I congratulate Mr. Williams on securing this debate. We do not often have debates on forestry or the Forestry Commission, and I hope that I can address some of the points that he raised.

In the hon. Gentleman's opening remarks, he touched on the history of the Forestry Commission and how it developed originally from a wartime need over many centuries to provide wood for our ships. When the commission was established in 1919, the commissioners were charged with the general duty of promoting the interests of forestry, the development of afforestation and the production and supply of timber. Later, a general duty of promoting the establishment and management in Great Britain of adequate reserves of growing trees was added to the commissioners' duties.

In 1967, the Forestry Act consolidated previous legislation and is the basis of the Forestry Commission's activities today. It was not until only 20 years ago that the commissioners were required to achieve a reasonable balance between the creation of new forests, the management of existing forests, the production and supply of timber and, most importantly, the conservation and enhancement of natural beauty and the conservation of our natural environment. After more than 60 years of focus on timber supply, the commission had a duty to change, which it has embraced with ever-increasing enthusiasm. Today, the Forestry Commission, in both organisational and activity terms, is unrecognisable from what it was only 20 years ago. I know that some people are still trying to catch up with the dramatic change that has been made.

The woodland resource created in the last century now has the capacity through enlightened management to deliver a wide range of social, economic and environmental benefits and make a positive contribution to sustainable development. The pace of change has increased, and today forestry is a devolved issue, as the hon. Gentleman mentioned. The Forestry Commission is responsible separately to Ministers in England, Scotland and Wales, and collectively on Great British functions. The current structure of the commission reflects those changes.

Much of the commission's work is with private woodland owners, to whom it provides grants and advice, but a significant part of its work is delivered by the commission's Forest Enterprise agency. More than three quarters of the commission's staff based in England work for Forest Enterprise, and the agency is the manager or steward of the national forest estate. It is a unique national asset. Its current range of activities vividly illustrates how much it has evolved, and I will give some examples of how it has developed.

The agency is England's largest provider of countryside recreational opportunities. It offers a vast range of activities, from open access for walkers and cyclists on all its freehold land to activities such as horse riding and motor rallying in selected woodlands. Forest Enterprise manages more than 100 self-catering cabins in woodland sites, which make a significant contribution to local economies. In 17 campsites across England, it provides nearly 5,000 pitches, generating additional income of more than £2 million a year.

The cabins at Keldy in the north york moors have recently received a major facelift in Forest Enterprise's largest ever investment in recreation. Some 62 superb new cabins are equipped to top-quality self-catering standards and built from sustainably produced timber, over half of which was grown in the UK. They will provide an additional 50,000 bed nights each year, as well as contributing £1.5 million to the local economy.

The business overall is profitable. In 2002–03, it showed a net surplus of nearly £800,000 and earned a real rate of return on capital invested of 8.5 per cent. In 2003–04, the surplus rose to £1.3 million. The commission is now developing a public-private partnership that will ensure that the returns on the investment can be sustained at no cost to the taxpayer. However, it is not only in fields of recreation and leisure that Forest Enterprise has been playing a leading role. The public forest estate has been independently certified for sustainable timber production. Indeed, it was the first state forest service anywhere in the world to have its operations certified in that way.

Enhancing biodiversity has equal importance to timber production. Great efforts are being made to improve the ancient woodland on the estate and to bring all 41,000 hectares of sites of special scientific interest on the public forest estate into favourable condition. That was the point that the hon. Gentleman was making about clear-felling. Clearly, different management systems are now required to meet the aims and obligations. In England, clear-felling and continuous forestry systems have their place, but they should be site-specific. The precise choice is for the managers in the region, taking account of the relevant environment gains and standards.

The process of dedicating the whole of the freehold national forest estate to public access under the provisions in the Countryside and Rights of Way Act 2000 is under way, and will be completed next year. That will help to ensure that public access will continue to be available in perpetuity. However, it is not just in our countryside that the Commission's expertise is providing real benefits. It has also been very active in delivering social, environmental and economic benefits for our towns and cities. It is at the forefront of work to restore former industrial land, and to create a green infrastructure for future developments.

There have been good examples of this new role in three of the 12 community forests. In Thames Chase to the east of London, in the Red Rose forest near Manchester and in the Mersey forest, a £9 million Treasury-funded capital modernisation fund project has enabled Forest Enterprise to create 1,300 hectares of new woodland. Forest Enterprise has bought land, planted trees and created footpaths through the new woodland. Local people have enthusiastically played their part, helping to design and develop the new woodland. There are many more similar projects right across England.

If the commission is to continue to be an effective delivery body, it needs to operate within clearly defined policy frameworks. In our rural strategy, published last year, we made a commitment to transfer responsibility for strategic forestry policy in England to the Department for Environment, Food and Rural Affairs, and that has now been done. That is allowing the Forestry Commission to broaden its responsibilities as the lead delivery body for forestry; that includes taking on responsibility for community forestry and the farm woodland premium scheme.

The new forestry policy unit in DEFRA will act as an advocate for forestry in Government, contributing to all the cross-cutting policies in which forestry does, or could, play a part. One of the first tasks of the policy unit will be to undertake a review of the England forestry strategy that we published in 1998. The strategy set out a five to 10-year vision of our priorities and programmes for forestry and has been a very successful framework for support for forestry in England. However, with the changing policy and delivery landscape, now is an ideal time to refresh the strategy. The new forestry policy unit and the commission will work closely with each other.

We are not, however, looking at forestry in isolation. One of the key elements of the draft Natural Environment and Rural Communities Bill, published two weeks ago, is the establishment of an integrated agency to help protect and improve our natural resources. The commission will become a close working partner of the new agency, ensuring that there is a comprehensive and coherent approach to land management, whether woodland or not. That alignment of the Forestry Commission will build on the success of partnerships that the commission has established with English Nature, the Countryside Agency and the rural development service.

The Forestry Commission provides grant support for the management of existing woodlands and the creation of new woodlands through the woodland grant scheme. Owing to exceptional demand the commission closed the scheme to new applicants in June last year, and an additional £3 million of funding for the current year was announced last October on top of the £18.5 million already in place. The success of the scheme means that more than 24,000 hectares of new woodland was established between April 2000 and March 2004. The Forestry Commission is well on the road to meeting the England rural development programme target of 30,000 hectares of new woodland in the seven-year period ending in 2006. The replacement England woodland grant scheme is expected to open for applications in July and will provide a framework for the delivery of public benefits through incentives for the stewardship of existing woodland and the creation of new woodland.

The hon. Gentleman made a couple of points about timber markets and imports, and it has been suggested that Forestry Commission timber production is depressing the timber market for private growers. The Forestry Commission regularly publishes production forecasts and details of its planned production. That assured supply has been one reason for continued investment in the UK processing sector. One of the hon. Gentleman's points was that that supply is seen by many producers, particularly processors, as the basis for their investment and future investment. About 85 per cent. of the UK's wood supply comes from imports. Timber from UK sources has to remain competitive with those imports, which could easily increase. That means that the world market, and not the level of Forestry Commission production, sets prices for UK-grown timber.

By their very nature, the economics of forestry arouse a great interest in many people. It is a complex area in terms of assessing the relative costs and benefits, which are often interdependent. That is the nature of multi-purpose forestry—action taken to implement one objective frequently delivers benefits for many objectives. They are complex matters that I cannot do justice to in this debate. In April 2003, an economic analysis of forestry policy was commissioned by DEFRA and the Treasury. I will arrange for a copy of the final report to be sent to the hon. Gentleman and for copies to be placed in the Library.

We have a sustainable procurement policy supported by the UK Timber Trade Federation, which implements a responsible purchasing policy through its members. I am pleased to note that all Forestry Commission woods are certified together with an increasing number of owners' woodlands. We estimate that more than 70 per cent. of all wood produced from UK forests is now certified, and 50 per cent. of the output from UK saw-mills is also certified. That independently verified assurance of their sustainable management provides a real advantage in the competitive marketplace.