Forestry: Planting Targets (Hansard, 31 March 1988)

§ The Minister of State, Scottish Office (Lord Sanderson of Bowden)
My Lords, my right honourable friend the Secretary of State for Scotland announced on 23rd March that a new woodland grant scheme offering higher rates of grant would come into operation on 5th April. Clearly the industry will have to adjust to changes. But with the transitional arrangements announced we hope to sustain planting at a reasonable level until planting under the new grant scheme gets into its stride.

§ Lord Taylor of Gryfe
My Lords, I thank the Minister for that Answer. Will the Minister confirm that the Government are committed to the 30,000 hectare target which has long been regarded as acceptable for forestry in the United Kingdom? Can he identify the new investors that he hopes to attract to forestry, because many of the traditional investors will find other opportunities for rewarding investment in other areas?

§ Lord Sanderson of Bowden
My Lords, I can confirm that it is the Government's intention that the new planting at the rate of 33,000 hectares per annum should remain. In addition, there are the farm woodlands scheme targets which we hope to attain. As regards new investors, I am sure that the noble Lord, with his great knowledge of investment, will understand that we shall, like Mr. Asquith, have to wait and see.

§ Lord Renton
My Lords, in the light of the views expressed in our recent debate on the report of the Nature Conservancy Council, can my noble friend give an assurance that future planting, particularly of conifers, will not impair the environment?

§ Lord Sanderson of Bowden
Yes, my Lords. I have seen comments in the newspapers recently about that matter. I believe that my noble friend is referring to Scotland and Wales, where most of the conifer planting takes place. Perhaps I may assure my noble friend that the uplands of Scotland and Wales will be protected against environmentally damaging afforestation. No planting scheme will be approved for grant aid which is out of sympathy with the environment. There will be special provisions in the new plans of operation for positive environmental and conservation proposals. The existing consultation arrangements provide adequate safeguards for areas of special environmental importance.

§ Lady Saltoun of Abernethy
My Lords, what calculations have been made with regard to further investment in the processing sector, should there be a drop in planting levels?

§ Lord Sanderson of Bowden
My Lords, the noble Lady has made a very important point regarding downstream activities which are particularly important to the economies of Scotland and Wales. As regards the new regime—the removal of tax incentives and the move to grants—the Government will keep under review the activities that take place, particularly over the next months. As I have said to the noble Lord, Lord Taylor of Gryfe, 33.000 hectares is our target.

§ Lord Carter
My Lords, is the Minister aware that although there are many people, including noble Lords on these Benches, who supported the closing of the tax loophole on forestry, there are a number of owners who are considering a reduction in their forestry staff as a result of the changes, because they will not be able to charge the cost of maintaining their plantations against tax? Perhaps the Minister can tell the House the Government's views on the employment aspects of the proposed changes.

§ Lord Sanderson of Bowden
My Lords, the noble Lord is referring to the maintenance situation. Planting grants under the woodlands scheme will be paid in three instalments; 70 per cent. at the start of planting; 20 per cent. five years after initial planting; and 10 per cent. after 10 years. Those grants are paid subject to satisfactory planting, establishment and maintenance. As regards management grants, those were paid under earlier dedication schemes and continue to be paid under closed schemes. However, they do not feature in the later schemes because of the lack of any persuasive evidence that such payments stimulated better management and were cost effective. We are not convinced that there is a case for introducing them. However, I hear what the noble Lord says and I am well aware of what is being said in the industry.

Lord Hunt
My Lords, in the light of the Minister's reply to the noble Lord, Lord Renton, does he agree that the further planting of conifers is especially undesirable on environmental grounds in national parks? Can he confirm that nonetheless grants have continued to be available for private forestry in Welsh national parks while that is quite rightly not the case in England?

§ Lord Sanderson of Bowden
My Lords, as regards the planting of conifers, I am well aware of the views strongly held on both sides of the argument. My noble friend Lord Renton may not like me to repeat it, but it is a question of balance.

§ Lord John-Mackie
My Lords, perhaps the Minister can tell the House the logic of withdrawing the tax relief which has created wealth and jobs in Scotland and elsewhere and giving relief in another way which means that the money will be spent elsewhere and probably abroad. What is the logic of the exercise that the Chancellor has undertaken? The Minister said that he hoped that a reasonable level of planting would be maintained. The Government must know that the target of 33,000 hectares has fallen short by an average of 10,000 acres over the past eight years. How will the Government get a reasonable level of planting when up to now they have failed?

§ Lord Sanderson of Bowden
My Lords, I believe that the noble Lord understands that the figure of 33,000 hectares is a target. I do not accept that the level has significantly fallen consistently below that. We have seen an increase in the level, although admittedly it has not reached the target level yet. The noble Lord has asked me about the logic behind the change; it is a simplification of the situation. We must look at the whole of the Budget in the context of that 868 area and realise that a drop in the top rate of tax from 60 per cent. to 40 per cent. might well have had an effect even if the change had not been made.

§ Lord Mackie of Benshie
My Lords, can the Minister assure us that in the farm woodland scheme and any scheme for planting—whether conifers or not—the farmer's own labour and that of his men will be taken into account as a proper expense when considering the grants?

§ Lord Sanderson of Bowden
My Lords, I think that that is a little wide of the original Question. I shall look very carefully at what the noble Lord has asked me about the farm woodland scheme. Of course the Bill has not yet gone through the House, but I should like to look at his question relating to what can be charged against the farmer's own business before giving a categorical assurance.

§ Lord Taylor of Gryfe
My Lords, I wish the Minister a very happy Easter. May I ask him whether when he returns to the Borders, where he will spend Easter, he will meet his neighbours who are active foresters and consult with them as to the devastating impact of these tax changes?

§ Lord Sanderson of Bowden
My Lords, I shall be delighted to meet my neighbours. I meet them on many occasions. It will not surprise the noble Lord to know that trees are fairly well up the agenda in my discussions with them. However, I am not persuaded that what he has said is true. In my discussions, many people—and indeed many Members on opposite Benches—have asked for changes to take place. That has now happened. I wish the noble Lord a very good Easter. As I have said to him, I think—like one of the Liberal Prime Ministers from the past—we shall have to wait and see.

§ Lord Leatherland
My Lords, is the Minister aware of the fact we have to spend our Easter and other vacations without pay, whereas the other place pays its Members for every day of the year?

§ Lord Sanderson of Bowden
My Lords, I am not sure that I am responsible for answering that sort of question.