Beware the fire sales of March

Our cash-strapped Government may be tempted to flog the forestry commission, but at what cost to the environment, asks Charles Clover.

By Charles Clover Last Updated: 8:00AM GMT 02 Jan 2009

You don't have to look far into this New Year to see a time when the Chancellor will want to sell off some family silver to offset the cost of his pricey support for the banks and the questionable reduction in VAT.
State-owned assets already being looked at with "potential for alternative business models" include the Royal Mint, the Tote, Ordnance Survey, the Meteorological Office and land owned by the Forestry Commission.
A former Treasury mandarin, Gerry Grimstone, is already on the case and will reveal in the spring how much cash he believes can be raised to hurl into the deepening holes in the national coffers.
Now, I happen to believe in privatisation. I also think that the privatisation of the water industry in England and Wales has left Scotland's state-run arrangements looking pretty Third World, so I don't want to get too hysterical about this fire sale.
But I do believe that the Government could be about to repeat some of the old pratfalls by selling off at least one asset that did not get privatised for good reason during 18 years of Tory government.
There are generally two catches to the privatisation of a state-owned asset: one involves price, the other function. Selling off assets too cheaply tends to rebound politically. That is a real danger this year when few institutions have money to spend. There are also pitfalls in thoughtlessly privatising functions that people have come to take for granted.
The most brilliant anticipation of a problem during a privatisation was achieved by the otherwise accident-prone Nicholas Ridley, when Environment Secretary in 1988. Ridley, a sea-trout fisherman, loved rivers. He saw that the water authorities had two roles, regulation and operation, which were in tension with each other. Privatising the authorities whole, or allowing them to set their own standards, would doom the rivers to pollution and rotten management. Thanks to his foresight, the rivers of England and Wales are much cleaner and richer with wildlife than they were.
It remains to be seen whether or not the lot now in power have a clue what they are doing with an asset such as the Forestry Commission, a nationalised industry for plantation forestry set up after the First World War had exhausted woodlands for pit props and trench supports.
As it was state-owned, the Commission set about acquiring land as cheaply as possible and planting it with as many nasty, fast-growing trees as it could in order to achieve the volumes of timber required. It thought nothing of planting up some of the most wonderful wild land in Britain with American conifers. It seduced private owners, including Cliff Richard and Terry Wogan, into putting their money into these woeful blocks of gloom in order to claim the tax breaks that existed for that purpose until 1988.
When these scams collapsed, after the outcry grew deafening, the Commission had to spend a lot of money putting things right. It planted deciduous woodlands to hide the hideous conifer blankets and cut holes in them for wildlife. It put in footpaths, trout lakes and bike trails. The job of ameliorating the dark, Stalinist blankets was expensive – and it ain't finished yet.
An example of what happens when the Forestry Commission comes under pressure to make some money occurred recently when it proposed selling off a Norfolk woodland dear to local dog-walkers so a developer could fell it and extract the three million tons of sand and gravel underneath.
There is a case for returning plantations and woodlands to private ownership. It is just that with the ownership of land come environmental responsibilities and they tend to lower the price. Whether this Government heeds that lesson before it flogs its woodlands off for pulp and quarries remains to be seen.
ŠThe number of salmon caught in the Wye, once the most prolific river in England and Wales, has exceeded 1,000 for the first time in 12 years after £5 million of improvements – a sign that environmental problems can be solved if you try. Isn't it ironic that all this progress is threatened by the proposed Severn Barrage?