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Clause 1. — (Machinery and Plant.)

Part of Orders of the Day — Industrial Development Bill – in the House of Commons at 12:00 am on 11th August 1966.

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Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough 12:00 am, 11th August 1966

I beg to move, That this House doth disagree with the Lords in the said Amendment.

The effect of the Amendment would be to make the extraction of timber and works that are ancillary to the extraction of timber a qualifying industrial process for plant and machinery grants. We ask the House to reject the Amendment for three main reasons: first, it is outside the scope and intentions of the Bill; secondly, the forestry industry does not fall within the category of industries that require the highest priority for Government assistance in the present economic circumstances; and, thirdly, there is already an adequate system of Government financial assistance to forestry.

I remind the House that the scope of the Bill is, broadly, to provide investment incentives for industry in the sense of manufacture and production and for construction and mining. The Bill is not designed to provide incentives for agriculture, horticulture or forestry.

As the White Paper on Investment Incentives stated, there are separate arrangements for agriculture as a key sector of economic activity. Provision for investment grants for agriculture and horticulture is made in the Agriculture Bill. The arrangements for agriculture are different in a number of important respects from those contained in the Bill.

I agree that the Amendment relates to the extraction of timber rather than the cultivation of our forests and that forestry is not covered by the other arrangments to which I have referred, and that what I have described as the mining processes of the Bill cover the extraction of peat and brine—in case hon. Members wish to raise this argument—which are not minerals. I am sure that it will be agreed by hon. Members that the extraction of these minerals is essentially similar to the mining of minerals. On the other hand, the extraction of timber is more akin to the harvesting of a crop although, in this case, a very long-term crop.

I do not deny that forestry makes an important contribution to import saving. We import approximately 90 per cent. of our requirements in timber and timber products and spend large sums abroad each year on imported timber, timber products and paper. But the application of investment incentives for forestry equipment, which is what we are discussing here, whether for cultivating or for tree felling, would not, in our view, have any immediate effect upon the balance of payments.

8.15 p.m.

To take, first, the planting of trees, many years pass before trees which have been planted can make any contribution to the economy, and the rate at which timber can be extracted depends upon the planting of forests. Moreover, most private foresters and timber merchants operate on a modest scale and do not buy enough plant and machinery to attract sizeable investment grants. For the industry as a whole, the amount at stake is not very large.

We therefore take the considered view that the needs of forestry should be looked at as a whole, rather than that we should take this one narrow section, and that these needs should not be dragged in at this very late stage to a scheme which is designed for manufacturing industry. As I have said, there is already a system for giving Government assistance to forestry.

We have considered carefully whether the present system of assistance to forestry is adequate, or whether it needs supplementing by something comparable to the special schemes under the Agriculture Bill which will provide the new investment incentives for agriculture. The Government have concluded that this would not be justified at the present time. However, there is provision for regular review of the assistance to forestry and I assure hon. Members that the Departments responsible will certainly watch the situation carefully as it develops and consider whether any improvements are called for at any time.

I again stress, however, that in our view the assistance to forestry as asked for in the Amendment is outside the scope of the Bill. It is much better to help forestry in the ways I have suggested. I must, therefore, ask the House to disagree with the Lords' Amendment.