detailed consideration in the Minister's reply. I understand that in another place reports of the Select Committee on Science and Technology received the Government's considered comments in a White Paper. I do not suggest that we need slavishly to copy the practices of another place, but this seems to be a good precedent and I invite the Minister to follow it and to publish in due course a White Paper giving the Government's comments on the committee's recommendations. My Lords, I beg to move.

Moved, That this House takes note of the report of the Select Committee on Science and Technology on The Scientific Aspects of Forestry (2nd Report, Session 1979–80, H.L. 381).—(Lord Sherfield.)

3.25 p.m.

Lord Dulverton had given notice of his intention to move the following Motion: To call attention to the Government's Statement on forestry policy of 10th December 1980 with its emphasis on the expansion of forestry on the basis of the continuing partnership between the public and private sectors; and to move for Papers.

The noble Lord said: My Lords, I am instructed on the best authority that in the order of things this afternoon it is not appropriate for me formally to put the Motion which stands in my name; but it is difficult not to refer to it and, in doing so, I should like to make it very clear that I have much in mind that the Motion just moved by the noble Lord, Lord Sherfield, deserves the undivided attention of your Lordships' House. Having served on Lord Sherfield's Select Committee, I should like immediately to pay tribute to the quality of his leadership and guidance from the chair and to express the belief that the report and recommendations of the committee are of an excellence and importance that merit the most seriousconsideration and subsequent action.

There are a large number of points in it to which this remark would refer and which have pertinence to the subject of my own Motion. In saying that, I should like to pay a further tribute to the noble Lord, Lord Sherfield, on the very clear exposition that he has just given us and the salient consideration of his report which, I suggest, is a masterly synopsis of the situation. The pity is that the report is not in the hands of Ministers so that they could themselves have given it consideration before releasing the Statement on forestry policy on 10th December—which was the same day as the publication of the Select Committee's report. It is this circumstance of timing which makes it almost inevitable that our thoughts today will spill over into matters arising from the Government's Statement. My Motion really only bows to the inevitable and puts it on record.

In welcoming the intent of the policy Statement—which, for ease of reference, I will refer to subsequently as "the Statement"—to bless the expansion of forestry and the partnership of public and private sectors, I fear that it is not possible to give an unreserved welcome to some parts of it. There are matters of broad principle which have been questioned by many and many matters of detail that call for a lot of thought and discussion; but besides what the Statement does contain, there are numerous matters brought forward by the Select Committee which are vitally relevant to its entirety and which cannot have been fully considered before the Statement emerged. Last March we debated the need for a long-term forestry strategy. I must admit that, in our enthusiasm, we wandered rather widely round this particular theme on that occasion, and I hope that it is no discourtesy to the House to hope that we may today concentrate our thoughts upon the Motion. I venture the thought that the Select Committee report offers the basis of a strategy that could be, and needs to be, worked out transcending party politics and immediate circumstances and demands.

The Statement seems this year to be much more of a tactical dimension than a strategic one. There is no need for me to repeat the broad considerations which we discussed in March and of which the noble Lord, Lord Sherfield, has just reminded the House so clearly—our dependence on foreign timber and all those alarming figures. Does the Statement, changing, as it does, so many of the existing rules, take us far along the road suggested by, for instance, the Centre for Agricultural Strategy Report; and, behind the proclaimed intent towards expansion and partnership, which again I welcome, can we find the stature of a well-laid strategy?

If some would question this, it must be realised that the forestry Ministers have had to do their best in the face of pressures and adversities. The general economic climate and the gravity of the need to reduce Government expenditure has obviously loomed large; and the Treasury, with all its immense power and influence, has never been enthusiastic about the long-term investment which forestry entails. The catastrophic collapse of at least three home-supplied pulp mills, not from inefficiency but under outside cir- cumstances—largely the strong pound and the high costs of energy in British industry—and the difficulties of the other sections of the home-grown timber trade during the world recession were in fact used by some to discredit the protagonists of a stronger forestry industry. Besides these factors, the clamorous anti-forestry attitudes of some of the conservation and amenity organisations—and I belong to some of them—not infrequently overstated, but enlisting the sympathy of a lot of voters, must have made ministerial decisions towards a vigorous support for a really expansionist policy extremely difficult.

It would be churlish not to recognise that these influences surely did exist, and among them that of Treasury is powerful indeed. Yet, without repeating the basic figures and the forecasts which the noble Lord, Lord Sheffield, has given us and about which he has reminded us, as a background against which his committee went to work, I cannot help setting the cost of £29 million, which is what the Forestry Commission drew from Government last year to balance its own budget, including the support given to the private sector, against the benefit to come from the investment in a growing national asset which the national forest is.

The year 2025 may seem a long way ahead, but by then it is forecast that the converted value of the product of the forest, per annum, and at today's prices, would be £800 million. That is if we planted no more. If we were to plant on the maximum scale of options mentioned by the Centre for Agricultural Strategy—and the Government Statement does not seem to go anything like this far the annual figure, and thus the saving of imports, would become £1,700 million per annum. I repeat, "at today's prices". Goodness knows what the prices will be by then. Really, against these figures, and even more when measured against the total of Government expenditure, £29 million seems a rather trifling figure.

Reduction of expenditure seems paramount and is sought in two ways, through the streamlining or simplification of administrative measures, relating to the support of private forestry. This is the recommendation of the Rayner Report. No quarrels with the principle of that, though the suggested methods will call for scrutiny. The other way, which is more drastic and certainly controversial, is the sale of Forestry Commission land and plantations. I for one (and I know quite a number of others would agree with me) find no fault with the intention to sell off areas that are so detached from its main forests (and there are examples of these) as to present some difficulties of management.

I should not like to see it going much further than this. I utterly fail to see the sense of the commission selling off its plantable land—and I repeat "plantable land"—which it has acquired over the years (and the cost of land is going up all the time) even though it is only to be allowed, as I understand it, a paltry 5,000 hectares per annum in future. I hope that I may have that wrong. It looks most lamentable. I am sure that the Minister can say something about that. If I have it wrong, I shall be very glad. What I would call for—and I hope other speakers will support me in this—is that the commission should clearly be permitted by Government to retain the proceeds of any sales to finance its future operations, and that these should not be grabbed by the General Fund. I should like to emphasize that.

The Commission stands high in the reputation it has earned at home and perhaps even more abroad. The Select Committee, while recommending some changes here and there, pay tribute to this; and throughout the forestry world, which includes the processing industries and the private sector, there would be grave regret if the viability or the authority of the Forestry Commission were to be weakened or damaged.

Passing to other matters contained in the Statement, I do of course welcome Government's hope that the private sector will play a vigorous and increasing part. They will if we get the infrastructure right; and a most important part of this, to which I would only now refer in the briefest manner, includes the need for Government to give some necessary help and encouragement to the timber processing industries, which are collapsing or struggling. The modern British timber industries are as a young and tender plant, striving to grow to strength in the jungle of the long-established world timber-trade. I hope very much that other noble Lords will develop this theme and I leave this important matter to them otherwise I should feel that I was not dealing with it properly, but I know that other speakers will refer to it.

The other most important thing of all perhaps is to offer and establish an infrastructure of stability in the rules, especially but not exclusively of the fiscal regime. These latter, as some will know, were called in question again only last summer in the Public Accounts Review, less than three years after the Interdepartmental Review Committee set up by the previous Government had decided upon the points concerned. The continual messing about and calling in question of the fiscal rules, which has beset private forestry inside of the past 10 years, is now followed by dismemberment of the dedication schemes. That is another matter of serious concern.

The Select Committee, quoting five impediments to forestry, says in paragraph 21 that one: troubles the private sector, and so seriously that it seems to take priority over the other three, namely, uncertainty of national support (in the legal, fiscal and financial senses)". How are we to strive for stability here other than by working for an agreed strategy between the major political parties? We have mentioned this before in this House, but I fear we may not achieve that in the context of the present Government Statement.

I am sure that in seeking to end dedication the Government have it in mind that the growth of silvicultural know-how among private foresters and their advisers makes the supervisory powers and duties of the commission less needful than it was 30 years ago when the dedication schemes were brought in. Certainly there is a lot of truth in that though there is still need for the kinds of expert advice which the Select Committee wishes to increase the power of the Commission to generate and give.

However, there is another point to dedication: the passing of which really is gravely to be deplored. Dedication is a solemn and binding contract between the nation and the dedicated grower to work together with some obligations on both sides. Forgetting for the moment that Governments can and do renege on legal contracts in a way that citizens cannot do—and there was only last year a reneging on the undertaking to review the level of planting grants—there has been a tangible value to the system in this wise.

To establish, or re-establish, a national forest after centuries of dispoliation will take about 100 years, starting in 1920. We are just over half way; and during the next 40 years or so I would suggest that there is a need for Government, represented by the forestry Ministers and the Forestry Commission, to stand by those who are investing in this long-term undertaking, in some manner that is enshrined, as the dedication schemes did in fact enshrine, with legal force, the partnership, which the Statement itself refers to. I pray that Her Majesty's Government will not disregard this message, and will work out, in consultation with foresters, some practical formula to deal with the point.

I would just add that, just as the agricultural industry has its own powerful and highly respected representative organisations—the NFUs—private forestry has been lately reorganising its own representative bodies the better to be able to respond to Government's wish to see their increasing participation. I hope that Government will recognise this effort and the responsible stature of Timber Growers of Great Britain, which replaces—in fact, it is their new name—the old Forestry Committee of Great Britain, which continually got muddled up with the Forestry Commission. When I was chairman of the Forestry Committee of Great Britain I kept on being taken to task by the press for pretending to talk for the Forestry Commission. I see the director-general sitting in this House. We are now calling it the Timber Growers of Great Britain.

To conclude, I would pick upon two of the points among the many made by the Select Committee which must not be neglected during our deliberations on this Statement. They both relate to the very important, and often complex, considerations of land use. I will try to do this briefly and only by way of underlining what the report has said about them. We have been talking for years now about the integration of forestry and farming in the hills, but do not seem to get much further. Paragraphs 48 and 54 of the Select Committee's report have something to say about this and the noble Lord, Lord Sherfield, also made reference to it with some emphasis just now. There are also important recommendations in paragraph 124. May we hope for some action? There is a recent interesting and relevant report and survey which was carried out by Edinburgh University and published by the East of Scotland College of Agriculture which is worthy of attention in this context.

The only other point I would pick upon relates to the long-established woodlands of hardwoods, often over-standing now neglected coppice. These, which have been disappearing, having been cut down and ploughed up in many cases over the years, or sometimes replaced by conifers, are of very special concern and interest to the Nature Conservancy Council. There are about 300,000 hectares of them, of which some are already nature reserves, about 40 per cent. are SSSIs and most of them are in private ownership. If the nation values them, these woods really do necessitate a completely different silvicultural treatment from woodlands in which timber production is paramount, or newly-established plantations. They can still produce useful timber, but they are a different class of goods and call for a different set of rules in relation to grant incentives and tax treatment. Also, they should be completely exempt from capital taxation. People cannot he expected to look after them when it is realised that with those old hardwoods it is a hundred years or more before you get anything back out of them, especially if you have three or four capital transfer tax impacts during a lifetime. As I said, it would take too long here fully to develop all the arguments but the Select Committee has some important things to say about them. I am hoping that my noble friend Lord Cranbrook will be referring to the matter later and I also hope that the Government will grasp this nettle—or perhaps I should say "bramble"—and work out some appropriate rules with the Forestry Commission, the Timber Growers of Great Britain and the Nature Conservancy Council.

I am only too aware of having had to pick and choose between so many facets of the subject before us and I shall look forward to others covering the areas that I have left quite untouched. I also look forward with hopeful anticipation to the response to some of those points and problems by my noble friend Lord Mansfield, who is himself such a knowledgeable and successful forester in Scotland. To him, I need not say, "Have a mind for those who will come after us". Nor need I repeat the opening words of that concluding paragraph of Lord Sherfield's report which he has just himself quoted which I shall not forego the pleasure of quoting again, hopeful and wise as they are: With a sensitive lead…Britain's forests can be productive, varied and beautiful".

3.47 p.m.

Lord Tanlaw

My Lords, we from these Benches must thank the noble Lord, Lord Sherfield, and his Select Committee and the noble Lord, Lord Dulverton, for bringing our attention today to the whole position of forestry, both scientific and political. I think it is right to say at this stage that one can only congratulate the members of the Select Committee under the direction of the noble Lord, Lord Sherfield, on the quality of the reports before us. They are remarkable documents, and I believe that for many years to come they will be used as a reference or as a handbook by all of us who declare an interest in forestry. The present report is particularly useful in showing the very large number of organisations, universities and Government departments which are making scientific studies into and contributions to forestry and its related industries and skills. I think there is absolutely no question of our support for the noble Lord, Lord Sherfield, in asking Her Majesty's Government to reduce this report to a White Paper with their very clear-cut views on the implications contained in the views put forward by the Select Committee.

I also think it is worth repeating what has been said by the noble Lords, Lord Sherfield and Lord Dulverton, and also what we have said from these Benches; that is, to repeat a call for a general recognition by Her Majesty's Government and their departments of the long-term nature of forestry and its treatment as a 50-year crop. Why does it have to be said again and again in order that the Government of the day and Government departments can appreciate the fears, both in the public and private sectors, that foresters have of any sudden or rapid change in policy which could affect the confidence of the whole industry? We all know this has happened on more than one occasion in the past five or 10 years, with near-disastrous effects on forestry investment of all kinds and also, far more seriously, on those who are employed in the industry.

The noble Lord, Lord Sherfield, mentioned also the effect on science and forestry. Now it seems, unless one is going to be contradicted by the noble Earl, Lord Mansfield, that the Government are putting some questions and some doubts in the public sector of forestry; that is to say, the Forestry Commission, where it stands and where its future stands. It is worth saying now—and we have said this before—that the interests of foresters in both the public and private sectors are identical in their commitment to their 50–year crop and their 50-year thinking.

With a report of such detail and excellence, whose contributors are experts in the specialist fields in which the submissions have been made, it would be quite wrong to question their conclusions, certainly in the debate today. However, there is one area, which has been mentioned by the noble Lord, Lord Dulverton, which the report admits it has been unable to cover in the detail which it would have preferred, and that concerns integrated land use. Some of the reasons were given by the noble Lord, Lord Sherfield. My intervention today is concerned primarily with the integration of hill farming and forestry, from a practical and commercial point of view. It is also to suggest to Her Majesty's Government how, perhaps, further studies can be made more effective, which could make a major contribution to land use in the hill and upland areas of Britain.

As regards Government departments, one can see how the situation has arisen today where there is no cross-fertilisation of ideas, of grants or, indeed, of forms. It is worth saying at this stage that I fill in my own form as integrated hill farm hill/forest, but it goes only to the Minister of Agriculture. It makes not the slightest difference. But there are areas now, especially in the case of those of us who are stocking inside the trees, which need clarification, because they can lead only to misunderstanding when looked at from one Government department's point of view.

One of the problems with integrated hill farm/hill forest I have already mentioned; that is, the lead time that forestry investments require. Therefore, I appreciate that very few such integrated units have been in existence long enough to provide proper data for any change in Government policy. In my own case, it was only after 12 years of planting and development of such an integrated hill farm/hill forest that I was in a position to know whether it was worthwhile going on any further. This will give the noble Earl some idea of the problems in encouraging this kind of investment, which could be based on insufficient data.

However, I hope from experience gained to be able to suggest that, along with the report on page 25, volume 1, the evidence that I have acquired confirms that, although 50 per cent. of the farmland was con- verted to forest use, agricultural production has increased by more than 30 per cent. In terms of employment, the farmland concerned had been abandoned before purchase. It was, therefore, not contributing anything towards employment, but it now provides permanent employment for at least six men and their families.

The case for integrated land use should be judged primarily not on scientific grounds but on fiscal grounds, because people have to make a living off the land in this way. In particular, there is a need in this case to distinguish revenue from capital, plus the lack of a capital input to a normal hill farm without a forestry content. In simple terms, this means that a working hill farmer can, if he is both skilful and fortunate, obtain a living for himself and his family from marginal lands, but only with the help of his bank to which those lands have been committed. The problem arises when capital investment is required to improve the land or to modernise the farm buildings. This, again, has to be achieved through further borrowing from the bank, unless there is another source of capital forthcoming from outside and beyond his farming operations.

The fiscal argument for including a block of forestry on a hill farmland is that it will inject a capital sum into the unit every 35 years or so. Therefore, there is a very strong case for special afforestation loans to be made with low interest to those who are classified as working hill farmers, in order that forestry blocks of between 50 and 100 acres can be planted with a suitable road system. This suggestion is not new from these Benches, nor is it new from the noble Lord, Lord Dulverton. We have always maintained, and still maintain today, that there is a case for a land bank system to fund all capital requirements of this nature. However, I am only arguing today that if farm/forest integration is to work at all, it can be done only if such special loans are available for this particular type of planting, which can be limited to a sum adequate to cover up to, say, 100 acres of forestry.

I am going into some detail here, because I feel that the data is insufficient, as the report says. Once a small block of trees has been planted and has become established, there are immediate other side benefits to the farmer/forester which will increase his revenue more than if he were just a straight hill farmer. It has been found quite clearly that, if stock not only have access to the trees for shelter but are fed in them as well, their food intake drops considerably in the winter months and a higher stocking rate can be maintained without detriment to the farmer's summer grasslands.

I should have hoped that in the Select Committee's report on farm/forest integration the point about making better use of a forest road system would have been made. I ask your Lordships to bear in mind that when a forest is planted the roads are laid out and constructed at that time. The road system remains virtually dormant for the first 20 years or so, until the thinning starts. Then, again, it remains dormant for another 20 years until the main crop is harvested. Throughout the 50-year life of a forest, the road system is, for obvious reasons, grossly under-utilised. However, in a farm/forest unit, the forestry roads, provided they have been properly planned and integrated into the farming operations, can be used every day, as they are on my farm, for feeding and moving stock. This is just one more area which justifies recognition that farm/forest integration is efficient in terms of both land use and income/production benefits to the owner.

The report goes on to say that computer studies and further information gathering will take place to provide Her Majesty's Government with more facts and figures. This is all very well, but, as I have tried to indicate from my own experience, the feedback in real terms on the ground can take at least 10 or 12 years. If the Government wish to establish—let us say, tomorrow—a trial unit of this kind, I am afraid that with the period of time they will require before they are in a position to report to the House or to the departments, to prove any of the points that have already been proven by existing farm forests that are in private hands, it will be too late.

I am, therefore, suggesting that it may be a much quicker and more productive experiment to obtain information from these existing integrated farm/forest units, in order that integration may become part of all Governments' policy and thinking for the future. I, and I am sure any other proprietor, would be very happy to co-operate in any such scheme, provided there was adequate compensation given for the time and effort taken to provide this information, which must cover at least one full season.

I want to add just one small point. University grants and studies have been mentioned in the report and will, no doubt, be mentioned in today's debate. But I ask your Lordships to bear in mind that, when an enthusiastic student, who is bent on gathering information for a thesis or a report, turns up on a working hill farm, he can take up an interminable amount of time with questions and so on, often based on a non-understanding of how a hill farm works in the first place. So I ask that if this information is to be given and is to be accurate, proper arrangements should be made before such visits occur.

It is my guess that some of the information given to students is totally inaccurate because it has been given by a very irritable, overworked farmer who just wants to get the man off his property. That information will go into a computer study and it will be a case of rubbish in, rubbish out, with a really rotten report at the end. So I would say that, if these information-gathering visits are to be made, they will be welcomed if they are properly arranged. Indeed, I ask that people are properly compensated, because I should like to see information-gathering on the spot, or even on a semi-resident basis, so that people can fully understand our problems and rewards in this industry.

I shall now switch briefly to conservation and wildlife, again in the context of farm/forest integration, because I believe that, with the incorporation of a fire protection loch and adequate clearings in the forestry areas, a farm forest will provide an increase in the resident and seasonal wildlife which can be an added source of income to the farmer himself. If he is not a shot, he can let it out. I also think that this will require little management and no extra trouble. In the wider context of forestry investment, wildlife can be protected and vermin controlled professionally if it is done by such units as that which is managed by Economic Forestry (Scotland) at Eskdalemuir. They have a proper wildlife unit which is highly scientific. It is used for vermin control, for roe deer and for sporting interests. Those noble Lords who have visited Eskdalemuir will have some idea of the work that Mr. Ronnie Rose is doing there. It is units such as this which should set an example both to the Forestry Commission and to other private forestry companies as to the role of professional vermin control, combined with wildlife and ecological management.

I may now be slightly controversial, but it was noticeable that most of the complaints against forestry in the report came from respected conservationists, ecologists, ornithologists and other interested parties, but I have rarely observed a conservationist, an ecologist, an ornithologist or a rambler on our hills during the winter months. It is only in these months when some of the worst weather of Britain is experienced that the role of standing timber can be seen at its best and how it shelters not only the stock but the wildlife. All too often these experts disappear off the hills as soon as the first flakes of snow begin to fall. They get into their cars and drive to their very comfortable towns and suburbs where they write very aggressive reports against forestry. I do not mind aggressive reports against forestry being written, but I do ask that the experts should stay and see the area they have been studying all the year round.

The forest is what we call the byre on the hill. My point is that there would be a far higher death rate of all the species which these experts wish to see protected if these trees were not there. Furthermore, it should be recognised that those of us who feed stock in the forest are introducing a new life source into these areas, for a hill cow is a mobile eco-system in itself. The stock feeding areas in the trees become focal points for small birds and rodents. Roe deer come and use the same salt and mineral licks as the stock itself and thus get protection from some of the risks of disease associated with mineral deficiencies.

Finally, the management of the hill and upland areas of Britain, and in particular Scotland, depends upon the men and women who are prepared to live in these isolated districts and suffer the long winter months, with little opportunity to travel very far from their homes. Hill and upland farms, or forests, normally exist in areas where populations do not exceed 200. This has created a new problem for those of us who live in these areas. Because of the terrain, the homesteads are often on the periphery of the television transmission signals. In Eskdalemuir in particular we are unable to receive television at all unless the house is situated on top of an exposed hill. Because the population is below 200, this gives the district one of the lowest priorities, as seen by the IBA, for rectifying this situation. This is perhaps not, on the surface, a very important point, but now it has become an issue which is starting to affect employment in these outlying districts. How can one expect a young family to put up with the difficulties, the hardships and the challenge of living and working in these kinds of areas when there is the added disadvantage of not receiving a television signal? Television is not an amenity; it is an essential element in maintaining a population devoted to working in some of the most difficult conditions in Britain. I should have liked to see this aspect of employment mentioned in the report.

Furthermore, the present position is aggravated by the little known scientific fact that as forests grow in height there is increased attenuation of UHF television signals. This means that you get the "snow storms" as the trees grow bigger. This becomes more noticeable in wet weather rather than in dry, if the foliage lies in the signal path. As is well known, Eskdalemuir is not the driest part of Britain but one of the wettest and, like most forestry areas, depends upon a high rainfall. This kind of interference is beginning to affect households which were not previously affected by the terrain and therefore is adding to the problem of employment at this time.

In conclusion, I should like the Minister in his reply to consider what action is being taken to acquire more information for the pursuance of a policy on integrated land use throughout the marginal areas of Britain. In connection with this, is he prepared to say whether, while the Government are reviewing their forestry policy part of that review will contain the possibility of encouraging small forest blocks to be planted by working hill farmers through access to special low interest loans created for the purpose? Thirdly, will the Minister kindly take note of the seriousness of the lack of television signals among the small populations to which I have referred, and will he consider that these areas may be chosen as pilot areas for the use of small satellite receivers, as they are in France? Or, alternatively, will he be prepared to encourage more self-help deflector schemes to ensure that the working population remains to work these huge investments which have been made in both farming and forestry by both the public and the private sectors?

4.6 p.m.

Lord Flowers

My Lords, I am no forester. Although over the last few years I have had planted a goodly number of new trees at Imperial College, our campus remains more of a glass and concrete jungle than a bosky extension of Hyde Park. But if I do not follow the noble Lord, Lord Dulverton, and the noble Lord, Lord Tanlaw, at least the will is there. What I can perhaps contribute to your Lordships' debate—and I am grateful to the noble Lord, Lord Sherfield, for giving me the opportunity to do so, as I am indeed for his splendid chairmanship of your sub-committee—is a few words about the nature and organisation of research funded from the public purse, especially as it relates to forestry.

My first point concerns policy. We are talking about scientific activity relevant to forestry—in other words, programmes of applied research and development. I do not intend to reopen the whole issue of the Rothschild Report, but it is perhaps relevant to mention two points which arose in it and which have received pretty general acceptance over the years. The first is that a programme of applied research and development should have clear objectives set by the user. The second is that much of the scientific content of applied research and development is rooted in basic research not necessarily performed with any immediate objective in view. I state no paradox. I merely emphasise that the organisation of research must be such that it fosters basic research on a wide front and yet can direct and expand some of it, when the time is ripe, to meet policy objectives.

To judge the efficacy of a programme of applied research in forestry, we must therefore ask: what are the policies for forestry that the research is intended to meet? What are we growing the trees for? Is it to improve our environment? Is it to produce timber for the construction industry or for the paper industry? Is it to meet some of our fuel requirements? Or is the research intended to help us to make better use of our enormous imports of timber or to prevent sad events such as that which has so grievously changed the appearance of the ceiling of this House? Because, depending on the answers to such questions, the research programmes should be different. Even the trees, maybe, should be different—or, at any rate, the planting programme. In our investigation of these matters your sub-committee was unable to find a clear statement of forestry policy which would really have enabled us to judge the efficacy of current forestry research. And that, it seems to me, is the main reason for our conclusion in paragraph 109 of the report that, research to support the forest industry lacks the coherent approach that is a feature of research in agriculture and medicine". Scientists, any more than anyone else, cannot work at their best in a policy vacuum.

My second point concerns organisation. Any programme of applied research and development requires an intelligent focus which interprets policy in terms of the research that is desirable and which develops that policy in the light of the research that has been achieved. As the noble Lord, Lord Sherfield, has made clear, we found no such focus.

I should like to pay tribute to the work of the Forestry Commission within the limits it has set itself, which are concerned with its role as a producer of wood and of wood products. I should like also to pay tribute to the work of the research councils, especially the Natural Environment Research Council, and within it the Institute of Terrestrial Ecology, which I have visited, for the excellence of their work in many relevant fields of basic research. I should like especially to commend the institute for having initiated the European study of ecological forestry management through the European Science Foundation. I should like also to pay tribute to the work of several universities whose evidence to us was very influential. It showed that there certainly exists a body of independent scholarship which can readily be exploited for forestry research. The proof is in the volume of published evidence.

We may have been a little hard on NERC in paragraph 110 by suggesting that they take their forestry resonsibilities too lightly. The Institute of Terrestrial Ecology does valuable work on tree growth, physiology and genetics which has been developed and expanded as recommended by the former Forestry and Woodlands Committee. It has been fully supported since then, so I understand, by the Terrestrial Life Sciences Grants Committee of NERC. It is not necessary, in order to foster basic research in forestry, that it be singled out from other contiguous disciplines and separately funded. That might even be a disadvantage, leading to a narrowing of the base of knowledge. What is important is that there should be persons expert in forestry research involved in the work of the relevant grants committee, and that appears to be the case. Nevertheless, it remains true that NERC have not given the public impression that research relevant to forestry is as important to them as agricultural and medical research is to others. Nor is it likely that they will be able to do so effectively until such time as there exists an intelligent focus for forestry research within Government.

We were concerned, too, at the relative weakness of forestry products research. As the report says in paragraph 110: Each of the changes which have affected the organisation of the Forest Products Laboratory since the disbandment of DSIR has carried it further from the needs of timber producers and the timber industry ". We are here dealing not only with home-grown timber at an annual value of several hundred million pounds but with the import bill amounting to several thousand million pounds. We were influenced here by the evidence of Dr. John Levy, who proposed to us that the unique and important Princes Risborough Laboratory should be removed from the Building Research Establishment, where it has withered somewhat, and put under the aegis of the Forestry Commission. It should become a forest products research laboratory, concerning itself with wood and its end use and at the same time integrating the requirements for both homegrown and imported timber. Some, no doubt, would like to "privatise" it for good measure. In my view, that would be wrong. It should remain within the public service to ensure the continuity of effort over long-term projects, to give authority to the development of standard test and evaluation procedures, to become the accepted storehouse of knowledge on all aspects of wood as a material, and to act as an advisory body for industry and the general public.

To be sure, the universities and the research councils have a very considerable innovative role to play in both forestry and forest products research, but they need a central body into which their ideas can be passed for further practical development. Conversely, a strong co-ordinated programme of research on forest products would help to focus the more basic work of the universities and research councils on tree biology, pest control, environmental matters, including land use and the properties of wood as a material. Especially it could provide much-needed feedback between end use and the management of commercial forests.

Finally, I come to the proposal that a chief scientist should be appointed to the Forestry Commission. A chief scientist would be the intelligent focus, the absence of which I lamented in my earlier remarks. I know that the Forestry Commission in their evidence to us were not keen on the idea but I hope they will think again about it. The duty of the chief scientist would be to ensure that forestry research was in accordance with policy objectives, and conversely that policy objectives took into account the results of research. He would play an important part in guiding the basic research of the universities and the research councils and he should be able to commission additional research wherever it can best be carried out. He would need to work in close contact with departments of Government and other agencies where there are mutual interests. He should be at all times in close personal contact with forestry research (and researchers) wherever it is being carried out and this means that he would have to be a person of recognised and considerable scientific stature. I do not think that this task could be carried out by the present staff of the Forestry Commission given—from the point of view of research—their narrow remit.

I am aware that there is an economic recession and a desire to reduce the volume of the public services. The appointment of a chief scientist and a small supporting staff would of course be an additional drain on the public purse. But in return one could be sure that moneys devoted to forestry research were more effectively used than they appear to be at present, and one could hope that there might be a considerable saving in the total cost of wood and the uses to which it is put. The role of the chief scientist has been laboriously built up to great effect in a number of Government departments. I am alarmed to have learned that there are proposals to abandon this concept in some. I would urge the Government not to do this without very good reason. I hope the noble Earl the Minister can give us some reassurance today on that score. We can all agree how important it is to harness the results of scientific research for the good of the nation. The chief scientists have an essential part to play in this process, in forestry as elsewhere. They should not be abandoned through bureaucratic bumbledom.

There is here a great opportunity for public service. I hope that the Government, having embraced their chief scientists, will not behave like Vivien who, as Tennyson tells us in The Idylls of the King, overcame Merlin, the great Enchanter, stripped him of his charms, and left him sleeping: Then crying 'I have made his glory mine,' And shrieking out 'Oh fool!'the harlot leapt Adown the forest, and the thicket closed Behind her, and the forest echo'd fool '".

4.20 p.m.

Baroness Jeger

My Lords, I had the honour and pleasure of serving on this committee and I should like to add my congratulations to our chairman, not only for the marvellous summary he has given the House today of what was a very complicated report but for his wise and patient chairmanship through our many sittings. I must confess I was overwhelmed with the distinction of my colleagues on the committee. They either seemed to be FRS or very experienced foresters, and I am neither of those things. But I listened very carefully and I learned a great deal. When I got too tired and could not understand anything more, I lay back and thought of Edmund Blunden who wrote: I am for the woods against the world But are the woods for me? and I said to myself "Yes, the woods are for the world as well".

I think it has been a very important report. Not only were the members of the committee distinguished and wise—and I am sure Members who have taken the trouble to read the report will agree with that—but there was a very high calibre among the witnesses who came to us from many parts of the country. I came to the conclusion that people who understand about trees are really the wisest and most agreeable of people, and I think their voices should be listened to in high places.

But I must say that had our Committee had before it the House of Commons Statement of 10th December and the disastrous Forestry Bill, we should have had to have—I may speak only for myself—other thoughts and perhaps some other suggestions in our report. I feel that we were severely disadvantaged by not having that information before us. I recognise that there are problems in the timetables of these things but I must say a word or two about the present situation.

Of course, we all agree that we need a long-term programme for increased forestry, but I was appalled to read in the Hansard of another place of 26th January, col. 650, that the Government propose to sell up to a third of the commission's reserves of plantable land. That is about 20 to 25,000 acres. Surely that must disrupt, must cripple any central concept of long-term planning by the Forestry Commission. It will not benefit forestry, because it appears that any income from these sales is to go not to the Forestry Commission but into the Consolidated Fund. Ministers may say that the use of the money may be a matter for negotiation, but in negotiations between the Treasury and the Forestry Commission we know who will win, and it will not be the trees. In fact constitutionally the Forestry Commission is answerable to forestry Ministers and the commission's agreement or consent is not constitutionally required.

Worse still, the new Bill says that the Minister may dispose for any purpose of land acquired by him ". I have to ask noble Lords what good does that do forestry? There is not even any undertaking that land sold by the Forestry Commission must be planted and must remain in forestry, albeit in private hands.

I think there are two ways of increasing the production of our forests. One is by increasing the productivity of the existing acreage, and we had much evidence of how, through more scientific work and more training and by other means, this could happen. Secondly, I think we should of course be bringing more land into forestry, and I very much agree with the noble Lord who spoke from the Liberal Benches about the desirability of doing this on a mixed basis. Neither of these objectives can be reached by dividing up our present resources. At present the cake, if I may use that word, of our forestry is divided about half and half between the Forestry Commission and private owners, and in my view it works very well. Dividing the cake differently does not increase the size of the cake; that seems to be the result of present policy.

What assurance will we have that the new owners would plant at all on the land now awaiting planting by the Forestry Commission? Because of the long-term nature of investment in forestry, commercial interests are much more likely to buy up ready-made forests grown at public expense. Some new owners may buy precious land just for privacy and prestige, and as we are winding up the dedication and grants system they do not want to ask for grants. There seems nothing to stop them just walking through the bluebells and shooting birds and never planting a tree for the rest of their ownership. How are we going to ensure that there is any real interest in forestry by the purchasers of these lands? How are we going to ensure that there is the concern for conservation and the environment which has been such a distinguished feature of many of the present owners of private forests? In many cases these forests have been in family ownership for generations, and I think the public is indebted to many of those owners for all they have done to keep their woodlands available to the public and in good shape.

What are private purchasers going to do about the training of forestry workers, which is a vital part of the Forestry Commission's work? What part are they going to play in research?—and because that is largely the subject of our debate today I shall come back to that. I was confirmed in my fears by the Statement in the House on 10th December, which included these words: The Forestry Commission will continue to have a programme of new planting in the more remote and less fertile areas where afforestation will help maintain rural employment". That to me can mean only a selling off of the good land, the more prosperous and profitable land, and leaving to the Commission the difficult sites, the remote areas and the areas more expensive to develop. When it comes to their account keeping, I am wondering whether there is going to be any help for them in that element of maintaining rural employment, because if it is Government policy to push the Forestry Commission out to places in order to maintain rural employment there ought to be some consideration of the money made available.

The Centre for Agricultural Studies states on page 263 of its publication, Strategy for the United Kingdom Forestry Industry, which I am sure not quite everybody has read: Institutional investors have shown less interest in afforestation than in buying large blocks of semi-mature conifer plantations". So now are we to have an invasion of oil companies, multinationals, Japanese pension funds, buying up acres of our forests over which we are to lose control? Then, in a few years' time, are we to receive reports not of an increase in the forestry products of our country, but of a decrease? If there is a clamour by the private sector to put money into woodlands I would welcome it, but I suggest that there is new land which might benefit from their attentions and from their investments. Moreover, by investing in land at present not planted, they would be adding to the afforestation of our country and benefiting the nation.

I speak very humbly on this subject, as I have already explained to your Lordships, because I do not know much about these matters. However, I have tried to find out about them. It was suggested in The Times that there were about 5 million acres in this country which were available, plantable and suitable for development, outside the land owned by the Forestry Commission, and that therefore the development of that land would be a real addition and not just a transfer as the present proposals would appear to be. But, of course, the market will obviously want planted land, leaving to the Forestry Commission the poorest and most expensive land. I suspect that that will give the Government an excuse to decry public enterprise once more, having made the job of the public sector infinitely more difficult.

Moreover, to me the proposals do not even make capitalist sense. The Government will be selling off assets in which public money has already been invested and from which the benefits have not yet been realised. The taxpayer is thus denied the fruits of his investment in this increasing asset. It is like cashing in an insurance policy before maturity, for it seems, on present trends, that the Forestry Commission might well be self-financing by the end of the century, but the nation is to be denied the benefits of the potential profit.

I ask noble Lords to remember that our imports today—already about 90 per cent. of our requirements (which I think is a disgrace)—would have been even higher but for the benefit we are reaping from trees often planted in the dark economic days of the 'twenties and 'thirties. If in those difficult days the Government had told the Forestry Commission that they could not afford expansion and planting, we would be in an even worse plight today. In my view it would be an absolute disgrace and future generations would not forgive us, if because of the day-to-day troubles we ensure that there are more difficult problems for the future. Forestry should be isolated from day-to-day economic pressures because days are insignificant in the life cycle of a tree.

The Centre for Agricultural Studies suggested that the Forestry Commission needed to acquire land for planting at an average rate of about 20,000 hectares per year for the next 50 years. So why should it dispose of what land it has, if it seems advisable to a very expert body that it ought to be acquiring more land? Nor am I influenced by suggestions that there might be some arrangement of leasing back. It seems to me that it would save a whole lot of paperwork if, instead of letting land and leasing it back, the land stayed in its present ownership.

I turn to research. I do not think that we can look to the private sector for substantial assistance as regards research. I say that advisedly because it was a subject to which we paid careful attention. In the evidence given by the Department of Forestry and Natural Resources at the University of Edinburgh it was stated: There is virtually no investment in research in tree crops by the private sector which has a general policy of leaving all research to the Forestry Commission. This is historically very much at variance with agricultural research for which associations of growers started a number of the research stations run today by the ARC"; and they gave East Mailing as an example. So we have the Select Committee establishing that we are spending on research at present about 1 per cent. of the value of the annual United Kingdom timber consumption—0.1 per cent. of our import bill. We seem to be getting into a situation where research will be more difficult because of the fragmentation that threatens this industry. I cannot see how research is to be encouraged by transferring assets from the Forestry Commission to the private sector. We heard evidence from the Institute of Foresters which stated: It is noticeable that the private sector has initiated and conducted very little development work (and less research work) on their own account". The submission by the Royal Forestry Society included these words: To plant on land long bare of trees involves biological changes, and fundamental ecological and edaphic research is only sensible". But how do we know that private owners will do these sensible things?

Of course, the results of research should be made publicly available. I am not saying that we should try to keep research outside the knowledge of serious foresters in the private sector: it should belong to the public. But I do suggest that there may be a case for considering a levy on private owners, and I personally think that it should be directed towards new private owners because the present private owners have, as I have already said, a long tradition of care for their woodlands. But at least new buyers under the proposals could well be asked to make a research contribution through a levy. Indeed, that would not be very unusual because something similar occurs as regards, for example, the wheat levy in Australia, and there is also the set-up at East Mailing. If they are serious foresters they will be glad to contribute to research.

It may be suggested that any financial contribution might be a further disincentive. However, we must remember that already these people are enjoying tax reliefs—and again I am thinking more of the companies and of the investment schemes that are being thought up at present than I am of individual forest owners—and it seems unfair that ordinary taxpayers should further contribute to their prosperity.

The Forestry Commission and private owners have worked well together for about 60 years. I thought that we had got the balance about right with roughly 50 per cent. each way. I got the impression from listening as carefully as I could to the committee and to all the witnesses who came before us, that what this industry needs more than anything else is a period of stability. The trees want to be left alone to grow. Nothing is more distracting in an industry where the results are by nature very long term, than for people to feel unsure, unconfident about the future of forestry.

I must ask: why disturb this unique relationship? It has managed to stagger along under all sorts of Governments, and I very much regret that it should now be disturbed. I can only think that the answer must be in some sort of fiscal dogma that has nothing to do with trees, and which at the end of the day will not even make fiscal sense. It is part of a theological commitment to dispose of public assets. I very much regret it. I am sorry if I have introduced a discordant note, but it is because, through my membership of this committee, I have come to care so much about the future of forestry in this country that I am deeply worried.

I shall conclude by recollecting that when I was at school we used to have to sing a dreadful sentimental song that ended: Only God can make a tree". I must say, I do not think that this Tory Government are doing much to help him.

4.40 p.m.

Lord Lovat

My Lords, I cannot think of a better place for a backwoods Peer to emerge from the undergrowth than in a forestry debate. I am a descendant of a long line of foresters who have made their mark in the timber world. In view of the very interesting speech that opened this debate—which deals with technical skill and ability, research and the whole study of silviculture—without in any way wishing to boast, I should like to tell your Lordships in passing that in 1823 my great grandfather went, with his head forester, to Germany and from Germany he brought back European larches and established them in the Highlands north of Dunkeld. When he was an old man he arranged for Douglas fir trees to be collected by some of his clansmen in Canada from the Fraser River. They were brought back to flourish in the Highlands. As noble Lords know, my father was the first chairman and progenitor of the Forestry Commission, and I think that he would have liked the speech that has just been made by the noble Baroness, Lady Jeger.

Forestry is long-term. Trees are my livelihood; I have worked with timber since my father, who was a stern man, sent me out to plant every spring in the school holidays, from 1933 onwards, 48 years ago. The only time that I have disagreed—and I did not even disagree—was when I ventured to have the audacity to ask in my maiden speech in 1933—and I am sure that everyone of your Lordships knows the fear and trepidation that goes into a maiden speech—whether the Forestry Commission or the Government would pay a little more than £1 an acre to help meet my death duties. That is a staggering thought if you consider that today the worst kind of plantable land is £150 an acre. Yet we have made little or no progress in profit over the sales of timber. I am astonished that nobody, including my noble friend Lord Dulverton, has stressed the disastrous economic state of the timber industry today. Timber is practically unsellable on the West coast, and on the East we do it only with the greatest possible difficulty.

When I was a young man and was selling quite a lot of timber after the war, there were conventional markets. There were pit props for the mines, railway sleepers of Scots fir and wagon bottoms of a better class of timber, such as larch, Today, all those are almost unsellable. Several speakers have mentioned the closure of the big pulp mills at Fort William and Port Ellesmere. They dealt with thinnings which were no longer wanted in the mines, and those closures are a tragedy.

The extraordinary situation has now developed in my part of Scotland, which is close to Inverness, where I cut down young timber—thinnings again—tie it into bundles and send those bundles on a pontoon, towed out into the Moray Firth; they are then loaded into boats which go to Gothenburg in Sweden, where they are dumped into a fjord and pulled ashore. One would normally only associate that practice with logging operations perhaps in the Amazon Valley or the hillsides of New Guinea. They are then drawn into the pulp mills in Sweden, processed into pulp and sold back at a profit to this country. That is a truly staggering state of affairs, but it is symptomatic of the timber industry.

I hope that everyone who will read today's Hansard or Hansard of last week of another place will remember how little is known about the parlous state of the home-grown timber industry. We all know that 90 per cent. of our timber is imported; we all know that this is a country the climate and the soil of which is ideally suited for timber production. We are producing only 9 per cent of our timber requirements, and we have difficulty in selling that. There must be some terrible error between ourselves or the Government and the Department of Trade. This has nothing to do with the finer points that several speakers have made about improvements to the woods themselves. This is a case of selling the end product, and surely it is the end product that really counts. I think that this is what this debate is all about. It was the humorist, Mark Twain, who once remarked: Buy land, they ain't making it no more". That is so very true.

It is just as easy to distinguish between a good area of woodland and a bad area of woodland as it is to distinguish between a bad hill farm that tries to grow wheat and a good arable farm that obtains three tonnes an acre. There is a dangerous school of thought which seems to say, "Keep on growing trees, regardless of the cost ". I want to grow trees, just as the Forestry Commission wants to grow trees, and we do not want to have the conception of growing trees broken up; but, as the noble Baroness said, it is also true that the Forestry Commission may well be left with its less viable areas, which are still unplanted. I am told that at present there are 70,000 hectares of unplanted land in the hands of the Forestry Commission. Nobody is likely to want to buy all that land. This is a problem. There has been talk about institutions and pension funds buying it, but do they have any idea what it costs to plant an acre of Highland hill today? Deer fencing costs £1 a yard. The cost of drawing that woodland out would be prohibitive, taking into account freight and transport charges and the cost of road approaches.

Noble Lords know all the dangers to which timber is subject. There is gale damage and fire risk. Even various caterpillars have reared their ugly heads and destroyed forests in the Highlands. There are the encroaching risks of vermin, which will not be controlled without great difficulty. I see my noble friend Lord Bradford in the House. I sold him some land where the trees were all devoured by short-tailed voles, for which I was very sorry. In another part of the House I see the noble Earl, Lord Seafield; in the severe snows of four years ago he had the timber ring-barked in some of his woods 12 feet above the ground by hares coming in on top of the snow, ring-barking and killing his trees. Those are some examples of the risks we run in growing trees, which have nothing to do with the more scientific approach to the facts of life. With great respect I think that earlier speakers rather lost sight of that.

I think that I have said enough. The Government must find a way to get a fair price for the timber that we are trying to grow. When Sir Walter Scott, who was a great forester, bought Abbotsford, he said: I hope to see the day when a hooded crow will be nesting in the top of an oak tree which I have planted". I have lived to see that; Sir Walter Scott did not. I end on that note.

Lord Dulverton

My Lords, before my noble friend sits down, would he accede that there was possibly a slip of the tongue in referring to deer fencing when he said it cost a pound a yard. I believe it costs £3 a yard.

Lord Lovat

My Lords, I thank my noble friend for that correction. I have not been able to afford it.

4.50 p.m.

The Earl of Seafield

My Lords, I should first like to declare my interest in so far as I own woodlands in the north of Scotland together with a sawmill. First of all, I should like to congratulate the noble Lord, Lord Sheffield, and also my noble friends Lord Dulverton and Lord Lovat, on their excellent speeches. In the face of such expertise and eloquence, I very much doubt that I shall be able to add anything to what has been so admirably expressed. However, I am more than grateful for the opportunity to take up a small amount of your Lordships' time in making one or two observations which I consider have a bearing on this debate.

The Select Committee on Science and Technology's Report on the Scientific Aspects of Forestry comes at what I consider is a crucial time in the forest industry in general. I am delighted to see that the committee have not restricted their remit to the purely scientific aspects of forestry, and have commented on some of the more far-reaching problems facing us. They have used as part of their background in the context of their inquiry the Forestry Commission's report in 1977 on the projected demand for industrial wood in the United Kingdom, and also the report from the Centre for Agricultural Study in the University of Reading, Strategy for the UK Forest Industry.

They have quite rightly reiterated facts such as the bill for imports of wood and wood products now standing at over £2,800 million, and also the uncertainty of national support, which is so strongly felt in the private sector, from a legal, financial and fiscal point of view. Their comments in conclusion deserve careful scrutiny, and I feel that many of their recommendations are valid, although I believe that the position of the Forestry Commission should be upgraded much more vigorously, over and above dealing with the lack of a coherent approach as mentioned in their report under Organisation of Research. I would go so far as to say that the Forestry Commission should be upgraded to a Ministry of Forestry controlling all aspects of forestry at Government level and answering to only one master.

Turning now to the Government's statement on forestry, together with the consultative paper on the administration of felling control and grant aid, while I welcome the part of the statement which refers to the continuing expansion of forestry, there are some aspects, or lack of them, which concern me, and it is to these and those not mentioned that I wish to turn my attention. Referring to the comments made over the recent difficulties in the pulp and paper sector, and the almost rosy picture painted by the phrases "adjusting to changed markets" and "exploiting export markets", I can only say—and now I am speaking about Scotland —that the export market to Scandinavia is nothing short of a miracle, and without it there would hardly be a market at all for timber in any area north of Perth and a very limited one south of Perth.

While I am in full agreement that a harmonious relationship between the private sector and the Forestry Commission is essential if forestry is to have any future at all, it is neither desirable nor essential to sell land or woodland belonging to the Forestry Commission. I suggest that the Government turn elsewhere to cut their public sector borrowing requirement. The effect on the morale of workers in the Forestry Commission will be nothing short of disastrous and, most important of all, I very much doubt that any more trees will be planted as a result. In short, the theme put forward for reducing the Forestry Commission's grant-in-aid is completely incompatible with that put forward for the continued expansion of forestry in the United Kingdom.

My Lords, it is high time therefore for the Government to pay more heed to the excellent proposals put forward not only by the Select Committee on Science and Technology but also by what has become known as the "Reading Report". The Government would also do well to heed the exhortations of some noble Lords from both sides of the House. How much longer will it take for the forecasts of scarcity and the effects of an increasingly high import bill to sink home?

After mentioning some of the problems facing forestry as an industry and voicing some of the complaints from it, I should like to make some constructive suggestions, though they may not be original and could doubtless be put over in a more professional manner by many other noble Lords who have far more experience than I.

Much of the feeling of insecurity felt by the private sector has been caused by inconsistencies, to put it kindly, in the fiscal and legal areas of forestry administration. CTT was introduced. That, needless to say, contributed to the fact that planting in the private sector fell from some 23,000 hectares in 1973–74 to 8,000 or so hectares in 1977–78. The dedication basis was changed. The popular Basis 2 was restricted and a by and large unpopular Basis 3 was introduced for new areas to be planted. The level of grant aid increase is spasmodic. Yet again, the Schedule B and D taxation arrangements are attacked—in this case by the Public Accounts Committee.

My suggestions, for what they are worth, are as follows: CTT should be abolished, or at the very least be altered so as to have no worse an effect than death duties did prior to 1975. When payment is deferred, why could the assessment not be made at the date of death and not at the date of payment? Grant aid: this should be increased annually by the rate of inflation. What could be more simple? Dedication: this we now hear is to be changed, but unless the main aim (that is, the growing of timber) is kept in mind, there will be far too much interference from outside bodies.

As I have mentioned earlier, the Forestry Commission must be upgraded and in its new form it should be the only body to exert control over the growing of timber. Under no circumstances should local authorities have any statutory powers over timber growing. Bodies such as the Countryside Commission, the National Conservancy Council, and the NERC would merely advise the Forestry Commission. Lastly, taxation, Schedule B and D: I am greatly relieved that the Government have left this provision alone, as to remove this incentive would be disastrous. The Treasury must realise that tax incentives are an essential prerequisite to getting anyone to invest—as my accountant put it—in what almost amounts to a bond which is unsaleable in the interim, and redeemable after approximately 60 years.

To sum up, a committee should be formed with a remit to investigate and change where necessary the fiscal and legal aspects of forestry, using as a guideline the aim of encouraging the private sector to plant on a scale commensurate with that suggested in the Reading Report—that is, a total planting of over 1.86 million hectares over the next 50 years. And when it has finished its deliberations the legal and fiscal decisions made as regards forestry should be left completely alone by tacit agreement between the major parties, and here I only echo the words of my noble friend Lord Lonsdale, who said the same thing when the Reading Report was debated last March.

I want to take a quick look at the industrial and marketing side of the timber industry, and what I say here applies in the main to Scotland, which, as it has the largest productive forest area of any part of the United Kingdom, is probably an appropriate choice. It also deals mainly with the smallwood market, which I am reliably informed accounts for about one-third of the whole timber market in Scotland. As noble Lords will know, Wiggins Teape ceased taking any smallwood into their mill at Fort William; that amounted to a loss of about 250,000 tons per annum in intake. Bowaters at Ellesmere Port ceased taking in any home-grown timber, and that had the effect, I am told, of a loss of 100,000 tons from the Scottish market. About 12 months ago, Weyrock of Annan ceased taking in any timber at all; I am afraid I do not have the figures for the loss there. The existing home market for smallwood in Scotland therefore centres on the Scotboard chipboard mill at Irvine and a similar mill at Stirling owned by Caberboard. Their intake is about 200,000 tons per annum between them. As long as the export market to Scandaniva remains, the situation is not a complete disaster, but it does not alter the fact that there is no home-based industrial smallwood factory of any consequence north of Perth. It is an appalling state of affairs.

What is the solution? I have said that the Forestry Commission's status should be up-graded to Ministry level and that it should cover all aspects of forestry. I consider that its duties should include the investigation, encouragement and promotion of investment for the middle and end users in the area where the timber is grown; I would term this horizontal and vertical integration in the production areas. We should have the provision of interest-free loans for industrial users such as pulp, chipboard mills and so on, with an assurance of the marketability of home-produced material providing the costs were competitive at international level. Protection against dumping would be necessary. Together with private growers, there should be guaranteed supplies to raw material users with the necessary price review safeguards. The Forestry Commission in its new state should have on its specific committees representatives of various private growers' and timber merchants' organisations, and so on, and, where necessary, representatives of the NCC, NERC, PRL and any other organisations it felt were included in its remit.

I have spoken for long enough and would say in conclusion that the successful future of forestry in the United Kingdom rests on three words: incentive, stability and confidence. There is much that the present and succeeding Governments could do to achieve that end.

5.4 p.m.

Lord Taylor of Gryfe

My Lords, like other noble Lords who have spoken in the debate, I have to declare an interest: I am the chairman of a company that is concerned with the attraction of investment to forestry. I apologise at the outset to the noble Lords, Lord Sherfield and Lord Dulverton, for being absent at the beginning of the debate. Monday is not the best day to travel from Scotland to London and I hope that when we come to debate the Forestry Bill, some concern will be paid to the difficulties of travelling such a long way, and perhaps it will be possible to have those debates mid-week.

We are indebted to the noble Lord, Lord Sherfield, for what is all immensely valuable report. He was good enough to invite me to become a member of his distinguished committee, but when he supplied me with the evidence which was being submitted by the various organisations it was obvious that I had not the time to study that mass of material. I am therefore indebted to those noble Lords who participated in that committee's deliberations for doing a very valuable job. The forestry industry owes a debt to all of them for their application, and to the various organisations which offered advice and comment to the Sherfield Committee.

We in this House have had a number of debates on forestry in recent years. I notice that, when they discussed the Second Reading of the Forestry Bill in another place, it was pointed out that it was the first debate on forestry in 50 years. As I look at our programme, I see that we have today the Select Committee on Science and Technology with a Report on the scientific aspects of forestry; we have the Government Statement on which the noble Lord, Lord Dulverton, spoke; and presumably in the near future we will have before us the Forestry Bill. I suspect that much of what is said today in connection with forestry policy will recur in the debates on that Bill, which simply carries forward into legislative form the Government Statement on forestry.

On reading the Official Report of the debate in another place and listening to the comments on forestry offered today in your Lordships' House, I would say that it may be extremely difficult for the Government to take that Bill through this House. There has already been comment on the powers given to the Secretary of State to dispose of Forestry Commission assets and in forestry circles there are considerable doubts about the wisdom of dispensing with dedication agreements, which offer some guarantees for the continuity of forestry planting. It might be well therefore for the Government to anticipate some of the criticisms that may arise when the Forestry Bill reaches this House.

When we are discussing Government forestry policy in relation to their Statement and the Bill which will shortly arrive here, we must answer the question which was posed by Mr. Benyon, the Member for Bucking-hamshire, in another place when he asked: …the question that I ask myself and my right honourable and honourable friends is: will the Bill, in conjunction with the measures to assist private forestry which we shall be debating later this year, produce more trees in sufficient numbers to make a major impact on imports of timber and timber products? That is the crunch. [Official Report, Commons, 26/1/81; col. 668.] Will the Government's policy, their assurances that they are committed to an expansionist forestry policy, the proposals they have announced in their Statement and in the Forestry Bill, in fact contribute to an expansion of forestry? I ask that question because the figures quoted in the debate in another place indicate that the Government's target falls very far short of the Reading Report, the CAS report. On page 241 of the report, after an examination of the case for further planting, it is stated: Country-wide statistics imply that there is sufficient space for water gathering, amenity, conservation and improved farming activities to coexist, without difficulty, with an additional 1.1 million hectares of forests". The Government's proposals fall very far short of achieving anything like that objective. In fact the more I look at the Bill and at the Government's Statement, the more I see it as a product not of a forestry Minister, but of a Treasury Minister.

Perhaps some of your Lordships, like myself, recall a previous exercise some years ago when the Treasury carried out a cost benefit analysis of forestry. The analysis was a curious document. It bore no relationship whatsoever to forestry. It was related more to computers than to trees, and it tried to devolve a system of evaluating amenity, the countryside, a beautiful view, and to add those values into some kind of cost-benefit analysis. I remember discussing the matter with the Minister at the time and we agreed that it was not a sensible or relevant contribution to forestry policy. The Minister agreed, we sat down, and I asked, "Should not our civil servants hear our judgment?" We brought in the civil servants, and my civil servant said to me, "Really, Lord Taylor, it is all very interesting, and I have heard what the Minister has to say, but my boss is not the Minister of Agriculture; my boss is the Treasury ". I think that there has been a good deal of that kind of thinking behind what is now before us in the Government's Statement that we are discussing.

If the present Government have made one major mistake in economic policy—and this goes far beyond forestry—it has been in the failure to distinguish between revenue expenditure and capital expenditure; and that has had a serious effect upon the whole economy. Revenue expenditure involves money that people spend, and it can contribute substantially to inflation. Capital expenditure involves money that people invest to create assets that are wealth-producing. If we look at this particular Statement of Government policy, we see that the total investment is about £43 million as grant-in-aid to the Forestry Commission. We are not talking about large sums. Over the years the contribution of these small sums to the Forestry Commission's activities in acquisitions, development and planting, has created an asset of £1.2 billion. That is a great national asset. It must be one of the greatest investments in which the state has ever engaged. So I think that it is quite wrong for the Government to look at this small sum of £43 million and say, "Let's apply monetarism to this small sector of Government activity".

I should like to say a few words on the question of disposal of Forestry' Commission land, which is incorporated in the Government Statement. There is a very strong case for disposing of small parts of the Forestry Commission estate. Inevitably in the building up of an estate for 65 years there are small areas of land in different parts of the country. One hopes that a neighbouring estate will be for sale at some future date. It never really comes on the market, and one is left with a certian amount of fragmentation in the Forestry Commission estate that ought to be rationalised. There is a very strong case for the rationalisation of the Forestry Commission estate. That does not involve the dismemberment of the Forestry Commission estate. It does not involve the large-scale disposal of the commission's assets. It is simply a sensible piece of land management, and that has to be supported.

However, that is not enough. The Treasury is suggesting not only that the Minister be empowered to sell off Forestry Commission land, but that sale-and-leaseback arrangements should be entered into with City institutions. Obviously anyone who enters into a sale-and-leaseback arrangement, whether it involves a piece of land, a building, or some other property, expects a return on the investment. So what will he look for? He will look for the best land that can be included in such arrangements, since that land will offer the greater yield. Unlike the Forestry Commission, such an investor will not be desperately concerned about amenity, recreation, and the various other activities that the Forestry Commission accepts as a public responsibility. Forestry is not entirely a matter of making money or of capital appreciation. It is also a matter of enhancing the beauty of the countryside, recreational facilities, public access and of sensible planting, too, in order to improve the amenity of the countryside, which is not always justified in purely economic terms. Therefore, to suggest that Forestry Commission land should find an attractive market in sale-and-leaseback, where the major concern will be the return to the investors, be they institutions or insurance companies, might not be in the best interest of good public forestry.

I understand from what was said in your Lordships' House when the Government Statement was originally made that the cash realised from the sale of Forestry Commission assets will not be returned to the commission for further development. I think that the noble Earl, Lord Mansfield, made a statement to the effect that under Treasury rules it was impossible to make such an arrangement. However, as I understand it, in the privatisation measures relating to certain nationalised industries, that are at present proceeding through the House, the sale of assets of certain of the nationalised industries are to be ploughed back into the industries concerned. I would suggest that the forestry Minister considers the precedents that have been established by ensuring that, at least if Forestry Commission assets are sold, the cash realised should be used for further development of forestry.

As has already been said in the debate, we are talking about an import bill of £3 billion, and we are talking about cutting back in grant-in-aid of £43 million. I suggest to your Lordships that it is not quite sensible to cut back on that small national investment. Of the £43 million in grant-in-aid, £8 million is for the forest authority responsibility, and £2 million is paid out in the form of grants for private planting.

Nothing has been said today—and I am happy that this is so—about the question of integration of forestry and agriculture. There used to be great debate on the subject; and I should like to read a quotation from what was said during consideration of the Forestry Bill in another place on 26th January, as reported at column 698 of the Official Report. Mr. Lang referred to the drawing of attention to a study of possible forestry integration with farming that was carried out by Edinburgh university last year on 13 hill farms totalling about 43,000 acres. The report found that after 26 per cent. of the land surface had been planted, skilful management led to an increased stock-carrying capacity. The number of lambs weaned rose from 8,678 to 11,321, and livestock units, including cattle as well as sheep, rose by one third. Still more important, although farm jobs fell from 35 to 32, an extra 26 jobs were created in forestry". This is a very important statistic, because it shows that forestry is not the enemy of agricultural development, and sensible integration and land use can create greater wealth and more job opportunities.

Lord Dulverton

My Lords, may I interrupt the noble Lord for one very brief moment? The report which the noble Lord, Lord Taylor, has been talking about was one to which I myself referred earlier, before he was able to be here, but I called it by a different name. He was quite right in saying that it was carried out by Edinburgh University, but it has been published by the East of Scotland College of Agriculture.

Lord Taylor of Gryfe

My Lords, I thank the noble Lord, Lord Dulverton. I know that, in addition to the Edinburgh University studies, the noble Lord himself has instituted independent studies on his own estates, which have borne out the figures that I have just read. Let me say just a word about tax incentives, because there has been a good deal of misunderstanding on this. I am in favour of tax incentives to private planters who take the long view of an investment and are prepared to accept a 3 per cent. return on investment in forestry as against the current rates, which can be attractive to private investors in the market. I think there have got to be incentives for private investment, and this is one of the fine things about forestry. We established a partnership in forestry. The Forestry Commission was not simply an instrument for state forestry; the Forestry Commission is a forest authority with a research department, with its grant facilities and with its dedication schemes, all designed to encourage private forestry. We should get that kind of partnership in other sectors of the British economy. Here are two sectors in the same industry working together in harness for mutual benefit, and I would be very sorry indeed if any measures which the Government introduce in the Forestry Bill should upset that kind of partnership.

I was delighted to hear the noble Baroness, Lady Jeger, saying that she had joined this committee with little knowledge of forestry and had become converted. May I say that there is a provision in the new Forestry Bill that a businessman be appointed to the Forestry Commission. Some years ago the Secretary of State for Scotland, the noble Viscount, Lord Muirshiel, came to me and said, "Tom, I wish you would join the Forestry Commission; we need a businessman on the Forestry Commission, because these silviculturists are concerned about growing trees and not very much about economics". That balance has now been redressed; the Forestry Commission is not only a group of dedicated silviculturists; it is also a well-organised and well-managed organisation. So I hope that anything which is done by the Government will not upset the happy relationship which we have all enjoyed, private and public, in the forestry industry.

5.24 p.m.

The Earl of Cranbrook

My Lords, perhaps I may draw your Lordships' attention from the broad perspectives that the noble Lord, Lord Taylor, has just illustrated so well, and bring your Lordships down from the great open spaces of the Highlands, where most of the noble Lords on this side of the House have their experience, to the problem of small wood-lands in rural lowland England. Here I declare an interest. The scope of my interest is 28.5 hectares of dedicated woodland, and I consider from that standpoint I am reasonably well acquainted with the problems that are faced by the small farmer and landowner in the English countryside.

As a member of the Select Committee I wish to be associated most warmly with other noble Lords who have spoken of the very formative and distinguished chairmanship of the noble Lord, Lord Sherfield; of the guidance provided by Professor Poore; and also of the high quality of the papers and the oral evidence that we received to support our conclusions. In this report paragraphs 39 to 44, the recommendations in paragraphs 125 to 129 and the conclusion in paragraph 145 all relate to broadleaved woodlands. The great importance attached by many people to aspects ranging from amenity and landscape values to conservation were well brought out in the pages of the report. I also believe that we must find some commercial potential for such woodlands. I believe that the survival of these woodlands into the future depends on a commercial background, just as does the survival of a successful forestry industry in the Highlands of Scotland, about which we have heard so much so far.

From Forestry Commission data which your Lord-ships will find in the report it will be seen that 394,000 hectares of productive broadleaved woodland and coppice exist in Great Britain, about 87 per cent. of which is in private ownership. In addition, from Forestry Commission figures there are 294,000 hectares of scrub and felled land, which I presume is hardwood in the main, of which 98 per cent. is in private ownership. The Nature Conservancy Council, in their evidence, refer to something like 250,000 to 300,000 hectares of semi-natural woodland, which is said to be some 20 per cent. of the total broadleaved woodland of the Kingdom. From another source I have read recently that there are about 450,000 hectares of somewhat unspecified woodland in Great Britain not under any system of planned management. About half of this is made up of blocks of less than 10 hectares in extent, and by inference it is all in private ownership. The Timber Growers of Great Britain, in correspondence with me, claim that there are about three- quarters of a million hectares of broadleaved woodland in private hands, of which only about half is under proper management.

Your Lordships will appreciate that there are some incompatibilities in these statistics, but the point which is clear to me is, first, that the involvement of the Forestry Commission as a forestry enterprise in the broadleaved woodlands of lowland England, or of Great Britain at large, is negligible compared with the involvement of the private sector; and, secondly, that all quarters agree that roughly half of such woodland is under no system of planned management whatsoever.

As a forest authority, the Forestry Commission has, through the various Forestry Acts, influenced management in two principal manners. First, there has been a carrot. This has been grant aid through the dedication schemes which were initiated in 1947 and have been modified several times subsequently. In this respect we have heard today, I think, more or less uniform expressions of regret from both sides of the House, and having myself dedicated woodland I, too, regret that I entered into an agreement which I considered certainly solemn and binding for my part upon myself and my successors. This, we are told, is now to be dismembered (to use the phrase of the noble Lord, Lord Dulverton), to be dispensed with (to use the phrase of the noble Lord, Lord Taylor) or scrapped, which was the word I had in mind myself. The forestry authority has also had a stick in their hands, and this has been felling control, which is now to be relaxed.

So I ask: How successful have these two influences, the carrot and the stick, been in protecting the existing stands of broadleaved woodland in the lowlands of Great Britain and in promoting the regeneration of our national resource of broadleaved woodland? I ask also: What is the outlook for this particular type of forestry under the new proposals? As to my personal view, I look around in Central and South-East England and I form the opinion that a great proportion of the trees in the broadleaved woodland are dead, dying or doomed if they are elms; mature or overmature, in the main, if they are other species.

In the report of our Select Committee you will find, first, the evidence of the Nature Conservancy Council and that of Dr. Oliver Rackham claiming that since 1947 up to half of the scientifically important, ancient, semi-natural woodlands have been lost—lost, that is, to agriculture or to other developments or replaced by plantation forestry. You will find also the Countryside Commission expressing concern over the progressive loss of small farm woods and copses which are exempt from felling control under existing arrangements and, in the main, are being converted to agricultural land. Thirdly, you will find Professor Roche of Bangor emphasising the downward trend year by year in the supply of roundwood from broadleaved trees that is coming on the market; and (I quote): a massive shortfall in the present planting programme of broadleaved species in relation to what is required to replace the amount logged each year". He goes on: The conclusion seems inescapable that Britain is liquidating its indigenous broadleaved resource wherever it is to be found, in hedgerows, farm woodland, parks and in plantations". This is a serious indictment and I regret to say that it is my opinion that it is substantially true. The broadleaved woodland owner or manager today faces massive problems. First, for longer than the producers of softwood in the Highlands of Scotland, he has been subjected to economic pressures of the most appalling forms. As a timber producer, he has been progressively swamped in the last decades by competition from the enormous volume of imported hardwoods, chiefly from tropical regions where exploitation forestry is practised so that the only cost incurred by the timber industry is that in felling and extraction. In the report, you will find a few murmured asides from the Countryside Commission who see an end to this import, presumably through the end of viable forestry in the tropical regions. I have travelled fairly widely in the forestry-producing regions of the Far East tropics and, although there are problems there, I am not convinced that the sources of hardwood will dry up soon enough to save the hardwood industry of this country. The gross returns from British hardwood timber extrapolated over the lifetime of a tree are derisory. It makes me weep to see the price tendered for an oak which has stood for 150 or 200 years. It must be taken into consideration by all in authority that the returns from hardwood plantations, compared with any other form of managed land use, are utterly inconsequential in any financial terms.

For products other than timber, the underwood and the coppice, which once were of great economic importance—and one has only to read Thomas Hardy's The Woodlanders, to realise the type of community that was supported very largely from these woods by underwood rather than timber exploitation—the traditional markets have disappeared. Substitutes have been brought in but these are mostly of an industrial nature—pulpwood, hardboard, chipwood and so on—and they yield ridiculous returns in relation to labour costs compared with other traditional uses.

Now I come to the scientific aspects. As far as I could discover, as a Member of the Select Committee, until recently there has been no research at all into the economics of pure hardwood management. The economic section of the Department of Forestry at Oxford publishes summarised data drawn from the accounts of a random sample of private, mixed forestry estates that arc managed in accordance with an approved plan of operations under a dedication scheme. These figures are illuminating. Losses have consistently been shown. In 1977 (the latest year of available figures) the average deficit, net, was £8.43 per hectare (without grant). Considerably higher deficits of £21.20 were recorded by the smaller estates. There is little wonder that about half of our broadleaved woodlands in lowland Britain are left unmanaged. One can see clearly that benign neglect saves money: planned management costs money.

From the report, although there is some pessimism, I feel that in the main the scientifically important woodlands can be safeguarded through the efforts of the NCC, the National Nature Reserves, the voluntary conservation bodies and other non-Governmental bodies that are concerned with scientifically important broadleaved woodlands. This I applaud. But these woodlands exist in a matrix of woodlands which are not of scientific importance. If only the scientifically important woods are secure, then they exist as minute isolated islands in a landscape totally devoid of comparable habitat and, as any student of island biology knows, in the end, the animals and plants which survive in them are destined only to extinction. What is needed is a more or less semi-contiguous, more or less continuous habitat of woodland of (let me say) not non-scientific importance but ordinary broadleaved woodland covering the country in order to confirm the security of the scientifically important woodlands.

I am in touch daily with working farmers, my neighbours, who rely on the land for a living. In the main, they tolerate woodland. Some of them enjoy shooting and those in this class will respect their woodland and keep an eye on it. But, to them, the commercial value of the woodland is the land on which it stands. They and their advisers, when farmland changes hands, put on to the woodland a price which reflects that land plus the cost of converting it to arable land. This is the attitude of the ordinary farm working landowner who relies on the land for a living.

The second main problem faced by the broadleaved woodland owner is the problem of disease. The unchecked progress of elm disease has demonstrated clearly that, as a nation, we are incapable of protecting our trees from an imported pathogenic micro-organism. Dr. Kenneth Ashby, in the report of the Select Committee believes that countermeasures were available and believes that the failure to apply these with sufficient ruthlessness and their premature withdrawal contributes to the northward spread, unchecked, of elm disease. Thirdly, there are the pests. I believe that the seriousness of the grey squirrel as a pest has been under-stressed. Mr. Roderick Nicholson in the report points out: This squirrel attacks a vast range of tree species just after the great costs of establishment have come to an end, and has rendered valueless literally thousands of acres of young hardwoods. Most foresters in Southern England have come to regard its presence as incompatible with the continued existence of hardwood woodlands in the long term". There are other difficulties faced by the broadleaved woodland owner or manager. These include the difficulty of getting good stock of hardwood seedlings. As far as I can find, there is in this country no production of young plants of native hardwoods or known genetic constitution and, hence, of uniform and predictable characteristics. This is indispensable for proper plant husbandry. We do not plant fruit trees or roses in our gardens—in fact, we do not plant conifers—unless we know what strain the seeds are from. This is available for the softwood industry. If you wish to get plants of known characteristics, I believe that you can find them abroad. In this country, so far as oaks are concerned, I believe that there is such widespread pollution by Turkey oak pollen—certainly in lowland South-East England—that you cannot guarantee that an acorn you plant yourself in your nursery will in fact come pure. That is the picture and I find it excessively gloomy.

I propose a few remedies. I reaffirm my strong support for policies outlined in paragraphs 125 to 128 of the report. In amplification of these, I add a few personal views. First of all, economics. The dedication under Basis III provided for a higher establishment grant for broadleaf wood than for coniferous wood. I have no idea whether this was intended to be an incentive or whether it was based on some comparison of the relative actual costs. So far as I know and can discover, the figures have not hitherto been available. I have only lately seen some figures from Oxford which suggest to me that if identical operations are performed, whether planting hardwoods or softwoods, the costs are not significantly different.

The figures also show me that the costs per hectare for small plots, plots of one hectare or less, can work out on average at up to £2,000 per hectare. Against figures like this the possibility of providing economic grants seems somewhat remote. I believe there must be an incentive element to encourage broadleaf plantation. I sincerely hope that the grant levels, when they are proposed, will take account of the true costs involved in establishing broadleafed woodlands.

I have spoken of the swamping of our market with imported hardwood from the tropics. I believe that there should be import control. I do not favour unilateral control. I believe that the fullest discussions are needed with our European Community partners who face very much the same problems in their own countries. I also believe—and perhaps these discussions should take place through an international agency—that there should be discussions with exporting tropical countries.

From my own experience in the timber-producing regions of South-East Asia, I believe that the more thoughtful Governments would heartily welcome a tightening up of import control. So far as they are concerned, it would have the effect of supporting the prices they get on the export market, and would also encourage commercial exploitation of a greater variety of tropical species and thereby would lead to a less wasteful exploitation of what to them is a very vital national resource.

Lord Somers

My Lords, may I interrupt the noble Earl for one moment? Would he agree that one of the great problems on the rare occasions when one can buy English hardwood is that it is only half seasoned?

The Earl of Cranbrook

My Lords, I am sure that the timber marketing industry is more geared to importing exotic hardwoods nowadays than to dealing with our native species.

For roundwood and underwood, I should like to see research into small scale conversion plants for use on site to produce combustible materials, whether alcohol, charcoal or dried compressed cellulose residues. I believe that research into such products is necessary. The log market for stoves in rural areas, which has been mentioned, exists but the transport and distribution costs are uneconomic.

Finally—if your Lordships will excuse me for going on rather long—I want to revert to the subject of grey squirrels. The Forestry Commission have kindly made available to me their latest thinking in the form of a paper entitled Appraisal of Squirrel status in the United Kingdom, which was produced jointly by the Forestry Commission Research and Forest Management divisions this month. This document advocates no special steps to be taken against grey squirrels at present in anticipation of a peak in population levels (and hence damage) which is thought to come on a cyclical pattern and is predicted to be due again in the next few years. If it does not seem ungrateful and discourteous to them for kindly making this paper available to me, I find this approach gloomy in the extreme, inadequate and also unrepresentative of the acute concern felt by the private sector of broadleafed woodland owners.

The Forestry Commission's research has concentrated on surveys of distribution of squirrel species for damage done and also on control by poisoning. The Forestry Commission's paper points out the difficulties—and the word that they actually use is "impossibility"—of organising a systematic, concentrated control over large areas. The document advocates localised control in and around vulnerable crops just before and during the damage periods.

I believe that research is needed to establish the reasons why grey squirrels damage trees especially at certain seasons of the year. I understand that research projects of this nature are being carried out particularly at the Institute of Terrestrial Ecology at Monks Wood in England and also at Edinburgh University. I hope and ask whether these are adequately funded, staffed and supported.

Ultimately—if the House will bear with me for a minute longer—I believe that the grey squirrel must be eradicated. I say this with regret because it is a pretty animal, particularly in urban parks, and it was for this reason that it was introduced. I believe that the Forestry Commission were right in their appraisal referred to on paragraph 23 that shooting (coupled with drey poking) is an effective method. They say (if I do not misquote them) that they were surprised at its effectiveness. This is infinitely preferable to poisoning, because I dislike poisoning animals. If it is coupled with a seasonal attack on grey squirrels at an appropriate time of the year, which is in the coming months before full leaf flush, it can be useful. It can also be used when both grey and red squirrels are present.

I should personally like to see the grey squirrel proscribed, perhaps first on a trial basis, initially in one or a group of adjoining counties, so that it became the duty of all owners or occupiers of land to control themselves or to permit other persons to enter their land for the purposes of control; otherwise I do not believe that any lesser measure will rid our shores of this unwelcome pest.

5.47 p.m.

The Earl of Bessborough

My Lords, we are so often in debates of this kind on the work of subcommittees of Select Committees of your Lordships' House indebted to the noble Lord, Lord Sherfield, not only for his able chairmanship but also for the manner in which he introduces the debates, that I feel it almost superfluous to repeat the many praiseworthy remarks that I have made in the past about his work and the way he conducts our proceedings.

We must also be grateful to my noble friend Lord Dulverton for drawing our attention to the Government's recent Statement on forestry. My noble friend is of course quite exceptionally well qualified to speak on these matters for he is (as he told us) a former president of the Forestry Committee, now the Timber Growers of Great Britain, to say nothing of his being trustee of the World Wildlife Fund among many other related organisations of which he is a member, including the Nature Conservancy Council in Scotland.

I agree very much with everything that the two noble Lords said in introducing this debate or at any rate what they have so far said. I should also like to join with other noble Lords in giving thanks to our clerk Mr. Paul Hayter for all he did for us, and our specialist adviser Professor Duncan Poore and indeed the numerous witnesses who gave evidence before us. In so far as my own remarks are concerned, I propose to confine them largely to the report of the Select Committee and indeed to certain aspects of it since I do not wish to be repetitive and I know that other noble Lords have covered or will cover other aspects of the report.

I found work on this subject quite fascinating and of very great interest. I say that for good reasons, in so far as I, too, have interests in the subject, as president of a prestigious society concerned with the planting and preservation of trees in various parts of the world—a society of which we are proud to have His Royal Highness the Prince of Wales as Patron and a societywhichwas founded by that famous nonagenarian, Richard St. Barbe Baker, who now lives at Mount Cook Station in New Zealand, whence he still continues to travel the world. It was of course he who, among many other things in his long life, saved the redwoods in California and has helped to reclaim parts of the Sahara.

I have a more modest personal interest, as an owner (like the noble Earl, Lord Cranbrook) of woodlands, but also mainly of plantations which have been planted by my father and myself over the past 60 years. These are plantations in West Sussex and part of the ancient Forest of Bere. I also employ 10 men in the woods department, and I may say this is presenting major financial problems. We are having a general review of the situation now. I agreed very much with what my noble friend Lord Lovat said and with what was said by my noble friend Lord Seafield on the general economic situation so far as the home-grown timber industry is concerned. I also support strongly what my noble friend Lord Cranbrook said on hardwoods.

As your Lordships may well have observed, and as I think members of the committee concluded, the whole subject turned out to be much wider and deeper than some of us anticipated. I have never had the honour of taking part in a forestry debate in your Lordships' House before because I have been interested in other matters; but I now have to study with some care the various interrelated problems that arise. Certainly the whole subject has been much wider and deeper than some of us anticipated, as witness the scope of the report and also the wealth of evidence given in the second volume.

The noble Lord, Lord Sherfield, has dealt with the report in a general way and other speakers have covered specific points. I should like to concentrate my few remarks, in order not to be repetitive, mainly on pests and diseases and the risks mentioned by my noble friend Lord Lovat. I should like also to say a word on ecological sustention: that is, the need to make sure that our forest land will grow not just one crop but two, three, four or more crops. I agree with what the noble Earl, Lord Cranbrook, said about grey squirrel damage. I do not know whether I would not go quite so far as to say that they should be proscribed, but I go very nearly as far as he did on this subject. We have suffered terrible damage from this pest, which incidentally I do not call a squirrel but a rat.

I also take a gloomy view, as has my noble friend Lord Cranbrook, in regard to pests. A very gloomy view, but, I suspect, a fairly realistic one, was expressed by the University of Edinburgh. They said that reports of new insect pests on forest trees in the United Kingdom suggest that …British forestry may be entering a phase of development where such attacks are the norm rather than the exception, as in the past ". It is to be expected that the introduction of exotic species will be followed by a temporary lull while native and indeed exotic pests and diseases adjust to the new hosts; but the lull has to end some time. Maybe the adjustment has taken place—I do not know—and the ravages, for example of the pine beauty moth on the introduced lodge pole pine in Northern Scotland will be followed by other cases. If so, we must concentrate an important part of our research on preserving our existing production. When attacks by the pine beauty moth reached epidemic proportions in 1977, the Forestry Commission quite rightly took emergency action in spraying with fenitrothion. I do not suggest they were wrong to do so because it was an emergency; but we must think for the future and, in general, I cannot believe that aerial spraying with pesticides is the best means of pest control on the large scale of our forests.

As many of your Lordships will know—those who have suffered, as I have in West Sussex, from windblown herbicides or agricultural pesticides—spraying is not always as selective as one would like. There is often a risk of killing the good with the bad and in forestry this could mean that certain pesticides will harm the natural flora and fauna of the forest. In my case, the use of an agricultural herbicide in a wind, browned off a row of cedar trees in an arboretum for over a year, although I am glad to say they have now recovered.

There is a second risk: to make control effective, spraying may have to be repeated yearly, with the chance of building up resistence in the pest until the pesticide ceases to have effect. When you may have to spray several square miles of forest—which I hasten to add does not apply in my own case—the risk and the cost are considerable. That is why the Select Committee urge, and I am glad they do, that there should be resolute research to find methods of pest control which do not involve annual spraying. One promising avenue is the work on insect viruses which is being developed by the National Environment Research Council's Institute of Virology.

An attempt, I believe, should also be made to alter the ecological conditions that make trees liable to attack. Having lost all our elm trees at home and suffered severely from beech bark disease or even deformed acorns—though not yet, I am glad to say, oak wilt—I feel very strongly indeed on the matter. Again, I agree very much with what my noble friend Lord Cranbrook had to say on this and I hope that my noble friend the Minister of State will be able to assure us, when he comes to reply, that the Government are watching the position in regard to the importation of oak from North America.

This question of diseases is one of the reasons why the Select Committee encouraged the Forestry Commission to diversify both the species in their forests and also the age classes within those species. Some species are more prone to attack than others and they are also prone to attack at different stages of their life cycle. If we can avoid extensive monocultures—applying, of course, mainly to conifers—we shall reduce the threat of an epidemic attack by pests or diseases. I do not claim that diversity is doing something to prevent local damage but it should help to insure against widespread losses.

Some of the same considerations arise from the need to ensure the long-term sustention of forest soil. We shall do no good at all if our forestry methods leave the soil impoverished, or even useless, after a couple of rotations. This is not expected to happen; indeed, the initial results of Forestry Commission research suggest that there are no swift or irreversible changes taking place in forest soils. But our knowledge of this is incomplete and firm data are, I understand, not likely to be available for 15 to 20 years. Therefore, we must take care that our cultivation and drainage methods do not result in washing top soil, for example, into the rivers.

We must also take care that our fertilisers do not produce faster growth than the soil can stand; and we must take care that harvesting methods do not leave the soil exposed to widespread erosion. I hope that research will test the effects of clear felling in order to assess whether it is desirable to keep a continuous canopy of trees within the forest. It may be that by felling smaller irregular plots, as we do at home, erosion can be avoided and, at the same time, the natural flora and fauna of the forest can be encouraged to keep a foothold.

I realise that changes in pest control, disease control, cultivation and harvesting methods may all involve some expenditure, though I do not think that extra expenditure is a foregone conclusion. But if this is the case, we must recognise the long-term effects of our forestry methods and not sacrifice the long-term benefits for short-term gains. Here I must quote from paragraph 144 of our report, where we say: …it is clear that maximum tree growth is sometimes the enemy of integrated land use and good forestry". We must remember that some allowances in forestry practice have to be made for other land uses, including, as we have heard, agriculture, water gathering, nature conservation and amenity, and that the changes which benefit other land uses may eventually work to the advantage of forestry itself. That is why I welcome this remarkably comprehensive report which is, I think, the first of its kind.

I should like to add one word about incentives. Several noble Lords have spoken about incentives. I should not like the Government to forget altogether the kind of suggestions that have been put forward by, for example, the EEC, in regard to planters of plantations receiving some kind of annual payment in the same way as they do for their agricultural crop. I know that some thought is being given to this matter; indeed, it arose during the course of our deliberations in the Select Committee. But 1 think it would be interesting to know—though I am sorry that I have not given my noble friend the Minister of State warning of this question—whether further thought is being given to this, perhaps, very radical and rather way out idea. In conclusion, I also hope that the Government will produce a White Paper on the Select Committee's report, or perhaps, as it will be a paper about trees, it should be green.

6.4 p.m.

Lady Saltoun

My Lords, I have to declare an interest in forestry as an owner of small woodlands. I should like, first, to congratulate the noble Lord, Lord Sher-field, and his Committee on the very interesting, farsighted and readable report which they have produced and to thank them for it. I hope that the Government will pay it the attention it deserves.

Britain produced in 1979, only 8 per cent. of her timber requirements. The remaining 92 per cent. were imported at a cost of £2,750 million. The present area of forest woodlands is slightly over 2 million hectares. The highest estimate of possible future levels of planting is the addition of another 1.96 million hectares by the year 2030, enabling us to become 26 per cent. self-sufficient by the year 2025. It is impossible to increase timber production quickly, and it must be remembered that trees planted in 1981 will not yield thinnings for at least 25 years, even in favourable areas, or a crop for 50 years in similar conditions, and in both cases where trees planted are of fast-growing varieties. So it will be 2031, at the earliest, before trees planted this year can be harvested, and it will be 100 years or more from now before trees planted in 2030 reach maturity. Not all existing woodlands are on favourable sites, and future expansion is bound to be in less favourable areas. It is therefore vital to make the right decisions now.

Britain cannot expect to buy timber from abroad for ever, even if she can afford the price. A world shortage has been predicted, according to the Sherfield Report, "largely caused by depletion of tropical forests". I should like to add that it is not only tropical forests which are being depleted. Some years ago, I visited a non-tropical forest which was being felled for industrial purposes. I asked whether there were any plans for replanting and was told there were not, because there was such a huge area of virgin forest that it would never run out! As I was a guest in that country, I do not wish to give further particulars in this debate, but can supply anyone who is interested with details. But it is certainly not only in the tropics that trees have been plundered and not replaced.

The European Community is already a net importer and, in fact, over one-half of the world's timber exports are imported by European countries and, of them, we are the biggest, importing 15 per cent. of world exports. In 1950, European timber imports and exports were roughly equal. By 1980, their imports were around 50 million cubic metres equivalent, and they are expected to increase to between 85 million and 115 million cubic metres by the year 2000, even assuming that there are substantial increases in timber production, waste paper recycling and wood residues. Moreoever, developing nations are increasing their demand for timber; world population is increasing and, with it, world timber consumption.

New uses are being found for timber. We have heard of some this afternoon and, for example, methane gas is one. Consequently, shortage, combined with the present trend to add value to timber at source, will push up prices and a conservative forecast estimates that world prices in real terms will increase by 30 per cent. by the year 2000 and a further 150 per cent. by 2025. But Denis Crawford of Scottish Woodland Owners' Association Commercial Company, author of the British submission to the Confederation of European Agriculture General Assembly at Innsbruck last October, considers that the price increases will be nearer 30 per cent. in the next decade and 100 per cent. by the year 2000. It therefore seems to me that we and our timber importing friends have no time to lose. Whatever we do, it will be a case of too little too late, but that is no excuse for not making a start and quickly, too.

I also hope that the Government will do all in their power to encourage the expansion of forestry, as new forests create new employment, and, in this case in rundown country areas where it is so badly needed. This will be permanent employment, because new plantations need work from before the actual planting until the final crop is harvested, whether by direct labour or contractors. According to the Reading University Report, in 1979 United Kingdom forestry employed about 15,000 people in the forests and about 8,000 in supporting services. A further 15,000 jobs in sawmills, pulp and panel mills and servicing industries, such as haulage and nurseries, were dependent on British forestry. So that made 38,000 jobs in 1979. It is not difficult to calculate the number that could be created by expansion. In the years 1971 to 1975 inclusive, the private sector was doing very well in the direction of increasing area, and during those five years new planting averaged over 19,000 hectares per year.

On 28th June 1972 the Government undermined confidence by producing a consultative document, out of the blue, and that year the Basis III dedication scheme replaced the Basis I and Basis II schemes for new entries. In 1975, capital transfer tax replaced estate duty. The following year, new planting by the private sector dropped dramatically to about 9,600 hectares and by 1978 it was down to 6,300 hectares. Due to some CTT allowances to private growers, which still do not adequately take into account the long-term nature of forestry enterprise, the area of new planting for 1979 and 1980 averaged about 8,000 hectares, but that is not satisfactory.

The administration of the Basis III dedication scheme, far from being less costly and complicated, has become a procedural nightmare, involving long-drawn-out consultation with planning authorities and agreements regarding public access and recreation. This last has been disastrous, particularly in dry years, and has led to appalling fire damage caused by a public which no longer drinks its tea out of a thermos flask but finds it necessary to light a stove and boil a kettle and which does not know that an incompletely extinguished cigarette or even a piece of glass can cause a holocaust.

In the Forestry Commission's consultative paper, published last December, we read in the first paragraph: The control of tree felling began during the second world war to maintain the supply of timber and continued afterwards in order to build up a strategic reserve of standing timber", and, later: The concept of a strategic reserve has changed. Control today is wholly exercised to safeguard amenity". That is a shocking state of affairs. The devil driving us is economic necessity. Amenity is a luxury, and if we can combine it with the demands of necessity, well and good. But it is not always possible to do so. Circuses are not much fun without bread.

The consultative paper does not represent forestry thinking in any way. It is merely a collection of suggestions, forced on the Forestry Commission by an internal governmental committee under Sir Derek Rayner, as to how forestry may be squeezed in order to save cash to tide the Government over a bad patch. It will do nothing to bring about the expansion of forest area and production which the ministerial Statement on 10th December, some of which we welcomed, mentioned as desirable.

As the noble Lord, Lord Dulverton, said, by all means sell a proportion of the Forestry Commission's planted woodlands, provided the proceeds of those sales are ploughed back into the acquisition and planting of more forest land, including some or all of the 287,000 hectares of scrub and unproductive land in this country, and also into the provision of adequate planting and maintenance grants to the private sector to encourage extensive further afforestation. And this should be done by the Forestry Commission, and by them alone, because they have the knowledge and expertise to do it and the ability to acquire more knowledge, which local authorities do not. Moreover, their relations with the private sector are, on the whole, excellent and they are trusted, which local authorities are not—and with good reason. If the Government are going to allow the Forestry Commission to get rid of some of their responsibilities as regards forest ownership, they should strengthen their position as forest authority.

To plant a tree is an act of faith. Unless you are very young and are planting fast-growing species in a very favourable area, you are unlikely to live to see your trees grow to maturity and be harvested. Planting is expensive, and so is the after-care necessary to their establishment. But no return can be looked for for at least 25 years. Few, if any, private owners can nowadays afford that kind of expenditure, particularly when they have little prospect of even being able to pass on their forests to their heirs, which is one of the strongest incentives to make expensive improvements. Private growers are human beings, not altruistic saints, and unless it is made worth their while by increased and adequate planting and maintenance grants which keep up with inflation and capital tax allowances they will not plant.

In March 1974 the Minister of State, Treasury, said: …in an industry with the long term horizons of forestry, the prospect of further change can only be unsettling and I hope the arrangements I have announced will restore confidence and provide a durable basis for the operations of the industry for many years to come". He was quite right and the suggestions in the Forestry Commission consultative paper as regards grants, felling licences, public access and so forth are very unsettling indeed and will do untold damage, if imple- merited, by further undermining confidence in the future, confidence which it will not be easy to restore.

That future may not be our future. It will not be the future of most of us here today. It is our children's and grandchildren's future. If we make the right decisions now, they will look back and bless us. If we make the wrong ones, they will look back and curse us. The choice is ours, and the Government's but mostly the Government's. I hope they will make the right one.

6.16 p.m.

Lord Burton

My Lords, I, too, should like to thank the noble Lords who introduced this debate. Certainly it has come at a timely moment. The situation is serious. First, I must declare an interest, as I have been responsible for planting in the region of 4,000 acres or, to be more modern, about 2,000 hectares.

In time gone by, the emphasis has been on planting to restock the areas devastated in two world wars. This planting was not always done with an eye on marketing. The story was always, "There will be a shortage of timber within a few years, so we must get planting". However, there have been vast developments in extraction techniques in recent years, but even so we are now told that our timber is too expensive.

Most of my woods are within 60 miles of Fort William, but our net return on pulp timber was 50p per metric tonne—surely not too expensive. The men employed on felling and extraction are mostly on piecework and work hard for a wage far less than the miners, let alone the wages being sought by the water service employees. They were getting a wage on a par with the boys who swept the pulp mill floors. The haulage costs are entirely competitive and certainly no greater than general haulage rates. How, then, can our wood be said to be too expensive, as was said when the Fort William mill closed?

The question must be asked: With current wage rates, haulage costs, local government rates and necessary overheads, can forestry be economic in Britain today? That 50p which we were receiving in no way covered the cost of plants, planting, clearing and fencing, let alone interest on expenditure. Now, with the Fort William mill closed, we are getting a net return nine times as great by exporting by sea to Scandinavia. However, £4.50 per tonne is little enough and still does not give an economic return.

The larger timber market has been very hard hit by the recession. We are still importing the greater portion of our requirements. The noble Lord, Lord Taylor of Gryfe, gave us the exact amount. But why do we import such a high proportion? Is it not because the home-grown timber cannot compete with cheap imports from Iron Curtain countries, with pulp wood grown in very favourable conditions, such as in South Africa, or with wood cut by giant machines from natural forests, or, as my noble friend Lord Cranbrook said, from the tropical forests?

I have opened with a brief comment on the financial implications because a healthy forestry industry, as with most other industries, depends upon the proceeds which can be secured for the produce of the industry. There can be incentives in the way of grants and subsidies and in tax remissions and benefits, but the fundamental need is a satisfactory end price for the product.

In the short term there seem to be two necessary requirements. First, a market, such as chipboard, to use our smallwood is urgently required. Secondly, there seems little alternative to an import tariff—probably an EEC régime. Let me give one comparatively small example. Quite a large quantity of timber, mostly small cuts, easily produced by ourselves, is used throughout British schools in the instruction of carpentry. I understand that all, or almost all, of this timber is Russian imported and sold through a firm in central England. If this wood has to be imported, surely something is wrong.

Partly, I feel, because of the financial squeeze upon the Forestry Commission, a problem is arising over forestry fencing. I gather that the National Farmers' Union has secured a gentleman's agreement with the commission over the fencing of their plantations in England and Wales, but in Scotland there is an increasing problem. It will be appreciated that many of the Scottish plantation fences need to be deer fences. Once the initial fence has deteriorated—after 12 or 15 years—the trees are big enough no longer to require fencing. The fencing then becomes an unremunerative burden upon the Commission. However, had the land not been planted in the first place, no fence would have been required, so the liability must remain a forestry one. In this respect there is a growing problem because it has become fashionable to fertilise plantations from the air when they are perhaps 12 to 15 years old, just when the fences are beginning to deteriorate. The fertilising of the ground is, of course, a bait which lures in animals from outside. Before my trustees could secure the second instalment of grant on their plantations they were compelled to fertilise. The following year more deer broke into that plantation than ever before and consequently more damage was done than ever before, which probably overruled any benefit that was done by the fertiliser.

With regard to the Government's consultative paper on felling and grants, I should like to make two brief points. The lifting of the restriction on felling more than 30 cubic metres per quarter, most of which had to be used on the farm, is a very dangerous amenity proposal. Farming today is placed in a severe financial straitjacket. Farm borrowing increased 30 per cent. last year. What easier method of finding a little badly needed cash than to fell the farm spinney? Those of your Lordships who have taken part in the Wildlife and Countryside Bill will know that some money is to be made available for conservation but in no part of that Bill can I find anywhere to indicate that the minute cost of retaining controls on felling these small woods would be better spent.

My last point concerns the proposed loss of the inspector from the Forestry Commission who comes round once every few years to see that the country's money, given in grant aid, has been well spent and is being put to good use. A reminder that thinning is due often comes timeously and I fear that if we no longer get these visits from the Commission, neglect of many woods will become prevalent. A little jog to one's memory is sometimes a good thing.

Finally, my noble friend Lord Bessborough mentioned the question of virology. I am afraid that the Commission are rather frightened of this. The conservation lobby is such that the Commission are frightened that if they use these techniques they may rebound. There is, I believe, a very good virus for that damaging little pest, the sawfly, but the Commission are frightened to use it. I think that anything which we can do to lift that fear which they have upon them would be most auspicious.

6.24 p.m.

Lord Gibson-Watt

My Lords, I confess an interest, both as an owner and as a Forestry Commissioner. It is indeed fortunate for the forestry industry as a whole that so many of your Lordships are interested in, and have knowledge of, this particular subject. It was of particular interest today to hear the noble Lord, Lord Lovat, speak, having only 10 days ago heard his brother speak in another place on the Forestry Bill. I think it was significant that the Select Committee under the chairmanship of the noble Lord, Lord Sherfield, in general commended the research work of the Forestry Commission. I may say that the Commission took this Committee extremely seriously—as it was right that they should do—and there were many occasions when the general director and the head of research attended your Lordships' Committee to give evidence. It is a matter of considerable pleasure to the Commission to hear such comments as those made by the noble Earl, Lord Cranbrook, this afternoon, when he said that the standard of oral evidence was of a very high order. Indeed, one would have expected such from the general director and the head of research of the Commission but it was good to hear it in public.

This debate has divided itself into two topics: first, the Select Committee's report and, secondly, to some extent a general debate on forestry. If I may take up one aspect of the Select Committee's report, which was the integrated use of land for forestry and farming, we spent a great deal of time discussing this aspect in various ways. In some areas it is very well carried out. Many of your Lordships have the experience of having done it yourselves. Indeed, I have been privileged to see the experiments carried out by the noble Lord, Lord Dulverton, in Scotland in this respect. But I think there is something that we often overlook.

We automatically take it for granted that farmers will and should go in for the integration of forestry. If we look at the average life of the average farmer, certainly in the uplands, he does not think much upon forestry lines. He is thinking about his stock; he is very undermanned with regard to labour and when he goes to the market he does not hear a single word spoken about forestry from the time he goes in until the time he comes out. It is all farming and it is fair to say that there are very few people in this country who are both good foresters and good farmers. I remember the late Sir Richard Cotterill, chairman of the English Forestry Commission—a great forester but he would not have called himself a great farmer any more than I would. I know very many other examples of people who have made a great contribution in one field but, because of the very complexity of the subject, do not do so in the other. So what I am saying on this matter of integration, on which universities and others have spent an immense amount of time and trouble and money, is that the time will come where there is profit in it. I do not necessarily mean money profit—there are many other forms of profit, such as shelter to stock. An excellent remark was made by the noble Lord, Lord Tanlaw, earlier on when he referred to the new ecosystems in the forest. There are profits of that sort which can and will come, but it is not easy to get the replanting of the type that many people want. There is a shortage of capital and there are the other problems to which I have referred.

In discussion of the whole question of the forestry industry, I think the remark which stuck in my mind was that made by the noble Lord, Lord Flowers, who asked what are we growing trees for? Quite right. What are we growing them for? It is possible that the general answer is that we are growing trees in the long term for import substitution so that we shall not be so dependent upon other countries to send timber to us in its raw state. Indeed, I noticed only today in the newspaper that somebody in the Malayan Parliament said that it would not be for ever that Malaya would be sending timber in its raw state to this country, and this we shall have to expect from an increasing number of countries.

As the noble Lord, Lord Lovat, said, we have lost a great number of the old uses and demands for timber in this country; wagon bottoms; less pit wood is required; and now even the match industry is having to find new markets. Curiously enough, even in these difficult times—and times are difficult in the forestry industry—new processing plants and new uses are being created all the time. Only the other day a sawmill, put up by Western Softwoods, was erected only four miles from my own home in Wales. This is encouraging. Although I think things are difficult at the moment, I believe, as indeed the noble Lady, Lady Saltoun, said, that prices are very likely to rise as the century goes on. I believe times will come again for our forestry industry.

There has been criticism of the steps that Her Majesty's Government are taking in regard to the Forestry Bill, and no doubt we shall have other opportunities to discuss that in your Lordships' House. I would only say this. At times of financial difficulty, when all parts of the state and all parts of the country are asked to make some contribution, I do not think it unreasonable that the Government of the day should say to the Forestry Commission, as indeed to others, "Here is an industry where the British taxpayer has invested a great deal of money over the years, and it is not unreasonable that we should now say to you that we do not think we can continue to find large sums of money for the state enterprise, but instead we know that there are certain sources of private investment "—if indeed one can call pension funds private investment. If these sources are there, it is not unreasonable that they should tell the Forestry Commission to sell some of their woodlands.

I would just say this to Ministers. I think that, while a Bill of this kind is going through, there is, of course, a good deal of apprehension—I do not put it higher than that. Anyone who is employed in the Forestry Commission, whether it is high up at a senior level or simply in the forest, really does want to know how it is going to turn out. I am not asking Ministers to make an amendment to Clause 1 of the Forestry Bill; of course they cannot do that, despite the large number of amendments which will undoubtedly be put down. What they can do, and I think they did do during the Second Reading in another place, is to make assurances of some kind which will make it clear to those who get their living from the industry that these new steps are not a threat to the forestry enterprise; they are, in fact, something which in the long term will and must strengthen the forestry industry.

Lord Taylor of Gryfe

My Lords, I wonder whether I may interrupt the noble Lord for one moment. While accepting that pension funds and insurance companies may wish to invest in forestry, there is nothing to stop them investing in forestry now. It is a free market. Why is it necessary to dispose of Forestry Commission assets to do this? Pension funds and insurance companies can buy the land now and invest if they so desire.

Lord Gibson-Watt

Yes, indeed, my Lords; the noble Lord is quite right. Pension funds and other organisations can go abroad and they can invest in other countries, as we very well know. It is a free market in that respect. The point I was trying to make, and perhaps did not make well enough, was that if we have a situation where Her Majesty's Government are producing from taxpayers' money something of the order of £32 to £34 million a year, and if it is quite clear that funds are available from other sources, it is not unreasonable for a Government, faced with severe economic problems, to take the steps which Her Majesty's Government are now doing.

I come back to the question of the reassurance, because there are so many young men today who are trying to get into the forestry industry, for it is a good life, it is a healthy life. There must be many noble Lords who have received letters from aspiring young men who wish to get into the industry, and indeed it is extremely difficult to find homes for them. When one is able to do so, it is very reassuring. But it is an industry which is an industry of the future, and I think this is important.

One of the things I hope the noble Earl, Lord Mansfield, will be able to say when he winds up is that that land which is sold by the Forestry Commission will remain in forestry management. I think this is very important indeed. I think, if this was said, it would remove one of the causes of apprehension. There is no reason at all why these new employers, these new owners, should not wish to employ qualified forestry expertise. I feel quite certain they will. These are gentlemen who look at their assets in just as detailed a way as we all do. I feel certain that is not a reason for fear.

I am a little bit concerned about the giving up of the dedication scheme. I can see that it has got to be done. The cost of administration has grown as the dedication schemes have become more detailed. If you look at the figures—I have not got them with me today—of the amount of official time which is used in this administration, I am quite certain it is right to bring the dedication scheme to an end, although there is no doubt that it was an anchor in the past and a great source of agreement between the state and private owners.

I would touch on one or two things which the noble Earl, Lord Cranbrook, said during his very excellent speech. First, he referred to the large amount of virtually untended forests in this country. I think the figure he gave was 290,000 hectares. Most of it is in England—not a great deal in Scotland. With respect to the Scots, they do not always win on the Rugby field but they generally win on the forestry field. Their forests as a whole do not contain these neglected woods to which I refer. But I am afraid there are a great number in England. There may be one or two in Wales. I do not see any easy way of putting this right. I think that the undedicated private woodlands on the whole, or some of them, are very sad to see. This question of maintenance is something which is very often neglected. It is one thing to talk about planting trees, but very often the question of maintaining trees is neglected. This is as true in motorway planting as in other forms of private forestry.

I want to make reference, also, to two further remarks made by the noble Earl, Lord Cranbrook, in his speech. First, although I agree with him about the menace of grey squirrels, I am not certain I go all the way with him with regard to the method of killing. Like many other noble Lords, I have suffered from grey squirrels. I believe you have got to attack them all the time. I believe you have got to attack them with every weapon at your disposal. If you happen to wish to go out on a fine afternoon and poke the drays out and shoot the grey squirrels, all well and good. It is very good for young men to learn how to shoot in that way. Secondly, I believe that the use of Warfarin is by far the most effective way of killing them, and it must be done, I believe, in the period from April to the middle of June; that is when it must be done in an intensified way in hoppus. It is not a pleasant way to kill any animal, but the fact remains it is probably no more cruel than any other. There is no doubt that the grey squirrel is a pest and particularly in those hardwood areas to which the noble Earl referred.

One further point on the hardwood side. Much of what the noble Earl said was true, but if he is short of a seed source let him go to Herefordshire; he will find no problem in finding good oak trees there. If he wants to go to Caroline's copse he will find the best source in the country. As I have said, these are difficult times for forestry. Prices are lower than they were a year ago and wages are higher and going up. I hope that export substitution from Scandinavia will be only temporary, and I hope too that new firms will come along to strengthen the industry. However, like other noble Lords I am an optimist, otherwise I would not be a forester.

6.40 p.m.

Lord Hale

My Lords, I shall with your Lordships' permission remove my hearing aid, which means that if anyone wants to interrupt me he will have to give me a moment to replace it before I can hear the interruption. Immediately after the war when I returned from Canada where I had been engaged in the business of buying not merely timber but readycut houses, I saw my friend Nye Bevan and said: "Nye, it is true that you keep on saying that you cannot get any timber and the world is very short of seasoned timber, but there is ample timber available for your requirements in a very friendly British dominion with a fine organisation". Nye in his high-pitched voice used when he was feigning indignation said, "Do you think that I am going to swim the Atlantic with an axe in my mouth to bring back some timber?" This report shows that, on the whole, we have to do even more than that. It shows, as I previously learnt abroad, the complexities that have to be faced.

The terms of the Motion are put in the most modest possible terms and calls on the House to take note of the report. One can hardly fail to take note of it—indeed, one can hardly fail to profit by it. It was presented by the noble Lord, Lord Sherfield, in a speech of admirable clarity and admirable audibility and I was able for once to hear every word of the opening of a debate without difficulty, and even with my limited faculties I was able to understand and appreciate it.

There are some facts of life that I think we are not really ready even now to acknowledge. One of them is that the Forestry Commission was, in a sense, conceived in sin as we all were, because it arose out of German submarines. The war was over when it was established but it took over the improvised organisation of trying to find wood anywhere and providing stockage places anywhere. Inevitably it started in difficulty and on the wrong foot.

I can recall quite clearly—because my father was engaged in the manufacture of engine carriages and wagons—going out with him at weekends and visiting a very charming little estate on the Leicestershire and Nottinghamshire Border of a noble Lord who today is very prominent in this House, hoping to try and find trees which would keep the works going. Of course, it was heartbreaking to part with some of them and a great sacrifice. But it is not easy now to recall that time in our life when we were perhaps as near defeat as we could be.

You do not fight wars for nothing. The noble Lady, Lady Saltoun, referred fairly to "too little and too late". We are too little. One of the matters we must consider in relation to the many other claims upon our resources is how far such an industry can produce the timber which will meet our requirements. I do not profess to have any expertise whatever about timber, and in so far as I have personally taken part in timber conservation schemes, those schemes have been abroad. Some reference has been made in the speeches to the problems of tropical agriculture. Indeed, immense schemes covering five or six large countries have been undertaken, normally under United Nations auspices. In one case in which I took an interest they were proposing a scheme which would embrace the eradication of blindness in that area. The type of blindness was onchocerciasis of which there are two kinds and which is wholly incurable from the moment that the vector fly has delivered its goods and the venom gets into the eyeball. In that connection the complexities show all too often the problems that we have never had to face—and I hope that we never shall—but which sometimes are slightly mirrored when we read about the pine moth and the problem of the damage which it causes and the problem of its destruction.

As ignorant as I was, I was also puzzled about the oak, for the oak is England. The oak is England's history. Although I know the problems which it presented it was not until I heard the speech of the noble Earl, Lord Cranbrook, which recalled some questions put by the noble Earl, Lord Bessborough, in the course of the report, that I realised that here again there was evidence which put some doubt upon the future of our greatest tree.

On my knowledge of it, steps to control Dutch elm disease were not only too few but too late, and it was ignored in the area in which I live. Time after time it was reported, because we are a country of tree enthusiasts, and it was the experts and the advisers who ignored it and who delayed so long in tracing its origin and its transmission when it had already threatened the elms of at least half of England or more. This is one of the major problems, and until Dutch elm disease I do not recall a similar epidemic in this country. One noble Lord said that we should try to monitor many of the goods that we import from tropical countries which suffer from these problems. But I believe that problem to be quite insuperable so long as shipping transportation continues.

I now live in a garden suburb a few miles from here, in a house which was condemned as uninhabitable about 30 years ago and which we are still trying to rebuild. But we have a number of disadvantages. We have the grey squirrel. I appreciate that the damage caused to the countryside by the grey squirrel can be enormous. From the woods nearby the grey squirrels have been sharing my house with me for a considerable time. They can travel between the floors, between the lower and the upper floors; they can bore into virtually anything. There is a large attractive sycamore tree which now clearly shows signs of damage. In the debate on the Wildlife and Countryside Bill I heard people express doubts about the sycamore. I have a sycamore that can be seen by all and sundry. Year after year I have received assurances from the Front Bench that this and that can be done. It cannot be done. I dare not experiment with Warfarin with all its experiences even if I wanted to. It is a cruel poison because animals of all sorts, including pets, can be endangered. Indeed, it could make life unbearable. The squirrels are not confined to my premises; they are confined to the woods and to the area which leads to the local station, and they can be seen in their numbers all about.

In what I thought was a brilliant speech, the noble Earl, Lord Cranbrook, speaking with vast knowledge and at great speed, raised a number of these problems and I shall not attempt to repeat them. I have gone further than I intended—I nearly always do—and I shall come to a close. I should like to say a few words to the noble Lord, Lord Tanlaw, and to the two noble Lords opposite who spoke in quick succession.

I do not know what the ecology lobby is. The Forestry Commission has been using, quite extensively, a poison which is described by those distinguished scientists who monitor it as the most dangerous poison in the world. In their very long report, which I have not yet read, they say that they have now reduced the dose by half and that one part in 2 million distributes this poison, which arouses fear, animosity and anxiety all over the world. We are not told that it performs any job that cannot be done by anything else, but just that it does it a little better. I think that there would be much better relations with the Forestry Commission if this could be done. But the ecologists switch on John Evelyn who was President of the Royal Society and who, according to Sir Arthur Bryant, called into being 10 million trees and made possible the maintenance of our fleet in those years of difficulty. I beg leave to apologise for speaking so long. I am most grateful for a patient hearing.

6.58 p.m.

Lord Gisborough

My Lords, I also should like to state an interest, as I am a private forester. As the great forests of the Americas are felled, and it is only recently that any thought has been given to replanting those vast areas, and Canada has made it clear that it will not be able to maintain its supply to the United States after the end of this decade, by 2025 the world is expected once again to be facing a timber shortage. Vast areas of South America and Nepal are being levelled and overnight the sparse forest soil of milleniums is washed away never to be replaced. What damage to the planet is being caused by the release of all the carbon can only be guessed at. By the time it becomes apparent it will be too late to reverse.

Meanwhile, as the Amazon forests disappear, so does the plant life that has so often provided the basis of so many medicines, quinine being the best known, and with it the prospects of further discoveries. Little wonder then that people are beginning to see the end of cheap timber and forecast a shortage in 40 years' time. The Food and Agriculture Organisation has suggested that large-scale extensions of European forests are vital to close this impending gap in supply. With that in mind the Minister has expressed the wish to see more British forestry and a larger private sector, but the present method of levying CTT—Capital Transfer Tax—on forestry is a direct and strong disincentive to private planting.

A crop takes a minimum of 50 years to mature, and that would be a very fast-growing crop. Eighty years would probably be more realistic over the country as an average. Either way it is unlikely that the man who plants the trees will ever live to harvest them as a mature crop. The man who plants certainly obtains tax relief on planting and the long years of maintenance, but he still forfeits considerable net income with no hope of any return to himself. He can enjoy amenity planting, but the only incentive he has for growing forestry is the prospect of leaving value for his family to inherit. He hopes to leave not only value but an all-age group enterprise that can be managed as a rotation by his descendants as a thriving business. Without that incentive he would be far better off to enjoy the net income himself that he forfeits by growing forestry.

Let us see now if the heir benefits after transfer tax. On inheriting he has two options as to how he pays. One option is for him to pay immediately on the value of the crop on succession. The eventual sale of the crop is then totally free of tax, but in the interval between succession and harvest the capital sum paid in capital transfer tax has been costing him bank rate, while the timber has been growing at only 3 per cent. a year. At 16 per cent. bank rate he is losing 13 per cent. a year on the rate that he paid. Thus, he is soon on a hiding to nothing and every year he delays felling makes him worse off until the value of the timber on felling cannot possibly equal the financial outlay of CTT plus cumulated interest on that amount.

Also, having paid for the timber he takes a risk of it being destroyed by fire, pest, or loss of demand in the market, and many other problems which have been mentioned in this debate. I myself lost 40 acres by fire from a man who dropped a cigarette.

The heir's second option is to delay payment until harvest, and this may be 30 or 40 years on. In this case he pays transfer tax on the full sale price in spite of the fact that the value will by then have increased by 30 years' growth and by the good maintenance and good management of his own stewardship, none of which management cost will he have been able to set against tax. Therefore, economically it is essential for an owner to fell all his timber before death or for the heir to do so immediately on succession, and this is quite opposite to the needs of the country and quite opposite to any inclination that a private forester will have.

The method of levy is a strong and direct disincentive to private planting and is in direct opposition to the Minister's desire for increased private forestry. This disincentive is reflected in the level of private planting, which has plunged from an average of 20,000 hectares a year up to 1975 to somewhere around 10,000 hectares a year since 1976. It is vital that CTT should revert to the system under death duties whereby the duty is paid not on harvesting but on the value at succession. It is also vital that the party opposite, who altered the rules, should try to understand the position. It is of equal importance to both parties that there should be a strong forestry enterprise, and it is vital that the good friends of forestry on the opposite Benches, which there are, should use their influence to promote a common all-party policy to give the confidence that is needed.

It is furthermore totally dishonest for the nation to encourage people to plant under one set of rules over a period of 50 years and then to change the rules just before much of that planting is coming up to harvest. Even if the present CTT rules are to stay, the least that should happen is that the old rules of death duty valuation should apply to those woodlands planted in good faith before the rules were changed. Further, CTT inevitably breaks up estates and forestry land, yet the ever increasing cost of machinery demands large acreages to justify their use. Smaller forest enterprises are unable to afford big machinery and will suffer from reduced maintenance and poorer final crops.

The main point in the Minister's statement in December seemed to be as regards the sale of Forestry Commission woodland. I believe it must be good to try to tie up private rather than public money in timber. However, as the whole object of the Forestry Commission and the Minister is to grow more timber, it is essential that the proceeds of sale be reinvested in new planting elsewhere—this is a statement that has been made by almost every speaker—each acre of sold woodland paying for the planting of several acres elsewhere. In this way the commission can retain its labour force and achieve its object of increased planting for the future without cost to the Treasury, and these new plantings can be sold off in their turn.

I therefore support the view that the profits of sale of growing timber should be reinvested into planting, but I see no reason why unplanted land should not be sold off to the private sector provided that the land is planted by private enterprise, and this must be ensured by dedication or conditions of sale.

Lord Burton

My Lords, may I interrupt the noble Lord? I think that the Forestry Commission—and other noble Lords will bear this out—have a lot of land which is not plantable, and I am sure he would not object to that being sold. There is a lot of high ground, particularly in Scotland.

Lord Gisborough

My Lords, I am sure that that sounds eminently sensible. There are some peculiar worries expressed over the sales of the forests; that a forest is going to be taken away. When they are bought by private or institutional buyers they will still need managing; they will still need a labour force. It is silly also for the users to complain that they will no longer be able to buy stocks of timber. The growing timber will still have to be sold but the users may have to compete a little more for what they want, and this will do nothing but good to them and to forestry.

The forestry will often be better and more economically managed when in private hands, with traditionally far more attention to amenity than by the bureaucracy of the Forestry Commission.

Noble Lords

No!

Lord Gisborough

I should like to go on with this point. One sees this very often when one compares private and Commission planting side by side. The drawback is bureaucracy, and does not reflect against the individual foresters within the Commission. I do not expect that to appeal to the party opposite. However, the Minister must not at this time of high interest rates expect an immediate demand to buy. This will come over the years and particularly at times of lower interest rates.

The worry has been expressed that the Government will not reap the fruits of their planting. But this is of course nonsense. Forestry will be sold at its present day value for cash, which is worth 15 per cent. per year; far more valuable than waiting years for the value of felling after an annual increase of 3 per cent. I should like to see substantial sales if buyers are available.

Turning now to thinnings, there is great difficulty of securing an adequate market, and consequently many forests are getting under-thinned. This will have far-reaching effects on the crop, and the quantity and quality of harvest will be seriously impaired. The Swedes have developed techniques for using wood waste in automatic feed boilers, and introduction of these boilers could help the problem of disposal of thinnings. The waste wood available in the United Kingdom is estimated to equal annually the equivalent of 1.5 million tonnes of coal, and it would surely be well worth while the Government doing all they can, even including grant aid, to encourage greater use of this sophisticated wood burning apparatus along with all the other efforts to increase sales of thinnings. Any national investment in research for the profitable use of thinnings would soon pay off through exploitation by the commission, quite apart from the benefit to the private sector.

The problem for the commission and for private planting on any scale is to find adequate suitable marginal land. Farmers first wish to retain their high land for sheep. However, as I think has already been explained, where farmers have sold off their sheep strays to forestry they have often found that the capital re-applied to their inby land has enabled them to get a much greater return out of their sheep and on a much smaller acreage.

The Select Committee report, and various noble Lords, have recognised the need to integrate forestry with farming, and have repeated this. It would be ideal for a sheep farmer in the hills to have a few acres of forestry of different age groups that he would tend at slack times of the year. The problem is to get rotation going, and even a grant would be unlikely to encourage him to plant forestry that would show no return, even for fencing stakes, for such a long period.

It occurs to me that small private investors might be persuaded to finance hill farm plantations which could later be bought back by the farmers at a time when they could start to use the crop. It is difficult to visualise a workable scheme, but once a rotation was established and once the farmers became forestry-minded, as they are in Scandinavia, it would run itself, and the forestry income would then help to reduce the need for hill farm grants. It would be a long-term business, but we must remember that in Scandinavia it works.

Secondly, there are large areas of moorland hillside that are unusable for forestry because they are technically commons. These commons are not open to the public and refer purely to grazing and peat-cutting rights. Surely legislation should affect forestry so that it could override commoners' rights on some of this land that is too steep for peat-cutting and of little use for sheep or even sporting purposes. Thirdly, we have the conservationists who object to the planting of timber and who equally object to the felling of timber. Apparently they want to see a status quo in the country. They often complain that they prefer hardwood and do not like the sight of softwood plantations. That opinion must be weighed against the opinion of those who like the sight of softwood plantations and whose silent opinion is just as valuable. It is, I believe, an opinion which is a great deal less prejudiced.

7.12 p.m.

Lord Inglewood

My Lords, as the hour is late, I shall be brief and I hope your Lordships will forgive me if my speech seems disjointed; I have cut out of my notes all parts which will be equally appropriate to the Second Reading debate when the Forestry Bill comes before the House. Those of us who recall forestry debates and problems directly after the war—and I am glad to see the noble Lord, Lord Peart, in his place—must have great satisfaction today in view of the great progress that has been made in the intervening 35 years, not just in rebuilding our woods which were devastated by the war but in widening the knowledge and appreciation not only of woodland management by professionals but of general appreciation through the country of what forestry is about; first, of course, timber production and then generally contributing to making this country a better place in which to live.

In the years between, say, 1945 and 1950 it would have been unthinkable that a committee of your Lordships' House would have been considering the scientific aspects of forestry in the way that has recently been done by the noble Lord's committee. That has happened, and its report is very valuable indeed. I regret that I did not hear the noble Lord, Lord Sherfield, because my train was half-an-hour late into Euston, so I hope he will forgive me if I misinterpret anything he may have said.

One point seems to have been underestimated, unless I have overlooked references or missed something the noble Lord said. Surely there is great benefit to be achieved from close co-operation between our scientists and researchers and those in countries in North-West Europe. There is no mention of forestry in the Treaty of Rome, which seems curious, but to avoid costly duplication or to cover gaps in research, it would seem sensible to co-ordinate the work being done at least, say, in Britain, France and Germany, even if we do not go any further. The climate and soil conditions in those countries are not so dissimilar from those here.

I hope the report will lead to this and succeeding Governments talking rather less about planting and more about improved management and marketing, and realising that forestry, like any industry, must see some profit, however small, at the end if it is to continue. It cannot be denied that in this country we waste wood, not least sawdust and what we call wood waste. Recently on the marketing side we have had very difficult times. Costs have been rising steadily over the past few years and although prices tended to rise from what was a very low level, they have, in the last 12 months, dropped appreciably, not least for good quality English hardwoods, which is hardly encouraging to those who are thinking this planting season of adding to their hardwood acreage.

We spend what can be described as a Shah's fortune every year on importing timber, pulp and paper, yet in this country we see a timber market at a level which cannot do anything except bring those who are in the industry to make a loss, in the short term, small if not big.

It is wrong to maintain that there are only a few, some would even say no, forest businesses where the woods are a normal forest and managed on the principle of the sustained yield, because they exist in this country and it would be interesting if some statistics could be obtained separately from that sample and were not just included with the rest, where of course the greater acreage is of young plantations.

Relations between the Forestry Commission and the private sector have improved enormously in the past 30 years. Today they are very good but there could be even closer co-operation in studying today's and tomorrow's market. I am sorry to hear the Government refer to sales of Forestry Commission woods in the terms they have done. Fringe sales—part of normal estate management—we would of course all support, but sales on a much bigger scale, which have not as yet been explained in any detail, arouse in most of us a measure of apprehension.

I have said that we should pay more attention to today's market and stop repeating airily that in 40 years' time there will be a world shortage of timber which must mean a fair return, maybe to our sons. That is too much "jam tomorrow". What we are concerned with is the market today, next year and the year after that. Because our woods are small, handling costs are large, but we have a market on our doorstep as well as a very favourable climate. Be that as it may, foresters must take a long view and they must take the risks associated with a long view in any business. What we need now is a Government who will think and act on the same lines.

7.17 p.m.

Lord Mackie of Benshie

This has been a fascinating debate, my Lords, and the noble Lords, Lord Sherfield and Lord Dulverton, deserve the gratitude of the House for initiating this discussion. Speaking personally, I should have preferred to see the two debates split in two; the extremely valuable report, so ably introduced, deserved a debate of its own, not that justice has not been done to it. I cannot help feeling that the Government wanted to fog the issue a little and therefore welcomed mixing the report, with which nobody could disagree, and the second debate, although it was introduced by the noble Lord, Lord Dulverton, in able and unmistakable terms. Perhaps the Government thought that in that respect they were not on such a good wicket and therefore welcomed having the two debates together.

I find extraordinary the unanimity of feeling that exists in this House about the Forestry Commission. Apart from the noble Lord, Lord Gisborough, saying that perhaps sometimes some bureaucracy crept into it, everyone else has spoken in glowing terms about the Forestry Commission, remembering too that noble Lords opposite cannot be described as normally being great lovers of state enterprises. The Forestry Commission has caught the imagination and, by its conduct, has earned the approbation of, by and large, all the foresters in this House and the country at large.

Several noble Lords touched on a very important point when they said that of all industries, it is vital that in forestry—the same of course applies to agriculture—there is confidence and continuity. They are vital before people will begin planting for their children as well as other people's children. Since the war there have been quite a few hiccups in the build up of confidence, mostly caused, I fear, by Conservative Governments, which is extraordinary; and I must say that it appears to me that there is another such hiccup right now.

I cannot believe that the noble Earl, the Minister, has a great enthusiasm for his task at the moment, but no doubt he will deny that totally. However when politicians of some experience hear about the sale of assets, with the assets going to the Consolidated Fund, they smell a large rat in the shape of the Treasury, and they cannot feel that that will give the industry the confidence it requires. One thinks of the position of commissioners—and I thought that the noble Lord, Lord Gibson-Watt, rode his horse along the fence very nicely. He expressed doubts, but gave the Government every benefit of the doubts in regard to what they were doing. However, if the commission is told that it might be forced to sell to doubtful buyers, that must look as if the Government do not have confidence in the commission's ultimate objects. Handing the money over to the Treasury puts the lid on it, though probably it works both ways. If the commission keeps the money, I suppose the Treasury can say, "All right, but we shall cut the grant by that amount".

I believe that in most people's minds the solution must be that the commission should, in normal estate management terms, have the say as to what is sold. If the commission sells, it should keep the money and it should make the judgment decisions. Certainly noble Lords who know the subject backwards have said enough to show that at current prices the potential return to the country is enormous. As we know, many of the world's resources are diminishing, and nothing is more certain than the fact that forestry, timber, all over the world is one of these resources; and it is bound to go up in price. As the noble Lord, Lord Inglewood, said, that is not much comfort to the foresters of today who are making a loss on their work. However, all noble Lords in the House who have spoken in the debate have recognised that forestry is bound to pay off. Every bet is not a certainty, but it appears that this one is.

The Minister must restore the confidence of the foresters of the country, both the commission and private foresters, and show that the Government are not simply saving money and cutting back a resource that is so worthwhile. Noble Lords all over the House have agreed on this matter, and I believe that one of the great advantages of having a Second Reading debate—which is what we are really having at the moment—is that perhaps the Government can go away and think again. If I were the noble Earl sitting there with all around me warlike neighbours who had come down from Scotland to tell me what I was doing wrong—I do not mean warlike neighbours on this side of the House, but on the other side—I would go back to my masters and say, "We should think again about this. I have told you before, and I am telling you now that there are many people who are great foresters and who love forestry, who might well upset our plans". I believe that the noble Earl would be wise to think again.

7.24 p.m.

Lord Peart

My Lords, I endorse everything that the Liberal spokesman has said. I always feel that he knows a lot about forestry, since I once appointed his brother as chairman of the Forestry Commission. He was a very fine chairman, and no doubt there was good liaison there. We also had a fine chairman in the person of the noble Lord, Lord Taylor of Gryfe. Indeed, we seem to have had excellent chairmen of the commission, and I believe that that was due to Ministers having a good appreciation of the qualities of the various chairmen.

However, today is really the day of the noble Lord, Lord Sherfield, and his committee. On reading the report and the evidence, one realises how much work the committee must have put in. I have read all sections of the report very carefully and I believe it to be an admirable document. It puts clearly the present management objectives of the Forestry Commission: As Forestry Authority To advance knowledge and understanding of forestry and trees in the countryside; To develop and ensure the best use of the country's forest resources; and to promote the development of the wood-using industry and its efficiency; To undertake research relevant to the needs of forestry; To combat forest and tree pests and diseases; To advise and assist with safety and training in forestry; "— and that is important.

I am sorry that the noble Earl, Lord Lonsdale, whom I saw in the Chamber earlier, has not remained because I was going to pay a tribute to the work that he has done in this field. I think of what he has done in my county and in Northumbria. I have known him a long time. He has always paid careful attention to the needs of forestry. He has escorted me on visits to see some of his products, and he remains a forest lover, as do so many farmers as well as colleagues here today.

This has been a very fine debate. I do not wish to appear churlish, but I must mention that I have had sent to me a note from the Forestry Commission Whitley Council about the trade union opinion. The trade union side of the Forestry Commission Whitley Council is very worried and concerned by the implications of the recent statements by the Government and the Forestry Commission chairman regarding the future of forestry, and it takes issue with the commission's management over its interpretation of the Bill currently before Parliament. I hope that those fears will not be realised and that the Government will be very careful when they make major decisions. After all, the Forestry Commission is a very successful organisation, and I believe that all of us here, in all parts of the House, do not wish to harm the commission, which has done so much and which so often has the admiration of the world. Therefore, I hope that the Government will be very careful in whatever action they take.

The trade unionists say that there is plenty of room for both the private sector and a provenly successful public organisation, particularly in a climate of expansion. They go on to say: There is also an absolute need for forest policy to be agreed and operated on at a level acceptable to all shades of political opinion". I hope that that spirit will still hold good in relation to the body itself. I shall not make a long speech—we have had a very fine debate—but I thought I would reminisce a little by quoting the autobiography of a fine Minister of Agriculture, whom I had the pleasure of serving as Parliamentary Private Secretary. I refer to Tom Williams, who said: Another industry I had to look after was forestry. I had scarcely settled into my chair at the Ministry after the 1945 election before Sir Roy Robinson, the chairman of the Forestry Commission, was telling me the sad story of the trees and pleading for an early Government statement of policy on forestry. The facts as he related them were that while Germany had dominated Europe, all our usually considerable supplies of timber from that source were cut off, and there has not been shipping space available to bring in timber from other sources. The consequence had been a wholesale slaughter of our own forests, both privately and nationally owned. We were now, said Sir Roy, in a very dangerous position if ever war again cut our supply lines. It was absolutely essential that we should control the felling of timber and prices over the next 25 to 50 years". Tom Williams continued: I quickly brought the facts before my Cabinet colleagues with recommendations for action. And the Cabinet readily accepted my proposals in principle, leaving the details to be worked out later". Indeed later he had the major support of the Chancellor of the Exchequer, Hugh Dalton, who was a great lover of forests, and this evening I should like to pay tribute to those two gentlemen for what they did for the industry. How right they were to lay stress on it when they were Ministers. I am proud to say that in my own little way I tried to do the same.

Lord Taylor of Gryfe

My Lords, before my noble friend sits down may I say that it was suggested by several noble Lords that a forestry Minister should be appointed, as distinct from the triumvirate which now operates forestry policy—the Welsh Office, the Scottish Office and the Department of Agriculture—which at times makes for a great deal of difficulty in getting decisions. I wondered whether, with his vast experience, he would like to comment on that proposition.

Lord Peart

My Lords, that is something out of the blue. It may well be because of the fragmentation of responsibility that we had in previous Governments. When first I was a forestry Minister I was in charge, but the last time I was a forestry Minister I had to share my responsibility with the Secretary of State for Wales and the Secretary of State for Scotland, so it was quite different. If they reverted back to the old system, that might help.

Lord Davies of Leek

My Lords, before my noble friend sits down finally, may I ask whether he realises that it is a fact that World War I reduced the amount of timber that we had in Britain, and that, according to authoritative sources at that time, at the rate we were then planting it would take 144 years to get the woodlands and the timber of England back into the position in which they were in 1913, or just before the 1914 war? How far we have improved on that today is another issue. I support the idea of a Minister for Forestry, and for forestry alone.

7.32 p.m.

The Earl of Mansfield

My Lords, if the noble Lord, Lord Peart, has finally sat down, I think that before donning my ministerial hat I should declare an interest, of which I think most of your Lordships will be aware. It is almost a year since the House had a most interesting and constructive debate on forestry on a Motion by my noble friend Lord Dulverton. That debate was, so to speak, a curtain-raiser for today's double bill, and it is particularly fitting that my noble friend should have been instrumental, at least in part, in bringing this subject again to your Lordships' attention. We are also indebted to the noble Lord, Lord Sherfield, who provided the other Motion we have been debating today on the forestry research report of the subcommittee of your Lordships' Select Committee on Science and Technology, which the noble Lord chaired with such distinction. Once again your Lordships have demonstrated the deep and wide-ranging knowledge of forestry affairs that is to be found in your Lordships' House, which therefore makes my task of summing-up that much more difficult and, I am afraid, probably rather long.

If I may turn first to the Select Committee's report, I should like to pay tribute to the noble Lord, Lord Sherfield, and his fellow Members, who have conducted a very searching inquiry into the scientific aspects of forestry and have produced a wide-ranging report backed by an impresive volume of evidence. My right honourable friends and I very much welcome the close attention which has been given to this specific aspect of forestry policy at the present time. We have asked the Forestry Commissioners to study the report with care, but until we have their considered views on the many recommendations that it contains it is not possible for me to deal with the matters in any detail. However, the report touches on some extremely important aspects of forestry research and practice, a number of which have far-reaching implications for policy in this and related fields; and many of them are matters of public concern. Questions of organisation and funding are also raised, which will require careful evaluation before the most appropriate course of action can be determined.

The two aspects of most immediate concern are perhaps the concept of a chief scientist for the Forestry Commission and the relationship between the commission and the research councils, particularly in the field of fundamental research, which the committee seems to consider has been rather neglected. On the other hand, they were obviously impressed by the way in which the applied research carried out by the Forestry Commission is planned and conducted. The Forestry Commission has not previously had a major co-ordinating role, nor been given the remit to support fundamental research on the scale now envisaged, and it will be necessary to consider whether its terms of reference should be extended so that it may take on these two functions. Such a development would require some additional funds to be placed at the disposal of the commission.

It is also open to question whether in such a relatively small research area there could be sufficient work of a suitable calibre to justify the appointment of a chief scientist, or whether this function could not be better assumed by the commission's director of research with the necessary high level scientific advice being supplied by its research advisory committee. Similarly, in view of the minor role played by forestry in the work of both the Agricultural Research Council and the Natural Environment Research Council, it may be more appropriate for the co-ordinating role to come from the Forestry Commision than from any particular research council. These are matters which clearly call for careful deliberation before any far-reaching changes are set in train.

The question of who should be responsible for fundamental and applied research into the end uses of wood and other forestry products rests largely on the future role of the Princes Risborough Laboratory of the Building Research Establishment, which is still under consideration. If its wood science capacity is to be maintained at least at its present level, it would probably be as well to leave things as they are and for the commission to continue with its policy of commissioning research at the laboratory. Otherwise, there would seem to be some logic in the Forestry Commission taking over the work on wood science, though other aspects of the laboratory's work in this field would have to be pursued elsewhere. This is, of course, a matter which will involve my right honourable friend the Secretary of State for the Environment. The various recommendations relating to forestry practice, intended generally to introduce greater diversity, largely concern extensions of work already in train, although some of the more extreme proposals may have to be viewed with caution. Careful account will, however, be taken of all these recommendations when the commission's research programme is being reviewed.

Two other aspects of the report are perhaps worthy of some comment at this stage. First, the appropriate management of the traditional broadleaved woodlands, which are such a feature of the landscape in lowland Britain. These woodlands are widely recognised as a valuable national asset from the historical, conservation and recreational points of view, as well as for the production of hardwood timber. A broader approach to the objectives and techniques of management may well be appropriate if their potential is to be fully realised, and we shall be looking very carefully at the recommendations in this respect, bearing in mind that over 90 per cent. of these woodlands are in private ownership. Secondly, the report has a good deal to say about the integration of new afforestation with other aspects of countryside management, and about the need for closer collaboration with other interests in the field of education and research in order successfully to achieve this objective. These are matters which we shall continue to pursue as part and parcel of our overall forestry policy, and not solely in the context of this report.

I regret that at this stage it is not possible for me to be more forthcoming about the Government's response to this stimulating and timely report, but this may be taken as some indication of the attention being given to it. The Forestry Commission are at present consulting other interested departments and agencies, including the relevant research councils, and they will also be taking account of views received from their research advisory committee and their chief advisory body, the home-grown timber advisory committee. We expect to receive the commissioners' considered advice within the next few months. Then, I know that the noble Lord, Lord Sherfield, and one or two other noble Lords, have considered that the issue of a White Paper might be the most appropriate way to proceed. As at present, we intend to announce our conclusions as soon as we can thereafter in a Statement to Parliament; but I shall keep this very much in review, and if a Statement at the end of the day becomes inappropriate then we may well take up the noble Lord's suggestion.

The noble Lord, Lord Sherfield, and also the noble Baroness, Lady Jeger, I think, in the first reference which was made to projected sales of part of the Forestry Commission's estate, hoped in effect that such sales would not lead to less research. The Forestry Commission already undertake research for both the private and the state sectors. There is absolutely no reason to suppose that it is intended, and certainly there is no intention, to transfer control or ownership in such a way that there will be any less research in the future, and I hope that the noble Lord will be comforted thereby.

The noble Baroness went on to say that, in effect, we are spending on research only about 1 per cent. of the annual production. I think-that, in fact, what she meant was 1 per cent. of the total value of the forest estate. Research now is running at about £5 million per annum which is about 3.6 per cent. of forestry's annual contribution to the gross domestic product or about 3.6 per cent. of the net annual expenditure on forestry by the public and private sectors combined.

Lord Davies of Leek

My Lords, does that include scholarships for students who want to follow forestry as a discipline or career?

The Earl of Mansfield

My Lords, I do not know. I will write to the noble Lord. My noble friend Lord Cranbrook was concerned about hardwoods or broadleaved trees. He said, in effect, that the hardwood reserves in this country are being destroyed. What I can say is that, first, the annual yield is likely to remain at the present level for at least 20 years and, secondly, the age-class distribution of hardwoods is very unbalanced. About three-quarters of our hardwoods are more than 70 years-old and, certainly, without a considerable planting programme, the yield must decline in the next century. So, says my noble friend, there is a need for an adequate financial incentive for planting broadleaved woodlands in the lowlands. The answer is that the dedication scheme provides significantly higher planting grants for broad-leaved species; that is, £225 per hectare compared with £100 per hectare for conifers, while the small woods scheme provides higher grants for planting small woodlands, and these are usually composed of broadleaved species.

The consultation paper issued following the policy Statement which I gave in this House last December makes it clear that similar considerations will be taken into account in determining grant rates under the proposed new scheme. Then my noble friend—and he was echoed by one or two other noble Lords—advocated the imposition of import controls on imported tropical hardwood. In this House, the Government are frequently being asked to impose import controls on a very wide spectrum of our commercial life. It is a highly contentious argument. As I have said, it can be advanced for all sorts of products. It is extremely unlikely that to interfere with the free movement of timber would do very much good. It could do serious harm to the consumer. It would certainly do serious damage to the British furniture industry which is an important export earner and which depends on imported timber for its raw material. As in other fields, I think that the salvation of British hardwood growers must lie in other directions.

Then my noble friend raised the matter of the grey squirrel, as did other noble Lords. He slightly surprised me in view of his very conservationist attitude on the Wildlife and Countryside Bill, by suggesting that they should be totally eradicated. I do not think it is possible. They are now, rather like foxes, in areas which can only be described as urban—and, certainly, surburban—as well as in country areas. I do not think it would be possible to eradicate them. The Forestry Commission is presently commissioning work at Reading to see if the control of breeding of the grey squirrel is an avenue which may be explored. That, I think, is probably the most fruitful line of research.

The Earl of Cranbrook

My Lords, would my noble friend agree that research directed towards the possibility of eradication might also be fruitful?

The Earl of Mansfield

My Lords, it might. My noble friend Lord Bessborough asked about oak wilt and the importation of oak from North America. He referred in particular to the dangers of oak wilt, which is known to occur only in the United States, being introduced here on oak imports from North America. The possibility of the transmission of this disease on sawn wood is considered by pathologists in Britain and America to be remote. The bark, which attracts the beetle, is the source of risk and the Import and Export of Trees, Wood and Bark Health (Great Britain) Order 1980 requires bark to be completely removed before shipment. In addition, the wood has to be further treated by one of three different methods; complete squaring, drying to prescribed limits or disinfection by hot air and water. The wood must be accompanied by a plant health certificate. These measures are enforced by Forestry Commission plant health inspectors who aim to inspect each consignment of unmanufactured North American oak arriving in this country. I hope my noble friend will agree that these measures turn what is already very small, as far as risk goes, into a matter of infinitesimal proportions.

I should like to turn now to the other part of the debate. When I made the Government's forestry policy Statement to your Lordships' House on 10th December last, a number of Lords expressed a desire to have an early debate. We are grateful to the noble Lord, Lord Dulverton for providing us with that opportunity: and I welcome the chance to develop some of the points in the Statement, to explain why we came to the conclusions we did, and hopefully to allay some of the fears which have been expressed by noble Lords this evening.

One of the important aims of our Statement was to help restore the confidence of the industry which had been waning as the result of a series of separate developments partly linked to the general economic climate. First, there was the announcement last May of the decision to close the pulp mill at Fort William, despite the strenuous efforts by the Government to keep it in operation through the offer of a very significant package of financial assistance. This was followed in August by Bowater's decision to close their newsprint mill at Ellesmere Port. Here, again, the Government offered substantial financial assistance for new investment, but the decision was one for the company to make and unfortunately they concluded that the future of the mill was too uncertain. These closures had potentially very serious implications for the forestry industry. The speed and efficiency with which it organised al- ternative markets, with commendable co-operation between the public and private sectors, showed, however, its underlying strength and resilience.

The private forestry sector was also concerned by the publication last May of the Public Accounts Committee report recommending the phased abolition of the Schedule B income tax option available to owners of commercial woodlands. Added to this, was the element of uncertainty about the future generated by the fact that we were reviewing forestry policy.

I should say at this point what I said in December. One of the reasons why we delayed, or appeared to delay, the publication of the reviewed policy was that we were anxious to restore confidence and anxious, so far as the private sector is concerned, to get it right. We were anxious to produce there a policy which might commend itself to both sides of the House, bearing in mind the political persuasion of those opposite. So far as the Public Accounts Committee is concerned, those anxieties and uncertainties should have been largely allayed by the Statement made by my right honourable friend the Chancellor of the Exchequer on 9th December that the present tax arrangements for forestry will continue, and should have been further allayed by our Statement on forestry policy of 10th December. I believe that these two Statements have given forestry a new impetus; they will help to restore confidence and set the industry firmly on the right road again. They are a declaration of faith in the future of forestry and its associated industries in this country.

I appreciate that there are some who would like to see a firmer target set for forestry expansion at the rate commensurate with the more ambitious proposals in the Reading Report and the Forestry Commission's own Blue Book published in 1977. This view has been expressed by some noble Lords today.

We took very careful note of these reports and, also, the many comments that we received on the subject. However, we concluded that expansion on such a scale, although desirable in terms of wood production and import saving, would be unacceptable on other grounds. It would have entailed a major increase in forestry in Scotland, where much of the suitable land is to be found, and could also have lead to an appreciable increase in England and Wales. It is our belief that this would have had an unacceptable effect on the balance between different uses of land in the countryside, and would have been strongly opposed by local authorities, and by environmental and conservation interests. As I said in the forestry debate last year—and as has been exemplified in recent debates on the Wildlife and Countryside Bill—we must understand the very real fears of farmers and environmentalists of expansion pitched at the levels that had been suggested, quite apart from the financial implications, which would have been significant. We therefore took the view that expansion broadly at the historic rate of the past 25 years, taking one year with another, was both feasible and practicable, and should not upset the traditional balance between the various countryside interests. We did not consider it desirable to set a firm long term target, since many of the factors which would determine it are outside Government control, particularly in the private sector. Nor is it possible to commit future Governments to a target which, for reasons we cannot anticipate, they might not be able to fulfil.

There are also those who are critical of our plans for the Forestry Commission, particularly in relation to the proposal to sell some of its lands and plantations. This undoubtedly exercised the minds of a number of noble Lords. We shall have the opportunity of discussing these matters again and in much greater detail when we debate the Forestry Bill which is at present in Committee in another place. Since there is concern, it is right that I should—I hope—try to dispel it. Among those who raised the matter were the noble Baroness, Lady Jeger, who got in a good party political point (I do not criticise her for that), the noble Lord, Lord Taylor of Gryfe, for whom I have a great respect and affection, my noble friend Lord Seafield, and then of course the noble Lord, Lord Mackie.

The main allegation seems to be that the Bill, despite its title, is not intended to help forestry but is really a Treasury Bill designed to raise money at the expense of the forestry industry in general and the Forestry Commission in particular. This places an interpretation on our objectives which has no foundation in fact. When the noble Lord, Lord Taylor, was quoting some recalcitrant Back-Bencher in another place, he could have done no better than to have quoted me in this place on 10th December in the Official Report at col. 745, where I said: The Forestry Commission will be totally in charge of the sales which take place. I anticipate that there may be many forests and many areas of woodland where for management purposes, environmental or commercial considerations and, not least, employment considerations, such woodlands will not be for sale or alternatively—and this particularly applies to employment—will be for sale and leaseback. So there is absolutely no danger of the jewels in the Forestry crown being sold off with only the less exciting, less profitable and less easy to manage woodland remaining". That was in answer to a question, and not in the brief.

Lord Taylor of Gryfe

My Lords, it is a very important statement and will inevitably arise in the debate on the Second Reading of the Forestry Bill. In the event, the noble Earl said it is a Treasury Bill and therefore there are certain Treasury targets established as to the amount the Forestry Commission has to realise every year.

The Earl of Mansfield

No, my Lords.

Lord Taylor of Gryfe

No, my Lords? I apologise, but that seemed to be the interpretation of the Minister in the debate in the other place.

The Earl of Mansfield

My Lords, with respect, I think it is very much better if the noble Lord were to gain his information from the fountain of wisdom in this House and not rely on what happens in another place. May I go on, and then if the noble Lord wishes to interrupt again he is at liberty to do so.

We have every confidence in the commission and we have no intention of making it less effective nor, as my right honourable friend the Secretary of State for Scotland has said in another place of pillaging it to fill the Treasury coffers. That was the phrase used. On the contrary, this is a forward-looking Forestry Bill to give the commission a fresh impetus, so that it can operate more effectively in the competitive commercial world of which its forestry enterprise is increasingly becoming a part. The proportion of the forestry enterprise expenditure supported by grant-in-aid is already diminishing, but we say that it can and should be reduced more rapidly. The commission controls assets worth at market prices something of the order of £1,000 million. We consider it right to capitalise on some of those assets in order to reduce its call on public funds for the management of the Enterprise.

The money raised by these sales will not be lost to forestry as it will be recycled back into the commission through the grant-in-aid. Of course, the disposal receipts will substitute for funds which would otherwise have had to be provided by the taxpayer, hut this is entirely consistent with determination to reduce public expenditure which is essential if we are to bring down inflation.

Under existing provisions, receipts from the sale of forestry assets have to be credited to the forestry fund. In the absence of a surrender provision, such receipts cannot be transferred to the Consolidated Fund. Therefore in deciding the grant-in-aid and the cash limit derived therefrom, account would have to be taken of receipts from the disposals programme and any shortfall in such receipts in what is a rather speculative market would impinge on the main expenditure programmes. The obvious solution lies in a surrender to the Consolidated Fund with the net call by the commission on Exchequer funds being shown in the Forestry Commission's account and in public expenditure White Papers.

Within our financial objectives, the arrangement of the sales programme will be in the commission's hands; and, in selecting areas for sale, it will be guided by a number of factors which the commission itself has identified. These are extremely important. They are, first, financial considerations; second, the maintenance and development of the wood processing industry; third, the maintenance of employment and the viability of local communities, especially the socially fragile areas; fourth, the use of forests for public access and recreation; fifth, the interests of conservation, research and education; sixth, the effects on management; seventh, the market preferences having regard to other criteria; and lastly, but by no means least in importance, the rationalisation of the forestry estate. I confirm that this is a list of criteria, and I have not read it in order of diminishing importance.

As to scale, the financial figures will appear in the public expenditure survey in due course; but the Forestry Commission has estimated that it will be able to raise some £l 0 million in the first year of the sales programme and £15 million in each of the next two years. Every £10 million represents little more than 1 per cent. of the commission's estate, which I submit puts our intentions clearly into perspective. I should emphasise, however, that the market for plantations is largely an untried one, and if the demand is either much greater or much less than the commission has envisaged, it will clearly need to take this into account in drawing up its sales programme.

Lord Taylor of Gryfe

My Lords, can the noble Earl say whether the figure that he is quoting is for outright sales, and how much of that is sale and lease- back, or is sale and lease-back additional to these figures?

The Earl of Mansfield

My Lords, "sales" means "sales". Sale and lease-back is a rose by another name. It may be a very important one but it is still a sale. Within the broad objectives we have set, we expect the commission to adopt the most sensible and flexible approach to sales. This flexibility will also govern the method of disposal in individual cases. The lease-back alternative to outright sale which was referred to in our policy statement will, in appropriate cases, help to ensure that access and recreational opportunities and wood supplies to industry are not disrupted, and that employment, particularly in those localities where the commission is the major employer, is not unduly affected. This is a matter to which the noble Lord, Lord Peart, referred, and I have myself met union representatives of the industry.

Baroness Jeger

My Lords, I merely want to ask the noble Earl what sanctions the Government will have on land that has been sold, particularly if it is sold to investment companies and foreign buyers, including EEC buyers, to impose these conditions, particularly if these purchasers do not apply for grant, and therefore there would seem to be no room for conditions to be applied.

The Earl of Mansfield

My Lords, I do not want to be offensive, but I think the noble Baroness is a bit muddled. If the forest is more than five years old there is no question of a grant and I do not suppose that an investor who is looking for a reasonable return on his money—not a quick profit, but a reasonable return—will buy a forest less than five years old. If the noble Baroness's point is that which was echoed by several other speakers—how can we ensure that land which is in forestry remains in forestry?—then the Forestry Commission will not issue a felling licence without making it a condition of the licence that the woodland area is replanted after felling. I hope I have dealt with that particular point adequately. If not, the noble Baroness can reculer pour mieux sower and come at me again.

I believe that most of your Lordships who have had contact with the Forestry Commission would agree that it is an efficient organisation with a high reputation, and its long-standing and harmonious partnership with the private sector has been, and will remain, the foundation-stone of forestry policy. Fears for the future of the commission are unfounded. Its range of activities in the management of the forestry enterprise will not diminish, nor will its forestry authority function be impaired. It can be expected, of course, to have a somewhat smaller planting programme, because we consider that the larger share of the expansion we envisage for the immediate future can and should be undertaken by the private sector.

As we said in our statement, the commission's planting programme will help in some cases to contribute to the rational management of existing plantations, and in others to maintain employment in some of the remoter and less fertile areas of Britain. It will also help to underpin the commission's research and development programme in the sphere of afforestation. Thus, while our policy statement rightly stressed the importance we attach to the private sector playing a greater part in future forestry expansion, this must not be taken to imply that the commission will cease to have a crucial role. On the contrary, we shall be reviewing both the commission's planting and disposals programmes periodically and consideration will be given in the light of their achievements to expanding the forestry enterprise activities. Naturally this would be subject to the prevailing economic situation and the Government's view of competing demands and priorities of other expenditure but I hope that noble Lords will accept this intention as further evidence of our resolve to have a stable and dynamic forestry industry.

A number of your Lordships, including my noble friend Lord Dulverton, have commented on the proposals arising from the recent review of the administration of grant-aid and felling licensing carried out under the auspices of Sir Derek Rayner. Some interesting points have been made which we shall bear in mind before reaching final decisions on the implementation of the proposals. I should, however, like to make it clear that we see the proposals stemming from this Rayner study as giving the private sector the freedom it needs to get on with the increased role we envisage for it. It is not our intention that the incentives or the safeguards built into the present grant-aid régime should change to any fundamental extent, but the bureaucratic and legal complexities that have silted up the dedication scheme over the years and added to its administrative costs must be reduced. Private forestry has now come of age and should have the skills to stand on its own feet.

In our opinion, it should no longer be necessary—even if resources permitted it—for the Forestry Commission to oversee the detailed management of private woodlands. As your Lordships will be aware, the consultation period for these proposals finishes at the end of the month. Subject to the comments received, the commission will then proceed to draw up the details of the new grants scheme in consultation with Timber Growers of Great Britain, as the Forestry Committee of Great Britain is now named. The new scheme will be introduced on 1st October to replace the present grant schemes which will be closed to applications as from 1st July next. Some of the other changes proposed, particularly those relating to the felling control procedures, will take longer to implement, however, because of the need for covering legislation.

I am acutely aware of the clock and I have not begun to respond to any of the points in this part of the debate. I hope that your Lordships will be forbearing and that on consideration of the Official Report tomorrow you will see how important is the statement which I made on our policy of sales.

My noble friend Lord Dulverton raised the point near the beginning of his remarks concerning the collapse of three pulp mills. He attributed it to a mixture of the strong pound and high energy costs. I have to remind your Lordships of what I said in the Statement: that the Government continue to believe that long-term confidence in both the forestry and the wood processing industries in the country is fully justified. We look for a steadily increasing proportion of our requirements of timber to come from our own resources. These recent difficulties in the pulp and paper sector, which represents only one-eighth of the market for wood grown in the country, do not affect that conclusion.

Regarding the rate of expansion in the forestry industry, we indicated that we saw scope for new planting to continue in the immediate future at broadly the rate of the past 25 years. As I have already said, this is the rate we consider would promote and preserve an acceptable balance with agriculture, the environment and other interests. I have been looking at some of the points which have been put to me and I will write to those noble Lords concerned where perhaps the inquiry (if that is the word) is of a technical nature or one which broadly lends itself to a letter.

One matter to which I should respond is a suggestion which was put by my noble friend Lord Seafield and then was fairly enthusiastically adopted by other noble Lords. That was the question of ministerial responsibility for forestry. In fact my noble friend suggested there should be only one Minister for forestry instead of the responsibility being shared, as at present, between three Ministers. I was slightly surprised by what the noble Lord, Lord Taylor, said: that he thought it was difficult to get decisions timeously.

There are major implications for the countryside beyond the confines of forestry, and we do not think it is necessary to disturb the existing deployment of ministerial responsibility. The three of us who are concerned certainly work harmoniously together, and because of the very different conditions prevailing in each of the three countries of Great Britain I think that each of the three Ministers is able to devote more attention to issues of particular interest in the country for which we have individual responsibility. That is certainly more than could be done if the arrangements which my noble friend suggested were taken up.

I can illustrate it in this way. Eighty per cent. of the private planting is now going on in Scotland, and I do not think that the industry in Scotland would be at all attracted by the idea of merging matters of forestry in the Ministry of Agriculture in Whitehall Place. Equally, it is difficult to plant in Wales without treading on a number of environmental corns; and I see the noble Lord, Lord Taylor, nodding at my slightly facetious turn of phrase. But the fact of the matter is that forestry in Wales demands an extremely sensitive touch, and that can be given only by their own forestry Minister—

Lord Peart

My Lords, may I just ask when the noble Earl is going to conclude? This is a strange procedure. I think that the Government should have issued a White Paper.

The Earl of Mansfield

My Lords, I have already said, in effect, to the noble Lord, Lord Sherfield, that we are not going to issue a White Paper, as at present advised, on the very valuable report of his committee. It may be that it was a mistake to tack these two debates together. But since, inevitably, this would have turned into a debate on the Forestry Bill, whether it had been described in the Motion or not, it was thought appropriate that the Order Paper should at least try to be honest and should reflect what was obviously going to happen.

This has been one of the best and most comprehensive debates that we have had for many years. I have been particularly instructed by receiving a number of very different views on the report of the committee of the noble Lord, Lord Sherfield, which will be studied with care. On a broader front, I believe that the Government have provided a firm foundation for the future of forestry in Britain. This debate has strengthened my belief that our policy is soundly based, and in future debates on the Forestry Bill I am confident that your Lordships will come to agree.

8.12 p.m.

Lord Sherfield

My Lords, at this late hour, it remains only for me to thank the speakers who have taken part in this debate, particularly those in what I might describe as my half. The noble Lord, Lord Adrian, would have made a very valuable contribution, but I am afraid that he was struck down by flu, and the noble Earl, Lord Lonsdale, would have spoken but for the effluxion of time. But I should like to thank and pay tribute to the noble Lord, Lord Dulverton, and the speakers in his group for their contributions.

A number of kind and generous references have been made to me and the committee in regard to the report which we produced. I should only like to stress that this was a collective exercise and that all members of the committee, the specialist advisers, the staff and the witnesses all contributed to this report: the chairman is really only in the position of a producer. I should have stressed earlier, as later speakers have done, the value of the material in the second volume of the report. Our evidence was certainly on a very high level and I think that there is much of enduring value in this second volume.

The noble Lord, Lord Inglewood, asked what consideration we had given to liaison with European scientists and European experience. We certainly were very much aware of the contribution which could be made by the experience of European countries, with their older and more diversified forests than our own. Certainly, the members of the committee would have appreciated the opportunity for a little European travel, but we had to limit our inquiry strictly to the United Kingdom. I am sure that the Forestry Commission, in particular, have very good relations not only with European foresters but also with foresters all over the world, and particularly in the Commonwealth.

I should like to thank the noble Earl, Lord Mansfield, for his observations on the report. I quite understand that he was not in a position to reply to our recommendations in detail. In fact, I hardly expected that he would. I am very glad to hear that the Forestry Commission are giving such careful consideration to the recommendations, and that they will be communicated to us when the Government have taken their decision on them—in not too many months, I hope. As for the form in which the decisions of the Government are communicated to the House, I think that the content of the document will be much more important than its form. I imagine that a document there must be, but what form it takes is perhaps the least important part of the matter. I would draw the noble Earl's attention to a rather good draft of a paper on the report which has been published by the Institute of Foresters of Great Britain.

The two halves of the debate have come to one common conclusion; that forestry is a long-term enterprise which is of great importance to the future economy of this country. That underlines the importance of current research to make sure that the forestry programme is on the right lines, and that the existing estate is safeguarded from the pests and other menaces which threaten it and which have been referred to by so many speakers. This underlines the importance of ensuring that there is what the noble Lord, Lord Flowers, described as an intelligent focus for the research programme.

There will be another opportunity, as other speakers have said, to deal with the wider issues that have been raised when the Forestry Bill comes before this House in due course. I will say no more about those wider issues this evening. I will merely once more thank the Minister for his reply and thank all the speakers who have contributed to make this a very interesting debate.

On Question, Motion agreed to.