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Lembit Öpik (Montgomeryshire) (LD): Although I represent an Opposition party, I acknowledge the Government’s proactive waterways development. Does not the hon. Gentleman accept, however, that after all the positive investment, the great tragedy is that we risk losing many waterways and restoration projects, including one in my area—the reconnection of Montgomery canal—because although the plans are in place, they need the funding previously anticipated, rather than the cuts threatened now?

Sir Peter Soulsby: I share that concern. That so many right hon. and hon. Members have turned up to join in this debate reflects the concern shared widely among Members who have canals and waterways in their constituencies.

David Taylor (North-West Leicestershire) (Lab/Co-op): I am grateful to my hon. Friend and constituency near neighbour for giving way. He will remember from visiting, in a previous capacity, the Ashby canal that it is a significant success. A £60 million grant in aid triggers and catalyses £6 billion of social and economic investment, particularly in areas such as north-west Leicestershire. Does my hon. Friend regret that the cuts will have a disproportionate effect on capital projects such as the £500,000 Shenton embankment project on the Ashby canal, which is close to my constituency, and the Long Horse bridge project over the River Trent, which is in it?

Sir Peter Soulsby: I agree with my hon. Friend. The work that has been done as a result of the investment in the Ashby canal is a good example of the way in which waterways investment brings regeneration to an area. However, there is much left to be done to re-link those sections of the Ashby canal to the remainder of the canal network and to bring further regeneration to that area and to many others.

Mr. Edward Garnier (Harborough) (Con): I am grateful to the hon. Gentleman, my exact neighbour, for giving way. Although he represents an urban area, he is in Parliament and in Leicestershire an acknowledged expert on the canal system. Does he agree that in the British Waterways system, and particularly in Harborough, where we are proud to have the Foxton locks flight, which is one of the great wonders of the canal system, maintenance will be put at grave risk if the cut in grant in aid happens? I represent a farming constituency, which has benefited from single farm payments, but which has incurred from a different aspect of the public purse the penalty for the Government’s failure to deliver them adequately.

Sir Peter Soulsby: The hon. and learned Gentleman draws attention to what has been achieved through Government investment, in particular in the Harborough basin in his constituency. It is a prime example of a mixed-development partnership between British Waterways and the private sector, which has transformed a derelict canal basin into a visitor attraction that is of importance to the local economy. He mentioned the Foxton locks, a job that is also partly done. Although there has been significant investment
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in the locks, the inclined plane that once stood adjacent to them has enormous investment potential, if only British Waterways were able to catalyse it as it has in other areas.

Mr. Michael Wills (North Swindon) (Lab): My hon. Friend will have noted as I did that the hon. and learned Member for Harborough (Mr. Garnier) suggested a certain incongruity about an urban MP representing the interests of waterways and canals. Does my hon. Friend agree that canals have huge potential for urban regeneration? In my constituency, the Conservative leader of Swindon borough council has proposed an imaginative vision to regenerate the canal system in the centre of Swindon, which has enormous potential to bring new life to the town centre. Does my hon. Friend agree that that is desirable and valuable?

Sir Peter Soulsby: I agree entirely with my hon. Friend.

The Government, through British Waterways, have enabled waterways investment that has led to the reopening of canals, at times faster than they were built at the height of the canal construction era. Waterways have been at the heart of regeneration in many of our major towns and cities. One has to think only of Birmingham, Manchester, Leeds and other towns throughout Britain to realise what an impact British Waterways' investment has had on regeneration.

Government support also made it possible for British Waterways to attract the millennium lottery funding that restored the historic waterways link between Edinburgh and Glasgow. Its fantastic and innovative boat lift, the Falkirk wheel, is an iconic visitor attraction. Government support has made possible not only new developments like that, but the restoration of amazing and historic engineering structures, such as the Anderton boat lift, which has restored the link between the canal system and the Weaver navigation. Again, that is a visitor attraction and a major contributor to the area’s economy.

Mr. David Drew (Stroud) (Lab/Co-op): Does my hon. Friend agree that the short-term approach could backfire because it gives very little lead-in time for BW? In my own constituency, a bid has been put in to the Big Lottery Fund in respect of the Stroudwater canal. The approach could backfire and result in the fund being less inclined to provide the money. Does my hon. Friend agree that that is a problem?

Sir Peter Soulsby: I agree entirely. I shall come to it a little later, but one of my major concerns is not just the loss of funding, but the loss of confidence that could result from it and the number of regeneration schemes that could be put at risk.

Mr. Bob Laxton (Derby, North) (Lab): Does my hon. Friend accept that there is an added difficulty? One must bear in mind that the loss of funding to British Waterways means that it must bear the risk on any renovation or new project. The classic example is found here in London. Hon. Members might have visited, as I have, the proposed site of the Prescott locks and the River Lee navigation. That project
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will cost £18 million. British Waterways only put in £1 million, but it will have to bear the risk of a bomb or something being found in the riverbed.

Sir Peter Soulsby: My hon. Friend gives another good example of the remaining potential for regeneration through investment in the waterways. That is as evident in the example that he referred to as in some of the examples that I have given.

Bob Spink (Castle Point) (Con): The hon. Gentleman is being extremely generous in giving way. I acknowledge and am grateful for the Government’s support for BW during the past decade. However, does he accept the view of BW’s chief executive, Robin Evans, that during the three-year period covered by the comprehensive spending review, the actual loss to British Waterways will be about £60 million? Such a loss will be very significant indeed.

Sir Peter Soulsby: I thank the hon. Gentleman, but I think that he might have misunderstood the chief executive’s figures. As I understand it, British Waterways fears—reasonably, given what is being predicted—that the loss, if the new figure is carried forward into future years with up to 5 per cent. cuts, could equate to £50 million over five years. None the less, it is a very serious figure. As I said earlier, however, the problem is not just the figure for the loss, but the loss of confidence that goes with it.

The other aspect of investment that I wanted to discuss is the astonishing backlog of safety-related repairs that British Waterways has been able to deal with as a result of Government funding. Across its 2,000-mile network, British Waterways had an amazing number of structures, many of which are now more than 200 years old, that had fallen into a dangerous state of ill repair, threatening property damage and, in some cases, injury or death. As a result of Government investment, British Waterways has been able to deal with them.

British Waterways has been able to achieve that not only with Government support, encouragement and investment, but with entrepreneurial flair. Today it has a reputation as an effective organisation that delivers what it promises. Indeed, British Waterways has delivered everything that it has promised and much more. It has proved itself a dependable partner to local government, regional development agencies and voluntary groups of enthusiasts, and particularly in innovative partnerships with the private sector. Its status today is that of a public corporation established by the British Transport Commission in 1963. When it was established, its role was perceived to be one of managing decline. Through the 1950s into the ’60s and ’70s, much of the system became semi-derelict and continued to be closed and filled in and to have roads built over it so that it could never be navigable again. Only the pioneering work undertaken by what then seemed to be eccentric enthusiasts such as Tom Rolt and Robert Aickman established the Inland Waterways Association and began to change attitudes, drawing attention to the priceless assets and history being lost as a result of the decline.

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Over the years, the biggest change has been in British Waterways. It has been transformed from an organisation that managed decline to one that today champions growth and renewal. However, it remains a public corporation, albeit a very successful one, and it is subject to the statutory constraints of a public corporation; specifically, as a public sector body, it has constrained borrowing powers.

The benefits that British Waterways delivers range widely across Departments and Government policies. Those cross-cutting benefits were recognised by the Government in 1999 in the document “Unlocking the Potential”, which was followed up in 2000 by “Waterways for Tomorrow”. Both were championed across Departments by the Deputy Prime Minister. It is almost by chance that British Waterways is in DEFRA’s charge; a case could be made for the Department for Culture, Media and Sport, the Department of Trade and Industry or the Department for Communities and Local Government to provide a home for it, because many of its outputs relate to theirs. It could equally easily be with the Department for Transport; there too, British Waterways delivers entirely relevant outputs.

Let us look in more detail at its outputs. Within its purview, British Waterways delivers heritage-related outputs. It cares for more than 2,700 historic listed buildings and structures. Through the Waterways Trust, it supports the waterways museums housing collections at Ellesmere Port, Gloucester and Stoke Bruerne. Across its network, it effectively maintains a 2,000-mile long linear park with some 300 million visitors a year. Only 20 per cent. of those visitors are boat users; the remaining 80 per cent. are anglers, canoeists, cyclists and those who simply enjoy the tranquillity of a riverside towpath in the country, or an oasis of calm in town or city.

To take up the point about the DTI and the Department for Communities and Local Government, British Waterways works with regional development agencies, local councillors and councils to deliver regeneration in towns and cities. As my hon. Friend the Member for North-West Leicestershire (David Taylor) pointed out, it is engaged directly in £6 billion-worth of regeneration projects that offer the potential for 6,000 new homes. Beyond that direct engagement, British Waterways facilitates regeneration and investment by working to renew the canal system and the rivers that connect it.

Not to be forgotten, as hon. Members have pointed out, is the potential—as yet only partly met—for the waterways to contribute to Department for Transport responsibilities for freight carriage. Although some freight is carried on waterways and there has been some growth as a result of British Waterways initiatives, there is undoubtedly untapped potential. One current example is the discussions about the potential for carriage of freight connected with the Olympic construction sites—how freight that otherwise would be carried by road could be diverted on to the waterways.

Mr. James Gray (North Wiltshire) (Con): The many different assets that come from canals are well reflected in my constituency, where the Wilts and Berks canal is halfway through its fantastic restoration. A huge
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amount of wonderful work is being done on a great asset for the community. However, in his 20 minutes or so of speaking, the hon. Gentleman has not yet referred to the cuts that British Waterways faces. Surely the main point of this debate is the fact that all the work that he has described would be badly curtailed if those cuts were made. Boat charges would go up, restoration would be halted and canals might close. Will the hon. Gentleman expand a little on the shortcomings of DEFRA’s funding?

Sir Peter Soulsby: I shall happily move on to that topic immediately.

I remind hon. Members that the cuts are being made to a budget that British Waterways might have expected to be £62.6 million this year. Following the pattern of recent years, British Waterways would have expected the grant to remain at that level or to increase with inflation, but the reality is that British Waterways has had a cut of 12.5 per cent. this year, and is threatened with even further cuts. Most of the cuts were imposed well into the financial year, when a large part of the budget had already been committed. Because the cuts came so late, they probably represent about 20 per cent. of the available spend for British Waterways at this stage of the year.

DEFRA cannot say yet what the grant will be in the next financial year, but all the indications are that it will be reduced significantly from the new lower level of £55.4 million. We should therefore debate not just this year’s budget, but what it means for the future. If £55.4 million is the new base and if—as has been seriously suggested and not denied by the Department—there is a threat of a further 5 per cent. cut every year, that raises the prospect of cuts totalling £50 million over the next five years, which is the figure that I mentioned earlier.

Mr. Philip Hollobone (Kettering) (Con): I congratulate the hon. Gentleman on making that point, which means that the budget for British Waterways in 2010-11 might be only just above £50 million. That raises the prospect of the fees for boat licences increasing by 43 per cent. over the next three years, which would price many boat owners off the canals.

Sir Peter Soulsby: Indeed. I have not yet touched on the effect on boat owners, but that is undoubtedly likely. It is a mistake to believe that all boat owners can afford even the current licence fees, never mind the levels to which they would probably rise if British Waterways had to recover a significant proportion of what it is likely to lose from those owners.

The £50 million, if that is what is to be lost, is not only important in itself. That £50 million would have been used to lever in at least as much again from Europe, local and regional government, charitable organisations and the lottery. Just as that money provides leverage, so its loss is multiplied and the opportunities for leverage are lost.

British Waterways has immediately cut maintenance, cancelled engineering works worth £5 million and announced the loss of 180 jobs. Losing £50 million will
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inevitably require British Waterways to reduce the maintenance of structures that in many cases are 200 years old and which perform duties that could never have been imagined by those who designed and constructed them in the first place, and to look for massive increases in licence fees. If British Waterways is to find £50 million more to cover the cuts, much worse will have to follow than what we have already seen this year. Despite having dealt with the safety backlog with significant Government support, British Waterways still has £119 million of outstanding maintenance work to do. If that work is not done, the canal system will continue to deteriorate.

Charlotte Atkins (Staffordshire, Moorlands) (Lab): Does my hon. Friend accept that canals such as the Caldon, which is merely a tributary to the Trent and Mersey, are particularly vulnerable, because they do not have the status of the larger canals that are more used? The cuts could lead to the dereliction of the smaller canals, as happened in the early ’60s.

Sir Peter Soulsby: It is inevitable that those canals that are less used, as well as those that are in line for further investment and regeneration, will suffer first, as British Waterways prioritises where it will be able to make cuts with the least effect on its current users.

As promised, I shall say something about what the Minister could do about the situation. British Waterways will want to minimise the effect of cuts and to preserve as much as it can. We all remember the dereliction and disrepair of the mid and late 20th century. However, unless the Minister and his colleagues take some action, potential developers will inevitably be nervous, if they fear that the canal next to, say, a block of flats that they plan to build is likely to be drained and become a muddy ditch in the next five years. I expect that the Minister will remind us of the investment that has already been made and the support that the Government have given. He will undoubtedly want to make the case that there is little that his Department can do about the situation.

However, I hope that the Minister will say that he will talk to his ministerial colleagues, because the responsibility falls across Government, not just on one Department. I particularly hope that he will enlist the support of my right hon. Friend the Deputy Prime Minister, to whom I referred earlier as a champion of the waterways. I hope that the Minister will also enlist the support of the Treasury, which, with his Department, can find solutions to the funding problems of British Waterways. British Waterways is a national treasure. It has a unique importance in our history and plays an invaluable part in our life today. What is needed is a solution across Government, to preserve the place of that national treasure in our life. I hope that the Minister will agree to talk with the Deputy Prime Minister and the Treasury and work with them to deliver a review of the funding mechanisms for British Waterways that will secure a way out of the immediate crisis.

One approach would be to give British Waterways a status that permits it to make full use of its assets, without having to rely on the partnerships that are such an essential part of its current fundraising mechanisms and which it has used so creatively. I do not suggest for a moment that British Waterways should leave the
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public sector: it belongs in the public sector and it should remain there. However, it could certainly be permitted to use its expertise to invest in property beside waterways other than its own, or to borrow commercially using its own property. Above all else, British Waterways could benefit from a clear long-term contract across Departments, rather than being expected to meet the objectives of many Departments while its funding is dependent on a single Department that has short-term problems and of whose core business it is not really a part.

Whether we are waterside developers, walkers, canoeists, anglers, historians, ecologists or merely people who love our canals and rivers, we need to be reassured that the Government’s enormous achievements will not be lost. Whatever the cause of DEFRA’s immediate financial crisis, British Waterways—that priceless national asset—and the inland waterways that it has so ably and creatively cared for, nurtured and developed are far too important to be allowed to return to decline. Confidence in the future must not be lost. Our waterways must not be permitted to fall back into decay. The Government as a whole must find a solution.

Several hon. Members rose—

Mr. Mike Hancock (in the Chair): Order. We have about 35 minutes and about a dozen or so Members want to take part in the debate. I intend to start the winding-up speeches at about 3.35 pm and to call everyone who wants to speak before then, so can we all play the same game and be fair to each other? I urge Members to give others a chance to have their say and not to intervene from now on, unless they want to intervene on the Minister or the Front-Bench spokesmen.

3 pm

Mr. Michael Ancram (Devizes) (Con): I will, indeed, try to be brief. I start by congratulating the hon. Member for Leicester, South (Sir Peter Soulsby) not only on securing the debate, but on the way in which he deployed his arguments. In very simple terms, he is saying that our canals are under threat of further decline—we had reversed that situation a few years ago—and that we are asking the Government to go away and think again about the consequences of their proposals for the grant to canals.

I have a particular reason for speaking today. The Kennet and Avon canal runs for 30 miles through my constituency, and although my hon. and learned Friend the Member for Harborough (Mr. Garnier) is not in his place at the moment, I must tell him that my flight—the Caen Hill flight in Devizes—is two and a half times the size of the flight in his constituency; indeed, it is one of the wonders of the world.

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