I beg to move amendment No. 38, in clause 1, page 1, line 13, at end insert—

‘(4A)The functions of the Forestry Commission for regulation and the provision of advice and incentives, so far as those functions are exercisable in relation to England, are transferred to Natural England.’.

I am pleased to be able to move the first amendment in our consideration of the Bill. It refers to an issue that was debated extensively by the Select Committee and which arose in Lord Haskins’s report, which gave rise to the legislation. The issue is that of forestry.

This is largely a probing amendment. The Select Committee quite clearly believed—as did Lord Haskins—that much of the role of the Forestry Commission relating to England should be transferred to Natural England. We appreciate that, since devolution in Scotland and Wales, the issue of the Forestry Commission has become more complicated. However, the Government are already proposing to shift policy from the Forestry Commission back to the Department for Environment, Food and Rural Affairs. If they shift policy back to DEFRA, what will be left are regulatory matters and the issue of grants and incentives in the forestry sector. Those things differ from country to country in the devolved authorities. The grant and regulatory systems in Scotland are different from those in England. Reading the Government’s response to the Select Committee’s proposals, I came to the view that the Government’s argument for not shifting the remaining function to Natural England was somewhat thin. Their argument seems to rely entirely on the idea that that would lead to even greater complexity in Natural England than exists at the moment.

There are already problems with forestry and the Forestry Commission. The commission is suffering ever-increasing losses and there are costs to the taxpayer year on year. I accept that some of that is to do with the collapse of timber markets in the past few years, but it is also to do with the fact that the commission has developed into activities that it perhaps should not be involved in, such as holiday cabins. There is a serious comparison to be drawn with the support that is going into the private forestry sector, which is of course by far the biggest overall owner of woodland and forestry in this country. About £20 million is being spent on the private sector in England, in terms of grants, compared with a loss of £350-odd million in relation to the Forestry Commission’s activities. That seems a huge imbalance.

The development of Natural England is about land use and conserving the natural environment. A great many of Natural England’s functions, which we will debate later, refer to the relationship between Natural England and land managers. We will discuss management agreements. Natural England will be responsible for implementing the Government’s changes to environmental care schemes. There are the replacements relating to stewardship, including the entry-level scheme and the higher-level scheme. All those schemes will be dealt with by Natural England.

Those of us who take an interest in these things—by which I mean members of this Committee and others—know that there is an ever-increasing trend in the countryside for land use to be more all-embracing. Many more farmers are planting woodlands or forests on their land and the whole interrelationship between forestry and other forms of land use is becoming ever closer. I therefore find it much harder to understand why the Government seem to insist that the implementation of forestry and woodland policy should remain distinct from all the other issues that Natural England will take on board. That is the gist of the amendment.

I am content that the Government are shifting the policy issue back to DEFRA, but that enhances the case for saying that the rest of the work of the Forestry Commission—I am not talking about managing the forestry estate; I am talking about the regulation and incentives side of the commission’s work—should transfer to Natural England. We already know that some 10 per cent. of the English landscape is covered in woodland. Many people would like it to be considerably more. There is ever-increasing interest from landowners and managers in developing that idea.

The concept of biomass is also on the horizon. You can rest assured that I am not going to go very far down that road, Mr. Forth, but there is ever-increasing interest from the Government, and the Opposition and other outside bodies, in the planting of crops or woodlands—in the form of poplar or willow coppice—for biomass production. In such a situation, we really would see an interaction between agriculture and forestry policy. If there is going to be—as many believe is possible—a huge development in the planting of coppice in the next few years for biomass production, it seems an even better argument for dealing with all the issues under one roof. Otherwise, we have a recipe for confusion.

As I said at the outset, I will not pretend to the Committee that I have necessarily chosen the precise words that do the job properly in this amendment, but I wanted to take the opportunity to challenge the Government to explain more clearly their reason for rejecting the Select Committee’s proposals. I note with interest that the hon. Member for Sherwood has absented himself from this debate because it deals with an issue where the Select Committee was at odds with the Government. I hope that the Minister will go a   little deeper into the Government’s reasoning rather than simply referring to the issue of complexity. As I have tried to explain to the Committee, that has been partly resolved anyway by the Government’s decision to shift policy out of the Forestry Commission and by the current devolved set-up within the commission.

We are considering why we cannot integrate that process with the overall purposes of Natural England in order to have a genuine one-stop shop—the phrase used by many organisations—for land managers, farmers, those in rural communities and others who are involved with the landscape and the countryside so that they are not subject to the confusion I referred to; not knowing who may be involved with a particular policy area.

There is no need for me to repeat any of my points, and I hope that I have made my case clearly to the Minister. I ask him to take the opportunity to explain to the Committee in a bit more detail the Government’s reasoning for rejecting the Select Committee’s proposals on this point.

I would like to support the amendment of the hon. Member for South-East Cambridgeshire, which I assume is a probing one designed to tease out from the Minister some of the Government’s reasoning. The Government’s response to the Select Committee report was a little thin and even at the stage of pre-legislative scrutiny, the Forestry Commission recognised that the issues were what it called “finely balanced”. That is probably as close as it can get to saying that it cannot understand why we are not moving in this direction.

There needs to be a clear, close working relationship and it has even been suggested that Natural England and the Forestry Commission would have shared targets. If they are going to share targets and be operating in similar spheres it is difficult to see why they are not part of the same organisation.

It was also suggested at one stage that the Bill creates a big enough amalgamation and incorporation anyway and that to include another large organisation might be too much to swallow in one go. Perhaps in two years’ time the Government could consider a relationship that would be so close, with shared targets and shared work, that it made little sense for the organisations to remain separate. There should at least be a consideration of the situation to establish whether there is a more efficient way of issuing guidelines, and whether controlling and examining forestry matters might be done better by one integrated organisation.

I begin by drawing the attention of the Committee to my entry in the Register of Members’ Interests, which shows that I am a consultant for the Countryside Alliance. I do not think that that will be relevant to today’s affairs, but I would like to make my position clear.

I would like to support my hon. Friend’s amendment, which I take as a probing, but important, one. My constituency contains what I think is the largest man-made forest in Europe, certainly in England. Forestry is an important part of the local economy. Ever since the Forestry Commission was, in   effect, split into three—England, Scotland and Wales—the large northern commercial forests have been left slightly on a limb, with the emphasis of the Forestry Commission England being much more on the environment and sustainable land use. That is why it is important that we hear the Government’s thoughts about the future of forestry in this country and the Forestry Commission.

The forests in Northumberland, and no doubt in other parts of the north, play a substantial part in our local economy. In my constituency, there is a large chipboard mill, which relies on a large quantity of timber coming from the Northumbrian and Scottish border forests. It is a major employer and puts something like £30 million into the local economy. So, the future of forestry in this country is extremely important.

The difficulty that has arisen in England since the emphasis, under DEFRA Ministers, was switched to environmental issues is that the commercial forests have tended to be slightly sidelined. Foresters from Forest Enterprise in the north often say that, in many respects, they wish that they could move the border further south so that they would be in Scotland, where the emphasis is much more on commercial forestry.

Having said that, the Forestry Commission has made tremendous steps locally in improving access to the forests and encouraging visitors. Our forests are now a major visitor attraction, so I do not wish to denigrate anything that the commission has done to improve access and recreation. That has been extremely important. However, it is necessary at this point to emphasise the importance of commercial forestry in the UK. The argument about the environment, sustainable forestry and looking after the ancient woodlands of Kent and Sussex is worth while but, as agriculture continues to change, commercial forestry has an important role to play and I would hate to see it being marginalised or sidelined in any way.

The Committee will see that the amendment would mean that the Forestry Commission’s work on regulation, incentives and advice would be incorporated into Natural England. I accept what the hon. Member for South-East Cambridgeshire has said about this being largely a probing amendment and I welcome that. There are some technical issues in respect of the way in which it has been drafted, which, as I accept the spirit in which it has been tabled, I will not dwell on. The debate is useful in that it allows us to flesh out how the provisions work.

I also noted what Lord Haskins said in his “Rural Delivery Review” and what the Environment, Food and Rural Affairs Committee said. Lord Haskins said:

“it is logical to integrate or closely align functions”.

The Select Committee said:

“it seems anomalous that the delivery functions of the Forestry Commission are not to be included in the remit of the Integrated Agency. If the territorial problem cannot be resolved easily, we recommend the closest possible working between the two organisations”.

The Select Committee and Lord Haskins, like those who have spoken in the debate, rightly pointed out the close and clear links between the work of the Forestry Commission and Natural England. As the hon. Member for South-East Cambridgeshire has said, both are concerned with sustainable land management. The Forestry Commission must be a close working partner of the new agency and work is already in hand to look at how the Forestry Commission England and Natural England can align their functions.

The straightforward answer to the probing amendment would be to say that, in essence, the hon. Gentleman is right that we need to get the bodies to work together as closely as possible, but, for technical reasons to do with the fact that the Forestry Commission is a British body, we do not think that it is appropriate to have complete integration. We think that aligning their functions is the more pragmatic route to take so that they can act as one organisation where that will deliver additional benefits for the customer and the environment. That might include, for example, sharing specialist staff and establishing first-stop shops; the hon. Gentleman used the phrase “one-stop shops”. To that end, a memorandum of understanding is being developed between the Natural England confederation of partners—English Nature, the Countryside Agency and the Rural Development Service—and the Environment Agency and the Forestry Commission. It will set out shared environmental outcomes and collaborative work programmes so, as far as possible, where appropriate, the individual customer will liaise with a single body.

The hon. Gentleman raised a very good example about the number of landowners developing more woodland who do not want to deal with a large number of agencies. I hope that through that memorandum an understanding can be reached with shared staff.

May I challenge the Minister a little more on the issue of the Forestry Commission as a GB-wide body? We have already seen that in Scotland all these functions are carried out completely separately; there are totally different delivery mechanisms in Scotland to those in England. Having made that division, I cannot understand why the Minister is saying that the delivery section, which is already completely discrete for England, cannot be shifted into Natural England. To me, that is its natural home.

I shall come back to that in a moment. Clearly, the hon. Gentleman raises a very good point that needs to be fleshed out. I would like to give him one further example of joined-up working first, which is the issue of biomass that he mentioned. I can confirm that we are looking at that issue as part of the funding streams review that is being carried out at the moment. We shall certainly try to ensure that the Forestry Commission and Natural England operate in a seamless way to simplify structures for customers. That is another good example of the direction in which we want to go.

The schemes run by the Forestry Commission will be part of an environmental land management fund, one of the three major funds that we will have under the simplified funding arrangements that I just referred to. The Forestry Commission and Natural England will share targets and objectives in many areas, although one of the aims of alignment will be to drive out duplication and inactivity.

The delegation powers that we shall debate later mean that the Bill will allow that close partnership to work. When we come to those provisions, it will be worth the Committee’s while to bear in mind that one of the main reasons for those powers is to allow such activity to take place.

On the issue of the body being a cross-border one, transferring functions from the Forestry Commission to another body could impact on the commission’s work in Wales and Scotland. As well as the delivery functions of regulation, provision of advice and incentives mentioned in the amendment, the Forestry Commission has other delivery functions related to the management of the public forest estate and the protection of the health of woods and trees. If delivery functions were transferred in England, Wales and Scotland would doubtless wish to consider their own arrangements and any changes there would require their own primary legislation to come into effect.

The Committee should also be aware that the Forestry Commission has other GB-wide functions, which, with the agreement of the Northern Ireland authorities, mean that it acts as the lead department for international forestry matters, such as trade and statistics, EU policy development and sustainable forestry on an international scale. It also has GB-wide research functions through its forest research agency.

May I push the Minister a little more on this issue? In reality, it has been some time since forestry became a devolved matter. The Forestry Commission has operated on a UK basis on matters such as research and plant health perfectly happily. However, the delivery that the Minister mentioned becomes more and more different and separate.

The other day, the Scottish Minister responsible for forestry announced a scheme—a madcap scheme in my view—to use taxpayers’ money to allow Scottish communities to buy state forests. That is a completely different policy from the one we operate in England. There is a real difference between delivery in the different devolved Administrations. I cannot see why there cannot be a UK-wide basis for matters such as research and plant health but complete devolution in the other countries that would allow most English forestry activity to be transferred to Natural England.

I am grateful for that. The way of thinking behind this is that we agree that a reasonable amount of delivery happens in England, or in Scotland and Wales. We agree that there are GB-wide functions such as research and international forestry which require an arrangement to take place. The debate then is whether we create an even smaller organisation to   carry out the GB-wide functions and possibly make it uneconomic for it to properly function as an organisation, or maintain the existing institutional set-up, but seek to align the England delivery functions closely with Natural England through the memorandum of understanding that I referred to earlier.

The Government have taken the view that we want to do the latter, not the former. I would understand if other people chose to take a different view, but we believe that that is the less risky option because we are dealing with currently constituted bodies and we do not then have to take the risk of trying to unpick all those GB-wide and devolved functions in order to put them back together in a new or emasculated body.

As my hon. Friend has said, all this joint working may go swimmingly and the opportunity may come later on to decide to go the whole hog and make the transfer from the Forestry Commission to the new agency. He says that that would take primary legislation and he knows how difficult it is to get a slot in the legislative programme. With all the enthusiasm on the Opposition Benches, why does he not snap their hand off and include in the Bill provision for a later scheme, to be made under secondary legislation, for the transfer?

My hon. Friend seeks to tempt me, but I will resist his temptation. I could go away and mull over his suggestion to see whether that is something we would want to do at a later stage, but I am pretty sure that we would decide to resist it. We have reflected on this matter. As I said at the outset, the issue was raised by Haskins and by the Select Committee, so we have had a good look at the intricacies and complications of reinventing the institutional infrastructure. We have concluded that, for now, we are best off with things as they are, but I will certainly reflect on the interesting notion that my hon. Friend has offered.

I concur with the hon. Member for Hexham in the sense that we have always considered that forestry responsibilities have been, to a large extent, devolved to Wales. When I put questions to DEFRA on forestry issues that relate to Wales, I am told to address them to the Welsh Assembly. I can therefore see the problem that the Minister faces. However, within the Bill, he sets up GB-wide institutions that could take over the residual functions of the Forestry Commission, such as the Joint Nature Conservation Committee, the nature conservation body for the whole of Great Britain. Surely that would be a fine resting place for the residual functions of the Forestry Commission.

It has been an interesting debate, but I come back to the delegation powers that we have included in the Bill and which we will debate later. They give us some room for movement in respect of shifting some of these things around within the basic infrastructure that we are setting up in this legislation. We will re-evaluate things on a rolling basis to see   whether they are successful. Ultimately, we regard the Forestry Commission as a relatively successful body and we shall continue to support it in its present structure, as Lord Whitty said in reply to the right hon. Member for Fylde (Mr. Jack) in relation to the Government’s rural delivery strategy last year.

We have considered whether we can achieve our objectives of sustainable land management and better customer service with the arrangements set out in the Bill, without the institutional disruption that we have debated. We are satisfied that the Forestry Commission and Natural England will be able to work closely together to deliver the benefits that we want for the environment and for customers. On that basis, I hope that the hon. Member for South-East Cambridgeshire will withdraw his amendment.

May I start on a slightly sour note? I hope that the hon. Member for Stafford (Mr. Kidney) will make more constructive comments in future.

I was trying to help.

No, I do not think that the hon. Gentleman really was trying to help. This is a serious amendment, as the Minister has appreciated. It was designed to provoke the sort of helpful and explanatory answer that the Minister has given. I will not pretend that I have been entirely convinced by everything, not least because of the point made by the hon. Member for Brecon and Radnorshire (Mr. Williams) that the Bill already includes the Joint Nature Conservation Committee, which will do the umbrella work on the conservation side. Whether that becomes the repository for the remains of the Forestry Commission or whether there was to be a joint forestry commission would be a moot point, but the principle is established for the rest of conservation.

The Minister also referred to the forestry estate, but I hope that I made it clear earlier that I was not talking about that. Part of the Forestry Commission’s problem is that, to use a phrase that is now politically incorrect, it is trying to run with the hare and hunt with the hounds, inasmuch as it is managing a forestry estate and trying, unsuccessfully, to run it commercially, while trying to support the private sector. I referred earlier to the imbalance of resources between the two. To shift the issue of dealing with the private sector to Natural England would be a constructive way of addressing the contradiction that already exists.

The Minister somewhat tantalisingly raised points about the later part of the Bill, in which the Government propose to grant powers and responsibilities to outside bodies. He tempts us to think that that is a way around the problems that we have discussed; perhaps we will examine that when we reach that part of the Bill. However, I am genuinely grateful to the Minister. He has done exactly what I hoped that he would do in response to the amendment, which is to clarify Government thinking. I am not   entirely convinced and we may wish to return to the problem at a later date, but for now I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

The clause establishes Natural England as an independent, non-departmental public body; if ever I slip into using the acronym, NDPB, later in the Committee’s proceedings, that is what I am referring to. Its general purpose and functions are set out in subsequent clauses. The clause also introduces schedule 1, which sets out the constitution of Natural England and other details that will be covered later.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.