§ Mr. Roderick
asked the Chancellor of the Exchequer what proposals he intends to introduce for the forestry industry in the light of the Interdepartmental Working Party Report on Forestry; and if he will make a statemnt.
§ Mr. Denzil Davies
In accordance with the Government's aim of encouraging private forestry to play an appropriate part in the rural economy, in harmony with the needs of agriculture and the environment, the following measures will be introduced:
- 1. The special capital transfer tax relief for woodlands under Schedule 9 to
164 the Finance Act 1975 will no longer be conditional on the woodland being the subject to a Forestry Commission dedication scheme. The necessary legislation will be introduced in the Finance Bill.
- 2. A number of changes will be made in the grants arrangements. The table which follows gives the details of these changes. They include increases in the existing grant levels under both Basis II and Basis III dedication schemes. The Basis III grants are to be raised more substantially, however, as an acknowledgement of the additional commitment into which woodland owners must enter to meet the environmental objectives of that scheme. Management grants, which already form part of the Basis II arrangements, will also be introduced under Basis III.
- 3. A small woods planting scheme will be introduced which will give particular emphasis to the planting of broadleaves in the lowlands. This new scheme will cover approved planting from 0.25 up to 10 hectares, which will now be the lower limit fo Basis III. Consultations between the Forestry Commission, local authorities and other bodies over woodland owners' plans under dedication schemes will continue to take place in accordance with the procedures outlined in the statement made by my right hon. Friend the Minister of Agriculture on 5th July 1974—[Vol. 876, c. 288–90.]—but discussions will be held about such consultations on applications received under the new small woods scheme.
- 4. The Forestry Commission has been asked to give wider publicity to its readiness to consider Basis III applications in respect of existing woodlands—and especially broadleaved woodlands—for rehabilitation by selective planting and natural regeneration aimed at bringing them into a productive state, without recourse to complete clearance of the woodland.
- 5. Approved planting of Caledonian pine of local origin in special areas to be agreed with the Nature Conservancy Council should in future attract the same planting and management grants as broadleaves under Basis III.
- 6. The grants review procedure will in future be formalised. The first review of the new grants will take place in October 1980.
Remaining details of the new grant arrangements will be published by the Forestry Commission after consultation with the Foresty Committee of Geeat Britain and with the local authority associations.
The additional cost of these measures, which is estimated to total £350,000 in 1977–78 rising to £1.8 million in 1980–81, will be contained within the existing public expenditure levels.
The CTT change will apply directly in Northern Ireland. The grant system there, however, is different and a review of the existing arrangements will be undertaken.
Existing grant per hectare New grant per hectare Dedication Basis II Planting grant £57.27 £75 Management grant First 40ha=£2.63 per annum Apportionment to be decided, based on a mean rate of £2.11 per annum. Second40ha=£1.77 Remainder=?1?09 Mean rate=£1.61 Dedication Basis III (Areas of one hectare or more) (Areas of 10 hectares or more) Planting grant (a) Conifers £45 £100 (b) Broadleaves £170 £225 (c) Caledonian Pine in approved areas £45 £225 Management grant for Confers under 25 years of age and broadleaves (and approved areas of Caledonian Pine) under 50 years of age. — £3 per annum payable quinquennially in arrears. Small Woods planting Schemes Areas between 0.25 and 3 hectares — £300 Areas between 3 and 10 hectares — £250 Seventy-five per cent. Of the relevant small woods planting grant will be payable on completion of satisfactory planting and the remainder five years later subject to the Forestry Commission being satisfied that the trees are properly established.