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Lord Thomas of Gresford: My Lords, I do not quite follow what is the purpose of the amendment. Paragraph 1 of Schedule 2 transfers to the assembly the functions of the Secretary of State as they presently exist in forestry. But the proposal in the amendment is to delete from the powers of the assembly any issue concerning funding. Therefore, the assembly is presumably to talk and to discuss and to lay down policy, but is not to have the ability to provide the funds to carry out the policies upon which it has decided.

Paragraph 1 of Schedule 7 states:

It seems to me that what lies behind that schedule is the intention to give to the assembly the widest discretion to lay down policy guidelines and if policy guidelines are laid down, surely the funds must be available to carry out those policies.

I heard the noble Lord, Lord Roberts of Conwy, say that forestry is important to the economy and it certainly is. I know of the importance to the community in North East Wales of two of the firms to which the noble Lord referred--Shotton Paper and Kronospan. Of course, very wide forestry areas exist in North and mid Wales.

The noble Lord, Lord Roberts, suggested that it made business and commercial sense to keep forestry on a United Kingdom basis. But I heard no argument which

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sustained that proposition in any way. He simply said that it is best run on Great Britain lines. In my respectful opinion, such an enunciation is not right.

It is not sufficient for the noble Lord, Lord Crickhowell, to say that he wants to retain the keys to all the gates in the United Kingdom; indeed, if it comes to that, he can do as the Liberal Democrats do and climb over the gates in Scotland and in England. So that is no argument. We have heard no argument whatever for removing from the functions of the assembly the power to fund its policies. I give way to the noble Lord.

Lord Roberts of Conwy: My Lords, I am much obliged. I was of course taking our Committee debate on 9th June as read. During the course of that debate, my noble friend Lord Mackay of Ardbrecknish outlined the position whereby many of our industries in Wales draw their supplies from other parts of the UK. I believe that he had in mind the scenario where, for example, it might be the case in the future that Scottish forestry policy could handicap our industry in Wales from using the product of the Scottish forest. It is quite clearly conceivable that these nationalist policies might be pursued to the disadvantage of the individual countries.

Lord Thomas of Gresford: My Lords, I am most grateful to the noble Lord for referring me to the Committee debate. I wondered at the time whether the noble Lord, Lord Mackay, was looking at the issue from a Scottish rather than a Welsh perspective. Indeed, I made that comment before. From a Welsh point of view, it seems to me to be entirely appropriate that Wales and the Welsh assembly should have power not merely to set forestry policy but also to fund it.

The Earl of Balfour: My Lords, I did not join in the debate in Committee because I was still trying to understand what the Wales Bill was about and, indeed, what the difference was between Wales and Scotland. As a small landowner with an estate in Scotland, I believe that I can honestly say that I am probably more involved with the Forestry Commission than almost any government department outside those which deal with farming.

One requires a licence for thinning, for planting and felling; in fact, one requires one for almost everything that one does. Equally, there are different grants available for planting different types of trees. It would be a great pity if the standards set by the Forestry Commission in the past were to vary among England, Wales and Scotland. I do not believe that that would be in the best interests of any country.

Moreover, one of the very few times that I am involved with VAT on my estate is when I am felling trees. One has to charge VAT as regards forestry. It is a pity that forestry is not regarded as a crop in the same way as is agricultural produce. I will never know what the difference is. Almost everything produced on a farm is zero rated as regards VAT, whereas, just to put the other side of the picture, rents are exempt. That can be a complication. As this Bill is a little further ahead in its passage than the Scottish one, I am a little concerned

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that there may be differences which I do not believe will be in the best interests of the four countries involved, including Northern Ireland.

Lord Williams of Mostyn: My Lords, as the noble Lord, Lord Thomas of Gresford, pointed out, Amendments Nos. 134 and 135 would radically affect Clause 105. We had a lengthy debate on forestry in Committee. Therefore, I shall follow the example set by the noble Lord, Lord Roberts of Conwy, and not revisit every particular grove that we raddled about in at that time. I did not find what the noble Lord, Lord Mackay, said on 9th June to be persuasive; indeed, I do not find it any more persuasive now.

The commissioners may be accountable to the assembly in relation to their functions in Wales. I cannot accept the rather overheated suggestion that, because this concerns accountability to the Welsh assembly, there might be adverse commercial consequences. I see nothing in that argument. Of course, the forestry industry is very important to Wales. After all, it owns 120,000 hectares. The noble Lord, Lord Roberts, has already indicated the employment consequences of its existence in Wales, as well as drawing our attention to the fact that 15 per cent. of the total British output is produced in Wales. We believe that that is a very good reason for putting the funding of its functions in Wales into the hands of the assembly. Obviously, as a consequence, the commissioners would have to be fully accountable to the assembly for their activities in Wales. We would say that that is simply one of the points of devolution.

After all, different institutions are sometimes established in the Welsh context and exist at present. I have in mind the Higher Education Funding Council for Wales, which deals with the appropriate areas in Wales only and on a Wales-only basis. There is a completely different funding council for England, and I have not come to the conclusion that that is a disadvantage to Wales or indeed to England.

Section 1(2) of the Forestry Act 1967, which is referred to in paragraph 1 of Schedule 7, charges the commissioners with the duty of promoting the interests of forestry, the development of afforestation, the production and supply of timber and other forest products in Great Britain. There is nothing in the Bill anywhere which can affect those duties, either now or in the future. All that an order under paragraph 1 of Schedule 7 could do would be to allow England, Wales and Scotland to be substitutes for Great Britain, thereby producing the consequence that the commissioners would be allowed to exercise their functions separately in respect of England, Wales and Scotland. We believe that that is an essential part of our proposals for devolving responsibility for forestry, and that it is entirely consistent with our proposals for wider democracy.

The noble Lord, Lord Thomas of Gresford, is quite right. Paragraph 1 of Schedule 2 devolves to the assembly the present functions of the Secretary of State for Wales relating to agriculture, forestry, fisheries and food. Moreover, Clause 105, especially subsection (1), provides the funding mechanism.

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At present, the Secretary of State for Wales is the forestry Minister for Wales. He has to exercise his functions jointly with the Minister of Agriculture and the Secretary of State for Scotland. We need the ability contained in paragraph 1 of Schedule 7 to split the joint functions so that the assembly, the Scottish Executive and the Minister of Agriculture can deal with matters in their appropriate areas.

To answer specifically the question posed by the noble Lord, Lord Stanley of Alderley, I should point out to him that there is no reason why he should not carry on in exactly the same way. The commission will not lose any of its powers. There is no reason at all why the present regime should not continue. However, bearing in mind the sensitivities and delicacies of this area, I should stress that the present role of the Secretary of State for Wales will fall to the assembly in relation to Wales and Wales alone. I am sure that the noble Lord will receive the same co-operative response in the future because the commission official will be reporting to the commissioners but they will be accountable and funded in an all-Wales context.

In answer to the noble Lord, Lord Crickhowell, I should point out that it is also important to realise what paragraph 1 of the schedule does and does not do. It does not allow for the abolition of the Forestry Commission; it does not allow for the establishment of a separate commission for Wales. The important distinction--and I agree that it is an important one--is that it simply allows for the commissioners' functions to be made separately exercisable for Wales. I hope that that is a useful clarification of what I agree is perhaps a rather cloudy schedule, at least unless one sat down for a day or two with a wet towel and a hot pot of coffee to consider it.

In many ways, this debate comes down to a difference in approach and a different principle. We believe that the point of devolution is to devolve the powers of the Secretary of State to the assembly. We do not believe that the suggestion put forward by the noble Lord, Lord Mackay, is realistic. We feel--this is the principle--that you need to trust the people. It is said that duplication or triplication will be difficult, but is it all that different from the position of the planning inspectorate agency, which is funded by two government departments, the DETR and the Welsh Office, or that of the Environment Agency, which can do better because it is funded by three departments, the DETR, MAFF and the Welsh Office?

If the dispute cannot be resolved, the assembly's duty is perfectly plain; it is set out in Clause 105. It has to fund the Forestry Commission's activities in Wales. It will not be on every occasion that a conclusion about Forestry Commission policy in Wales will be identical to that on policy and strategic planning in England or in Scotland. There is no real reason why every decision should be identical in every circumstance.

I think there is a difference of principle here. We believe that the powers ought to be devolved; that is what Schedule 2 says. Clause 105 provides the funding mechanism and Schedule 7 is limited in the way that I have indicated. I hope that is sufficient explanation to

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induce, coax and cajole the noble Lord into accepting that his amendments are wholly misconceived and to withdraw them.

6.30 p.m.

Lord Roberts of Conwy: My Lords, I am grateful to the Minister for his comments. There is a difference of principle here. We believe that the Forestry Commission operates best on a Great Britain basis, and that difficulties will arise if the functions are exercised separately in the three countries simply because of the accountability for the exercise of those functions which will obviously differ as between England, Scotland and Wales.

There is, of course, the point that the Scottish parliament will have primary legislative powers while the assembly will not, and that the Scottish parliament can make separate provision in Scotland. I shall certainly consider what the Minister has said. In that spirit, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 7 [Forestry Commissioners]:

[Amendment No. 135 not moved.]

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