HL Deb 19 July 1988 vol 499 cc1280-92

7.45 p.m.

The Parliamentary Under-Secretary of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington) rose to move, That the draft scheme laid before the House on 4th July be approved [32nd Report from the Joint Committee].

The noble Baroness said: My Lords, this draft scheme is to be made under Section 2 of the Farm Land and Rural Development Act. Many of the details were discussed when we considered that Bill together six months ago.

The Farm Woodland Scheme is intended to encourage farmers throughout the United Kingdom to plant new woodlands on some of their productive agricultural land. Paragraph 1 of the instrument says: this Scheme shall apply to Great Britain". However, I should make it clear that the scheme will also operate in Northern Ireland, where it can be implemented without a statutory instrument under different primary legislation.

Noble Lords may recall that at the Second Reading of the Bill I announced that, as a result of last year's consultation exercise, we had decided to change the main focus of the scheme. It will now concentrate primarily on arable land and improved grassland up to 10 years old. The definition of eligible land appears half-way down page 2. Restricting eligible land in this way will help to ensure that CAP savings are achieved and will discourage planting on marginal land which, especially in the lowlands, is more likely to be of conservation interest.

The minimum area of planting, which is laid down in paragraph 7 of the scheme, will be three hectares per agricultural unit and the minimum size for each block of woodland will be one hectare. This too will help to ensure that chunks of productive land are taken out and that planting will not simply be on odd unproductive corners of the farm.

Paragraph 9 and Schedule 1 lay down the rates of grant, and paragraph 10 and Schedule 2 their duration. The rates range from £100 to £190 per hectare in relation to improved land, with a lower rate of £30 per hectare for the 3,000 hectares of unimproved land in the less favoured areas which will be accepted into the scheme. These rates of aid will be reviewed by September 1991 and at intervals of no more than five years thereafter. However, this provision is in the parent Act rather than this statutory instrument as a result of the advocacy of my noble friend Lord Radnor.

The duration of the payments ranges from 10 years for planting traditional coppice up to 40 years for oak and beech planting. Noble Lords with an eye for detail may have noticed in Schedule 2 that we will allow up to 10 per cent. of other broadleaved trees to be planted with the oak or beech in the 40-year category. This is because we were urged by conservation interests not to insist on monocultures, even of such desirable species as oak and beech.

Another important feature of this scheme is the hectarage limit. The powers for Ministers to operate this limit appear in paragraph 12, although this is expressed in terms of financial resources rather than hectares to give us a little extra administrative flexibility. We have made it clear from the beginning that the scheme is an experimental one initially and will be limited to a total of 36,000 hectares of planting over the first three years. Within this total, as I have just indicated 3,000 hectares over three years will be made available for unimproved land in the less favoured areas. I believe that answers a worry expressed to me by the noble Lord, Lord Hunt.

For allocating places in the scheme, we cannot sensibly operate a first-received, first-served system because applications will take different lengths of time to process, especially when consultations with other bodies are required. We do not want all applications to have to wait for the slowest one. We intend therefore to allocate places in the scheme broadly in order of the applications being approved. Once the total of approvals reaches the hectarage limit—either 12,000 hectares in the first year or 36,000 hectares taking into account approvals in respect of the two subsequent years—the scheme will be closed. The same system will operate for the part of the scheme relating to the 3,000 hectares of unimproved land. As well as this limit on approvals, we shall be monitoring applications as a sort of early warning system. If it becomes clear that the scheme is going to be oversubscribed and that sufficient applications have already been received to reach the limit (once they have been processed) we shall be able, using our power in paragraph 12(1)(a), to close the scheme to new applications.

Once an application is approved, the relevant agricultural department will write and offer the farmer a place in the scheme. He in turn will then have to confirm his intention to plant the trees in the year, or years, in question. If he subsequently fails to carry out this planting as stated, and unless he could show reasonable cause for failing to do so, he would lose his entitlement to a place in the scheme (paragraph 14).

Some noble Lords may be interested in the cost of the scheme. The cost will depend on how quickly the scheme is taken up; and of course the cost will take some time to build up because the annual payments will only start to be made a year after planting when the impact of the lost income from agriculture is starting to be felt. However, we estimate that the cost of the scheme, if fully subscribed, will be between £9 million and £10 million in 1989–90, the first full year of payments, and about £12 million the following year. This includes planting grants, at the enhanced rates following the Budget, annual payments and administration. I should, however, remind your Lordships that these are gross costs. The scheme is intended to reduce agricultural production and we expect this to lead to savings in agricultural costs continuing for many years.

This brings me on to matters which are not exactly explicit on the face of the draft instrument. First, I should like to mention the link with the Forestry Commission's Woodland Grant Scheme. As we explained during the passage of the Bill, there will be a back-to-back arrangement at least during the first three-year experimental period and the Forestry Commission will be responsible for the planting grant element of the scheme. Farmers will only be asked to complete one application form but their application will have to be approved by both the Forestry Commission and the relevant agricultural department. This is referred to in paragraph 3(1)(c) of the scheme.

At this point I must pause for a brief diversion, because at the time that the Bill was before your Lordships' House the Forestry Commission's Woodland Grant Scheme did not exist. It was introduced following the tax changes in this year's Budget. The main implications for the Farm Woodland Scheme are, first, that it is a single scheme replacing two previous schemes. This not only makes it simpler, but it means that higher rates of planting for broadleaves will apply both to pure broadleaf planting and to the broadleaf component of mixed woodland. Secondly, the new scheme contains a strong environmental element and all applicants are asked to state explicity their proposals on environmental aspects of their proposed planting.

Thirdly, and most important, the rates of planting grant have been increased. But for the Farm Woodland Scheme, we have decided to increase the rates for broadleaves only, including the broadleaved element of mixed planting, while keeping the rates for conifers the same as those which previously applied. At the new rates, broadleaf planting under this scheme will receive between two-and-a-half and four times as large a grant as conifer planting. I know that many of your Lordships are stout defenders of the virtue of the conifer, and I am not decrying them, but we have taken the opportunity to weight this scheme more in favour of broadleaves because we are talking about comparatively small woodlands, mostly in the lowlands, and we have been convinced that a greater incentive to broadleaf and mixed planting—as an alternative to the minimum proportions of broadleaves advocated by noble Lords opposite—makes good environmental sense.

Following on from this, I should mention briefly some other environmental aspects which are important but because of the way we are arranging things do not feature in the instrument. As I have just explained, the planting grants are weighted in favour of broadleaf and mixed planting and this will be encouraged further by the longer payment periods for woodlands with over 50 per cent. broadleaves.

On larger schemes and in designated areas the Forestry Commission will be consulting local authorities and/or the statutory bodies about the planting proposals. Both the Forestry Commission and the agricultural departments will be very aware of their responsibilities under the Wildlife and Countryside (Amendment) Act 1985 and Section 17 of the Agriculture Act 1986 which we explicitly included in the Farmland and Rural Development Act at the request of the noble Lord, Lord Carter. We will, if necessary, turn down schemes, whether small or large, that would create environmental damage. This should enable us to fulfil the sort of assurances which I gave to the noble Baronesses, Lady Nicol and Lady White, several months ago.

One other aspect not obvious from this instrument is the link between the Farm Woodland Scheme and set-aside. The set-aside regulations have also been laid before your Lordships' House and are due to be debated next week. However, for tonight's purposes I can simply say that those wishing to plant woodlands under set-aside will have the option of entering the Farm Woodland Scheme. If approved, the woodlands planted would then receive payments at the Farm Woodland Scheme rates, and for the longer periods provided for in the Farm Woodland Scheme. This would, however, count towards the 20 per cent. set-aside area. Our hope is that the Farm Woodland Scheme will come into force on 1st October this year. In September we shall be issuing an information pack to farmers who express an interest in the scheme.

Finally, looking ahead as we must, perhaps I may say that we shall be monitoring the scheme carefully so that we can undertake a full review before September 1991. I look forward, as I am sure your Lordships do, to finding what has happened in practice. Naturally, having put the enabling legislation through this House with your Lordships' help, I hope the scheme is a great success. I beg to move.

Moved, That the draft scheme laid before the House on 4th July be approved [32nd Report from the Joint Committee].—(Baroness Trumpington.)

8 p.m.

Lord Carter

My Lords, I begin by thanking the Minister for her excellent exposition of the scheme, which we broadly welcome. We believe that the scheme will go well and that it will certainly fare rather better than the scheme for setting aside agricultural land that she mentioned. Whether the Government will actually achieve their planting target of 90,000 acres in three years is perhaps doubtful with the initial level of compensation proposed. I should like an assurance from the Minister that the Government are sure there will be enough nursery stock to plant up and reach the planting target.

Having mentioned the set-aside scheme, I refer briefly to a point I made in the forestry debate which I introduced earlier in the Session and which I believe is relevant to farmers who will be considering whether or not to join the scheme. As a farmer I can sign up for set-aside and draw the compensation of £80 an acre for five years with an opt-out after three years and my land is available to return to mainstream agricultural production immediately if I care to repay the set-aside compensation. Against that, under the Farm Woodland Scheme, I must put land aside for at least 20 years and perhaps up to 40 years and receive an income through compensation which will be slightly less per acre than the amount for set-aside.

In the forestry debate I said that comparing the two schemes will require some sophisticated calculations in order to decide which way to go. It will also require a great deal of hunch, particularly since the changes to taxation on forestry in the Budget, and it is even harder to see which of the two schemes the farmer should choose. I suspect that the level of compensation for the woodland scheme should have been set rather higher than that for the set-aside scheme if enough farmers are to be encouraged to join the woodland scheme.

I have a number of points to make regarding the details of the scheme. As the Minister said, there is a 40-year time-scale in the scheme for broadleaved woodlands. That seems to be an awfully long time for a farmer who is used to annual rotational crop production. Is there enough encouragement in the scheme to plant a conifer nurse crop which could produce some income after 20 years? I am puzzled by the reason for excluding improved and permanent pasture. There is some very productive permanent pasture around the country which is quite as productive as some of the so-called improved grasslands defined in the scheme. I refer to the famous fattening pastures in the Midlands. Their products are adding to the beef surplus. I should like to know why the improved and permanent pastures are excluded from the scheme.

Returning to the system for payments under the scheme, I repeat the plea made by a number of noble Lords during the passage of the Farm Land and Rural Development Bill for the indexation of payments. I shall not ask the Minister to comment on my belief that the Ministry of Agriculture may favour indexation but, like so many other departments in so many other cases, has been unable to overcome the objections of the Treasury. I ask the Minister this. If it is clear that the Government's planting targets will not be reached, will the Government undertake to reconsider indexation to encourage the uptake of the scheme by farmers? Since the annual grants are intended to replace the lost income from the planted land and the agriculture that comes from the planted land, surely the review of the level of payments should also take into account the cost of maintaining the woodland? Can the Minister say why applicants with more than one agricultural unit can only enter the scheme on one unit? I fail to understand why this should be so. Do the Government wish to reach the planting target or not? It is not at all clear, if there is a farmer with more than one agricultural unit, why he is restricted to membership of the scheme for only one unit.

With those reservations, which are points of important detail, I am pleased to repeat the broad welcome from this side of the House for the Farm Woodland Scheme and we wish it well.

Lord Hunt

My Lords, I too thank the noble Baroness for explaining the Farm Woodland Scheme. From these Benches I give it a sincere if qualified welcome. I congratulate the Government on their efforts to draw an acceptable line between the undoubted need to encourage and enable farmers to resort to forestry in diversifying the use of their land both in their own interests and in the national interest of home grown timber, and on their attempts to encourage the environmentalists as regards their particular concerns for the environment in general. I believe that the judicious combination of hectarage and cash limits intended to favour planting on improved land—without denying upland farmers on less favoured areas the opportunity, albeit on less favourable terms, to avail themselves of this scheme—has been skilfully designed to serve both the basic interests involved.

Over the weekend I was discussing with a friend who farms in the uplands on the Welsh borders as to his knowledge of the scheme and of what benefit it might be to him. He turned to some of the deep grass pasture dingles extending from the heights of Offa's Dyke beside my cottage. He assured me that he did not think that this scheme would be of much value to him through the grants offered for filling those dingles with trees. With my environmental bias I heaved a sigh of relief.

I used the word "qualified" in my opening remarks because the proof, as the Government in another place have made perfectly clear, and as the noble Baroness has repeated this evening, does lie in the eating, if that tag can be appropriately attached to so indigestible a crop as timber. For this reason I am glad that the individual schemes are to be monitored over a three-year experimental period because there may well be adjustments to be made ad interim pending the overall review in 1991.

In that constructive spirit I have a number of questions to raise and one or two points of criticism to offer. I apologise in advance if I missed a point made by the noble Baroness in her opening remarks. She referred to me at a point when my mind was slightly elsewhere. I exonerate her from replying to any of these questions if she has answered them already. Nontheless, I shall ask the questions.

Can the Minister clarify the position as regards the limit of 3,000 hectares on planting in the less-favoured areas during the experimental period? I am not entirely clear whether this is for the whole period at 1,000 hectares per annum or whether it is 3,000 hectares each year. Is that figure of 3,000 hectares included in the total of 36,000 hectares, which is the limit on all planting applications, or is it an additional figure? Perhaps the noble Baroness can make that point clear if she has not done so already.

Baroness Trumpington

My Lords, perhaps I may answer the noble Lord's question now. I covered that point. The figure of 3,000 hectares is included in the 36,000.

Lord Hunt

My Lords, I am covered with shame, but knowing the noble Baroness so well, I can wear it.

My second point is that the scheme relates to grants for future woodland planting and its management. But what about the management of existing pasture woodlands? In my speech on Second Reading on 5th November last year of the Farm Land and Rural Development Bill I pointed to the importance of providing inducements to farmers to maintain their existing woodland which at some time has been converted from pasture. I am not clear yet whether the Forestry Commission's woodland grants scheme may provide for that. On the assumption that it may not (I may be wrong) there would seem to be the provision of grants for that purpose in Section 2(1)(a) of the Farm Land and Rural Development Act, the last half sentence of which makes it clear that grants may be given for planting, or the management of land that has been so converted". Some examples of this land are to be seen—I am now drawing on my personal experience—in the oak woods which flank some of the valleys along the Welsh borders where I live. They are among the glories of that landscape and they must be protected and conserved. Otherwise, their scenic value will he destroyed. Perhaps the Government will reconsider this point in their intended review in 1991 if it not already covered by the woodland grants scheme.

My third point is that in her speech on Second Reading of the Bill on 5th November, at col. 1093 of Hansard, the Minister said that consultation with local authorities on planting proposals would, on environmental grounds, take place where the area exceeded 10 hectares. I am concerned about the lack of consultation below that level. For instance, within the permitted total hectarage for all planting there could easily be dozens of schemes which are very small proposals for small blocks of tree planting, the aggregate of which would be highly objectionable environmentally. Surely, an appraisal of the environmental impact should apply right down to the smallest eligible hectarage permitted of one hectare.

In support of that, when he was speaking in the House of Commons Standing Committee B on the order on 13th July, Mr. Gummer said: We will turn down schemes—small and large—which will create environmental damage". So will the Government keep this question under review?

My fourth point is that there remains some concern in wildlife circles about the safeguarding of the existing plant and wildlife habitats(which are not protected as SSSIs) lest they be ploughed up and put to agricultural use in replacement of land converted to woodlands. This replacement, or displacement effect—I have not seen it yet—has been taken into account in regard to the set-aside scheme. Yet amendments to close that loophole in the Farm Woodland Scheme in Standing Committee B on 29th March were not accepted by the Government. Again, can the Minister please comment on that?

My fifth point is that under paragraph 8(1)(b) of the statutory instrument an undertaking is required of a participant in the scheme that he will maintain converted woodlands, in accordance with the rules and practice of good forestry I hope I am right in assuming that this will embrace environmental aspects as well as commercial considerations. Perhaps the Minister will confirm that that is correct.

My sixth and final point is that as the scheme develops I hope that the matter of public access to and enjoyment of these new woodlands will not be lost sight of. Clearly the question cannot arise in the early years but renewal of grants at some stage after the review in 1991 should be made contingent upon this important environmental consideration. Subject to those questions and observations, I too wish this scheme well.

Lord Taylor of Gryfe

My Lords, from these Benches I should like to commend and support the scheme. It must be the first occasion in the House when during a discussion on tree planting I have been able to enter into debate without necessarily defending the planting of conifers in the uplands and on marginal land. This is a different category entirely. We are talking about planting on much more favourable land for the growing of broadleaved trees. It must be understood by those who talk about forestry that there are certain species for certain sites. That applies also in relation to broadleaves. There is no doubt that the planting of sycamore may be preferable and may give a better economic return than the planting of oak on certain sites. Therefore I am delighted that the great wisdom and experience of the Forestry Commission will be used in discussing operational plans which will make them attractive to the farmer and be environmentally acceptable.

This is a relatively modest scheme, although 12,000 hectares per annum over three years—36,000 hectares—is exactly the planting target for forestry for the United Kingdom, a target which the Government have failed to achieve over the past 10 years and are not likely to achieve under the new grant structure this year or next year. However, I wish them well in achieving this kind of target within the grant scheme. I am delighted that the Forestry Commission will offer its sensible advice in this area. I am sure that even the noble Lord, Lord Hunt, is less apprehensive these days about the Forestry Commission and its concern for the environment.

I should like to refer to an important point that was raised by the noble Lord, Lord Carter. When one enters a scheme of this kind the management costs can be quite high and may not be covered by the grants. If one has to do weeding for 15 years, which is quite acceptable in a well-managed estate, the cost and the difficulties that may arise will, I hope, be explained to the people who enter the scheme. I was glad to hear the Minister assure us that the scheme will be monitored. I hope that all aspects of the scheme will be monitored and that people who enter the scheme will accept their obligations in full. It is quite possible to take an annual grant, not manage the land as set out in the operational plan but turn it into scrub and simply let it for shooting. I hope that that will be avoided and that there will be the careful monitoring which the Minister has explained.

I have one other suggestion. Forestry and planting in general have certain tax implications. Once one adds trees to the land one affects tax liability, particularly in relation to inheritance tax. There should be advice not only in relation to the best use of the land, the appropriate species on the land and the environmental impact of the scheme but also on the tax implications for the farmers concerned.

With those comments I am delighted to commend and support the scheme. I wish it well.

8.15 p.m.

Lord Kilbracken

My Lords, I welcome the scheme and thank the noble Baroness for her exposition of it. The principles are absolutely right and the grants are reasonably generous. However, there are one or two details to which I should like to draw attention for a moment, particularly in Schedule 2, which sets out the categories of the converted woodlands. Category 1 is the most favoured of them. Those woodlands can receive up to £190 per hectare for a maximum of 40 years but they have to be almost pure pedunculate or sessile oak or European beech, though there may be 10 per cent. of other species growing among them. It is a pity that particular broadleaf trees have been specified. Although both the oaks and the European beech are noble and valuable trees which take a long time to reach maturity, others are just as desirable; in particular the ash, which I think is not only very beautiful but is perhaps the most, or possibly the only, profitable broadleaf tree to grow; the sycamore, the Spanish chestnut, the southern beech and so on. I do not know why these other broadleaf species should be discriminated against, particularly when the land in question is a little wet or has the wrong characteristics and may not be at all suitable for the species listed in category 1.

The other point I want to make is that to qualify for the maximum grant the 10 per cent. or less that do not belong to those species must consist of other broadleaf trees. That does not show very great knowledge of the ways trees are planted. If you do not want monoculture and you are going to plant other species with them, I cannot imagine a woodland in which the 90 per cent. is pedunculate oak and the other 10 per cent., 8 per cent. or whatever it may be are some other broadleaf tree. One would be much inclined, as my noble friend on the Front Bench mentioned, to put in a nurse crop of conifers which might amount to 10 per cent. In my opinion it would be better forestry practice to put in perhaps 20 per cent. or 25 per cent. of conifers. These are fast growing. They bring in a quick return after 35 to 45 years and when they reach their economic maturity they are cut out and the broadleaf trees are left to grow on by themselves. So you end up with what you want, which is a lovely oak woodland or a beech woodland or whatever it may be, but the conifers have helped the hardwood trees to get up, to keep straight and to keep competitive.

The good forestry principle deserving the maximum financial encouragement would therefore be a planting in which perhaps 70 per cent. are oak and beech and the other 30 per cent. are European larch or whatever you happen to choose. But if you do that you must come down into category 2 and you do not get the grants for 10 years. It is a very big grant. In category 1 you are going to get a maximum of £7,600 per hectare over a period. That is over £3,000 an acre, which is more than the land is worth. That is a big incentive and I think that that should be paid if an oak wood is planted in the right way rather than in the wrong way.

Lord Burton

My Lords, I apologise to the noble Baroness for missing her opening remarks. I should like to make two brief points. One is that two, if not three, of the noble Lords opposite have mentioned the question of a nurse crop. That is from the forestry aspect, but from the conservation aspect there is also considerable advantage in having softwood trees in among the hardwood trees. After all, in the winter, which is a cold time, all the leaves of most types of hardwood trees are blown off and if you have some evergreens among them it makes very nice roosting for the birds and gives much more shelter. I do not require an answer from the noble Baroness on these points but I just wanted to make them.

The other point is that I have felt for a long time that foresters have underestimated the actual cost of growing trees. They do not seem to realise that if you are going to invest X amount of money in planting a piece of ground, which also includes all the necessary other works like fencing, you should tot up the amount you have invested with compound interest until you get a return. People are saying that it is a generous grant, even the maximum one, but when you take compound interest into account it comes to a terrifying amount by the time you come to harvesting, especially of hardwoods which take much longer.

It seems to me that basically the grant will cover about half of the interest of your planting costs, although it varies from one type of planting to another. That means that you will still have quite a substantial interest rate each year to add on compound to your initial costs. I doubt very much whether people will tot up the cost. Perhaps some of them will do it for other reasons; for example, environmental reasons or because they think it looks nice one way or the other. If anyone is going into this on a financial basis I regret to say that I think it would be a had financial investment. I can state quite categorically that I have lost more money on forestry than on any other enterprise in which I have invested during the course of my fairly long life.

Lord Kilbracken

My Lords, has the noble Lord perhaps thought when he gets his grant of investing that himself for compound interest?

Lord Burton

My Lords, I am sorry; but perhaps I may just reply to that one point. You will receive so much per year and that will only cover about half of your interest.

Baroness Trumpington

My Lords, I am most grateful for the kind welcome accorded to this statutory instrument by the noble Lords, Lord Carter and Lord Hunt. Indeed, everyone has mixed their queries with a great deal of praise which makes me very happy.

The noble Lord, Lord Carter, first asked me about adequate supplies of nursery stock. We had several discussions with nursery growers' representatives after announcing the scheme. They seemed confident about meeting the majority of demand from domestic sources. We have kept in touch with them about our developments but we have not had any indication that they have changed their view.

As regards indexation, we spent some time discussing the subject during the Bill's passage. I know that the noble Lord, Lord Carter, will not expect me to go through all that again. We explained why we did not favour indexation and I do not think that we shall change our view. Instead, I should remind the noble Lord that we accepted the amendment tabled in the name of my noble friend Lord Radnor which obliges the Government to review the rates of aid at regular intervals and to report the results to Parliament. Therefore the noble Lord will have many future occasions upon which he will he able to question the Government about whether the right rates have been set.

In relation to application forms, the SI allows us flexibility in this as the noble Lord will see if he looks at paragraph 5(2)(b). Initially, because there is limited space in the scheme, we intend to limit the scheme to one application per person. However, if the scheme is not fully subscribed, we may consider relaxing that so as to allow more than one application per person. After all, it is an experimental scheme which will be reviewed and we shall have to find out the result.

The noble Lord, Lord Carter, also mentioned that farm woodland rates should be higher. As the noble Lord, Lord Hunt, said, the proof of the pudding is in the eating and time will tell. We believe that the annual payments offer an adequate return and I should point out that the enhanced rates we announced in November, now incorporated in the SI, were welcomed by the farming representatives.

As regards the question of excluding improved permanent pasture, we decided to retarget the scheme towards the most productive land. Because of that we had to use a definition to try to draw a line in a simple, enforceable and effective way. I do not deny that some pasture might be highly productive without having been cultivated and reseeded during the past 10 years. But allowing that land in would mean having an arbitrary cut-off point between productive and unproductive pasture. The system would then he open to abuse and even if enforceable it would require a large number of specialist staff to operate it and would therefore be costly. We constantly strive to keep the administration costs of the scheme down so that more of the benefits get through to the farmer in grants. Finally, most of the conservation bodies favour the more restrictive definition which we proposed.

The noble Lord, Lord Hunt, asked me several questions. I have answered his first and I do not think I need repeat my reply I hope that he will read it. So far as management of existing woodlands is concerned, I certainly remember the points that the noble Lord made on Second Reading. Indeed, we went into the issue thoroughly. Grants for existing woodlands do not fulfil one of the aims of our scheme, which is to reduce surpluses. Moreover, there is no significant loss of agricultural income to the farmer. Therefore the annual payments would be less justified. However, none of that excludes the possibility of our reconsidering the position at some point in the future.

Finally I remind the noble Lord that the Forestry Commission's new Woodland Grant Scheme with its higher rate of grant includes provision for natural regeneration of broadleaved woodland. The grants range up to £1,575 per hectare payable in three instalments, of which the first is payable on completion of approved work such as the fencing out of livestock. Such provisions are therefore already in place. I wholeheartedly agree with the noble Lord that the environmental impact should be assessed even on small schemes. The point is that we shall be doing this ourselves, taking due account of the responsibilities we have under Section 17 of the agriculture Act and under the Wildlife and Countryside Act 1981. What we shall not be doing in the smaller schemes, except in designated areas, is going through the bureaucratic and time-consuming process of consulting local authorities because we do not believe that to be necessary, given the other environmental safeguards I have described.

As regards the noble Lord's other point, we are certainly concerned about protecting plant and wildlife habitats. That is why we have targeted the scheme primarily on improved land. The set-aside scheme is concerned with arable cropping on the whole holding but the farm woodland scheme does not apply to the whole holding in the same way. Indeed, in some cases there might only be a small number of hectares on a very large holding to be entered into the scheme. In those circumstances it would be disproportionate to apply controls to the whole holding and might even deter farmers from entering the scheme.

So far as the rules and practice of good forestry are concerned, I can confirm that this would embrace environmental as well as commercial considerations. On public access, we shall certainly be encouraging farmers to think about the possibilities. We also require applicants to maintain any existing rights of way and to enter into discussions with the local authority about new ones if the local authority so request.

The noble Lord, Lord Taylor of Gryfe, asked about allowing land to return to scrub and monitoring. I assure the noble Lord that the land will be most carefully monitored and if planting is not properly maintained the grants will be reclaimed. I was most grateful to the noble Lord for the very nice words he said about the Forestry Commission, which I know will be greatly appreciated.

On taxation, there will be some general advice on this but tax is a complicated matter, as we all know, and it usually makes sense for occupiers to take professional advice on the matter. In that respect I could not agree more with my briefing.

With regard to nurse crops, mentioned by my noble friend Lord Burton, following consultation we have acknowledged the value of nurse crops by increasing the original payment period for over 50 per cent. broadleaved from 20 years to 30 years.

The noble Lord, Lord Kilbracken, asked why only oak and beech were specified. The incentives are greater for broadleaves, but we have introduced a special 40-year category—a long time for government—because oak and beech are especially desirable and take a long time to mature, much longer, for instance, than ash or sycamore. If the noble Lord wishes to come back on that point and would like to talk to me about it later, I shall be happy to write to him. He is far more experienced than I am.

I should like to thank all your Lordships who have spoken for your helpful contributions. This may be one of the rare occasions when we consider a piece of legislation whose results we may see taking shape in the countryside within a year or two and, we hope, gracing it for many years to come.

On Question, Motion agreed to.