HL Deb 14 April 1993 vol 544 cc1110-47

5.50 p.m.

Lord Taylor of Gryfe rose to call attention to the present position of, and the future prospects for, the forestry industry; and to move for Papers.

The noble Lord said: My Lords, we have waited long for this debate, but those of us who are engaged in forestry are very patient people and, as it happens, forestry is a long-term business, and this debate could not have come at a more appropriate time since the Government have just announced another review of forestry. I hope that the debate will have some influence on those proceedings. I trust that there will be no major departure from the statement issued in September 1991 which reads as follows: The main aims are sustainable management of our existing woods and forests and a steady expansion of tree cover to increase the main diverse benefits that forests provide".

In March 1991, the noble Lord, Lord Strathclyde, said: I have every confidence that the industry itself will increase the number of plantings in the next few years".

The noble and learned Lord who is to reply to the debate today, confronted with the mounting balance of payments problems, stated in November 1992: That is why it remains the Government's policy to expand forestry wherever possible".

Despite those optimistic assurances here are the facts: 20 years ago 42,000 hectares were planted in the UK. That has fallen to 14,000 hectares last year. The Forestry Commission planting in the same period fell from 23,000 hectares to 3,000 hectares last year. In its latest corporate plan it envisages dropping to a total planting programme of 1,000 hectares. So much for the promised expansion.

Noble Lords will be interested to note that, thanks to generous grants, 45 per cent. of new planting in the private sector last year was in hardwoods. While that will enhance the environment for future generations, it will contribute little or nothing to our economic well-being and to the balance of payments deficit which now accounts for over £5 billion per annum. I know that the Government spend a great deal of effort and money on promoting exports, and that is commendable, but the reduction of imports is equally important in terms of our balance of payments. I do not suggest that we shall ever be self-sufficient in timber and timber products, but millions could be saved by an aggressive planting programme.

The recent devaluation of sterling will increase our import bill. The cutback in logging in the United States, transport difficulties in the Soviet Union and the conservation of forests in other parts of the world will all create shortages and make us more and more vulnerable to higher prices. Britain's growing domestic market and the anticipated supply of high quality timber from British forests have attracted no less than £1 billion of new investment in the manufacturing industry in the past eight years. Close to where I live, the Caledonian Paper Company has invested over £215 million—the biggest inward industrial development in Scotland's history. It would be disastrous if we did not maintain a planting programme now to supply its future needs. Exporting countries are less inclined to supply logs—as they used to do—to the UK market. They all want added value in their products. So pulp and processed timber will be offered to us, and we shall lose the manufacturing capacity.

The UK is only 13 per cent. self-sufficient in timber. Let me remind noble Lords, especially those who are worried about the spread of conifer plantations, that apart from Ireland we are the least afforested country in Europe. Only 10 per cent. of our land has woodland cover, as against 30 per cent. in Germany and 27 per cent. in France. Yet we have the soil, the land, the expertise and the market to develop an important manufacturing and productive industry. Our processing sector is already the technological equal of anything in Europe.

In a recent debate in the House great anxiety was expressed about the decline in rural employment. Contraction of forestry can be a major contributor to that decline. People who live in remote areas have few opportunities for retraining for alternative employment. Forestry is not just about planting conifers; it is also about conservation and the provision for recreation. In the past few years, as everyone has observed, there has been a phenomenal increase in hill-walking and countryside pursuits. That is healthy. Many families seek to escape from the dreariness of big cities. The provision of nature trails, wild life protection, camp sites and bird-watching hides are all part of good forestry management. It is an immense contributor to the nation's health and well-being.

Last year there were no fewer than 50 million day visits to the Forestry Commission's estates. That places a substantial demand upon management skills. The Forestry Commission's staff have handled that with commitment and sensitivity as they respond to the public demand for recreation and at the same time protect the countryside. As a young man I lived in Glasgow. We used to go walking in the Trossachs which were within 20 miles of the City of Glasgow. It is an area of great natural beauty, but at each end of the estate the Duke of Montrose had erected toll barriers to provide access to that estate. That estate is now known as the Duke's Pass, but it is also known as the Queen Elizabeth Forest Park, owned and managed by the Forestry Commission, with free access. Last year, 1 million day visits were paid to that estate. That story can be repeated in many parts of the United Kingdom.

It is unfortunate that the Forestry Commission's critics have ready access to a biased and prejudiced media. It has not received the credit that it requires and which is justified by what it is doing. As a result, politicians have reacted to such pressure by diminishing the role of an organisation of which we should be proud. First, there was the sell off of parts of the estate, which began as a tidying-up operation. However, now the commission is under instruction to dispose of 100,000 hectares of land before the end of the century. In fact, since 1981, 172,000 hectares have been sold to the private sector. Secondly, the planting programme has been slashed from more than 20,000 hectares, which was the figure during my period as chairman and when my noble friend Lord John-Mackie was chairman, to the 1,000 hectares visualised next year.

Perhaps I may say a word or two about the history of the commission. It was established after the First World War because our woodlands had been depleted by the requirements of militarism and industrialisa-tion. We discovered therefore that we were vulnerable and the Forestry Commission was set up. We had to import pit props, for example, to keep the mining industry going. The commission was instructed to plant trees rapidly on land which was unsuitable and not useful for agricultural purposes.

Sitka spruce met those requirements and hardwoods could not be grown on the marginal land which was available to the Forestry Commission. Naturally many of the plantations had a similar age profile and not enough attention was paid to the environmental impact of square blocks of a single species. The Forestry Commission has recognised those early mistakes and now its woodlands enhance the landscape with proper provision for the existing flora and fauna.

I believe that the commission has been hardly judged by many who are resistant to change in the countryside. I have never met a forester who is unconcerned about the environment. That is why they choose such employment; it is because they love the countryside in all its diversities, the richness of the wildlife and the variety of flowers and other plants. The commission has had few opportunities of planting hardwoods, but wherever possible it has sought to protect our ancient native woodlands. New conifer plantations are made more attractive by the sprinkling of larch and the roadside corridors of beech.

Since its inception the Forestry Commission has enjoyed a happy and productive relationship with the private sector. It has been a good neighbour in pest control and a useful guide in research and training. I beg the Government to resume the partnership which contributed so much to the development of our forestry enterprise. People should not be so worried about environmental problems, because 10 per cent. of our countryside is now covered by SSSIs. In the Highlands 40 per cent. is covered by SSSIs. I am also happy to say that in Scotland indicative forestry strategies have been developed with local authorities, local interests and local environmental groups. They are now proceeding.

On 30th March the Government issued a statement setting up an inter-departmental committee to look again at forestry incentives. That is to he welcomed since the present arrangements have failed to achieve the declared target of 33,000 hectares. However, the statement also contained this ominous reference: To review options for the ownership of Forestry Commission woodlands". This suggests that privatisation is still part of government thinking. The policy would contribute nothing to the expansion of the forestry programme. It would certainly jeopardise the excellent work which is being done in recreation, access and conservation. I beg the Government therefore to banish the spectre of privatisation from the consideration of the committee which is being set up.

The commission was reorganised three years ago following a Select Committee investigation. Here we go again—another committee. The Government should realise that since forestry is a long-term investment it requires conservation and stability, which should be provided. I beg to move for Papers.

6.5 p.m.

Viscount Addison

My Lords, I thank the noble Lord, Lord Taylor of Gryfe, for bringing to the attention of the House the position of the forestry industry. I agree that forestry is a positive land use which can be beneficial to local and national economies and to the environment. The United Kingdom has a comparatively low percentage of land under forestry and there is scope whereby more land could usefully be put into productive forestry. However, in all cases policy should respect the landowners' right to make decisions and to manage land within the law.

It is important when planning forestry enterprises to ensure that the objectives are clear. Forestry can provide various outputs including the production of quality timber; the generation of income and employment in rural areas; alternative use for agricultural land; habitats for wildlife, access (both actual and visual) and recreation; reducing the impact of global warming; and a stock of environmentally sound capital to pass on to future generations.

Deciduous and mixed species forests attract a greater spread of wildlife (both flora and fauna) than conifer or monoculture forests, whose habitats for different types of wildlife might be more in demand. Mixed and deciduous woodland also attracts more deer than conifer forests. Many would see deer as a positive addition to rural areas. However, these animals are often difficult to manage, and left to their own devices they can do extensive damage to young trees and farm crops.

The major environmental impact of forestry occurs when trees are planted on new land, and other environmental effects are relatively minor when compared to this initial impact. However, afforesta-tion in appropriate areas can have other important environmental benefits; for example, forests can act as buffer zones to stop nitrate run-off into waterways, lock up carbon in a stable form, help to filter carbon dioxide from the air and, therefore, on a global scale can help towards stemming the advance of global warming.

The forestry enterprise has managed the woodland in its ownership to a high standard, including the management of wildlife within those forests and of access. Management at this level can be quite costly and new owners of these forests may not be able to afford management without assistance of some kind. It is important that when these forests are sold continued good management is ensured. Financial assistance from the Government may be necessary either in the form of management grants or tax incentives. While this is important for all types of forest it is particularly important for amenity forests, which are run primarily on a cost basis only as it is difficult to realise realistic returns from this type of woodland.

The CAP reform measures, particularly set-aside, provide both a challenge and an opportunity for the productive use of redundant crop land. There is a strong case for the full utilisation of the new forestry measures proposed in the CAP reform. While both the Ministry of Agriculture, Fisheries and Food and the Department of the Environment have a role to play in forestry policy, the Forestry Commission could be the focus for all forestry policy taking account of MAFF and DoE schemes and initiatives. In essence, there should be a "one stop shop" for advice. It is important that all schemes and initiatives are balanced with regard to the various outputs that forests can provide and are "user friendly" for landowners and farmers. The countryside stewardship scheme is a useful model to follow when designing any new scheme for forestry as it allows the greatest flexibility for all parties concerned and ensures that environmental goods and public access are provided where they are demanded.

Environmental land management services—which although nothing to do with the Dutch shortens down quite nicely to ELMS, a grim reminder of the continued threat to efforts to bring back the mature elm to the English countryside—act as an umbrella under which landowners can enter into contracts with public or private organisations to provide environmental services in return for cash payments.

The schemes for encouraging forestry in the United Kingdom tend to stress broadleaves rather than conifers and amenity rather than commercial forestry. It is vital that commercial forestry is not neglected by government policy. It is possible for commercial forestry to provide environmental benefits and high quality timber so long as forests are managed correctly. That can be expensive, especially as returns from forestry are long-term. Therefore, it is important that there should be a balance in the allocation of government funds between commercial timber production and other uses of woodland and between broadleaves and conifers.

One area in which forestry could provide positive benefits both to the individual landowner and to the nation as a whole is on set-aside land. Currently the provisions on set-aside land are purely rotational on an annual basis only. Therefore, at present there is no scope for using that land for forestry. It is important that the Government should allow for a non-rotational scheme that would allow landowners to use non-productive land for forestry. Within that flexibility a balance must be maintained between rotational and non-rotational set-aside and the uses of non-rotational set-aside to achieve diversity in the rural economy and the environment. There must also be flexibility for land to be switched back into production should a food shortage situation arise.

In conclusion, landowners need to be assured of adequate financial incentives to enable them to meet the long-term heavy cost of establishing and managing forests for the national benefit. It is vital that a clear national strategy is developed for forestry in the United Kingdom linked with adequate financial incentives for the establishment and future manage-ment of woodland. That is essential because of the extent of market failure in forestry. Returns from commercial timber production are long term and yearly management is costly. That is a significant barrier to entry.

6.12 p.m.

Lord Geraint

My Lords, I am sure your Lordships will agree that we have just heard an excellent maiden speech from the noble Viscount, Lord Addison. Some of your Lordships may not be aware that the noble Viscount's father, as Leader of the House, and the father of the noble Viscount's mother, as the then Bishop of London, have both been Members of this House. As something of an endangered species, the noble Viscount has much to be proud of. I thank the noble Viscount on behalf of the whole House for an excellent maiden speech full of constructive ideas. We wish him well in the future.

I am extremely grateful to the noble Lord, Lord Taylor, for giving us the opportunity to discuss forestry today. I am something of a forester, although only in a very modest way. I have, however, planted a few hundred trees in my time. I am roughly the same age as the Forestry Commission and I have observed closely all its policies as implemented in many parts of Wales over the years.

There is great potential in forestry. After all, we produce only some 10 per cent. of our timber needs within the United Kingdom and, given an ideal climate, particularly in parts of Wales and Scotland, we could and should double our present hectarage.

I was disturbed to see figures showing that in recent years the Forestry Commission has introduced no new planting whatever in Wales although it has restocked 1,800 hectares. Private planting is increasing at only 370 hectares per annum. My party and I are fully supportive of private enterprise in forestry but we are against the privatisation of the commission because we believe that to maintain a coherent policy of encouraging the growth of the industry and ensuring proper research and development we need the commission in public ownership. We view with great dismay the piecemeal selling off of woodland which has been taking place with no regard to future development.

In a recent statement the forestry Minister proclaimed that there would be further consultations before any changes took place in forestry policy. However, it seems that those consultations are to take place between government Ministers and their departments. I should like to see open consultation with all interested parties—farmers' unions and countryside groups—before any decisions are made. Forestry is a great national asset which should not be squandered.

I should like to make one further point about the situation in Wales. Forestry can be an important employer. I believe that at present the public and private sectors employ some 5,000 people. However, what is lacking is the opportunity for training. It has been pointed out to me that there is no course in Wales for training middle management. I should like to see that omission rectified in the near future to ensure that we have the trained staff which we need in this extremely important industry.

6.17 p.m.

Lord Barber of Tewkesbury

My Lords, I seek the usual kind indulgence of your Lordships when a maiden speech is afoot. I thank the noble Lord, Lord Taylor of Gryfe, for giving us the opportunity to offer a few thoughts on forestry. I must declare an interest. I chair a board which acts as a kind of mother hen—mainly an environmental mother hen—to a forestry and woodland management company. I also chair the National Forest Advisory Board which is intent upon establishing a multi-use forest in the Midlands.

I should like to try to help the debate by speaking on one or two outside issues which do not receive much attention. There are two cultures abroad in our countryside which are having a powerful influence on what we do and how we do it. The first is best described as the non-commercial culture. It has developed swiftly in relation to both forestry and farming with which there are strong parallels. It is an issue but it is rarely discussed openly and frankly.

To many countrymen and women with a living to earn, public opinion—that important incubator of political action—seems to have moved so far down the road of environmental virtue that the commercial imperatives of the two industries have become, in the public mind, almost of secondary importance compared with the need to create and maintain what is primarily an access, recreation and landscape and wildlife resource.

I do not make that point lightly. A very revealing litmus paper of public opinion is public meetings. In the past 10 years I must have addressed scores of such meetings. I find that public opinion has changed little in the past 15 years or so. Both industries—forestry and agriculture—are deceiving themselves if they believe that their PR programmes have made headway with the person in the street.

It is still a widespread and passionate view that commercial coniferous forestry is confined to dark satanic woods of wall to wall spruce, ruining the vista, impeding walkers and single-handedly killing off salmon fishing. In tandem, it is believed that modern agriculture is essentially corrupt with high tech farming inevitably a destroying influence. In some quarters even GATT is under fire for getting in the way of an Arcadian countryside where commerce is vile. I know that I exaggerate, but it is worth doing so.

It would be surprising if that were not the public mood given the media policy of keeping up a barrage of horror stories. I am bound to say that I look forward with profound dismay to the tedious prospect of the saga of the flow country, however culpable it was, running on smartly into the next century.

We are all well aware of the problems of projecting an accurate forestry image. The professionalism of the past now seen as a mistake—the rectangular bath-mat designs in the wrong sites, the brutal monocultures—is still with us. The new brilliant forest compositions and inspired new managements still have too new a face on them for people to understand that the leopard is changing its spots. I support the noble Lord, Lord Taylor of Gryfe, so far as concerns the Forestry Commission: it has done absolute wonders in Kielder and Thetford.

But as with agriculture, it is no good leaving everything to the organisations to influence public misconceptions. Everyone with a stake in forestry should regard him or herself as an ambassador and go out and shout from the housetops to anyone who will listen that we are marvellously efficient timber producers; that our United Kingdom trees actually grow twice as fast as those of our traditional suppliers; that our timber processing is world competitive; and that our contribution to trade deficits could in the future be even more compelling than it is today.

I mentioned two cultures. The second is the dependency culture—a close relative of the noncommercial one. More and more money moves into the countryside from public sources. A dependency culture, as exemplified by cascades of public money, also gives rise to concern. It takes us away from the market place where, under GATT and a liberalised world trade, we shall be earning our living in more rigorous commercial circumstances.

I was delighted to hear that the Government are setting up an interdepartmental committee. I believe that its remit includes looking at the options for incentives. I know that if I am controversial I run the risk of receiving a mild rebuke, but I should like to say that it is quite remarkable how effective fiscal reliefs were in comparison to the present grant system. We are all on the side of the angels. We all wish to see an ever more beautiful countryside. I applaud most warmly the fact that the Countryside Commission has just announced that it hopes to see the tree cover extended. It is absolutely marvellous that environmentally sensitive areas have really got off the ground, and I am proud to have had a small originating hand in their coming into being.

Over the past 25 years, first as a founder of the Farming and Wild Life Advisory Group and, secondly, as chairman of the council of the Royal Society for the Protection of Birds and latterly chairing what was then the Countryside Commission for England and Wales, I have watched with a growing sense of elation the brilliant progress made on those environmental fronts. The success has been beyond our wildest dreams. Now, like some others with a similar background, I have a sense of unease as the market place, commercial component, both in the public mind and elsewhere, seems to be slipping increasingly into the background of countryside politics.

My offering is a simple one. There is a need to re-state and maintain the dignity and status of the commercial ethic in our countryside affairs. I thank noble Lords for their patience.

6.22 p.m.

Lord John-Mackie

My Lords, I could not be more pleased about anything than standing up first and foremost to congratulate my old friend the noble Lord, Lord Barber. I should have liked to have been official and referred to him as my noble friend, but he has gone to the other side so I cannot do so. I have known the noble Lord for many years. I think that what he said today will convince your Lordships that he will be a great asset to the House. His perspective in looking at the situation and putting it the way that he did was very good. I think that we must all congratulate him most heartily and look forward to hearing more from him in the near future.

The five-minute time limit on speeches makes it very difficult for me to say all that I should like to have said. Like my noble friend, I am a former chairman of the Forestry Commission. I should like to make just one point. On the whole, commercial forestry is found in the thinly populated areas of the country—Wales, the north of England, and the north and west of Scotland. Those are the typical areas of commercial forestry. In many areas it is the only industry. I believe that my noble friend Lord Taylor pointed out that the processing industries are moving to where the raw materials are to be found. That is good. But in the meantime, and generally speaking, it is in those areas that forestry as such is the only industry.

I should like to concentrate on the position in Scotland. My noble friend touched on the main figures for the country. I should like to put forward the figures for Scotland which very much emphasise the situation. Since the Conservative Government took over in 1979 the average deficiency per year in Scotland for the 12 years after they took over, and for the 12 years before, is 8,828 hectares. The average labour force required to look after 1,000 hectares is about 10 foresters. The unemployment figure for the west and north of Scotland is 16.3 per cent., which is far above the average in the rest of Scotland. That is 16.3 per cent. of the workforce. The drop in planting has meant that about 1,000 men do not have a job. I have also worked out figures for the private sector for the three years since the Government stopped the tax benefit. It works out at about 7,000 acres per year. That is a loss of 70 jobs a year. In my opinion it is a very serious situation.

Some time ago I asked a Minister when the Government would make good that loss of planting. His reply was, "What's 10 years in the life of a tree?" I am sorry that that Minister is not present on the Front Bench today to reply to the following question. What is 12 years in the life of an unemployed forester? I think that that is something that should be thought about very carefully. The present depreciation in planting trees has created many unemployed foresters in such areas. I hope that the Minister who is to reply will convey that fact to the Minister who was supposed to have been on the Front Bench.

There are many rumours about what the Government will do about forestry and the commission, but one of them is not a rumour: it is evident that they are to stop the farm woodland premium scheme in Scotland. Indeed, that was announced recently. That seems to be a very retrograde step. I hope that an explanation will be forthcoming from the Minister.

Quite frankly, I suggest that the Government have interfered plenty and that they should leave things alone. So far as I can see, the knowledge that seems to be obvious to everyone does not seem to be obvious to them. The remarks of my noble friend and those of other people should make them think very deeply—otherwise, they should leave things as they are at present.

6.28 p.m.

Lord Gibson-Watt

My Lords, I believe that we should all thank the noble Lord, Lord Taylor, for initiating the debate. We should also congratulate the two maiden speakers, my noble friend Lord Addison and the noble Lord, Lord Barber of Tewkesbury, for their contributions. If I may say so, the latter, having done so much for the countryside and having been chairman of the Countryside Commission in Britain, was always one of those people who was never against forestry as such. He quite rightly pointed out his opposition to badly shaped patterns of conifers. However, he also said the Forestry Commission had learnt a lot in that respect. He attended an outing one day as a guest of the Forestry Commission. He told us that we should sell our conifer policy rather better than we did. That was possibly a difficult thing for the chairman of the Countryside Commission to say. I respect him very much for saying that.

I wish to mention the immense amount of new machinery that has been installed in the forestry industry since the 1980s. That process was, of course, helped by government grant. However, the industry needs a large and continuing supply of timber to operate. I wish we could provide more of that timber from our home forests. As has already been said, timber imports in 1991 were costing £4.5 billion. That represented a significant part of our balance of payments deficit which at that date was running at £14 billion. No doubt the Chancellor is more than aware of that fact.

What is limiting the acreage of conifer forests? We are near the bottom of the European league table in this area. It is well known that most of the demand today is for softwood rather than broadleaved timber. New planting has shrunk from 29,500 hectares in 1989 to 17,300 hectares in 1992. The Government's target is still over double that figure.

Since 1988 people in the private sector of forestry have known that the Schedule D option was to come to an end. Last week that occurred. It is too early yet to judge whether the increased grants will do the trick. However, my own apprehension is that they will not. It is important that confidence in that side of the industry is renewed. In 1988 the Treasury had a great deal of support for abolishing the Schedule D option —it had wanted to abolish it for many years—from the then Secretary of State for the Environment, Lord Ridley, who was against conifers.

I wish to refer specifically to planting in Wales—this subject has been mentioned by the noble Lord, Lord Geraint —and the effect this has on employment. New planting in Wales is down to a few hundred hectares and yet there is so much bracken-covered land that is suitable for planting. I know that if conifers are planted near watercourses the acidification problem arises, but there is a great deal of land that is situated a long way from watercourses that could be planted. I hope the Government will do what they can to increase the amount of planting in Wales. After all, today local authorities, in conjunction with the Forestry Commission, have strict approval regulations.

The working group has already been referred to. I approve of the review of the incentives for forestry investment but I am certainly opposed to privatisation of the Forestry Commission. One reason I oppose that step is that the private sector of forestry simply cannot provide the assured supply of timber that the industry needs. That arises because private forests are too fragmented and the owners of private forests follow the market a little more carefully than perhaps is the case with the Forestry Commission. The Forestry Commission has committed itself to assured supplies and assured prices.

I approve of the present policy of selling small areas of uneconomic woods belonging to the Forestry Commission. That process has done a great deal to encourage small forestry owners. A Conservative Government should be in favour of such a policy. As the noble Lord, Lord Taylor, said, over the past few years 171,000 hectares have been absorbed by the market in this way. However, if the Forestry Commission is sold outright that would mean, to my way of thinking, that too much woodland would come onto the market at the same time. Most of that woodland would be bought by people from overseas and that would place in jeopardy the new processing industry that has been established.

6.35 p.m.

The Earl of Radnor

My Lords, we are grateful to the noble Lord, Lord Taylor of Gryfe, for raising the subject of the forestry industry and its future prospects. I know he has waited a long time for the opportunity to table this debate. However, as the noble Lord himself said, this debate has occurred at a fortuitous time as a review of this matter is to take place. I hope that my noble and learned friend will take back a fairly strong message from this debate to whoever is to review our forestry industry and our forestry policy.

Perhaps I should start by considering the forestry industry at present and its prospects for the future if we pursue our present course. As has already been said in this debate, we are not planting nearly enough trees. The Forestry Commission has been threatened and its future, which has always been a slightly grey area, is in doubt. I hope we shall obtain a clear indication at the end of this debate that there is no question of privatising the Forestry Commission. As I have said in previous debates, the Forestry Commission is the backbone of our forestry industry.

If we continue our present course, our production, leaning on past planting, will increase for a certain time and then, quite understandably, it will decrease over a long time, long after we have lost interest in it. There is therefore a tremendous incentive to develop this industry properly. The reasons for doing so are perfectly simple. First of all, we import 80 per cent. of our timber. That is rather ridiculous. Secondly, we have been forced to place 15 per cent. of our agricultural land out of commission as regards agricultural crops. Therefore there is plenty of land available now without taking land in the Highlands or other areas of special beauty or in areas inhabited by special species.

Perhaps the most important reason for increasing the area of land that is planted is to reduce the agricultural unemployment that exists throughout the country as a result of the set-aside policy and descending farm profits over the years. That matter is of enormous importance to agricultural workers and their children. Those people are on the whole oriented towards agricultural work rather than other areas. However, there is no policy of increased planting at present. As I have said, there must be more planting. This is not just a matter of tinkering about with grants. At present the grants are too many and too complicated, although they play their part in agriculture. As I said before, I believe they should be indexed because that is the only reasonable way to deal with a grant which may stretch over 20 years as it is only after that period that a tree will make money for its owner.

The really damaging blow to the forestry industry was the ending of what I shall call corporate forestry. That occurred in the Budget of 1988 when tax relief was removed from forestry. That was a blow to the private sector in forestry. If it is unacceptable to reinstate that relief, some way must be found of organising corporate forestry to establish large and efficient forests and so enable companies to play their part in forestry along with private individuals. Inevitably the forests of private individuals are fragmented. That does not lead to an efficient industry. Companies should at least be treated on an equal footing with individuals. They should really be treated better than individuals. We need large forests as well as pretty little woods all over the place, which are hard to organise. It is also hard to sell the timber from those small woods in an efficient way.

Finally, I do not believe for one moment that forestry on such a large scale is incompatible with the environment. I am sure that by regulations or laws the two could be made to work well together and that the matter could be well enforced.

6.39 p.m.

Lord Wade of Chorlton

My Lords, I should like to congratulate the two maiden speakers in the debate. It was a pleasure and privilege to hear their views. I should also like to thank the noble Lord, Lord Taylor, for introducing the debate. I agree very much with everything he said, except for the last part, to which I shall refer shortly. He analysed the importance of the forestry industry and the opportunity for wealth creation which it provides throughout the British economy, not only nationally because of the reduction in imports but also at the level of the rural economy, in which I am particularly interested.

I believe that the right way ahead is that suggested by the Government and which the Government are now reviewing, namely, to privatise the forestry industry and Forest Enterprise. It is clear from the way in which forestry production has taken place over the past few years that we are reducing an industry which in other circumstances ought to be increasing. Surely we have all now learnt that one does not achieve the best productivity, the best opportunities, the greatest enthusiasm and the greatest drive to create wealth within government-controlled organisations; that is achieved within the private sector. I am delighted that the Government are now undertaking the review and have already made it clear that the potential for privatising forestry is under discussion.

I should like the Government to consider a number of options. It would be possible to introduce fresh finance into the forestry industry by financing the trees. The Government could no doubt devise an interesting method of raising money by considering that option while retaining the ownership of the land.

Another option would be to create a series of agencies—as the Government have already done—to deal with various parts of the forestry industry. The first step would be to create agencies. Those agencies could then be allowed to be privatised, either through management buy-outs or by bringing fresh money into those agencies. There would be a series of organisations owning forestry throughout the United Kingdom. Alternatively, the Government could put the whole lot up for sale as a whole or in lots to attract a wide range of investment from different sources.

The purpose would be to encourage the growth of the forestry industry, as other noble Lords have suggested, on lower lying land where the opportunity for efficient growth of wood in this country is enormous. It could be grown much more efficiently and economically than in many other parts of the world. That would improve our economy.

I am aware that there is considerable anxiety that such a move to the private sector would act against the interests of the environmental benefits of forestry for the rest of society. That does not seem to be an argument in other areas. As has already been stated, forestry covers 10 per cent. of our land and agriculture covers about 75 per cent. of our land. We have not thought it necessary to privatise all the land in order to ensure the environmental benefits of agricultural land. We have been able to do that by pushing farmers in one direction by grants or in another by regulations and have achieved a better balance of the economic and environmental benefits to society.

I believe that within the forestry industry we could also create the right balance which is necessary to make forestry available for leisure opportunities, for people to see and use it, to live within it and benefit from it as part of our society. We could do that just as well within the private sector, as in any other business.

There are great opportunities to link forestry and planning and development much more effectively. Why should we not say to some people who cannot develop land because of environmental restrictions that if they were to create forests they could do things within the forest area that they could not do on open land? Such environments would be so much more enjoyable to work and be in. Some noble Lords may be aware that in Herefordshire a planning application has been made to create a burial ground in a forest. That seems a very innovative and interesting use of the forest. It would be a more attractive place to lie than in a bare environment.

Diversity of ownership will create diversity of forest. It is diversity which produces the environmental interest. I believe that opportunities are now available to create wealth from our forests. Those are opportunities which the Government must not miss. I congratulate them on their new initiative and hope that they will now take positive action to create money from those opportunities.

6.44 p.m.

The Earl of Swinton

My Lords, a two-and-a-half hour debate with 22 speakers on the subject of forestry gives new meaning to the word "backwoodsman".

The disallowance of the facility for private landowners to opt for taxation of woodlands under Schedule D may well have stopped tax abuse by some rather greedy but well-known pop stars and media personalities, but it has discouraged the planting of new woodlands, with a consequent reduction of the labour force—drastic in some cases—that will affect essential maintenance over the years and lead to poorer crops eventually. It struck me as highly ironic that that change in the tax law came into force less than a week after the press release relating to the Countryside Commission's excellent policy statement England's Woods and Trees. I can assure noble Lords who have not seen the document that it is available in the PPO. If they have to pay for it it will cost them £2, which will not break them.

I should stress that the document deals with England's woods and trees. We have heard a great deal today about the tree coverage in Scotland and Wales. If it was not for that, the tree coverage of the whole of the British Isles would be even more pathetic than it is now because, compared with Scotland and Wales, England suffers from far and away the least tree cover.

As I am sure noble Lords are aware, the Countryside Commission is the Government's official adviser on the countryside. It tries to promote forestry itself. Perhaps I may give a special plug to the new national forest. I was delighted to hear the maiden speech today of the noble Lord, Lord Barber of Tewkesbury, which was constructive and well worth listening to. He has contributed enormously to getting the new national forest project off the ground. The Countryside Commission also helps with work on community forests and countryside stewardship. I was also glad to hear my noble friend Lord Addison refer to that in his excellent maiden speech.

The main objective set out in the policy document is to see England's acreage of woodland doubled by the middle of the next century. Noble Lords may think that that is pie-in-the-sky. I hope that it is not. It is an excellent aim. The Countryside Commission is perhaps inclined more towards amenity forestry than towards the industry, but I believe that there must be the closest possible co-operation between the amenity planters and commercial forestry interests, be they the Forestry Commission, large companies or national growers. If we squabble among ourselves over the type of forestry and where it will be we shall never achieve that object. If we work together to persuade the Government to be more generous in their incentives towards forestry we can achieve that admirable object.

6.48 p.m.

Baroness Nicol

My Lords, I congratulate my noble friend Lord Taylor of Gryfe not only on his choice of subject but, as others have said, on the appropriate time at which it has come forward.

Five minutes is not enough to deal with everything that needs to be said, but I must respond to one remark of the noble Lord, Lord Wade of Chorlton. The Forestry Commission has no monopoly on the planting of forests. If the private sector had so desired there is no reason why it could not have gone ahead and done everything which the noble Lord said it is capable of doing. I wish there was time to develop that point but I shall have to leave it there.

There has been a great deal of speculation about the possible privatisation of the Forestry Commission, couched in terms which seem to indicate that we shall have legislation before us to carry out that promise—or threat, depending on one's point of view. My understanding, however, is that the Secretary of State now has the power to sell all 2 million acres of forest, if he so wishes, without coming back to Parliament for legislation or, indeed, informing Parliament if he feels that way about it. No doubt the Minister who is to sum up will correct me on that if I am wrong.

We have heard from my noble friend Lord Taylor about the amount of land which has been sold and is earmarked for sale between now and the end of the century. In a speech last November, Mr. Dorrell, the Financial Secretary to the Treasury, was reported as saying: The conventional question was 'What can we sell?' Now we should ask ourselves 'What must we keep? Against that background, it seems to me that the Forestry Commission holdings are very vulnerable.

We have also heard from my noble friend Lord Taylor of Gryfe about the proposed interdepartmental body. I welcome it, but I have a number of straight questions to put to the Minister to which I hope to receive answers. It is vital that the group considers all aspects of possible disposals, as my noble friend said. First, will interested organisations and individuals be able to submit evidence to the group? Secondly, will the group's proposals be made the subject of public consultation before they are adopted by Ministers? Thirdly, will the management and improvement of existing woodlands be part of the discussion, or are they only concerned with new forestry? Fourthly, do the Government consider management for wildlife an important objective? If so, will the statutory conservation bodies be involved in the discussions with the new group?

Some may ask: why does it matter who owns our forests? The answer is that it need not matter if the Government are prepared to establish and enforce a sensible forestry strategy. It would have to be a strategy backed up, where necessary, by financial help, as many other noble Lords have said. But the strategy would have to be a sensible one and it would need to be enforced. It would have to encompass all aspects of the industry, not just the economic ones. It would have to encompass the environmental, social and recreational aspects as well.

The report from the Select Committee in another place, which was published on 10th March this year, stresses the importance of involving local communities in developing new forests and managing existing ones. Do the Government support that approach? The environmental and recreational benefits of forestry, as many of us have said, are as important as the economic benefits. The German approach to managing forests in the interests of all aspects is well known. Given the will, there is no reason why we could not do as well.

The record on public access to previous Forestry Commission holdings so far is abysmal. Only one access agreement has been signed since the new legislation came into force in 1991. It must become firm policy that access to previously held Forestry Commission land must be maintained and the only way to do that is by establishing rights of way. I know that that is not a popular suggestion, but it is the only certain way under our present laws to keep access safe for the public.

I have run out of time, but I should like briefly to mention a subject which I have raised on previous occasions—the care, maintenance and planting of motorway verges. There seems to be a certain amount of confusion about who is responsible. Will the Minister say whether that is to be one of the responsibilities of the new interdepartmental group?

6.54 p.m.

Lord Clinton

My Lords, it is a privilege and pleasure to congratulate the two maiden speakers on their contrasting speeches. I found myself very much in agreement with the noble Lord, Lord Addison, and not quite so much with the noble Lord, Lord Barber. However, it was a great privilege for me to receive a plantation competition prize at the Royal Show when the noble Lord, Lord Barber, was president of the show last year. That was certainly a commercial plantation planted.

Nearly 700 years ago, believe it or not, the first Lord Clinton planted trees and harvested them for one reason only —it was probably commercial. My great-grandfather, the second chairman of the commission, rushed down from London the night after the first meeting of the commission and planted a tree in Eggesford Forest in Devon to commemorate the first tree to be planted by the commission. That tree was a Douglas fir, a conifer, as it was to become part of the conifer forest on that site, some of which even stands today. Several years ago I had the privilege to go to the same site to commemorate the 50th anniversary of the commission and planted a Douglas fir.

The point of those two stories is to emphasise, first, that the right trees should be planted on the right sites; and, secondly, that we should not lose sight of the fact that growing timber is a commercial exercise. It is also to show my wholehearted support for the Forestry Commission. The first Lord Clinton, I am sure, planted and harvested oak for its many uses. Today we plant conifers for the same commercial reasons.

I must emphasise that good silviculture should be given a high priority to make sure that the right trees on the right soils and for the right purposes are planted. We should realise at the same time that commercial forestry can be practised sympathetically.

The balance has now, in my opinion, gone away from that end and has been dissipated too much towards amenity considerations. To see that happening in agriculture was to me bad enough, with set-aside and quotas, but one must accept that there was over-production in the industry. But surely not in timber. Surely it has been recognised time and time again in this debate and elsewhere that some of the land which we are talking about—over 1 million hectares —could be taken up and planted with trees. At the moment the lack of information as to the conditions of set-aside under the reform of the CAP is holding back that planting.

I believe that there are two priorities: one is a strong forestry body to make sure that timber production is given the highest priority, both in its planting and in its harvesting, especially in the private sector. Secondly, one Minister of the Crown and a department of state should be responsible for carrying this out. On one side, I see too many admirals trying to organise things and, on the other, perhaps too many conservationists who may not know the difference between a lemon tree and a lime tree. That cannot be right; there is obviously a place for both.

However, I see for the future little hope unless we can learn from the past. One message which comes across loud and clear is the damage which was done by politicians who have often not taken the trouble to consult the industry before making very important decisions.

We need a proper, industry-led national forestry strategy which is able to deliver government policy. That, in turn, must be well thought through and left in place for succeeding generations. Stating the obvious in your Lordships' House, especially at what used to be called "this late hour", needs no apology. However, we have to remind ourselves quite often that the final crop in forestty—I am talking about the conifer—has a life of a little over or a little under that of the average human being. The average term of a government is five years. That means that during that lifetime forestry policy could change at least 10 to 12 times. Once a tree is planted there is not much to say about it. However, the forester who has to manage the forest enterprise for the long term must have planning for it. That is important. Sixty years is a long time and it requires a long-term policy. It should be possible for a government to provide that as the policy should be long-term, non-political and give stability to the industry.

The forestry policy for Great Britain is set out in appendix VI to the 72nd annual report of the Forestry Commission. Paragraph 2, which is headed "Aims", gives again more emphasis to the rural environment. I think that that is a pity; but it then goes on to say: Our forestry industry makes a substantial and increasing contribution to meeting the growing national demand for timber and provides … employment to people living in rural communities". Surely our forestry industry should have that priority. Our future depends upon it, especially as there is so much interest and enthusiasm within the industry to carry that out. We must arrest that confusion and muddle and support commercial forestry again before it is too late. There have been successes (as has already been mentioned) in the extended use of home-grown timber at the Caledonian mill and in Wales which have brought to Britain some of the most advanced wood processing technologies available in the world. Timber will continually be needed for such technologies. We must build on this and other research. Without a robust woodland, managed to produce good quality timber of the right kind in the right place, all will be lost and nothing gained.

7 p.m.

Lord Marlesford

My Lords, a number of noble Lords have referred both to the environmental and the economic aspects of forestry—or the forestry industry, as it is referred to in the Motion of the noble Lord, Lord Taylor of Gryfe. I believe that in many ways those are two sides of the same coin. We have heard about the importance of growing more trees as import substitution of timber. But I would also suggest that forestry has in its environmental dimension a very real import/export role. After all, it encourages visitors to this country—which is clearly an export. It also encourages British people to take their holidays in Britain, which is clearly import substitution. So I do not think that we should regard them necessarily as separate. The employment dimension also applies equally to both.

It was a particular pleasure for me to hear the noble Lord, Lord Barber of Tewkesbury, in his maiden speech on the subject cover and touch both angles. I was lucky enough to sit as a member of the Countryside Commission for 10 years under his chairmanship. He was the most brilliant chairman I have ever sat under. I know the great benefits he will bring to membership of your Lordships' House.

I should like to go a little more into the taxation angle, which was referred to by my noble friend Lord Radnor. As we all know, the change in the forestry taxation regime which was announced in his 1988 Budget by my noble friend Lord Lawson came into effect this month. One understands why that change was made. I am ambivalent as to whether it was on balance desirable to remove the taxation privileges from commercial forestry. I am worried that under the new tax regime there is a real danger that the proper maintenance of non-commercial farm woodland will be lost. We could get zealous tax inspectors dissecting farm and estate accounts and disallowing all expenditure on the maintenance of the amenity farm woodlands.

It is much easier to make a distinction between commercial forestry and amenity woodland than it is between one form of amenity woodland and another. Does one stop at the amenity wood, or the copse, or the spinney, or the big hedge, or the single important trees? I contend that expenditure on the maintenance of those features, which are a crucial part of the countryside, is therefore of great economic significance.

Such maintenance is part of good stewardship by the individual land-holder, whether he be a farmer or a landowner. We are not talking here necessarily about the operations for which grants are given. I support the amenity grants that are given. The new initiatives of the Countryside Commission, to which my noble friend Lord Swinton referred, are to be welcomed. But much maintenance of the countryside is carried out by land-holders through ordinary, everyday good business practice. I hope that my noble friend the Minister will tell us whether the committee which the Secretary of State for Scotland announced last week could look at this so that we get a clear ruling. It should not depend on ad hoc decisions by different tax inspectors in different parts of the country. It would certainly be very damaging to the beauty of the rural environment if the maintenance of the countryside were allowed to suffer from a fall in the cash-flow from people making what is effectively a private contribution with only the tax element as a public contribution.

Finally, I should like to say one word on the privatisation of the Forestry Commission. Traditionally, the political parties in this country—the Labour Party and the Conservative Party (the Liberal Party is always somewhere in the middle on the matter)—have been divided on the question of privatisation. I fear that the privatisation of the Forestry Commission would divide the Conservative Party. My noble friend the Minister has probably received that message already. There are certain areas where privatisation or the selling off of parts of the Forestry Commission estate are desirable, particularly the small woodlands. In many cases the Forestry Commission has not looked after them very well. Anybody who goes to see the woodland where John Makepeace now does his stuff in Dorset will know what I mean.

I believe that there would be real risks to public benefit in a massive sell-off of the publicly-owned forest. The reason is that it is a national asset in more than a "growing of trees" sense. It is an asset in terms of public access. We know that the Treasury would be loath to allow a sale with covenants requiring public access. Therefore I suggest that the Government continue with what I think is called in local government reform an organic process; it is sensible to sell bits off, but keep the hard core of the Forestry Commission estate intact.

7.6 p.m.

The Earl of Lindsay

My Lords, I am grateful to the noble Lord, Lord Taylor of Gryfe, for raising this debate and also to the two noble Lords for their excellent maiden speeches. I speak today both as a farmer and a woodland owner and also as an environmentalist involved in the various disciplines that attach to landscape and land use. Outside this House it is often forgotten that we have some of the finest conditions in Europe for growing trees. Our forgetfulness is perhaps understandable, as other noble Lords have pointed out, as we have one of the lowest tree densities in Europe and we import some 86 per cent. of our timber needs at a cost of billions of pounds to our balance of payments. However, what should not be obscured is that forestry in the UK remains a strategic asset of considerable and diverse potential. Its impact depends upon the extent to which woodland schemes and incentives are realistically integrated with other land-use policies.

Nowhere is the need for integration more crucial than in relation to EC agricultural policies. Set-aside is creating a massive stockpile of wasting acres and lost jobs. The cost to the taxpayer of set-aside payments in this financial year alone is £940,000 million. At the same time, the urgent need for increased woodland planting is funded by just £25 million to £30 million per annum. Compared with the £1 billion set-aside scheme, the woodland budget is not only disproportionately modest, given its wider benefits, but—a point of the greatest importance—the woodland schemes themselves are too often a less viable option.

My experience of new woodland planting being discouraged by EC schemes is not untypical. Three years ago I planned to put 30 acres of arable ground into a new broadleaf planting scheme involving some 30,000 trees, rides, glades, proper woodland edges and so forth. However, new EC set-aside and crop subsidy rules acted as a disincentive to the grant-aided woodland scheme. This year that ground sits idle in set-aside. It is very depressing. The ground is better suited to growing trees than arable crops yet now remains in agriculture. It would have removed an encouraging 6 per cent. of our 500 arable acres out of arable cropping; and, like many others pondering current trends, had that new planting gone well it would certainly have tempted more.

The conclusions of such an aborted exercise are inescapable. Until new farm woodlands can be included as part of set-aside and until planting incentives are properly competitive in a wider context, initiatives such as the farm woodland premium scheme will not be a commercial alternative use for that land. Therefore the Government must fight their corner in the forthcoming EC review in order that such schemes will in future count towards set-aside. The benefits to everyone, including the taxpayer, are numerous. New woodland planting can provide an alternative use for an otherwise wasting asset. It can provide a crop that we need, as evidenced by the huge amount we spend on imported timber. It has notable benefits for rural employment, being labour intensive, and also for the environment.

The contribution to the environment is vital but is too diverse to go into in the time that has been allowed today. Suffice it to say that modern multi-purpose forestry can now simultaneously achieve both commercial objectives and environmental features in terms of land management, landscaping, the creation of habitat, the conservation of species and so forth.

I would also, like my noble friend Lord Addison, mention the link between forestry and the environment. It is estimated that one hectare of trees in this country can now absorb 10 tonnes of carbon dioxide. Ten tonnes of carbon dioxide per annum may sound small; but so is one hectare. If we doubled the area of woodland in this country we should lock up another 23 million tonnes of carbon dioxide every year.

Given the obvious benefits of forestry and of encouraging new and better woodlands, especially on idle arable acres, I question the wisdom of the recent review that left woodland planting grants unchanged. I also question the very low rate of management grants and the degree to which their eligibility is restricted. The form filling which attaches to grant applications can still clog the machinery right at the very start. New initiatives need to be kept free from morale sapping delays.

I should like to make one simple practical suggestion and would appreciate a response from my noble friend the Minister. Why not allow some grants to be applied for retrospectively? Their eligibility could be restricted perhaps to restocking, perhaps to areas of less than a certain size, say, 10 hectares or 20 hectares. If one wanted the grant, one would inevitably of one's own free will plant in accordance with the accepted guidelines.

A more fundamental concern is the sweeping fiscal reaction to previous abuses of Schedule D that now prevents all owners from offsetting woodland costs against other incomes. That has undermined many woodlands or conservation countryside management policies, especially those pursued by traditional estates that integrate farmland and woodland. Surely it would be sensible at the very least for a farm or estate to be able to offset its woodland oriented costs against incomes arising from other parts of that same farm or estate.

In conclusion, I urge my noble friend to give us the following assurances: that the Secretary of State will not return from Brussels until the farm premium woodland scheme or other such schemes can count toward set-aside acreage; that woodland planting and management grants will be made more competitive with other land-use policies; that retrospective grant applications will be considered as a sensible option in certain circumstances; that the manner in which the grant system encourages most broadleaf planting to be at the least density, thus producing the least benefits, will be reviewed; and, finally, that the fiscal arrangements will be revised in a calm and constructive fashion so that those good practices which have been lost will be restored.

Those are just some of the issues that a committed forestry strategy must address if its benefits are to be widespread and long-lasting.

7.12 p.m.

Viscount Mountgarret

My Lords, we are all very grateful to the noble Lord, Lord Taylor of Gryfe, for having initiated this debate and bringing to it two excellent maiden speakers who know their briefs extremely well. We look forward to hearing a great deal more from them on this and many other subjects.

I should like to say quickly—there are 22 speakers on the list—how much I support the remarks made by my noble friend Lord Marlesford about the taxation system. It is a little ironic that we are at the beginning of a new financial year and for the first time forestry expenses have been taken out of the taxation system. That may be a good omen. I hope very much that my noble friend will take the point on board and consider it. It is quite serious. The euphoric hopes that have been expressed so well by many speakers with regard to the further expansion of forestry and the fulfilment of all that we—noble Lords, the public and country lovers—wish to see will be frustrated if we do not have some meaningful allowance put back into the taxation system.

My noble friend Lord Addison was concerned about the possibility of using set-aside land for development of forestry, if not for wildlife. I wanted to comment on what he said but I shall be out of order if I do so. Other speakers have referred to the development of forestry and set-aside land. I should like to utter a word of caution in this area. It is not only forestry and woodlands that encourage habitat and wildlife but also plain, bare fallow land. Indeed, this year I was pleasantly surprised to see a rather larger number than usual of yellow hammers and barn owls around at home which I believe have been encouraged by the proliferation of set-aside. I should not like my noble friend to be carried away with the thought that we must develop forestry on bare land purely because of habitat.

Another danger is that the set-aside arrangements may not continue for long. One does not know. I do not argue the case for or against set-aside but merely state the fact. As many noble Lords know, if one plants virgin land, the difficulties of restoring it to agriculture are compounded. No one should rush into planting new woodlands on virgin land. The matter has to be treated with great caution. Our traditional woodlands, whether they be large commercial woodlands or amenity woodlands planted by our forefathers, were all planted in areas that were basically unsuitable for use as agricultural land. Those areas grew possibly better timber, being on rather higher ground. The trees grown in this country—I do not speak of Scotland, which is obviously higher, or indeed Wales, which is undulating country, but of the north of England more or less—and planted on virgin agricultural soil do not produce timber of good enough quality for the purposes for which many people want to use it. That is why we import so much Norwegian timber and why Scotland produces excellent larch and first-class timber. It is limited to those sorts of areas. So we must not be carried away by the fact that we could grow a lot more timber or that it would necessarily cut our imports and so on.

I should like to say in a few quick words—I was a little stopped in my track earlier and probably quite rightly—that the age of the planner and the bureaucrat is very much with us. There is a creeping paralysis which, if we are not careful, will overtake the private enterprise that has served us so well in the past. I refer to tree preservation orders. The orders were based originally on individual trees rather than large blocks or areas. I have the dubious privilege—certainly I had 30 years ago—of having the largest tree preservation order on a block of woods in this country. The result has been a running battle with the planners and the tree preservation order people to be allowed to carry out a proper silvicultural policy. I have tried to do the best that I could, but wind blow has occurred. Trees could not be felled because I was not allowed to fell them and others have now blown over. The next thing that can happen is that another lot will blow over.

My time has run out. If we are to develop our private industry, let us have some of the shackles of bureaucratic imposition taken away from us.

7.19 p.m.

The Duke of Somerset

My Lords, we need to examine why we need forestry in the United Kingdom and whether, despite the criticism, both government and industry are not after all striving in the same direction. To do so we must distinguish between industrial timber supply and amenity/sporting/farm woodland. The last two cases are very fine and important. They are worthy of the many grants that are currently available. But they will not serve the appetite of the processors who have made large investments in this country.

It has been stated elsewhere that we need to aim for a sustained production target of about 20 million tonnes per annum. That aim should be achievable by the traditional mixed estate together with the forest enterprise and by the broadening of public participation. The former provider, one of which I own, needs confidence restored by a long-term policy looked after by one Ministry. It needs financial impetus provided by a judicious mixture of grants and common fiscal treatment with other land users, maintaining the present tax-neutral status of timber production. However, associated costs of common works of infrastructure and agricultural integration, like roads and fences, ditches and ponds, should qualify for ordinary tax relief and not be covered by the woodland grant scheme. That scheme would be directed specifically at tree planting.

The second provider of timber—new planting—could be achieved by the broadening of participation through the shareholding public, as in other industries. Minor enabling legislation would permit the marketing of forestry portfolio schemes based on transferable shares wherein shareholders would be allowed the same tax treatment—neutrality—as individual investors. Those ideas would not involve additional Exchequer costs. The Government should target the intervention better. Intervention is bound to be necessary because of the distortion caused by agricultural subsidies and BES-type schemes.

I believe that the industry's objectives are similar to those of the Government. The industry wants to increase the quality of the resource—mostly industrial roundwood; to manage on a sustainable basis; and to provide a wide range of products and benefits for society. The Government want to stimulate agricultural diversification, rural investment and employment as well as provide social and environmental benefits. Arising from Rio, they also have the obligation to long-term resource creation.

All those aims would be achievable under a system which encouraged new investment but also reassured existing owners. It is vital that the forestry industry does not seek endless public subsidies. A strong flourishing processing sector could lead to better prices and therefore profitability for the landowner. However, part of the equation includes pitching the grants—that is, the incentives—at a realistic level.

The growth of native hardwoods in the UK is hampered by two factors with which the Government could help. The first is the damage done by grey squirrels. I wonder whether the Government have any plans for a co-ordinated publicity action campaign to thwart those horrid animals. The second is the relative lack of progress on genetics and breeding. It is no good growing a tree for 150 years if it is only going to be good for firewood at the end. Is the Minister confident that enough resources are being directed at improving hardwood form? Growing trees without growing timber is to suggest to our children that the world owes us a living, as we do by importing over 80 per cent. of our needs.

Finally, is the Minister aware of the work done by the Forestry Trust for conservation and education, of which I am a trustee. Last year the trust was instrumental in establishing the forest education initiative. This spring it published a handbook of woodlands open to the public with considerable help from the Forestry Commission and the Countryside Commission. However, further funds are needed to sustain the work of that valuable charity in the future.

7.23 p.m.

Lord Lyell

My Lords, I begin by thanking the noble Lord, Lord Taylor of Gryfe, for giving us the opportunity—it seems to occur so rarely—to discuss this industry. Secondly, I wish to declare my interest since I have spent all my life in the county of Angus —so well known to my noble and learned friend on the Front Bench and indeed to my noble neighbour Lord Mackie. I recall enormous timber operations, clear felling, during World War Two. I recall what was virtually a clear fell during the hurricane of 1953—Coronation year. I recall my school years when it seemed that all we did around Kinnordy was clear up the damage of the 1953 hurricane. Even at the time I left school, at the time of Suez and Hungary in 1956, we were still clearing up and trying to level out before we even started thinking of replanting.

Schedules B and D of the tax tables were part of my bed-time reading both as a forester and inhabitant of Angus as well as an aspiring member of the chartered accountants of Scotland. But in 1966 we were able to go ahead with some major planting. I am not sure of the acreage. I am told it was 47 hectares of Sitka, spruce and larch. In those 27 years we have noticed a doubling of the roe deer population and a trebling in the number of foxes in the area. However, it seems that we have done our bit for nature conservation. This year we planted close on 40 hectares of hill land, but under new regulations, which we have had to obey, for spacing and for percentage of hardwood, at the same time taking care of an old Pictish settlement. Nevertheless, we did not use military, regimented square blocks. We have what I hope will be a lasting monument to what can be done in mixing both silviculture and nature conservation as well as conservation of birds and wildlife.

My noble friend Lord Addison, in a notable maiden speech, mentioned amenity planting. We seem to have achieved harmony as regards broad leaves with the various planning authorities who sought to guide us in our activities.

Your Lordships will be aware that 1984 was the year of George Orwell. It was also exactly nine years ago today that my noble friend the then Prime Minister suggested that I go to Northern Ireland to administer its Department of Agriculture. That department was responsible for forestry operations. I recall four figures that were dinned into my head day and night. Indeed, they have been referred to by the noble Lord, Lord Taylor of Gryfe. I was advised that Northern Ireland's afforested land was 5 per cent.; in Great Britain—England, Scotland and Wales—it was 9 per cent.; in the Federal Republic of Germany it was 24 per cent.; and in France, 24 per cent. The noble Lord, Lord Taylor of Gryfe, has updated those figures. For goodness sake, Great Britain is 10 per cent; the Federal Republic of Germany, together with what I presume is the former East Germany, is 30 per cent.; and France is 27 per cent. They are therefore pulling ahead of what we are doing.

The thrust of today's debate is to encourage whatever methods are necessary—private or public —to close the gap. If there is one thing that my noble and learned friend can do it is to take the message to his right honourable friend the Secretary of State to encourage reafforestation, private or public, but to do it.

One of my noble friends mentioned all kinds of activities that may take place in forests, among which he included cemeteries. I looked at the noble Lord, Lord Taylor, and perhaps a monument to him may be there. But my noble neighbour Lord Mackie will be aware that not a mile from his house there is a beautiful cemetery, the Piper Hillock cemetery in a little forest glade in Cortachy. So it is mentioned in your Lordships' House, and we have it in Angus! Before I came into your Lordships' House I was given a leaflet referred to by the noble Lord, Lord John-Mackie, regarding the farm woodland premium scheme in Scotland. I mentioned earlier that I had the honour to serve in Northern Ireland and I know that occasionally Ministers make decisions which they later regret. If what the noble Lord, Lord John-Mackie, said is true, perhaps he will consult the little red book which is next door to the noble Lord, Lord Carmichael. If he consults St. John's Gospel Chapter 8, verse 7, he will see that it says, He that is without sin … let him first cast a stone". I shall not do that. My time is up. However, I will repeat the figures: 5 per cent. now 10 per cent.; the Federal Republic of Germany, 30 per cent.; and France 27 per cent. If my noble and learned friend will encourage the forestry industry, public or private, to close that gap, then our message will have been heard.

7.29 p.m.

Lord Lucas

My Lords, I should like to use the opportunity very kindly provided by the noble Lord, Lord Taylor of Gryfe, to argue for increased and co-ordinated government support for users of low grade hardwoods. The opportunity, and indeed the need, is clear. There is a vast amount of such material —large areas of unmanaged woodland that were ravaged in the two world wars; thinnings from commercial forestry; and old coppices. There is very little market for most of it and the consequence is dereliction and decay. It is much more efficient for the Government to support an industry, where 10p of government support might buy £1 of work, than to support a landowner, where one would have to pay him at least £1 to do £1 of work.

There are three industries at or near market which might make use of this material. First, there is charcoal. We import most of our charcoal from South East Asia, which must add to the forest devastation there, but some of it comes from the United States and Spain, which shows that a charcoal industry can be successful in the developed world. There are some small charcoal companies in the UK but, by and large, the industry is fed from imports. There is much interest in the Forestry Commission in introducing new charcoal businesses—the Anglian Woodlands Project comes to mind—but much further help is needed in kiln technology, in the training of the workforce, in helping to co-ordinate the marketing of charcoal produced by many small producers and perhaps through some initial grants to overcome the bad infrastructure.

Secondly, there is power. The Energy Technology Support Unit of the DTI has demonstrated some successful uses of timber in heating where there are local sources of such timber. There are some encouraging figures on the costs of the operation. It now has a project called Borders Biofuels which is intended to generate electrical power from willow coppice and waste wood chips. The project is at a stage where what is needed now is government action, first, in sorting out their position under the non-fossil fuels obligation, and, secondly, in sorting out their position under set-aside. It will be crucial to use set-aside land for willow coppice. Once that is done, as I am sure the Government will manage to do, a demonstration plant will need to be funded.

Lastly, there is the industry in wood chips and pulp. It is at present the only established user of low grade hardwoods. Most small mills have disappeared. There are two or three large users left, for which a new line would cost perhaps £25 million. However, this would be a major contributor to the uses of such timber because it would absorb about 200,000 tonnes a year. At the moment we appear to be losing such new industrial projects to Europe because they receive better grants. That appears to be because the grants in this country take into account only the employment in the mill and not the employment in the forestry needed to feed that mill.

What we need now is a co-ordinated commitment by government —the one-stop shop approach mentioned in the excellent maiden speech of my noble friend Lord Addison. We need that because so many aspects of government are involved in forestry. There are so many spin-offs in different areas; for example, in employment. Employment in the forestry industry is often appropriate for people who are very hard to employ elsewhere. If one is prepared to sit out all night watching a charcoal kiln one is probably not someone who will enjoy an office or shop job. It is important for the balance of payments, which has been mentioned many times. It is important for the non-fossil fuels obligation and for the environment, let alone for forestry. It is a very efficient use of the Government's money to support a user industry rather than just the work in the forest.

The commercial opportunities are at a critical stage. They seem marginal at the moment because of the high uncertainty —there are no existing businesses that can be drawn on for comparisons—and because of the lack of infrastructure in this country for using low grade hardwood timber. They need impetus, demonstration projects and solid support from the Government. If they have that, we may well see the establishment of new industries which in due time can be weaned off government support.

7.34 p.m.

Lord Jeffreys

My Lords, I too thank the noble Lord, Lord Taylor of Gryfe, for bringing this debate to the House and congratulate our two maiden speakers on their excellent contributions.

In the limited time available I should like to refer to the environmental and recreational benefits of forestry in Britain today. I link these two important areas because, for an increasing number of our people, the pleasure gleaned from visiting our woodland areas is in direct relationship to the environmental benefits that are seen to be at work there.

It is a fact of life that accountability, either corporate or political, necessitates that forestry be managed in a cost effective way. There are, of course, two major problems. First, cost effectiveness does not always work to the benefit of the environment; and, secondly, in an industry where time scales can be very protracted, who can really predict what will be commercially viable in, say, 40 or 50 years time?

I believe that some of the financial risks involved in forestry projects can be stripped out through a greater degree of public participation, at local level, in forestry planting or conservation projects. Perhaps tax breaks could be given to individuals who are not landowners but who wish to invest in local forestry projects and collective planting schemes. That in its turn might allow for a less intensive approach.

As an excellent example of public participation, often at a local level, I commend to your Lordships the work of the Woodland Trust, which, through its 150,000 subscribers, has been able to purchase and manage a number of important tracts of vulnerable woodland around the country. Multi-purpose forestry must be encouraged. Increasingly it is recognised that the commercial viability of forestry is not limited to its eventual timber value. Recreational value can also play a major part. In particular, I am thinking of the period between planting and maturity when funds are required for active management.

The Forestry Commission, along with other commercial growers, has been accused in the past of environmentally damaging policies, particularly with regard to the intensive planting of conifers. I fully support the much greater move that has been seen in recent years towards the planting of native hardwoods. Our climate is much more suited to this type of woodland and of course it does have a greater environmental and recreational appeal. That has very much been taken on board by private landowners, albeit through changes in the grant system. The Government would do well to give that a further boost perhaps through the abolition of inheritance taxes payable on woodland areas, particularly those that give access to the public.

One of the most important by-products of the Forestry Commission's activities is its granting of public access. Whatever happens to the commission it is vital that these rights be maintained. We live in a small, densely populated country with intense recreational demands. If the commission is privatised then problems of access will undoubtedly be raised. On balance, therefore, I am for its retention.

I should like to see forestry policy being co-ordinated at a much more local level. I see no reason at all why a series of "privatised" woodland ares could not be created with priority rights for local shareholders. I would even suggest that the public might be prepared to pay for the use of these parks either through a shareholder scheme or perhaps via a membership format. That would enable a more "user friendly" planting policy and ensure public access in the years to come.

Lastly, I should just like to say a word about set-aside. I am one of those—and this includes many farmers—who find it difficult to accept that any business should be paid to do more or less nothing with a portion of its assets, although I accept that in some respects food production is a special case. Would it not be possible to permit, say, 10 or 20 per cent. of the rotational set-aside to be put over to the planting of permanent woodland? I understand that that needs to be tackled at European level, but perhaps my noble and learned friend can give me some guidance on that.

7.40 p.m.

Lord Burton

My Lords, I too congratulate the two maiden speakers and express my deep gratitude to the noble Lord, Lord Taylor of Gryfe, upon having initiated the debate.

If one looks at the history of the country's forestry, one finds a general drift from one extreme to another. First, our woods were devastated by the two world wars. There was then the Schedule D phase, which was ruined by the abuse by forestry companies where excessive areas of sitka and contorta were planted, sometimes by greedy pop stars. The countryside is now bedevilled by poor prices for our timber and by a desire to placate the often mistaken views of our urban dwellers. Forestry is being treated to the same nonsense as the farmers with regard to form-filling bureaucracy, dictation from planners, health and safety regulations and so-called conservationists, ramblers and the like who frequently know little of what is best for the countryside, let alone forestry, and certainly know nothing of rural economics.

I know of several instances where forestry has suffered from wrong decisions by these people, but time does not permit me to quote them today. Harvesting woods is a major problem. It does not seem to be appreciated that forestry depends on harvesting crops. A farmer would not be told that he could not cut his wheat or his barley because it looked nice waving in the breeze, but a forester is told that he cannot cut his crop which he has matured over many years because that might spoil the scenery.

Now that Schedule D tax recovery has mistakenly been removed, we are at the mercy of complicated grant schemes. However, when one such scheme is having the desired effect and is being successful—I refer to the farm woodland grant scheme—we are told today that the money has run out for the scheme in Scotland. That is a sobering thought. It is the one grant that has really been taken up. I should like to know from my noble friend how long we shall be without it.

Let us take another example. The top amount of grant is not available if any softwoods are planted. That seems ridiculous. The situation presumably arose out of complaints from environmentalists about the blanket planting by forestry companies in Caithness and Sunderland of contorta pine. However, one of the best methods of growing hardwoods is to have a nurse crop of Scots pine to push up the hardwoods into nice, clean stems. Anyone who has seen mature hardwoods in the snow will know what cold, draughty places they are. Can woods with no evergreens be the best environment for wild life? Surely it is better to have a mix with some softwood to provide roosting for birds in the new plantation.

There is increasing pressure for more access to the woods of the country. But a large proportion of those already taking access use the opportunity to exercise their dogs. Woodlands will absorb considerably more human beings than the open hill, but some control over dogs must be available. The harassment and pulling down of deer by dogs being exercised in the woods is substantial around urban areas. Our last surviving hen capercailzie has now left us. She tried to nest for three years and was put off her nest every time by dogs. The forest enterprise receives a recreational grant but the private sector has no help in catering for the public.

Why is the forestry enterprise being allowed to fell plantations which are at the first thinning stage? I gather that the Audit Commission, whose report is shortly to be published, has strongly criticised that practice, which has cost the country millions of pounds. A committee in another place has recently queried the practice. It has been told that the intention was to bring plantations into a more even age classification for environmental reasons. I maintain that that is no excuse. Yesterday I drove from Inverness and passed what used to be well grown plantations which have now reached their first thinning stage. I was horrified to find that instead of thinning, large chunks had been cut out of the plantations, letting in the wind, which has already blown down a considerable number of the remaining trees.

When the Audit Commission has already criticised the practice, why is the vandalism being allowed to continue? Are the Government and forest enterprises so frightened or influenced by the environmental lobby that they can no longer do the right and sensible thing? Are the Government prepared to see millions of pounds of public money being thrown away to please that lobby?

7.45 p.m.

Lord Mackie of Benshie

My Lords, the majority of people have kept to their time well. I might therefore take an extra minute but no more. There is no need for me to thank the noble Lord, Lord Taylor of Gryfe, for initiating the debate. When he drew the ballot, nothing would have stopped him. In fact one could not have got him to talk on anything else. However, I do congratulate the two maiden speakers. Without any disrespect to the excellent speech of the noble Viscount, Lord Addison, it is good that the noble Lord, Lord Barber, has broken his duck and that we shall now hear him on many occasions in the House.

It has been an interesting debate with one common theme: that the Government must do better. If the Minister will permit me to say so, the Government need to do better. The 1988 change in taxation was an unmitigated disaster. I understand that they are now putting that right. Noble Lords have quoted the figures. From 20,000 hectares privately planted, the figure came down to under 9,000. Therefore the Government have a great deal to put right. I trust that they are facing up to the position with their far from customary zeal.

The withdrawal of the farm woodland grant scheme in Scotland seems extraordinary. Has there been such an enormous take up that the Government could not stretch the money a little? No doubt the Minister will tell us when he replies.

During the past week I have talked to farmers and foresters. It seems extraordinary that despite representations from the Country Landowners' Association, the Government still insist on compart-mentalising the taxation on different enterprises in an estate. It is quite ludicrous that if one has a good year with regard to grouse one cannot put that against an enterprise on which one makes a loss. Surely a Conservative Government should consider the issue so that the large estates can balance one enterprise against another.

If one is lucky and makes a good job of it, at best the return on money is about 2 per cent. One needs to be a dedicated man to accept such a return when one could certainly put the money into the Alliance Trust in Dundee and guarantee that one's heirs would be extremely well off even paying 40 per cent. taxation. We need some consistency from the Government that they will maintain the advantages. There is nothing better than bribing a rich man to expand the assets of the country, both for the beauty and for the wealth of the country, the control of imports and so on. But the position has to be consistent; otherwise the device does not work. That was exactly the position in 1988: it was not maintained consistently and it did not work.

About 40 per cent. of the land in Britain is still owned and operated by large estates. The figure might be a little lower or a little higher. About 60 per cent. is owner occupied. Much of that will be in fairly large blocks which could tackle forestry in a logical manner. There are therefore two factors. A great deal of propaganda needs to be put out about the present grants. A speaker has already made the point about indexation of grants. With luck and good management, if the grants will be available in the future, with tax advantages, an excellent investment could be made by a farmer or owner. A good deal of work needs to be done on this issue.

Again, the Government made a total mess of getting outside money into the industry. There is no reason on earth why Terry Wogan should not put money in. The great fault was that the people doing this and taking the money were trying to plant in impossible areas. In fact, the whole thing was badly done. Everybody knew that it would never work in parts of Caithness. That is why we need the Forestry Commission. Because those concerned were not taking the grants but were doing it out of income, they needed only a simple licence, and the Forestry Commission did not vet the sort of planting that they were doing or the land that they were planting on. That is one reason why we need the Forestry Commission.

If the Forestry Commission is to be a good advisory and administrative body, it needs to have its own estates well managed (they could be criticised by everyone, including the noble Lord, Lord Burton), but if it is relegated to being an advisory body only, it will not carry the necessary weight. Therefore, it is vital that the Forestry Commission is kept in national ownership. I trust that the Minister is listening closely to his noble friend Lord Marlesford and others and ignoring the doctrinaire advice of the noble Lord, Lord Wade of Chorlton. The Forestry Commission is necessary for the well-being of the industry, and I trust that the Government will continue to think so.

7.51 p.m.

Lord Carmichael of Kelvingrove

My Lords, I should first congratulate the noble Viscount, Lord Addison, and the noble Lord, Lord Barber of Tewkesbury, on their maiden speeches. Both showed that they are well informed about the subject, perhaps in slightly different ways. They added to the quality of the debate, which is not always the case with maiden speeches. I certainly learned a great deal from them.

I congratulate also my noble friend Lord Taylor of Gryfe on initiating the debate. It has excited a great deal of interest outside the House. I have received many briefs from extremely good outside bodies. It is only fair to mention that they include the Scottish Wildlife Fund, Countryside Link, the World Wide Fund for Nature, the Royal Society for the Protection of Birds, and the Countryside Commission. Perhaps most of all I am grateful for the excellent report on forestry produced by the House of Commons Select Committee on the Environment. It is a pity that it dealt only with English forestry. However, as the report states, the committee's remit is the environ-ment. It could not therefore consider Scotland and Wales: it had to confine itself to England. Perhaps that could be considered in any future reconstruction of Whitehall. We may need a national body to look after rural affairs instead of proceeding as we do at present.

I spent a large part of the recess reading those reports and enjoyed the experience. However, given the short time that is allowed to me in this debate, perhaps I should put my reading of those reports and the excellent speeches that I have heard down to self-improvement.

Tax relief has been mentioned a number of times. As has been said, the 1988 Finance Act ended a tax incentive which, whatever else it did to forestry, was ultimately very badly received by the public. Perhaps that was because of the bad publicity it received. In a debate on 20th March 1988, when explaining why the incentives were being discouraged, John MacGregor said that he was meeting the public's desire that such a scheme should be stopped.

Perhaps the woodland grant scheme should be looked at again to see whether it is adequate to meet the increased plantings we need. That is a more honest way to run our forestry. It has the advantage that the proper choices of tree species can be planted to suit an overall forestry strategy. Under the old tax relief scheme, there was a feeling that there had to be quick returns, which obviously did not help a good forestry strategy.

A number of noble Lords have referred to the fact that the Scottish farm woodland premium scheme has been suspended. My information is that it has been suspended only until October this year. But why only in Scotland when one considers that new plantings are at their lowest levels for 40 years and that forestry is normally funded on a Great Britain basis? Surely, government policy is to encourage farm woodlands as a means of reducing agricultural overproduction. EC policy to encourage farm woodlands allows national governments to be reimbursed a proportion of the farm woodland grant schemes. Scotland is the only region among all EC member countries where the farm woodlands policy appears to show some sign of working. It would be to everyone's benefit and in everyone's interest if the Minister could explain why the scheme applies only to Scotland.

I turn to the subject of access. I was very pleased to note that noble Lords who have spoken, all of them very knowledgeable about forestry, have with one exception agreed with the idea that one of the benefits of a national forestry policy should be wider public access to forests. If the public have paid for grants —I am not objecting to that because there must be grants for forestry—the public should then have certain rights of access.

In a Written Answer on 30th March the Secretary of State for Scotland said: We have established a small group of officials, with representatives of the Treasury," — that is always ominous— Ministry of Agriculture, Fisheries and Food, Welsh Office, Department of the Environment and the Forestry Commission, under Scottish Office chairmanship, to review the effectiveness of the current incentives for forestry investment, to review options for the ownership and management of Forestry Commission woodlands and to make proposals for changes which would improve the effectiveness of the delivery of the Government's forestry policy objectives, having regard to the Government's other economic and environmental policies".—[Official Report, Commons, 30/3/93; col. 150.] Is that a preliminary step to some big privatisation of the Forestry Commission? The general consensus among noble Lords who have spoken today is that we need the Forestry Commission. Would it not have been better if a statement such as that had been made publicly in the House?

This has been a most interesting debate. Perhaps I shall spend a few days reading up on it before I forget all that I have learnt in the past couple of weeks from the very good briefings that I have been given. It would be helpful if the Minister could enlighten the House on a number of points that have been raised, not only by myself but, much more pertinently, by many others.

8 p.m.

The Minister of State, Scottish Office (Lord Fraser of Carmyllie)

My Lords, in responding to the debate it falls to me, initially, to congratulate those who have made their maiden speeches. First, I add my congratulations to those given to my noble friend Lord Addison on a constructive, eloquent and clearly knowledgeable speech. I extend the same congratula-tions to the noble Lord, Lord Barber of Tewkesbury, who brought to the debate a wealth of experience and, without being controversial, introduced a refreshing balance of perspective to a complicated debate. I hope that it will not be another two years before they have the opportunity to contribute to a forestry debate. I appreciate all too well how frustrating that has been for the noble Lord, Lord Taylor of Gryfe, who secured this debate.

As the noble Lord observed during the debate on the social and economic needs of rural areas on 3rd March, he has been waiting for two years to have the debate. The debate has come at an important time, when internationally forestry has a higher profile than it has ever had, following the Rio conference. And, closer to home, it has come at a time when the Government have recently announced their intention to look into ways of improving the effectiveness of their forestry policy. It is therefore desirable that such a debate should take place in the House.

Anyone who has listened to all or part of the debate, or reads all or part of it, cannot fail to be impressed by the depth of knowledge on this important matter which resides in your Lordships' House. The noble Lord, Lord Taylor of Gryfe, is well versed in the subject having at one time, as have other noble Lords, been an eminent chairman of the Forestry Commission. That he still keeps his finger on the pulse is shown by the fact that in his opening speech he voiced a number of concerns—concerns which have been echoed in the House by many noble Lords during the debate.

I can understand those concerns, but I certainly do not share the pessimistic outlook which some noble Lords have displayed. We believe that the forestry industry in this country has an excellent future. The most satisfying consensus reached during the debate is that we in Britain continue to need to plant more trees. It continues to be our policy to encourage the expansion of woodland cover in Great Britain for the many diverse benefits that forests provide. That policy is based upon the realisation of multiple objectives. The noble Lord, Lord Barber, I think it was, said that the leopard has changed its spots. It is perhaps unfortunate that in the way that he meant it that is not yet a matter of as wide a public appreciation as it might be.

I accept what the noble Lord, Lord Taylor of Gryfe, said about the possible long-term effects on wood processors if new planting levels remain depressed. But I am sure that he would be the first to acknowledge that we cannot, and should not, take a short-term view of forestry. Although we may have started from a low base, as a nation we have done more than any other country to build up our forestry area. We have doubled our forest area over the past 70 years. Nearly 250,000 hectares of new forests have been created over the past decade alone, mainly by the enterprise and initiative of private owners. I am grateful to my noble friend Lord Lyell for making his small contribution to the improvement of the braes of Angus.

We shall continue to build upon those resources in the future. A number of noble Lords referred to the effect that removal of the tax reliefs for forestry had on new planting levels in the private sector and on the ability of traditional woodland owners to offset maintenance expenditure. A number of your Lordships pointed to the fact that the five-year transitional period for existing woodlands ended recently.

The removal of forestry tax reliefs was done with the best interests of the forestry industry in mind. It was doing the industry no good to be seen merely as a tax haven, not just in terms of the public perception of what the industry was about but in the way it worked. The changes made in 1988 and subsequently have put the industry on a much sounder and more acceptable footing. The removal of tax reliefs was matched by a substantial rise in grant levels under the woodland grant scheme. They are substantial. They range from £615 per hectare to £1,575 per hectare. We have made important improvements to the grant system over the past five years. In some cases we have improved it, and will do so increasingly, by simplifying the forms to be used. In 1988 we introduced a better land supplement of £200 per hectare to encourage more planting of better quality land. That may not meet with the approval of my noble friend Lord Mountgarret, but we believe the right trees on the right sites mean that better land on lower levels can be better used. That should encourage more planting on that better quality land.

In 1990 we increased the value of that supplement to £400 per hectare for conifers and £600 for broadleaves. In 1992 we introduced management grants to encourage the positive management of woodlands and forests by a special, higher rate of grant for woodlands of special environmental value. Also in 1992 we introduced a community woodland supplement of £950 per hectare for establishing new woodlands open to the public and within easy reach of towns and cities. Again, if there was a consensus in the debate its purpose to encourage planting on the urban fringe, adding to the amenity and to the overall amount of planting in this country, seemed to be accepted. We have taken initiatives, to which there was some reference, to create major new forests in the English Midlands and the central belt of Scotland.

Our policy for broadleaves, introduced in 1985, has resulted in big increases in broadleaved planting. In 1985, the total broadleaved planting totalled less than 2,000 hectares. By 1992, this had risen to 11,000 hectares. Our native pinewood scheme in the Highlands of Scotland encourages owners to manage their existing valuable remnants of native pinewoods and to create new ones to emulate the native pinewood ecosystems. In just four years the area of native pinewoods has increased very significantly. We have therefore taken steps to target the forestry incentives to deliver our forestry policy objectives.

Let me be quite clear, however, that I share the disappointment expressed by noble Lords that the level of new planting continues to be depressed. In many ways that was only to be expected, given the re-adjustments being asked of the industry. However, we must also bear in mind that the general economic climate has not been conducive to encouraging investment in such a very long-term business as forestry. Given the economic backdrop, it is encouraging that landowners are planting as many new woodlands as they are.

The Government acknowledge the concerns of many—inside and outside the forestry industry—that not enough is being done to encourage the planting of the right trees in the right places and for the right reasons. We have a manifesto commitment to look at the incentives for planting. In pursuance of this, my right honourable friend the Secretary of State for Scotland announced before Easter that he had set up a working group of officials charged with reviewing the effectiveness of the current incentives for forestry investment. We are anxious to see that the best possible use is made of limited public funds by concentrating our efforts where they are most needed. The review will be completed by the end of the year. It will take account of the many concerns voiced by my noble friends Lord Swinton, Lord Radnor and Lord Marlesford and the noble Lord, Lord Geraint. As it reviews the incentives, the working group will be looking at a number of the tax issues that have been mentioned.

The noble Baroness, Lady Nicol, raised a number of detailed points with regard to evidence and consultation. It is still early days in the analysis to be done by the working group, but consultation on some issues is a distinct possibility. I can confirm that the management of existing woodlands will be covered by the review and that wildlife and conservation are, and remain, an integral part of our forestry policy.

The working group has also been asked to review the options for the ownership and management of Forestry Commission woodlands. The noble Lord, Lord Taylor of Gryfe, and other noble Lords referred to that. In view of the opinions expressed tonight on the Forestry Commission perhaps I may make it clear that there is no predetermined outcome of the review. I say to my noble friend Lord Wade of Chorlton that obviously a number of proposals might come forward. In addition, a number of sensitive issues have been touched on; for instance, access to Forestry Commission woodlands. Clearly those must be addressed in the context of the review.

We have stated on many occasions that there are no present plans for the privatisation of the Forestry Commission. That remains the case. However, noble Lords will be aware that all activities of government are being reviewed and this examination is part of the process. I heard the contributions of the noble Lord, Lord Gibson-Watt, and other noble Lords indicating their hostility. But I repeat that there is simply a review without a predetermined outcome.

In looking at the incentives and the commission's holdings, the working group's remit is to make proposals for change which will improve the effectiveness of the delivery of the Government's forestry policy objectives having regard to their other economic and environmental policies. The movement of Forest Enterprise to the private sector is not ruled out but neither is it a foregone conclusion. If changes are proposed as a result of the review the nature and timing will be decided by the Government with the aim of serving the best interests of British forestry.

A number of references were made to the desirability of encouraging greater planting on agricultural land. The Government are certainly keen to see that as a means of taking land out of agricultural production. The farm woodland scheme which was introduced in 1988 has produced more than 11,500 hectares of new planting on farms. It has sowed the seeds and has encouraged farmers to talk about trees on farms. It was replaced last year by the farm woodland premium scheme which has higher grants and is simpler to understand. It has made an excellent start, with applications so far totalling some 10,000 hectares.

A number of queries stemmed from an announcement or an understanding that a particular scheme in Scotland has come to an end because the money has run out. I am pleased to say that the scheme in Scotland was particularly successful. All that I can say to noble Lords at present is that we are currently considering whether it will be necessary to close the scheme to further applications for the rest of the year. As I understand it, planting will end by the end of next month. However, if such a step has to be taken it will not be taken lightly. We must ensure that sufficient resources are available—

Lord Carmichael of Kelvingrove

My Lords, will the Minister—

Lord Fraser of Carmyllie

My Lords, no, if the noble Lord will allow me, I have little time to answer 23 contributions. I wish briefly to refer to matters raised by my noble friends Lord Lindsay and Lord Addison with regard to tree planting in relation to non-rotational set-aside. The European Commission has not yet decided whether tree planting will be an option on land set aside as part of the farmers' obligations under the new EC arable regime. However, I hope that I can reassure the House without difficulty that the Government will continue to press strongly for such woodland planting to be an acceptable option. We are grateful for the indications of support given to that approach.

The wood-processing sector has invested some £1 billion in new processing plant during the past decade. The new mills and plants incorporate the very latest in new technologies in paper-making, panel production and saw milling. I listened with interest to alternative proposals; for instance, those put forward by my noble friend Lord Lucas with regard to low-grade hardwoods. Wood production from new forests created this century has doubled since 1970 and is set to double again during the next 20 years. As has been said, our timber is of high quality and is in demand by our domestic wood-processing industries. All that has been made possible by that doubling.

After years of restricting woodlands to the poorer soils of the uplands we now have policies in place to encourage the creation of woodlands on better land. We have measures to encourage the development of community woodlands. New opportunities are opening up for the planting of broadleaves and mixed woodlands and in Scotland native pinewoods.

The debate has been long and complicated. I appreciate that a number of specific questions were asked but during the time available to me I have not had an opportunity to answer in detail. I shall scrutinise in Hansard what has been said and where I can identify particular questions I shall ensure that replies are received by noble Lords. I conclude by thanking the noble Lord, Lord Taylor, for introducing the debate. I also thank noble Lords who contributed for showing a real expertise and, more important, a great concern for the future of the forestry industry.

Lord Taylor of Gryfe

My Lords, I thank the Minister but I am sorry that his commitment in relation to privatisation and other issues which have been raised was not as concise as I had hoped. Nevertheless, I am sure that he was impressed by the views expressed in the House, in particular by all the practising foresters who stated them so clearly.

I also thank all noble Lords who participated in the debate. Most of them travelled long distances and arrived in the House only to discover that they had five minutes to speak. I admire their discipline in observing the five-minute rule, during which time they were able to make their anxieties well heard. The message is loud and clear—that foresters in this country want, first, expansion and, secondly, the partnership between the private sector and the state sector to be maintained. I hope that the Minister has received that message loud and clear. I believe that all noble Lords on all sides of the House have conveyed the message in no uncertain terms. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.

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