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The Parliamentary Under-Secretary of State for Transport (Charlotte Atkins): I congratulate my hon. Friend the Member for Stroud (Mr. Drew) on securing the debate on the future of Sharpness docks. I am delighted that his debate is the first to which I have had an opportunity to respond.

The speech has highlighted the important role that smaller ports such as Sharpness can play in meeting the needs of business customers and in generating wealth locally and regionally. Although the heaviest traffic flows are concentrated in our biggest ports, providing vital facilities for container and bulk traffic such as oil and coal, there are more than 1,000 ports and terminals throughout the United Kingdom.

The Government do not run the ports industry. Some ports are run by local authorities, and others operate as independent trusts or are wholly in the private sector; all are run as commercial propositions.

Let me set out three key tenets of the Government's policy towards ports. We recognise that all ports have the potential to bring significant economic benefit to their hinterland, be it local or regional. We have ensured that the framework is in place to allow ports, large and small, to make the most of the opportunities that the market presents. The Government are firmly committed to encouraging more freight to be carried by water, where that offers the best value for money for our economy, environment and society.

Sharpness is an excellent example of what makes our ports industry successful. Under the new operator's entrepreneurial approach, traffic has climbed 50 per cent. since 1996, and it has already established itself as the eighth largest port in the south-west region, whose coastline stretches from Gloucester to Poole. Sharpness Docks Ltd has successfully developed its niche business in dry cargo in and out of the west midlands on short sea shipping services.

I fully understand my hon. Friend's keen interest in supporting the company's efforts to build on this success—it would clearly benefit his constituents, the region, and the Government's policy aims. Sharpness is unusual, in that the owner of the site, and the statutory port authority, is British Waterways, a public corporation. As the port authority, British Waterways is required to ensure that the port is fit for purpose and can safely be used by ships and other vessels. However, the
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maintenance requirements laid down by the Transport Act 1968 apply only to commercial and cruising waterways, and British Waterways is not obliged to maintain Sharpness docks to specified standards, except for the length of the Gloucester and Sharpness canal where it passes through the docks.

There are many demands on British Waterways' budget, but the Government have been increasing the funding for the corporation. Between 1999 and 2002, British Waterways was allocated an additional £24 million to eliminate its safety backlog over a seven-year period. A further £18 million was provided between 2002 and 2004 to enable it to reduce the backlog even more quickly. In addition, DEFRA has in the past few years given British Waterways a further ring-fenced payment of £30 million for infrastructure improvements to bring the network up to a sufficiently reliable standard to attract new business and opportunities to the waterways.

The Government and British Waterways clearly recognise the need to invest in Sharpness to repair and upgrade the existing port infrastructure. Indeed, British Waterways has identified a requirement for £4.1 million of remedial work that it would like to undertake over the next four to five years if available funds and priorities permit. This includes work on the tidal basin jetties and entrance locks. In fact, British Waterways is now considering the phasing of this work into its overall maintenance programme. If further proof were needed of British Waterways' commitment to the future development of Sharpness, I would point to the £500,000 already spent in refurbishing the middle lock gates in 2003–04, and the further £595,000 earmarked for the sea gates in 2006–07.

I assure my hon. Friend that British Waterways is committed to keeping the docks open, and, under its ongoing investment programme, it hopes to encourage a continuing increase in freight traffic through the port over the coming years. I am pleased to hear that BW is currently in discussion with Sharpness Docks Ltd to explore how the docks might be used for the movement of waste and recyclable material, and how the port might, once more, become the gateway for traffic on the Gloucester and Sharpness canal. In this context, it is good to see the return of significant quantities of aggregate traffic to the Severn further upstream, between Ripple, Ryan and Gloucester, supported by a £1 million freight facility grant from my Department. This is the first major freight traffic to flow on the Severn for more than 10 years. It will remove 340,000 lorry journeys from Gloucestershire's roads over the next 10 years, and bodes well for the revitalisation of this major UK waterway.

I also understand that Gloucestershire county council has taken a considerable interest in the future prosperity of Sharpness docks. The county is part of a European Union Atlantic Arc partnership studying the potential for increasing short-sea shipping. We look forward to the outcome of that study later this year.

The county has also been leading on the re-establishment of the docks railway system through the freight quality partnership and is offering to match-fund this work. That will establish a connection to the metal recycling plant at Sharpness, which has rail-connected sites in the west midlands. Discussions are also in hand with the port operator regarding the potential for rail
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and with a distribution firm regarding the potential for a rail-connected warehouse. The dockside could include a general purpose rail/road facility.

Mr. Drew: I congratulate my hon. Friend and hope that that will be followed up, because the company is Howard Tenens. I ask that the Department actively pursue it, as there has been some disagreement on the ground for all sorts of obvious reasons. This could be a real key to turning the docks into an even more successful employment, and dare I say development, opportunity.

Charlotte Atkins: I am sure that the Department will look favourably at that, because it is very much in line with our objectives.

The county council feels that the role of Sharpness as a port was overlooked in the past, as does my hon. Friend, but it clearly believes that Sharpness now offers an exciting opportunity for the county, with tremendous development potential. There is a good supply of employment land and relatively few planning constraints. The local plan has identified 19 hectares of development land, which could probably be easily increased.

The potential of Sharpness was recognised in the county council's local transport plan with an explicit policy aimed at encouraging the development of water freight at Sharpness dock. Another county policy promotes the creation of rail freight terminals, with Sharpness as one of the possible sites.

It is clear that Sharpness is in an excellent position to become a tri-modal freight facility for the region. There is a rail connection—mothballed but largely in good order, having been well maintained for nuclear traffic to Berkeley power station—and the Gloucester and Sharpness canal, connecting with the River Severn at Gloucester. It is only a few miles from the M5. I am pleased to report that the county council is making provision in its second local transport plan for funding to improve the road link from the M5 to Sharpness.

I understand that the county council, through the freight quality partnership, is establishing a project team to drive forward the creation of a tri-modal freight facility at Sharpness. Starting with the dock railway network, the county council will work with Stroud district council, British Waterways, the rail industry, the port operator and other private sector and stakeholder interests at Sharpness to develop and implement the project. The county council sees this as an excellent opportunity to reduce the amount of freight moved by road and to promote the use of rail and water—inland and short-sea—for the transport of goods.

The Department for Transport also recognises the role that Sharpness can play in meeting transport needs in the south-west region and further afield. Sharpness is
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already well positioned to develop further. It can be reached from the midlands by road without having to negotiate the congestion of the M4 and M5 in the Bristol area. It also has the potential to exploit good-quality rail and even canal access.

The Government are keen to take freight traffic off congested roads and we support short-sea shipping as a safe, environmentally friendly and sustainable mode of transport. Freight should be carried by water wherever it offers the best value-for-money solution in terms of the economy, society and the environment. The Government will do what they can to help a port such as Sharpness make the most of that potential.

However, I should make it clear that we believe that port operations and port developments should not rely on public subsidy. Port infrastructure can and should be commercially financed. Port subsidies not only have the potential to distort competition between ports but risk spreading the problems caused by excess capacity. Nevertheless, we undertake to judge each case on its merits, balancing the potential for adverse economic impact against the real social, economic and environmental benefits to be derived.

Although we have no plans to give British Waterways increased grant aid to enable it to expand its freight activities, infrastructure investment might be supported by freight facility grants to help divert traffic from our roads on to water. Start-up and catalyst funding might also be available from the European Commission's Marco Polo programme, which is the grant regime supporting modal shift away from roads.

British Waterways remains committed to keeping the port of Sharpness open and the prospects for further traffic growth are good, whether it be more traffic from the west midlands or more locally sourced waste and recyclables using the Gloucester and Sharpness canal. The Government as a whole are committed to taking traffic off the roads and to boosting short-sea shipping, all as part of a sustainable freight policy. That entails ensuring that the Government's ports policy continues to provide the right framework for the sustainable development of our ports, large and small.

I am sure that my hon. Friend will be delighted to hear that the Department for Transport will work with the Department for Environment, Food and Rural Affairs and British Waterways to ensure that Sharpness has every opportunity to succeed within the ports policy framework. But, most importantly, we look to port operators such as Sharpness Dock Ltd to make the most of the potential, for the benefit of the port's customers, of the local area and the wider region that it serves.

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