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The Government have now completed their review of forestry policy and with your permission, Mr. Speaker, I should like to make a statement.
With the projected rise in demand for timber into the next century and with the world's forests likely to come under increasing pressure, the Government believe that long-term confidence in both forestry and wood-processing industries in this country is fully justified. We look for a steadily increasing proportion of our requirements of timber to come from our own resources. A continuing expansion of forestry is in the national interest, both to reduce our dependence on imported wood in the long term and to provide continued employment in forestry and associated industries.
Recent difficulties in the pulp and paper sector, which represents only one-eighth of the market for wood grown in this country, do not change that conclusion. Forest owners have adjusted to the changed markets. Export opportunities in Europe for small roundwood are being successfully exploited. Looking further ahead, our industries, with the more advanced processes being developed in this country, are expected to be capable of absorbing the rising production from our existing forests, and of enlarging their present 9 per cent. share of the home market.
There should be scope for new planting to continue in the immediate future at broadly the rate of the past 25 years while preserving an acceptable balance with agriculture, the environment and other interests. We see a greater place for participation by the private sector in new planting, but the Forestry Commission will also continue to have a programme of new planting, in particular where it will contribute to the rational management of its existing plantations, and also in the more remote and less fertile areas, where afforestation will help maintain rural employment.
The main basis of policy for the future must remain the successful and harmonious partnership between the private sector and the Forestry Commission. In accordance, however, with the Government's support for private enterprise and our policy of reducing public expenditure, a determined effort will be made, by making better use of the capital invested in its existing assets, to reduce that part of the commission's grant-in-aid which finances the forestry enterprise. We therefore propose to provide opportunities for private investment in these assets, including the sale of a proportion of the commission's woodlands and land awaiting planting, with lease-back arrangements where it is important to maintain continuity of management to meet wood supply requirements or to preserve environmental interests. In planning its broad implementation of this policy, the Forestry Commission will take account of the views of the organisations concerned. We will seek an early opportunity to take the necessary powers for private investment in commission assets on these lines.
Following a review of the administration of grant-aid and felling licensing, carried out under the auspices of Sir Derek Rayner, we propose to make these less complex and less costly to administer. A single new scheme will be introduced at the start of the next forest year on 1 October 1981, of which the main features will be planting grants, a simplified plan of operations and a minimum of legal formalities. The basis III dedication scheme and the small woods scheme will accordingly be closed as from 1 July 1981.
Existing dedication schemes will continue for present participants, although some procedures will be simplified and individual dedication agreements will not be renewed on a change of ownership. The felling licensing system will be simplified to recognise the change in circumstances since this was introduced. Copies of a consultative paper, on which the various interested parties are being invited to comment, have been placed in the Vote Office.
As my right hon. and learned Friend the Chancellor of the Exchequer has already informed the House, the Government intend to continue the current income tax arrangements for forestry in order to maintain confidence in the private sector.
Mr. Bruce Milian:
Is the right hon. Gentleman aware that when he says that the Government are in favour of a continuing expansion of forestry in the national interest he will have our agreement, but that he will not have our agreement to anything else that he has said in his statement, especially the hiving off proposals?
Is it not scandalous that we have to rely on imported timber for more than 90 per cent. of our requirements, with a balance of payments deficit arising from that of nearly £3 billion? Is it not scandalous also that because of high energy costs and for other reasons we are now seeing wood-processing industries closing down—for example, at Ellesmere Port and Corpach—and the ridiculous situation in which Scottish timber is being exported to Scandinavia to be made into newsprint, which is shipped back to Britain at about 10 times the cost of the timber itself? It is ludicrous that that situation is developing.
We shall want to consider planting figures. The right hon. Gentleman said, in effect, that the more profitable areas will go to private enterprise and that the Forestry Commission will be left with the more difficult areas. Bearing in mind the success of the commission and the good job that it has done for no fewer than 60 years, we are utterly opposed to that.
Is the right hon. Gentleman aware that we are totally opposed to hiving off part of the Forestry Commission to private enterprise? It is not a matter of handing it over to private enterprise, because private enterprise operates in forestry only by means of planting grants—that is public money—and various income tax concessions. Does the right hon. Gentleman accept that without those public subsidies we would not have a private forestry industry? The commission is doing the main job that requires to be done and is doing it with considerable economies. We shall oppose the legislation that the Government introduce to hive off any part of the commission's enterprise.
Is this not a prospectus for individuals to get into private forestry in the United Kingdom not with any legitimate interest in forestry or in the expansion of the forestry industry but merely to make money out of income tax concessions that are available to private forestry? That is the purpose of the hiving-off operation, and that will be the effect of it. We are utterly opposed to that, and we shall seek a debate in the House on this issue as soon as possible.
I am grateful for the agreement of the right hon. Member for Glasgow, Craigton (Mr. Millan) with the general objective of expanding forestry at the same level as in previous years. I am afraid that the rest of his remarks seem to owe more to Socialist ideology than to any wish to help the forestry industry. If the right hon. Gentleman had in mind the interests of the industry, or the forestry-using industries, surely he would be glad at the prospect of a great deal more private capital coming into the industries at a time of great difficulty. He is completely hiding his head in the sand if he thinks that the expansion o f forestry planting, which has been a feature of the past few years, can continue successfully in any other way in the years to come.
With regard to the right hon. Gentleman's point about private enterprise taking over certain areas, he is absolutely wrong in believing that it will have any objective other than to get the best possible use of forestry land. If ether foresters can do that, surely he should welcome it in the interests of everyone who works in the industry.
May I congratulate my right hon. Friend on bringing forward the long-awaited statement on forestry? Does he foresee a need to impose conditions or the selling of assets to the private sector? In particular, will he ensure that a strong family private sector is maintained, as well as a corporate private sector?
I am grateful to my hon. Friend for welcoming the statement, The Forestry Commission will decide what pieces of land to offer for sale. As my hon. Friend will know well, almost all private operators who will wish to plant land will want the aid of a grant, in which case the Forestry Commission will be able to put conditions on it.
Is the Secretary of State aware that his statement is welcome if only as the first that we have had on forestry for about eight years—although accept that the previous Administration are equally at fault? Is he aware that the current rate of planting is far too low for the years ahead and should be at least doubled in Scotland, where there is ample scope and where doubt about forestry has held up the purchase of plantable land? Will he further accept that there is no reason, other than looting the public purse, to transfer forestry to private interests?
I am very grateful to the right hon. Gentleman for what he said at the beginning of his question. I appreciate his enthusiasm to see more planting—an enthusiasm that I share. However, if he thinks about it he may agree not only that the availability of finance for such a huge expansion of planting would be difficult to find but that there would be formidable environmental and agricultural problems to overcome if planting on the scale that he recommends were attempted.
May I congratulate my right hon. Friend on having come to grips with the Forestry Commission, which usually succeeds in playing off the three Ministers responsible for it one against the other? Can my right hon. Friend confirm that that Department costs £30 million a year? Will he also confirm that as the statement that he has just made is so important, we shall shortly be able to debate the matter? Is he aware that many interests welcome the fact that he has not fallen over backwards for a vast increase in forest acreage, because there are many watersheds that can have no more trees, and fishing is more valuable than forestry?
I am very grateful to my hon. Friend for his welcome for my statement. He is right in saying that in planning the future planting programme one has to take into account all the interests that may be affected. I have no doubt that my right hon. Friend the Chancellor of the Duchy of Lancaster will have noted his request for a debate, which is a very good idea. I agree that in the future programme the commission will have a great role to play. Its present grant-in-aid is roughly what my hon. Friend mentioned. It is possible that it will be progressively reduced in the future by the announcements that I have made today.
Does the Secretary of State hold the view that after 50 years the Forestry Commission has failed in its deliberations? If so, what plans or incentives does he have in mind for the private sector in the purchase of land? Is the Secretary of State aware that many employees in hamlets throughout Britain are dependent on the commission? What plans does he have to safeguard their interests? How many acres of land in Scotland, England and Wales will be sold during the first five years?
I cannot give an estimate of how many acres will be sold. It will depend very much on the demand. The commission will have control over what is put up for sale. It will clearly be pieces of land that make sense in the context of its general estate. I by no means believe that the commission has failed. It has been immensely successful over the past years. It has been particularly successful because it has always worked as a partnership with private forestry. That is why I believe that the change in the balance between the private sector and the commission is very much to be welcomed. It will enable the planting programme to continue at the same rate as over the past few years. Almost all the land will remain within forestry. We expect very few, if any, redundancies in the commission, but if there are any they should be taken up by the private sector, which will be operating the forests in its place.
Will my right hon. Friend bear in mind that in the South-West of England forestry has an important role, industrial:1y and socially? I welcome what he says wholeheartedly, but will he also ensure that any transfer of land to the private sector is well planned and carried out carefully? Is he aware that there could be serious repercussions if only the poorer forests were left to the Forestry Commission?
If the Minister must pursue a policy of asset stripping in the public sector, will he at least undertake that the proceeds of such sales of forestry land will remain in the hands of the Forestry Commission and that it will be able to reinvest the funds in new land for planting and new planting? Will he also undertake to see that the Commission will not retain only the poorest land, which is what he seemed to be hinting at in his statement?
The Forestry Commission will not retain only the poorest land. It will be for the commission to decide which parts of its estate it considers most suitable for selling. Some of the proceeds will be used for the commission's operations and some may be used to reduce its grant-in-aid. The commission in general will be able to make better use of its assets in this manner, which is one of the best features of the change.
As my hon. Friend implies, that is an important feature. Our existing forests, public and private, are at present supplying 9 per cent. of our wood and wood product requirements. By the end of the century, when our existing forests will be in full production, they will be supplying about 15 per cent. Because we do not consider that that figure is high enough we are planning to continue the planting programme at its present rate for the future and bring in the private sector to help.
Does the Minister appreciate that forests not only produce trees and timber but act as amenity areas for many millions of people throughout the country? Can he confirm that much of the land that will be transferred from the Forestry Commission to private investment will be in England, where the commission has not such a good network to manage as in Scotland? The commission has an excellent record in terms of access for the general public. It operates a policy of open access, so will the Minister assure us that land sold to private industry will afford complete and free access to the general public.
I agree that the Forestry Commission feels strongly about public access and its environmental role. It will very much bear that in mind in deciding, first, which pieces of land are suitable for sale. Secondly, when the land is sold and grants are sought for planting it will be able to impose conditions, if it wishes, with regard to access and other environmental factors.
I appreciate my hon. Friend's concern about hardwoods. The Forestry Commission will be bearing that in mind when it decides the management of its future estates and its policy on giving grants with possible conditions to those who buy the land. That is the best safeguard. The commission is very conscious of its responsibilities.
Is the right hon. Gentleman aware that the private sector's attitude towards planting has been amply demonstrated by the hon. Member for Gainsborough (Mr. Kimball), who displayed his hostility towards planting trees and who, I think, owns about 30,000 acres of my constituency—land that the Forestry Commission would gladly plant? Does he accept that if he is to rely on individuals like the hon. Member for Gainsborough in the private sector to increase plantings he will be putting his hand very deeply into the public purse to make it worth their while? Does he realise that the commission is hampered in expanding its planting by obstruction by people like the hon. Member for Gainsborough?
I do not accept any of what the hon. Gentleman said about my hon. Friend's activities. I am sure that on reflection he will agree that the decision whether to plant particular areas depends on a wide range of factors, including a knowledge of the ground in question. I hope that he will bear that in mind when he makes off-the-cuff statements of that sort on this matter.
Is my right hon. Friend aware that in the New Forest the Forestry Commission is involved in tourism as well as forestry? Since many of the camp sites are on prime grazing land, will my right hon. Friend have discussions with the chairman of the commission to make sure that the revenues derived from these activities are used to help those such as the Court of Verderers, who are responsible for animal welfare in the area?
Will the Secretary of State give an assurance on behalf of the Government that his statement will not mean that there will be interference with the commission's activities, particularly in Wales, in respect of the reclamation of land that has been used for opencast working?
May I congratulate my hon. Friend on presenting a package that will sensibly release substantial amounts of taxpayers' assets, encourage private investment and involve an expansion of and a commitment to forestry? Does he accept that an essential part of this presentation is future demand on the paper and board industry, and that the present closures pose a threat to the continued flow of products from our forests? Will he urge the commission to take a much more commercial line, as the Government encouraged it to do with Ellesmere Port, to help to sustain other paper mills and particularly mills in the newsprint business so that they can get through these difficult times?
I agree with my hon. Friend that this injection of private capital should enable the forestry industry to continue to expand at a difficult time. I agree about the industry's importance to the paper and board industry, which is going through a peculiarly difficult time. I shall certainly draw my hon. Friend's remarks to the attention of those concerned.
Before faking the statement, did the right hon. Gentleman consult the district authorities that have national parks within their areas—such as the Alderdale, district authority? Did he consult the papermakers' federation on a national basis about the decision to sell off Forestry Commission properties?
There has been a wide range of consultation over a long period. As the hon. Gentleman will know, this statement has been a long time coming. I give the assurance that in the implementation of the policy account will be taken of the views of all other bodies concerned.
Will my right hon. Friend pay particular attention to the integration of agriculture and forestry, especially in upland areas? Will he consult I his right hon. and hon. Friends about how incentives can I be given to enable forestry to become a tenant's crop in the upland areas?
The National Farmers Union and tine Forestry Commission have been in touch about this matter for some time. I shall draw my hon. Friend's remarks to their attention. I hope that the new grants system and the certainty of the continuation of the tax regime will encourage, all concerned who may be able to tare advantage of planting to do so.
What has been the loss of income to the Forestry Commission since the closure of Ellesmere Port and other pulp works? Is the Secretary of State aware that the Government clearly did not think through the consequences to the commission of allowing these mills to go to the wall? Will he enlarge upon that part of the statement that refers to the sale of assets and lease-back arrangements, which seem to have spread from the Falkland Islands to the Forestry Commission?
I do not have a figure—it is a bit early yet—about any loss of income from the closure of Ellesmere Port. I would not have thought that there was any, however, as the commission is successfully exporting timber at prices rather better than those that it was previously getting. If the right hon. Gentleman would like an answer to that question it can no doubt be provided if he will table a question.
Is my right hon. Friend a hare that his statement will be read with interest by the tourist industry and agriculturists in my constituency, which suffers from some of the worst examples of blanket planting by the Forestry Commission? Will he ensure that any extra timber is gained not through blanket planting but through a proper integration with agriculture, because the countryside needs both in order to secure a proper balance?
What serious answer can the Secretary of State give to the hon. Member for Devon, West (Mr. Mills) that the less desirable areas of forest will be retained by the commission while the more desirable parts will be sold off? Have the Government thought through precisely what will happen in an area like West Lothian? There the commission has done doubtless excellent but very expensive work in the Fauldhouse and Stoneyburn areas, where land will be kept on because no private owner would look at the area. In the area just by the Forth, however, there is rich woodland, which it may be thought highly desirable to sell off to Lord Rosebery, Lord Linlithgow, or whomsoever.
Is my right hon. Friend aware that my constituency has one of the highest proportions of land given over to forestry in the United Kingdom? What will be the maximum and minimum acreages to be sold? I welcome my right hon. Friend's statement. Will he indicate what encouragement he can give to increasing forestry-related employment in South-West Scotland?
I know that the forestry in my hon. Friend's constituency is extensive. The commission attaches great importance to these large plantations. I should think it most unlikely that it would wish to sell them off. On employment, the commission hopes that the new people who take over land for the private sector will wish to make it marketable for industries that depend upon timber. That is the best way of increasing employment in forestry and forestry-related industries.
Will the right hon. Gentleman accept that the hiving off of these limited natural resources will be not to family concerns but, more likely, to Scandinavian firms? Is he aware that the import of dear wood pulp and cheap print material is another nail in the coffin of the paper manufacturing industry in Britain?
Under these proposals areas will be planted when otherwise they would not have been. They will employ people in that work and in managing them, and they will eventually provide raw material for British industry. If we can bring in private capital to help do that and relieve pressure on the public sector, everyone will be that much better off.
I should think that the public will benefit from the sale, in that it will have better use of its assets and a greater certainty of an expanded forestry programme, to the advantage of the country's economy.
Is it not a measure of the extent to which the Government are motivated by extreme Right-wing ideology that they should decide to dismember a State commission that has served the nation well under successive Governments for 60 years? Will the right hon. Gentleman admit that the British Paper and Board Industry Federation, which repesents the Reeds and Bowaters of this country, is opposed to the hiving off of State assets? Will he end the nonsense about the commission's having freedom to buy other land and admit that this is a policy of selling State assets, and that there are no forestry arguments in favour of it?
I do not agree with the hon. Gentleman about any of that. The Forestry Commission has done an extremely good job for many years. As to motivation, what this Government are motivated to do is to see that public assets are better used to the better benefit of everyone in this country.