House of Commons Hansard Debates for 11 May 1992

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whatever happens, the routes in a district which constitutes one third of the land mass of Britain and which is heavily dependent above the central belt on public service lines will still run and still be funded?

What can we make of the position when Scottish papers are full of speculation that Waverley station in Edinburgh will be the prime site that is sold first as the flagship of the new compromise? We find tagged on to an article in the Sunday Mail the reassuring news that

"A private company buying the station would have to give access for ScotRail track, trains and staff."

That is a relief--at least we are guaranteed that Waverley station will still have trains after the wonders of privatisation. Can the Minister deny or confirm the report that appeared on the front page of Scotland on Sunday on 10 May that the Scottish board of British Rail is about to be disbanded? I hope that he can give us an assurance that that is not so, particularly in view of the reason given in the article, which is that the board

"does not want ScotRail's advisory board leading private or public opposition to piecemeal privatisation north of the Border". It seems a sad state of affairs if, in order to try to muzzle opposition, we start disbanding important parts of the advisory and management mechanism of British Rail.

Why is the public against this privatisation--a fact conceded by the hon. Member for Saffron Walden (Mr. Haselhurst), at least by implication, when he said that privatisation was not one of the principal reasons of success? The answer goes back to the scepticism to which I have referred about the clash between the interests of the profit-driven operator and the needs and interests of the consumer. I have about a minute in which to discuss the coal industry, so my remarks will have to be compressed. Coal is an industry with a future and it should be at the heart of energy policy. I do not believe that hard decisions about where we get our fuel and how we price it should be ducked by the Government merely because they have privatised and changed the form of ownership. Will coal be sold as one unit or will it be broken up and packaged? If the latter, will the packages include deep-mine and opencast potential in each package? Will we sell the operations with the reserves attached to them, or will we sell geographical areas with all the unused and unworked reserves in them? Will there be an analogy with the North sea in which the Government hold the reserves and any exploitation will go out to tender? Half a thousand questions could and should be asked. We are reduced in Scotland to one pit--the Longannet complex--but it is profitable, with a five-year contract with Scottish Power. But Monktonhall and the Frances, and many other parts of Scotland, have possibilities that ought to be explored, too. There is opencast on a massive scale. At Dalquandy, the biggest site, on the borders of Lanarkshire, I am told that the potential is for about 4 million tonnes a year, with a life of 40 years. The Minister will know and doubtless be thinking about the fact that there will be many who will argue that any scheme for disposal should allow a Scottish sale that includes deep mine and opencast elements. There is much to be found out and examined before we get to that point, but I hope that all these matters will be laid on the table before the Bill goes into Committee so that we are not, ludicrously, left

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having to pass a paving Bill which is in effect a parliamentary blank cheque while we still have no idea of how the Government will deal with the real issues.

The argument is not yet over ; it has a long way to go both for coal and rail services. The Government still have to prove their case. I hope that they will be flexible but I take a gloomy view of the prospects of that. I fear that far too many Ministers will not even pay lip service to flexibility. The hon. Member for Southampton, Test (Mr. Hill), who I am sad to say is not in the Chamber now, said that an open mind was needed although, rather endearingly, he conceded that his own was set in concrete.

It is perhaps more sinister that when the Chancellor of the Duchy finally conceded that what was being offered to the railways was not privatisation in the full sense he went on, if I heard him correctly, to say that if this should lead to privatisation, so much the better. That confirms my fears that these proposals are buttressed by prejudice, that they are not well- founded in logic and that they are not in the public interest.

The Government should retreat. I remind them of the words of a well known Conservative rebel on this issue--the hon. Member for Christchurch (Mr. Adley), who described rail privatisation as the poll tax on wheels. And look what happened to the poll tax. 9.43 pm

The Secretary of State for Scotland (Mr. Ian Lang) : Like the hon. Member for Glasgow, Garscadden (Mr. Dewar), I begin by paying tribute to the rich crop of maiden speeches to which the House has been privileged to listen during today's debate.

First, there was my hon. Friend the Member for Croydon, South (Mr. Ottaway), who, as the hon. Member for Garscadden said, is a retread. He follows in the footsteps of Sir William Clark, the distinguished chairman of the Conservative Back-Bench finance committee who is fondly remembered in the House. My hon. Friend brought an international flavour to his review of privatisation--a clear suggestion of a speech written for another day in this debate : indeed, the speech was also a retread. Nevertheless, my hon. Friend made his mark well in a previous incarnation in this place and the House will look forward to hearing from him again.

The hon. Member for Devon, North (Mr. Harvey), as the hon. Member for Garscadden pointed out, has made such a mark that he has already been appointed his party's transport spokesman. He paid a generous and welcome tribute to his predecessor, Tony Speller, and showed a great knowledge of and interest in his constituency.

My hon. Friend the Member for Bury St. Edmunds (Mr. Spring) paid a welcome tribute to Sir Eldon Griffiths and showed great knowledge of the history and present problems of his constituency and the railways. The hon. Member for Sunderland, North (Mr. Etherington) showed a knowlege to the history of Sunderland and mentioned its forgiving nature to absentee MPs, which I am sure he will never be. I hope that the hon. Gentleman is in his place.

The hon. Member for Nottingham, East (Mr. Heppell) spoke with confidence and assurance on local government and privatisation, not always with accuracy, but that can be a matter of opinion. The hon. Member for Sheffield,

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Hillsborough (Ms. Jackson) spoke about her priorities in education and about deregulation and health and safety issues. The House will soon want to hear from her again.

My hon. Friend the Member for Erewash (Mrs. Knight) made a distinguished speech using references with skill and ability. She showed great knowledge and a grasp of the issues and the geography of her constituency and spoke in particular about the lace industry and local government. The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) demonstrated a knowledge of the railways and expressed clear views on environmental and constitutional matters. He spoke about harmful emissions of pollutants into the atmosphere and the House looks forward to his next speech.

I regret that I did not hear the only Scottish Back-Bench speech, that of the hon. Member for Midlothian (Mr. Clarke) who made what I am told was an excellent contribution. The House can imagine the enthusiasm with which I look forward to his next speech. I am sure that he will have many more opportunities in the House or in Committee to display his talents. He is the successor to Alex Eadie, a distinguished and much liked and respected figure. I am told that the hon. Gentleman spoke with authority and concern derived from 25 years underground in the coal industry and 16 years in local government.

He specifically asked about two matters which I shall deal with now in case they become lost. He asked about Frances colliery and Monktonhall colliery. As he knows, Frances colliery was closed following a fire during the miners' strike, with the loss of 500 jobs. It is currently maintained on a care-and-maintenance basis and the colliery's future is a matter for British Coal. However, reopening depends on several factors, not least of which is the need to secure a contract for its output. Monktonhall colliery has been on offer for third-party operation since December 1991, and two private sector organisations are interested in securing a contract with British Coal. It is encouraging to note that if Monktonhall colliery has a future, it seems to be in the private sector and not in nationalised management.

My hon. Friend the Member for Castle Point (Dr. Spink) made a fluent and entertaining speech which showed knowledge of his constituency and its needs and enthusiastic support for privatisation. I welcome my hon. Friend's tribute to Sir Bernard Braine, who was the Father of the House and highly regarded by all hon. Members.

The hon. Member for Doncaster, North (Mr. Hughes) spoke ably and interestingly about his constituency and about community care and privatisation. My hon. Friend the Member for Beckenham (Mr. Merchant), like my hon. Friend the Member for Croydon, South, is paying a return visit to the House and this time I hope that he will stay longer. The House welcomed his sound knowledge of his constituency and listened with interest to his views on how rail privatisation might help his constituents.

The hon. Member for Hampstead and Highgate (Ms. Jackson) delivered her maiden speech in the accomplished way that one expects from someone with such a distinguished career already to her credit. We especially remember the great speeches of Queen Elizabeth I that she once delivered. In one of them the Queen dissolved Parliament and bade every Member before leaving for his shire to come and kiss her hand. Who knows where the hon. Lady might end up with an accomplishment of that kind. She also displayed knowledge of her constituency

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and of housing matters and the House was grateful for her generous tribute to her predecessor, Sir Geoffrey Finsberg. We look forward to hearing her again.

The hon. Member for Sherwood (Mr. Tipping) paid a kind tribute to Andy Stewart, a displaced Scot and now doubly displaced and sadly missed in the House. Like his predecessor, the hon. Gentleman displayed great knowledge of the coal industry, and I am sure that he can be relied on to advance the interests of his constituents. The hon. Member for Darlington (Mr. Milburn) inevitably spoke about railways. I am sure that the House is grateful for his tribute to Michael Fallon, a former Minister in the Department of Education and Science and, perhaps more significantly, a former Scottish Whip, who is much missed. The hon. Gentleman's fluency and knowledge of his constituency and of his constituents' interests and his clear views on the policies that the Government should be following will have impressed the House.

Finally, the hon. Member for Wallasey (Ms. Eagle) paid generous tribute to her predecessor, my right hon. Friend the Minister for Overseas Development. She also spoke with authority and fluency about her constituency and her priorities in this place.

All the maiden speeches that the House heard today were accomplished, confident and knowledgeable contributions that will enhance the reputation of the House. The House listened with interest and admiration to all of them and will look forward to hearing these speakers again.

The hon. Member for Garscadden tempted me to speak about the Scottish constitutional question, and I could reply at great length on that subject, as we have debated the issues concerned at considerable length. However, at this stage, I shall confine myself simply to saying that the Scottish Conservative party fought the election to this United Kingdom Parliament above all else as a unionist party. We rejected the charlatan potions of all the other parties and, although wipe-out was predicted, in the event we held all our seats and increased our representation in the House by more than one fifth.

We were the only party to increase both the number of seats and our share of the vote. For every three votes that the supposedly omnipotent Labour party secured, we got two. We got twice as many votes as the Liberal Democrats and four times as many seats as the Scottish National party. That clear rallying of support to us, despite the massive combined assault by all the other parties, was confirmed by last week's district council elections, in which our vote went up by one fifth and the number of our seats by one quarter. The Labour party fought the last election on devolution throughout the United Kingdom and was defeated in elections to the United Kingdom's Parliament. Where its case was argued strongest, in Scotland, the swing against it was the largest.

Ms. Hilary Armstrong (Durham, North-West) : Does the Minister know that, in the northern region, the Labour party got more than 50 per cent. of the vote and that the commitment of the northern members of the Labour party was to devolution for the north? That was not a defeat.

Mr. Lang : Like hon. Members on both sides of the House, the hon. Lady stood for election to this United Kingdom Parliament, not to a Parliament for the north-east.

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The hon. Member for Garscadden asked me various questions about the consideration of these issues. All that I can say at this stage is that the Government remain willing to consider ways to improve the mechanisms of the government of Scotland, provided that that does not jeopardise the integrity of the United Kingdom and its Parliament. My right hon. Friend the Prime Minister said that the Government were taking stock and that we would report back to the House, and that we shall do in due course.

Mr. Dewar : I shall be brief, as I recognise that the Secretary of State has much to talk about. However, I referred to a report, allegedly authoritative, from Downing street and gave a direct quote from a Downing street source saying that there would be nothing in the next 18 months and no undertakings in the 18 months after that. I am sure that the Secretary of State will recognise that that is a depressing and lengthy timetable. Can he say anything to encourage me?

Mr. Lang : I can give the hon. Gentleman no specific information on timetabling, except to say that the speculation that nothing will happen for 18 months is not accurate.

The issue that primarily occupied the House today was privatisation and, most particularly, privatisation of the rail and coal industries. Many hon. Members spoke about railways, and some had close personal and constituency interests. The Government fully recognise the contribution that an efficient rail network can make towards the country's transport needs, as evidenced by our approval--here I respond to my hon. Friend the Member for Saffron Walden (Mr. Haselhurst) who requested that we ease the grip of Treasury control--of unprecedented levels of investment, which have amounted to more than £8 billion at today's prices since 1979. Investment is now standing at the highest level for 30 years. Introducing the disciplines and freedoms of the private sector will enable the railways to respond better to users' needs, and that will result in a better service to customers. To those who ask about our detailed proposals, I can respond by saying that the Government will publish a White Paper setting out our proposals as soon as they are ready. We shall continue to provide subsidy for loss-making regional rail services for as long as is necessary.

The arrangements will sustain the present national network of services. The liberalisation of access to the rail network for private sector operation can satisfy the necessary safety and competence standards. It is a positive move towards making the best use of the nation's railways and to seeing more traffic carried by rail. The development whereby Stagecoach Holdings is attaching two coaches for seated passengers on the Aberdeen-London train shows the sort of diversity and creative approach that can so much improve the quality of service to travellers.

Mr. Robert Hughes : During the election, the right hon. Gentleman dropped hints from time to time that we might get the electrification of the east coast main line between Edinburgh and Aberdeen. What are his plans for that? Under the Bill, who would pay for the capital development? Would he be asking Stagecoach to pay a substantial part of the capital development?

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Mr. Lang : The hon. Gentleman is mistaken. I made no reference to the electrification of the Aberdeen-Edinburgh line during the election. I am sorry to disappoint the hon. Gentleman. I give him the same reply as that which I have given in the past, which is that it is a matter for British Rail. It has been investigating the matter at great length to ascertain whether the project would be economically viable.

My hon. Friend the Member for Christchurch (Mr. Adley) emphasised the importance of safety standards in the privatisation of the railways. That is something to which the Government attach the highest priority through the railway inspectorate. My hon. Friend asked me about the Dornoch Firth bridge. In general, projects of that kind are matters of judgment for British Rail. It has to decide whether additional investment for such a project could be justified commercially. In this instance both Highland regional council and British Rail have studied the proposition and concluded that public investment could not be justified.

The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) talked about British Rail Engineering Ltd. and the position of employee shareholders. She suggested that those shareholders were being compelled to sell their shares. I understand that that is not the position. ASEA Brown Boveri, having taken over from Trafalgar House shares in BREL, is anxious to increase its holding by acquiring shares that are held by employees, but the employees are not obliged to sell. The unions are advising them not to sell. It is a matter for individual shareholders and not one for the Government.

Mr. William Cash (Stafford) : Will my right hon. Friend give way?

Mr. Lang : I ask my hon. Friend to forgive me for not doing so. He was not present during the earlier part of the debate and I have little time left to me.

My right hon. Friend the Member for Selby (Mr. Alison) and the hon. Members for Sunderland, North and for Midlothian emphasised the importance of safety and suggested that safety considerations in a privatised coal industry would be at risk. There is no reason to believe that there would be any reduction or diminution of safety matters under privatisation. The Health and Safety Commission and its executive would be much involved in safety matters throughout. I readily acknowledge that

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safety remains a paramount consideration. There is no reason to believe that privatisation would make coal mining any less safe. I have had little time to reply to the debate, but I want to say a few words about the underlying philosophies of privatisation and nationalisation. It is unsurprising that the Labour party is so preoccupied, especially in Scotland, with constitutional mechanisms. That is partly because, having failed in successive elections to win power through the established democratic processes, it is trying now to change the rules to its advantage. That lack of respect for checks and balances and for parliamentary democracy is recognised and resented by the British people. It is partly, too, because it has an unhealthy preoccupation with the exercise of power. That is based on an excessive belief in the role and functions of government. Nothing more clearly demonstrates that than its sustained addiction--it has been with the party throughout its life, which is now drawing peacefully to a close--to the draining and debilitating cause of nationalisation.

Nationalisation is an economic deformity. It is a dead end. To take over the commanding heights of the economy is at once to reduce them to the quagmire of the economy. Nationalisation cannot succeed, and now it is not only Britain but the rest of the world that know it. Labour's tragedy is a terminal one. However much it pretends that it is no longer wedded to nationalisation, and however much it renounces its creed, it cannot carry conviction because it is not convinced itself.

Clause IV is still there. It is still beating at the heart of socialist philosophy. With almost everything else excised, it is the heart of the socialist philosophy. I was struck by the ringing nature of the endorsement of the hon. Member for Kingston upon Hull, East (Mr. Prescott), when he said that he was quite happy to accept it. The Labour party mouths the phrases of decentralisation, free enterprise, choice, competition and private ownership, but nobody believes it because it does not believe these ideas itself. Its faith is a different one altogether. The Labour party cannot adapt because at its centre is an idea that has gone.

Privatisation is undoing the damage of nationalisation. It is returning the property confiscated by nationalisation. It is releasing a new life force to create wealth. It goes with the grain of human nature, it encourages enterprise, it generates prosperity, it enriches society and it is a force for good. That is why it will endure and why we, who support it, will endure.

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

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Forestry

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Robert G. Hughes.]

10 pm

Sir Jim Spicer (Dorset, West) : I open this short Adjournment debate by saying how delighted I am that the Minister--my hon. Friend the Member for Dumfries (Sir H. Monro)--is to reply to the debate. It is his first time on the Front Bench for a few years. There is no one better qualified to speak about forestry. As a Scot, he knows how important forestry is in Scotland--although it is equally important for all in the United Kingdom. I warmly welcome him to the Front Bench.

I apologise to my hon. Friend and to you, Madam Speaker, as the debate was billed as being on the subject of the Forestry Commission. I am not saying that that is a dull subject, but it is not what I intend to speak about tonight. If anyone from the Forestry Commission is in the Gallery listening to the debate, he will be sadly disappointed.

I want to talk about the crisis in forestry in this country, which could and should have been dealt with over the years. I hope that it will be a debate in shorthand because those with an interest in forestry know what the problem is only too well. I shall briefly set the scene. Between 1980 and 1988 there was a renaissance in the forestry industry in Britain which benefited all sectors of the industry. Sometimes people think about the subject only in terms of forestry, but there are three sectors--the nursery men, the growers and the processors. They are interdependent and equally important. During that period, the level of planting of broadleaf and conifers in private woodlands rose from 8,302 hectares to 23,821 hectares. There was near certainty that the target--and I stress that it was the Government's target--of 33,000 hectares would have been achieved by the year 1990-91. I am not arguing against the tax changes in 1988 because there were things that were wrong and things that needed to be put right. However, nobody really anticipated what would happen after those tax changes. I have a particular constituency interest as the first thing that happened was that 10 million plant orders were cancelled and a large nursery man in my constituency stopped production. In 1988 to 1990, there was a drop in planting in the private sector alone, from 23,000-plus hectares to 12,767 hectares. I am quoting the exact figures so that there is no nonsense about the matter. That massive reduction was not expected.

In 1988 and 1989 people said, "Don't worry. We have changed the tax system, we are moving over to grants, and grants will solve the problem." That has not happened and the haemorrhage and the lack of new planting have continued. Even the Forestry Commission reported in 1990 that new plantings totalled only 4,081 hectares--lower than in 1988. I apologise for giving more figures, but total planting in 1990 was 16,874 hectares, which was the lowest figure for 20 years--at a time when demand worldwide and in this country in particular had risen rapidly.

In 1989-90, spurred on by those with a great interest in the forestry industry, I went to see the then Secretary of State for Scotland, my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), who

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gave an assurance that if the situation was as serious as we had indicated, he was only waiting for the planting figures for that year before taking action.

The scene is one of falling planting over four years, and with no take-up of the grant system that can ever compensate for taxation. Some people might ask why there is any need to worry. The reason is that 90 per cent. of this country's consumption of forestry products is imported, at a cost of £7.2 billion per year. Imported timber products account for our fourth largest trade deficit after vehicles, food, and fuel. My guess is that, given that our vehicle exports are doing so well, our third largest trade deficit is now accounted for by timber imports. Demand will double over the next 60 years, so if no action is taken that deficit will massively increase.

Another aspect relates more to industry and processing. Most people would not know what I was talking about if I were to mention the Shotton and Caledonian paper mills. They are state-of-the-art mills that are at the top of paper processing, and were established between 1980 and 1988, in the firm expectation that there would be a massive rise in forestry and wood products in this country. Sadly, they are to be disappointed. Some 55,000 people are employed in the private sector, to which one can add those working for the Forestry Commission and processors. Therefore, the livelihoods of a large number of people depend on an expansion in forestry.

Forestry is and always will be part of the agricultural and rural scene. At a time when we are facing cutbacks in agriculture, it is ludicrous that forestry, which could and should provide an alternative, is not being fully exploited and taking up more land. Twenty-five per cent. of the European Community's overall agricultural land is taken up by forestry and forestry work, whereas in this country the figure is only 10 per cent. We are not only at the bottom of the league table ; we are right at the bottom of it. At the present rate of planting, we will stay there for many years to come.

Given that we face the certainty that our requirement for timber products will double over the next 60 years, it is unbelievable that we are prepared to import more timber without setting an environmental example by increasing our own planting capacity. There is a crisis. That cannot be denied by any Minister, least of all those in the Treasury. It is summed up in a letter written to the Chancellor on 31 October by Mr. Christie-Miller, chairman of Timber Growers UK. He wrote :

"The change in support for forestry from a tax based to a grant aided system is clearly not achieving the Government's aim, which is to sustain a healthy forestry industry whilst at the same time providing for a wide spectrum of public benefits including leisure, recreation, wildlife habitats and environmental enhancements." I cannot believe that a single hon. Member would not say, "Hear, hear" to that.

What, then, are we to do about the crisis? The letter from which I have just quoted made some recommendations. First, it recommended that planting grants should be index-linked. Secondly, it recommended that land acquired for purposes of forestry should enjoy the same tax relief as agriculture on the interest on its purchasing loans. I quote the letter in shorthand, as it were ; it exists, and can be quoted again--as I hope that it will be--in a further meeting with Treasury Ministers.

The third recommendation was the exclusion of forestry from inheritance tax. The fourth mentioned the

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need to broaden the base of forestry investment and ownership--the "people's capitalism" argument. That could be achieved through a unitised corporate vehicle whereby investors in forestry would be treated in a similar fashion to the individual investor. I shall not go into the details, but if my hon. Friend the Minister wants more information, he can refer to the people who really know what they are talking about--the timber growers.

Let me sum up my argument. No one can deny that there is a problem ; no one can deny that we need more home-grown timber ; no one can deny that at present, instead of seeing an increase in planting in this country, we are seeing a massive decrease. Something must be done. All that I ask of my hon. Friend is that he makes the strongest possible representations--on behalf not only of those who live in rural areas, but of all who care about our environment in this country and that of the rest of the world--and tries to persuade the Treasury to see some sense.

10.12 pm

The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro) : I thank my hon. Friend the Member for Dorset, West (Sir J. Spicer) for the warm welcome that he gave me on my return to the Front Bench. No doubt he was almost as surprised as I was. The portfolio for which I am now responsible is a great asset in terms of the Scottish Office, and also in terms of the United Kingdom where forestry is concerned. The environment, the countryside, agriculture, fisheries and heritage have all been combined as a single responsibility, and I think that in the long run that will prove a tremendous advantage.

I am glad to speak on behalf of forestry. My constituency, along with that of my right hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), probably contains a larger acreage of planting than any other region in the United Kingdom in percentage terms. We are both particularly aware, therefore, of the importance of forestry to the rural economy--and, indeed, of the other aspects mentioned by my hon. Friend, such as recreation, tourism and, of course, employment.

My hon. Friend was right to raise the question of the industry as a whole, from the seedling to the ultimate manufacturing process. He must accept, however, that that is connected to a large extent with developments in the Forestry Commission and the private sector. Both are interdependent and extremely important.

The incentives that have been developed in the past year or two, and even in the last month or two, to increase planting are significant. The overall crop is also important. As my hon. Friend rightly said, the timber deficits, in terms of the balance of payments, are extremely important in United Kingdom terms. I shall cover as much ground as I can, but if I am unable to cover all of it by the end of the debate, I shall write to my hon. Friend as soon as possible.

The Government are fully committed to developing and supporting the forestry sector. During the past 12 years, our record of policy initiatives has been one of considerable progress and achievement. The Forestry Commission has played, and continues to play, a central role in the development of forestry throughout Great Britain. We have made it clear on a number of occasions that we have no intention of privatising the Forestry

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Commission. That remains the position. Many Forestry Commission staff have asked me what policy the Government intend to pursue in the future. We have given a firm commitment not to privatise the Forestry Commission.

Only a month ago--this is important in terms of how forestry will develop-- the Government commissioned a major reorganisation, designed to achieve a clear distinction between its regulatory and advisory roles as a Government department and the management of its forests. The commission has set up a policy and resources group at its Edinburgh headquarters. That group is responsible for supporting and advising Ministers on forestry policy. Moreover, the Forestry Authority, which provides advice and sets standards for the forestry industry as a whole, administers the grant schemes, carries out regulatory functions, such as felling control, and undertakes forest research. That will be particularly helpful as we move into the world of set-aside and encourage farmers to plant trees on land that is no longer required for agricultural purposes. Advice there is particularly required, though farmers do not always realise that advice is available from the commission.

Forest Enterprise will now be free to concentrate on managing the commission's forest estate of more than 1 million hectares on a multi-use basis--for recreation, wildlife, landscape and conservation, as well as for timber production. That shows that the commission is forward looking and that it is determined to develop woodland planting in this country.

Nearly 250,000 hectares of new forests have been created during the last decade, mainly by the initiative and enterprise of private owners. Wood production has more than doubled since 1970 and is set to double again--to reach 10 million cubic metres--over the next 20 years. British timber is of high quality and is in demand by our domestic wood processing industries. The longer-term confidence of the industry has been amply demonstrated by the investment of over £1 billion in new processing plant since 1980. Our wood processing industry can compete with the best in the world. The new mills and plants incorporate the latest in technical innovation in paper making, panel production and saw milling. That has enabled them to capture a significant share of our growing domestic requirement for wood products. All that has been made possible by the doubling of the area of woodland cover during the past 70 years.

Sir Jim Spicer : The fact that we are going to double our production is very impressive, but does my hon. Friend accept that unless we have new planting we shall be left with an awful chasm? That is what worries me. I am not worried about all the products that will appear as a result of the planting that took place between 1980 and 1988. That is marvellous. But what will happen when we hit that trough? That is what worries me, and it should concern us all.

Sir Hector Monro : Yes, indeed. I was just coming to the point about the downturn in private sector planting over the past two or three years. I am sure that my hon. Friend will be interested to know that new planting in England has increased. In 1987, the figure was 1,200 hectares, whereas in 1991--the latest year for which figures are available--it was 4,400 hectares. The picture should not

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have been so depressing for nursery men and others in Dorset, but I know that conditions have been difficult for them.

In Scotland, the overall picture has been disappointing. The new grants offer an incentive to increase planting now and in the coming years. The woodland grant scheme, which we introduced in 1988, has made substantial progress. Grants range from £615 to £1,575 per hectare, depending on the size of wood and species of tree. I give these details because it is important to realise what is available to encourage people to plant more trees.

We recently introduced the better land supplement, which offers another £200 per hectare to £400 for conifers and £600 for broadleaf trees. That is another useful incentive. The woodland management grants are most important. As my hon. Friend will remember, possibly some of the fiercest criticism of the Chancellor's fiscal change was the fact that there would be no tax relief on maintenance in the later yars of the life of a plantation. Many foresters think that between 20 and 30 years is the crucial period for additional maintenance. The woodland management grant is of particular help in replacing what some foresters lost from the change in the fiscal system.

As late as last month we introduced a new community woodland supplement of £950 per hectare for establishing new woodlands open to the public and within easy reach of towns and cities. Its purpose is to encourage planting on the urban fringe to add to the amenity and to the overall amount of planting in this country. The native pine wood scheme encourages the management of existing pine woods in Scotland.

The most recent change or development has been our new farm woodland premium scheme, which provides grants to make planting more attractive to farmers. Its purpose is to offer a particular incentive to plant on good land. Farmers such as myself and many in my hon. Friend's constituency are reluctant, having looked after fields that require a lot of husbandary, to plant them into woodlands and know that their use as agricultural land has probably gone for ever. To encourage people to do so, bearing in mind our commitments in Europe to reduce overall production, there is a high grant for planting on good quality land and perhaps less grant for land of less importance, and certainly down to the less favoured areas.

We realise that there has been a drop in planting in the past two years. Only by raising the incentives as high as we can will the planting level be restored. My hon. Friend said--and this view is widely held among foresters in general--that we must think again about the change made to the fiscal system in 1988, but it is too early to be certain. I am sure that my right hon. Friend will want more time to assess the impact of our new grants on planting before any reconsideration of the tax incentives. Bearing in mind the fact that the overall grant to forestry probably equates to the amount of money that the Treasury had to pay in tax relief, I believe that that must almost have balanced the position.

However, we must accept that the forestry industry makes a substantial contribution to meeting our growing demand for wood. It supports and provides employment

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for people living in rural communities. The forests and woodlands also provide opportunities for people to enjoy and to have access to the countryside. They are also an essential habitat for a rich variety of wildlife.

My hon. Friend might be interested to know that earlier today I was in Perthshire at the inauguration of the new Scottish Natural Heritage, which is a combination of the Countryside Commission for Scotland and the Nature Conservancy Council, which will now have overall responsibility for many aspects of the habitat and conservation in Scotland, not of course directly for the Forestry Commission although it will co-operate very closely with the commission and, of course, with private woodland owners for whom we have the highest regard and whom we must do all that we can to help in the future.

Our policies deliver environmental as well as economic benefits. The Forestry Commission has a responsibility to ensure that full account is taken of all interests and that those interests are carefully balanced. The commission consults the statutory bodies that represent the interests of nature conservation, amenity and local people to ensure that planting schemes are, as far as possible, acceptable to all involved. Investors now fully recognise the need for planting to be sensitive to the environment. They are taking time to plan their planting schemes and, to assist in that, the Government are encouraging local authorities to prepare indicative strategies to show preferred areas for planting and areas that are environmentally sensitive.

However, we must keep bureaucracy to a minimum and the new Forestry Authority will be able to focus clearly on the needs of the private sector. It will put additional resources into its role of providing sound advice to woodland owners and of promoting the grant schemes at a time when new opportunities are opening up. In terms of bureaucracy, the authority is determined to make quick and speedy decisions because that is the right way to proceed, to encourage the planting of new areas, and not to allow the head of steam among the landowners to fall away because of the time given to the authority to proceed with planting.

On the whole, I am certain that the commission and the Government are doing a great deal to give incentives for planting and, therefore, to ensure that the total hectarage increases rather than decreases, as it certainly did in 1990 and 1991. I believe that the confidence stemming from the general election and the lowering of interest rates in every way encourages the landowner and private forestry developer to proceed in the future, knowing that he has the full backing of the Government and that the Forestry Commission will give every possible assistance in the form of grants, advice and experience.

Although I welcome the fact that my hon. Friend has raised this issue and shown his concern which will, of course, be considered by the Forestry Commission and the Government, I believe that we are on the right track, and I am personally confident that we will achieve great success in the coming year.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Ten o'clock.

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