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New Clause 8

Volume 887: debated on Wednesday 5 March 1975

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Relief For Woodlands

'Schedule (Relief for woodlands) to this Act shall have effect for giving relief where the value transferred by a chargeable transfer made on death is determined by reference to the value of woodlands and the conditions mentioned in that Schedule are satisfied'.—[ Mr. Joel Barnett.]

Brought up and read the First time.

With it we shall also take new Clause 3 (Agriculture assets). I must inform the House that new Clause 8 refers to a new schedule which appears on page 688 of the Amendment Paper. It will, of course, be in order to refer to that schedule and to the amendments to it which have been tabled by hon. Members. Mr. Speaker has not had an opportunity of selecting these amendments, but the right of hon. Members to move amendments at a later stage will be preserved.

The clause meets an undertaking I gave in Committee to provide a concession in relation to woodlands. I shall refer briefly to what is in the schedule without going into the detail which is normally involved in moving a schedule.

On death the value of the growing timber would be excluded, but it would be optional on the owner of that timber to do so. Then there would be certain conditions. First, the owner should have been beneficially entitled to growing timber for the five years preceding death. The second condition, which would apply only after 31st December 1975, would be that it must be part of a dedication scheme. Those are the basic conditions.

A third point is that the rate of tax in relation to woodlands will be the rate or rates which would have applied on death. That is covered by paragraph 3 of the schedule. This seems a reasonable way of dealing with the matter given that we are agreeing to a considerable deferment of the tax, particularly in the case of hardwoods. There may be deferment of the tax for four or five generations.

I know that the Opposition would prefer us to go further, but our proposals go a long way to deal with the main problem. The Opposition's aims would create a situation in which owners of that particular type of asset would be in a vastly better position than most ordinary taxpayers. The case for woodland owners generally has been grossly exaggerated. Many incentives remain. First, there are grants under the dedication scheme. Then there is the way the tax system works for woodland owners. As the legislation stands, the woodland owner will be dealt with under income tax or corporation tax, and all his expenses in the years up to when the trees mature, since there would be no revenue receipt, would be allowed against other income, including investment income. This is a substantial incentive particularly for woodland owners.

When the trees come near to maturity there is frequently a switch to Schedule B, and no income tax or corporation tax is paid at all.

There is then the question of capital gains tax. We have also been told constantly that there is a substantial hedge against inflation. Those are quite substantial incentives without putting in, as hon. Gentlemen seek to do, the old estate duty relief, which was a substantial bonus on top of the already substantial existing incentives. The bonus of the estate duty relief, as hon. Gentlemen who are objective about these matters will know, was enormously abused, and the abuse was growing on a substantial scale. Investment companies were offering woodlands to wealthy taxpayers on their deathbeds. That was of no help to the genuine woodland owners.

Under the clause we have excluded that type of operation by insisting that there shall be five years' beneficial ownership before the clause operates. Any reasonable hon. Member would regard that as a sensible way of dealing with the matter. In that way we give relief where it is intended and exclude it from the place where I hope even Opposition Members would not wish to give it.

Perhaps I can say to some of my hon. Friends who have been concerned with this—[HON. MEMBERS: "Where are they?"] They will come. When they hear about some of the things we are likely to hear from Opposition Members they will pour in. I can tell my hon. Friends that the Trades Union Congress strongly opposed even the relief we are giving. I apologise to the TUC, but I believe that the clause is reasonable and that the relief we are providing will help genuine woodland owners. I am very fond of trees. Anything we can do to help genuine woodland owners, we are happy to do. That is why the clause is being introduced.

The genuine woodland owners, through their representatives, have repeatedly approached the Revenue and Treasury about ending precisely the abuse to which the hon. Gentleman is referring. Both they and the forestry workers are genuinely concerned to see that the end result of the process is something which will enable planting to continue.

That is precisely what we are doing under the clause. I look forward to having the support of the hon. Gentleman and his hon. Friends. The genuine foresters will have a fair deal. One should not go further than that, because one has to bear in mind the majority of other taxpayers who will pay capital transfer tax on their assets. Therefore, it would be to go much too far if we went as far as some of those who made representations to us want to go. I hope that the hon. Gentleman, being a reasonable man, will accept that. I am glad to see him assent.

A number of amendments to the schedule have been tabled. I imagine that when we come to it some hon. Gentlemen will wish to speak to them. I shall be happy to deal with those and the new clause on agricultural assets when I have heard the remarks which I am sure one or two hon. Members will wish to make on behalf of their constituents. I hope that my hon. Friends will support the new clause and the schedule when we come to it.

On a point of order, Mr. Deputy Speaker. There appears to be a misprint of a rather mystifying character in the first line of the new clause, as originally tabled. In it we find the unusual word "haze". I do not know whether in this connection it should be "axe" or whether it is due to some kind of illiteracy which is not usually to be expected even on the Government side.

It has probably been influenced by the fact that we are dealing with trees, and axes are used for cutting down trees. The printer's mind was probably on "axe". I am sure that the right hon. and learned Gentleman knows full well what is meant.

9.15 p.m.

I wish first to speak to new Clause 3, in the names of my right hon. and hon. Friends and myself.

I declare an interest both as a landowner and as a tenant. The first request I make of the Government is whether it is possible for the Minister of Agriculture, Fisheries and Food to be present to hear the debate this evening. I am glad to see that the Parliamentary Secretary is present. He has made some comments in public about the capital transfer tax, but his right hon. Friend the Minister has been strangely silent about it. I wonder what is the right hon. Gentleman's attitude to this tax. With many of my hon. Friends and other hon. Members, I should like the Minister himself to reply to the debate and to speak as the leader of the industry for the time being. I regret that he is not here tonight.

The Chief Secretary has an altogether too glowing opinion of the new schedule which he referred to in relation to forestry. I do not propose to speak about forestry in detail since, as you have said, Mr. Deputy Speaker, this falls to be debated on Monday, but my hon. Friend the Member for Ludlow (Mr. More) may catch your eye later this evening.

The new clause is designed to bring to agriculture a measure of genuine relief that does not exist in the Bill at present. The effect of the tax as it stands on farming will be immensely serious unless it is mitigated in a reasonable and fair way. It is a devastating imposition on many thousands of families who are amongst the hardest working families in the land. What is more, these are the people who are engaged in the most primary of all activities—the production of food. Apart from the war years, there never has been a time when their enthusiasm was so much needed as it is now.

The tax hits farming hard because of the nature of the industry. It is highly capital-intensive with an ultra-low level of return. It consists of thousands of diverse units each of which is extremely valuable because of the value of the land. That land cannot be realised by sale without destroying the viability of the farm as a business. The wealth exists on paper and is "locked in" as an indispensable part of the activity.

All Governments, of both parties, until the present one have thought it good economic sense to move towards larger units. Our success in this is one reason why British agriculture is amongst the most efficient and productive in the world. That has been achieved in part by recognising the unique wealth aspect of land and making special provision for it in land capital taxation.

At least the Chancellor acknowledges in principle that agriculture ought to have some relief. To that limited extent there is common ground between the Front Benches. But the relief that the Chancellor proposes cannot properly be described as relief. It is wholly inadequate, to the extent that I can only describe the effect of the tax as naked confiscation. We are asking the Chancellor to make the relief adequate and sensible. Unless he does so, the result will be to decrease the production and productivity of farms. The burden of the tax on the assets of farms will be far too heavy. Farms will have to be fragmented, the opposite course to the one which has made our agriculture so efficient. Who will buy the fragments? How will they be farmed? I reckon that the tax is enough to set our agriculture back on a course that could lead to the peasant type of agriculture which is such a problem in certain parts of Europe.

The Parliamentary Secretary to the Ministry of Agriculture has a pathological mental blockage about anyone who possesses land, whether or not he farms it. The rural economy of the country is based on the family unit. This tax is nothing less than a threat to that whole structure. No other structure could work anything like as well. It is the very character and independent mind of our farming families that is the heart and strength of our agriculture. The Parliamentary Secretary said in Scotland in January:
"it is ludicrous to argue … that the application of the capital transfer tax to land represents a threat to the level of food production in this country."
He is wrong. It does represent such a threat, unless the tax is adjusted to take account of the unique circumstances.

As time is so limited I shall list only three inadequacies of the so-called relief as the Bill now stands. First, the multiplier of the rental value is too high at 20. When the Bill was drafted, values were relatively high and rents relatively low. The position is already different today, with the result that in many cases 20 times the rent is the same as or even higher than the capital value. At least the Government recognised in Standing Committee that the rate of 20 will have to be changed from time to time. We are grateful for that. But is it not ominous that in the conditions now prevailing there is no Government amendment to reduce the multiplier? It most certainly should be reduced. Are the Government's proposals to alter the rate by order a means only of putting it up? In view of what is happening to values and rents it should go down now. If ever there was a case to put it down, that case now exists. I am deeply suspicious of the fact that the Government, having recognised the need to change, have not responded to the circumstances that now exist and will not put it down now.

Secondly, the relief, such as it is, does not apply to let land. The tenant is no less worthy of relief than the owner-occupier. The Chancellor of the Exchequer and the Chief Secretary have not so far justified the exclusion of tenants from some measure of relief. There is no provision in the Bill for alleviating the tax load on working capital on livestock, crops and machinery. The average requirement today is about £120 per acre. Therefore, enormous sums are involved. My hon. Friends and I believe that there is an overwhelming case for giving appropriate and full relief to working capital as well as to land itself.

The third inadequacy is that that there is a very important element of continuity between generations of farming families. That applies to other business, but especially to agriculture. That is basic to the whole way of life in the countryside. I am convinced that it is fair and civilised to make sure that handing on continues to be possible, and to make it financially practicable for a farmer to hand over his farm to his widow, son or near relative before or after death without placing an intolerable burden on them which will have a deleterious effect on the possible production of food from that farm. The Labour Party loves to think of itself as compassionate. It has not shown compassion here; it has shown the jackboot.

I shall not continue to list the weaknesses and dangers of the Bill as drafted. I could talk at length about the relief that is necessary from the multiplicity of other taxes, the need for relief for quick succession and the need for more favourable terms for payment by instalment, but my right hon. and hon. Friends have tabled the clause to bring a straightforward and genuine relief to people whose life is on the land.

It seems that it was the original intention of the Chancellor to create relief, and that his intention was not so widely different from the 45 per cent. relief that operated before. Maybe the relief was not to be so great, but in principle the intention was not so different. However, if that was his intention he has signally failed to achieve it.

The Parliamentary Secretary, in the speech to which I referred a short while ago, said:
"let me stress that … the Government is concerned that the capital transfer tax should not adversely affect the real interests of the agricultural and forestry industries."
I must tell him that as it exists in the Bill it adversely affects the real interests of both those great industries.

It is wrong that on a debate on a tax which will have such a devastating effect on agriculture the Minister of Agriculture, Fisheries and Food is not present. He has not shown any inclination, either in public or in the House, to express any opinion about the effect of the capital transfer tax. That is a dereliction of his duty. I am sorry to criticise him when he is not here, but I had reason to assume that he would be present. Further, no Minister from the Scottish Office or the Welsh Office is present. I make these comments with no offence whatever to the Chief Secretary. We know his competence and versatility, but the Minister of Agriculture, Fisheries and Food is the present political leader of agriculture and I wish he were here. I believe that he was in the House earlier this afternoon and he may well be here now. The House is entitled to have the right hon. Gentleman's presence during a debate of such importance relating to food production.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food
(Mr. Gavin Strang)

The right hon. Gentleman is making rather a meal of this. [HON. MEMBERS: "No."] He cannot fail to be aware of the deep interest which my right hon. Friend has shown in this matter and the discussions he has had with interested parties. [Hon. Members: "Where is he?"] I can assure hon. Members that I am representing my right hon. Friend because he wholeheartedly supports the decision of the Government on this matter.

I do not think I am exaggerating things in any way. If the Minister supports it he has never justified this in public. He has never put forward an intellectual case to justify it in terms of agriculture and forestry. He should do that tonight in the execution of his duties. However, he is not present. I make no criticism of the Chief Secretary.

We believe that it is vital to have a thriving and productive farming industry, and, therefore, I commend the new clause or one similarly drafted.

I declare a dual interest. I own a farm and woodland. I, too, have strong reservations about the new clause. I believe that it is not sufficiently stringent.

A number of problems are associated with affording relief to farmland, not least of which is that if relief is granted the effect is that it will become another source of tax avoidance for wealthy people. The price of farmland will increase and will be out of the reach of the very farmers about whom the right hon. Member for Cambridgeshire (Mr. Pym) is making so much fuss. Even with the relief that might be afforded, the new land prices will mean that the farmer will be faced with raising the same amount of capital to pay the tax.

There is a sharp distinction between the ownership of land and the farming of land. What takes place on the land gives it its importance, not the ownership of the land. The problem with the new capital transfer tax is that it is only 50 per cent. If it is 20 times the rent it may be somewhat less than that. Farmland in many cases is an indivisible asset. This means that a farmer may have to sell something. The solution is obvious. We make the tax 100 per cent. In that case the whole farm goes to the State, thereby avoiding problems.

I have no objection whatever to the farmer's son getting the tenancy of the farm from the State. In that way we would continue this magnificent family tradition about which the right hon. Gentleman is so enthusiastic, and the State would get the farm. Ultimately there would be larger and larger farming units, thereby fulfilling yet another of the wishes of the right hon. Gentleman.

Would the hon. Gentleman not agree that the last man who tried that was Stalin?

We must not make comparisons between Stalin and my right hon. Friend. I appeal to my right hon. Friend and to the Chancellor to look again at this clause to see whether we cannot make a special concession and have a 100 per cent. tax.

9.30 p.m.

The hon. Member for Dudley, West (Dr. Phipps) made such an asinine beginning to his speech that I will not follow him.

The Minister gave an assurance in the latter part of January that he would look at this again. It is singularly disappointing that he has come forward with such an amendment. It does not begin to fulfil our expectations.

There are some areas of agriculture which the Minister must re-examine. First, there is the multiplier, which was referred to by my right hon. Friend the Member for Cambridgeshire (Mr. Pym). The Chief Secretary must accept that the multiplier, if it is to exist at all, should be flexible. Secondly, he must look again at the relief for tenants' assets. He does not begin to understand them—and he certainly will not understand them if he does not listen. While he is having a little conversation with his hon. Friend, perhaps I may remind him that we Scots are particularly dissatisfied with the fact that the Secretary of State for Scotland is not present for this debate. In an important debate on agriculture and forestry we expect the two responsible Ministers to be here to listen, particularly when we know that both are present in the House. If they have something more important to do, we should like to know what it is.

I believe that the Minister has given no worthwhile concession. It is almost incomprehensible that the right hon. Gentleman the Chief Secretary will not listen to advice which he seems to seek. He said that he had representations from the excellent Forestry Action Group, but he has not followed what the group told him. Perhaps he will say in his reply what advice the Forestry Commission gave him in recent months. It would certainly be interesting to know. I have a very good idea that the commission's thinking is very much more on the lines of the Opposition's thinking than the Government's thinking.

We all know that forestry is a long-term investment. However, it appears that the Government are setting out to destroy it. Unless they listen to sense tonight, they will succeed—and I do not think it is a success which they really want to achieve. The results of Government policy will be devastating, and particularly to the Minister's Department. We pressed upon the right hon. Gentleman in Committee at the end of January that the escalation of imports of timber will increase even further as our forestry industry begins to reduce its output in the years ahead.

Many of us have many worries about unemployment in the industry. There has been active lobbying by foresters not only in our constituencies but also in the House of Commons. We sought to explain in Committee the effect which the tax will have on employment in the forests, particularly in regard to foresters and haulage and saw mills workers. It will also have its effects in the chipboard industry and in other ancillary trades. I explained in Committee that a fifth of my constituency was under afforestation. If planting is to be reduced in future, I can see substantial unemployment developing in the rural areas. Will the Minister take responsibility for rural depopulation in the years to come? What will happen to houses and schools built in the forestry areas? We impressed on the Government in Committee that the tax will affect the social lives of people in the rural areas. Yet the Chief Secretary has produced the most mini-amendment to meet this situation. He believes that he has made a major concession but he must be alone in that view in the House, with the exception of a few hon. Friends now behind him on the Labour benches.

The tax on final sale value will more than cancel any benefit which might accrue from deferment of tax. In any event the Chief Secretary has set the tax at the top rate, which is far too high. We have already told the right hon. Gentleman that planting this winter has been ruined. About 30 million fewer trees than normal have been planted this winter. Does that not register with the right hon. Gentleman? It does not appear to do so.

The Chief Secretary must understand that if we want to retain a viable forestry industry, private woodlands and Forestry Commission activities must be complementary. They both go forward together. The Government must see reason and accept a suitable amendment to the Bill now, or certainly by the end of the Report stage.

Why has the right hon. Gentleman included dedicated woodlands only? Will he explain why he came to that surprising conclusion? Will the individual forester have the right to choose whether or not to enter the dedication scheme in the future? Will he say why he underestimates the importance to farming and forestry of the concessionary relief of 45 per cent. which has proved so satisfactory in the development of woodlands in the past? It is not the reason which he gave, since he knows that forestry yields a low return on capital investment, perhaps of the order of 3 per cent.

The Government should give more incentives for the planting of timber and the expansion of the forestry industry in the years ahead. Instead, they hammer away at this industry. If that policy continues there will be serious consequences for Britain, not only for this generation but for several generations ahead. Why is the Minister destroying that industry by means of his fiscal foolhardiness?

I ask the Minister to think again between now and Monday. This is a vindictive tax imposed by a Socialist Government who are legislating for unemployment in the rural areas, for rural depopulation, and for further balance of payments deficits in the years ahead. The Government's position is intolerable. I totally oppose this amendment as regards forestry and the subsequent amendments which deal with farming.

I was surprised at what the right hon. Member for Cambridgeshire (Mr. Pym) said. I assumed that he would advance cogent and detailed arguments, instead of which he devoted most of his time to bemoaning the fact that my right hon. Friends were not present. If my right hon. Friend the Minister of Agriculture had been present, the right hon. Gentleman would doubtless have produced his other speech out of his pocket, complained about the Minister wasting time and suggested that he should have discussed the importation of eggs, despite the fact that fewer eggs were imported in January 1975 than in January 1974—a fact which seems to have escaped the memories of the Opposition.

A number of Government supporters who are concerned with and slightly informed about forestry believe that during the next 20 years this country will have to maintain a considerable planting programme. I do not mind whether that programme is carried out by the Forestry Commission or by the private sector. However, I am convinced that that programme must be maintained. I have the real anxiety that if the Treasury persists with its public expenditure policy the Forestry Commission will not have the resources to make up for any decline in the private sector. Clearly the Report stage of the Finance Bill is not a time to discuss implications of this kind. [Interruption.] I frequently spend my holidays in Scotland. I am fond of the Scottish people. I should like to remind the Opposition that trees grow in England and that we are entitled to talk about English trees.

It is appropriate for the Chief Secretary to be concerned with the long-term implications of public expenditure. If the worst prognostications of the hon. Member for Dumfries (Mr. Monro) are realised and there is a continuing decline in tree planting in this country, it seems to me that a radical reappraisal of public expenditure policy will be required, because the need for timber will be greater in 10 years' time than it is now. That need has grown alarmingly in the last decade, and I am anxious that we should maintain timber production.

My right hon. Friend has spent a little time in recent weeks looking at this matter, despite the fact that the Opposition have sought to waste time in the House and in Committee with long, protracted and unnecessary debates largely involving debating points of the kind we have heard from the right hon. Member for Cambridgeshire when there were serious aspects to consider.

It would be wrong to look in detail at many of these matters now, but I ask my right hon. Friend whether he will be prepared to look carefully at the situation in agriculture in general and in forestry in particular and to watch how the situation unfolds. If it is clear that the balance of payments will be affected adversely, that tree planting in Britain is to be reduced and that the production of food is not to be maintained at the highest possible level, I hope he will bring forward in the next Finance Bill—we seem to have Finance Bills reasonably regularly—the necessary amendments to the law which will ensure that the country grows as much timber and food as it can.

The hon. Member for Rother Valley (Mr. Hardy), who spoke with good, robust, English nationalism, talked a great deal of sense about the necessity to watch the outcome of this Bill.

I remind the hon. Member for Dudley, West (Dr. Phipps) that we have experienced an increase of 100,000 since 1973 in the number of local government employees under Conservative local govern- reform and that we do not want another 100,000 bureaucrats to run the land under Socialism.

The people in the North of Scotland are deeply attached to their land, and this is a very important factor in the whole situation. They have fought to retain it against landlords and Governments. They do not intend to be turned off it now by legislation which may suit England but which may have unforeseen effects in the North.

I do not, however, take quite so pessimistic a view as was expressed by a number of earlier speakers. But since this is a brief debate, I shall not rehearse the arguments. I want to hear the Government's comments about the multiplier. The right hon. Member for Cambridgeshire (Mr. Pym) made a very good point when he said that in the present economic situation we know too little about what the effect of the multiplier will be.

We are anxious to keep some land available to tenants. There is a severe danger that virtually no land for tenants will come on to the market at a reasonable cost. Investment in land drives it out of the reach of many people, especially of families who have lived on the land for generations and wish to remain there.

In the North of Scotland agriculture is very different from what it is in various other parts of the country. What is more, there are great variations in the area. It is divided into small crofts, large estates and, in Orkney, dairy and arable farms. Have the Government consulted the Crofters Commission about possible repercussions from this legislation? We are hoping to have crofting legislation introduced in the not too distant future. We hope that nothing in the present legislation will prejudice the desirable reforms which we hope to see made.

We still have the figure of 1,000 acres in the legislation, which represents an enormous farm in the South. It is a different situation in hill country. However, I do not believe that this with its restricted application will in itself now be a serious limitation on the concessions made to agriculture.

I do not wish to delay the House. I have serious reservations still about the effects of this Bill in a highly inflationary situation in which the cost of working capital and everything else are constantly increasing. It is impossible to sell part of a farm without ruining the whole holding. The situation in farming is totally different from that involved in other forms of capital. I hope that we shall keep continuity of local people on the land. Although I accept that the Government have gone some way to meeting our fears when the Bill was first introduced, there are still a number of criticisms to be made.

I hope that the Minister will comment on some of the matters which I have raised.

9.45 p.m.

Is this country really in an economic crisis? Were we really short by £4,000 million last year? If so, is it not time that the country faced the situation and did something tangible about it? Looking at the books, we find that no less than £2,000 million of that deficit came from imports of timber and timber products. Yet we have hon. Gentlemen opposite screaming tonight because one or two companies appear to be making some profit from trees.

There is no profit in a tree until it is cut. Until the woodman cuts that tree there is no true profit in it. The value begins when the tree is cut and manufactured.

Does it matter who grows trees in this country as long as trees are grown? The important thing is for us to have a green revolution. We must grow our way out of this crisis. We must grow a percentage of that £2,000 million. Only 8 per cent. to 10 per cent. of our timber requirement is produced in this country. Therefore, why should we scream when one or two forestry companies plant trees? Let us get things in perspective, if we can.

I do not wish to spend any more time on forestry. I want to move to agriculture. Hon. Gentlemen opposite are unbelievably naïve when it comes to agriculture. I suggest that, looking at the scale set by the Government for the application of capital transfer tax, the amount of money that will be milked out of the industry, which has already been squeezed dry, will cripple it entirely.

The harsh reality of present-day agriculture is such that the income derived from the average farm in Britain is so low that the farmer cannot afford to pay a worker to help him. He has to rely not only on what casual workers he can find in the district, but, even more, on the hard work of his own family to keep going. The level of profitability in agriculture is so low that his business does not generate sufficient capital to pay income tax, let alone capital transfer tax.

Does the hon. Gentleman agree that on a train journey from Glasgow to London about two or three weeks ago he and I had a long discussion about the effect of capital transfer tax on agriculture in which he said that he was wholeheartedly behind the Labour Government's proposals for capital transfer tax as it affected agriculture?

On a point of order, Mr. Speaker. Is it not totally contrary to the traditions of this House ever to raise in debate what purport to be private discussions outside?

Further to that point of order, Mr. Speaker. Do not the scenes during the past few days, when democratic procedures in this House were brought to a standstill, indicate that some of the traditions followed by the Opposition are not worth a penny?

I am dealing with the question of private conversations. It is not in accordance with the convention of the House that private conversations should be quoted.

I will ignore that intervention and repeat what I said. The level of profitability in agriculture today is so low that the business does not generate sufficient capital to pay income tax, let alone capital transfer tax. Any young relative who may take over a farm usually has such a tremendous burden of debt round his neck that it takes him all his time to screw up the courage to make a start. I know, because I have been in that situation. If there is to be capital transfer tax on top of an already crippling burden, I assure the House that most young men will not bother getting started.

The Scottish National Party, throughout the passage of the Bill, has sought to educate the Government to the fact that the average family farmer is no financial wizard, although many hon. Gentlemen opposite may think so.

Am I not right in recalling that during the Second Reading debate the hon. Lady the Member for Moray and Nairn (Mrs. Ewing) said that the SNP came into the Chamber to support the CTT?

I am with the distinguished Lady the right hon. Member for Finchley (Mrs. Thatcher), who is now the Leader of the largest Opposition party in England, but not in Scotland, in saying that I am for CTT in principle but not this particular tax unless certain important reservations are made for forestry, fishing, small businesses and farms.

I hope that hon. Members who have the Floor will not give way to let other hon. Members make speeches.

I was answering the point made by the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). It was not my fault.

Thank you, Mr. Speaker. I must impress upon the Government that the average farmer today is overworked and underpaid, and the only thing that keeps him going is the hope that one day he may be able to hand over his land, his livestock that he has bred and his dead stock—not the fancy names that are used here—

No. Farmers today are prepared to carry on only because they know that, as of now, they can hand over their farms in some degree intact to those who come after them. If the act of handing on their heritage is to be brutally taken from them and brutally taxed, the last incentive will have gone.

Order. The hon. Member for Banff (Mr. Watt) is not giving way. The hon. Member for Dudley, West (Dr. Phipps) must resume his seat.

I cannot warn the Government too strongly that if they insist on pushing through this crippling Bill they will damage for ever the one section of our agriculture industry which they should be preserving.. I hold no brief for landlords or for large multiple farmers, many of whom are represented by Members on the Conservative benches. I speak strongly for the average family farmer, and I ask the Government to take back the Bill and bring forward a CTT that will be reasonable.

I ask the Government to accept the amendment in the name of my hon. Friend the Member for Perth and East Perthshire (Mr. Crawford) and give relief for 75 per cent. of the value of the land, the livestock and the dead stock which farmers hand over before attaining the age of 60. This should apply to men who farm land in the following categories, and I categorise them by acreage, not by value. Values are constantly changing. Acreages do not change. Therefore, as exemptions from capital transfer tax, I suggest the following scale: hill farmers who have 2,000 acres or under; animal farmers who have 300 acres or under; and dairy farmers who have 250 acres or under.

It will be appreciated that I am in no way defending the large landlords or the multiple farmers. The country is in grave economic crisis. That being so, why do the Government not let agriculture play its full part in trying to produce some of the £1,600 million-worth of temperate foodstuffs that could and should be grown in this country? That amount of food must be grown, but the extra production demands extra capital. What farmer will take the trouble of finding extra capital if he knows that that capital will be brutally penalised by the capital transfer tax?

I should like to support what was said by my hon. Friend the Member for Rother Valley (Mr. Hardy) on the whole question of forestry. I am sorry that my hon. Friend did not go a little further in what he said on the matter. I have always found the Treasury a strong opponent of any expansion of forestry, and I am sorry to see that that condition continues to a considerable extent.

We must face the fact, with the world as it is today, that a union of Russia, Finland, Sweden and Canada controls timber prices. They are in exactly the same position as regards timber as are the oil sheikhs regarding petrol. They have pushed up the price of timber products enormously already. At any time they could do so again.

Let us face the fact that in the world as a whole there is likely to be a growing shortage of timber and a growing demand for it. We should therefore be supplying more for ourselves. I should have thought that the Government ought to be thinking further ahead and ought to have a production programme. As I have said previously, we ought to have at least another 1 million acres planted by the end of the century. We shall not get that done wholly by the Forestry Commission. The Government will not find the money for that purpose. There must be a union of private money as well as Government money to achieve such a programme. There is an enormous amount of land, particularly in Wales and Scotland—and the hilly areas generally—which is not used to full advantage and should be planted up and made productive.

We therefore want to encourage a certain amount of capital to be put into doing that. This means that there must be an adequate return on that capital to attract it. I shall not labour that point further at present beyond saying that there are many people concerned with private forestry who feel strongly that their interests are greatly hit by the Government's present proposals. I hope that some attempt will be made to look at their arguments reasonably and responsibly.

I should like to make a suggestion. The Forestry Commission is not only a body that produces timber. It does the research for timber. It is the body which represents the whole of the timber interests of the country in discussions with the Government. Could not the Government ask the Forestry Commission, in that capacity, to look at the case put up by private foresters and make a report to them—and, let us hope, to the House as well—about what should be done to try to improve production by private forestry? That is a way out of the difficulty.

If the Government could accept an inquiry of that kind and we could know the results, we could see whether, when the next Budget comes along—which will be quite soon—the results could then be implemented. I hope, therefore, that the Government will look at this matter in this light and ask the Forestry Commission to look at the case of the private foresters and report to them and to the House.

Not having been able to participate in the debate in Standing Committee, I feel that my first duty when speaking on forestry at this stage of the Bill is to pay tribute to those colleagues who fought the battle on forestry night and day in Standing Committee, and that tribute includes hon. Members on both sides of the House. I have read those debates closely. I am bound to say that I find no evidence of the motivation for tax avoidance in forestry which seems to obsess the Chief Secretary.

Speaking on behalf of the Forestry Committee of Great Britain, which represent the forestry owners—

It being Ten o'clock the debate stood adjourned.