Back in 1981, the IEA published State Forestry for the Axe: A Study of the Forestry Commission and De-nationalisation by the Market by Robert Miller. Almost thirty years on, the government is now planning to sell off about half of the 748,000 hectares overseen by the Forestry Commission.
Largely untouched by ministers for ninety years, the Forestry Commission, like the BBC, is one of the last few unreformed nationalised industries. With an estate valued in the 1990s at £2.5 billion, transferring ownership to private hands will bring a range of positive economic benefits. As something that even Margaret Thatcher failed to execute during her time as prime minister, this move is long overdue. However, on closer inspection, the government’s plans do not go far enough.
The state runs the Forestry Commission as a huge loss making and heavily subsidised entity. Indeed, why previous governments have let such a quango exist for so long is perplexing. The Commission’s roots lie in World War I, when the government intervened in an attempt to ensure that enough lumber for coal mine tunnels and railway sleepers was supplied to defeat the Kaiser, at a time when Britain felt the need to be as “self sufficient” as possible. However, this type of mercantilist endeavour, where imports are thought to represent defeat, is deeply misguided. Britain probably has no comparative advantage in timber and can import timber and timber products more cheaply than producing them here. By selling off the forests to private companies, the government would be able to end the subsidies as well as raising money to reduce the deficit. The forests’ new private owners would also have strong incentives to increase the economic returns from the land.
The Comprehensive Spending Review suggests that the government plans to “retain and substantially reform” the Forestry Commission. But it is hard to see any kind of economic benefit from the continued operation of any part of the organisation. If the government really is intent on a bonfire of quangos, as it states, then surely this mega quango should be abolished entirely.