§ Motion made, and Question proposed, That this House do now adjourn—[Mr. Garel-Jones.]
9.38 am§ Mr. Terry Lewis (Worsley)I am grateful for the opportunity to bring to the House's attention the proposal of the Manchester Ship Canal Company to close the upper reaches of the canal by 1987. My hon. Friends the Members for Stretford (Mr. Lloyd) and for Eccles (Mr. Carter-Jones) will speak later, if they catch your eye, Mr. Speaker, and I shall leave time for them to do so. I have passed that information on to the Minister. It is also appropriate to record the interest of my right hon. Friend the Member for Salford, East (Mr. Orme) and others who are unable to be here to express their anxiety about a major regional affair.
The issue arises from the recent statement of the company that it intends to close the upper reaches of the canal by 1987 because of what it describes as financial losses on that part of the waterway. That statement of intent raises many issues for Members of Parliament who represent the area. Many questions will have to be answered to allay public disquiet. I believe that the long-term interests of the conurbation will be served best by keeping the canal navigable into Salford docks.
I am too young to reminisce and I do not want to be romantic about my boyhood experiences of living in the shadow of large sea-going cargo vessels 40 miles inland. I accept that ocean-going vessels are unlikely ever to ply the canal again, but provision can and should be made to facilitate the use of what I might describe as brine-type barges. For that purpose the locks will have to be kept in working order.
It is my considered view that the company has discouraged new business by failing to promote the waterway and to generate confidence in its long-term future. That has been apparent for some time. I must point out, however, that there is considerable traffic in goods and raw materials now and I find it wholly unacceptable that that should be transferred to an already overburdened road system in the area should closure take place.
I am also deeply worried about drainage. It might not be well known that the canal is an essential feature of the area's land drainage system and failure to dredge it would eventually cause flooding in large areas of Salford. Responsibility for fulfilling that function should remain with the company, but it is strongly rumoured that it might try to get that liability transferred to the North West water authority. I understand that such a course of action would require a Bill to be passed through the House. My hon. Friend the Member for Stretford wishes to speak on that matter. I hope that the Minister will be able to give us some guidance as to whether that is correct.
The canal was constructed for private profit and the company continues to trade profitably by utilising its assets on the lower reaches of the canal, its extensive land holdings along the canal and the area around the Manchester and Salford docks. I contend that it is utterly inappropriate for a profitable private company to offload an uneconomic part of its assets on to the public sector. The company should be left in no doubt by the Government and others that it is its responsibility to maintain the canal in good order so that it does not become a public liability. I sense that if the company is denied an 1364 easy way out its corporate mind will be concentrated wonderfully and it will go for the business that I know exists on the upper reaches of the canal.
§ Mr. Lewis Carter-Jones (Eccles)I am most grateful to my hon. Friend the Member for Worsley (Mr. Lewis) for allowing me some time to speak in this debate.
I remember seeing pictures of large ocean liners dominating rows and rows of industrial working-class homes. As my hon. Friend said, those days have probably gone for ever, but that does not mean that the ship canal does not have a vital role to play in navigation. The Manchester Ship Canal Company pleads poverty in sections—from Runcorn to the sea it can make a profit but from Runcorn to Salford it makes a loss. It is therefore suggested that it be allowed to cut navigational activities from Runcorn to Salford. That causes great anxiety among my constituents and the people of Salford.
I should like to link that argument with the anxiety that has been expressed by my right hon. Friend the Member for Salford, East (Mr. Orme), who is working on other parliamentary duties.
The company has assumed that, because it is making a loss between Runcorn and Salford, it should be allowed to close that part of the canal. The company will have a bonanza if that part of the canal is closed as it owns substantial amounts of land that can be sold off at high prices on that stretch. Although we might accept that the company is losing money, it will make substantial sums of money if it is allowed to close the canal. We should bear that in mind if and when a Bill is presented to the House. I hope that there will be exhaustive discussions between all of the authorities involved before there is any question of legislation or closure of navigation.
My hon. Friend pointed out that we are discussing a canalised river. It is part of the north-west's river system. It is part of our drainage system, the physical geography of the area, the area's industrial life, and it is vital for the social and economic development of the north-west. The decision must not be taken lightly.
We ask the Minister to be our friend on this issue. The north-west has suffered enough and we should like the active intervention of his Department and of the Department of the Environment to ensure that all of the assets linked with the canal are utilised for the well-being of local inhabitants. The citizens and council of the city of Salford are deeply worried about the long-term effects of closing the upper part of the canal. My hon. Friend has mentioned the risk of flooding. Some draining methods that are now being advanced by the company must be examined extremely carefully. We should not accept that what it proposes is necessarily the best method of drainage. We must certainly find better methods of keeping the canal open as a navigational system. However, for the industrial life of the country and the sake of people who are employed in the area, there must be a better solution than that which is proposed. There is enormous pressure on the Departments of Transport and the Environment to ensure that the north-west does not suffer another blow. We have suffered enough.
Recreation is a growth industry and the benefits of maintaining the ship canal for pleasure might well enable the company to reconsider, discuss the matter with all of the relevant authorities and perhaps arrive at a compromise 1365 that is in the best interests of the community and maintains full employment and an essential feature of life in the north-west.
§ Mr. Tony Lloyd (Stretford)For many of us who were raised in the Manchester area, the ship canal is a special historic symbol. About 90 years ago when my father was a baby he was taken to see the opening of the ship canal, and he and his generation saw the canal lead to the prosperity and growth of Trafford Park, which was the largest industrial estate in the world at that time. They saw the city of Manchester— an inland city — become the third largest port in Britain.
The prosperity of the Manchester region, if not created by the canal, was certainly encouraged by the existence of this ocean-going highway. My hon. Friends the Members for Worsley (Mr. Lewis) and for Eccles (Mr. Carter-Jones) said that, in reality, no one expects the heady days to return when the north American trade came through the ship canal into Manchester, because the size of oceangoing vessels has changed and the canal is now too small to take such trade. Nevertheless, it is important to recognise that the canal still has a viable commercial future.
Trafford Park industrial estate and the entire Manchester industrial base is under tremendous pressure. We need all our assets of infrastructure, including the motorways, airports and the canal, to offer those who might invest in the area the chance of using those resources to recreate the prosperity that it used to enjoy.
Recently, I attended a meeting of Trafford Park industrial council, which is mainly composed of senior managers from companies that operate on the estate. We discussed at some length the future of the ship canal. Much anxiety was expressed not only by the companies that still use the canal — I was surprised by the number of companies that do — but by company representatives who said that they would reconsider their transportation needs to discover whether they could use the canal.
This is not a party political or partisan matter. We are talking for the area as a whole and for the towns and villages along the affected part of the canal. There is a fallacy in the arguments put forward by the Manchester Ship Canal Company. In a letter to employees, the managing director said:
There is no prospect of attracting anything like the traffic we are losing let alone the volume of business needed to pay for maintaining any kind of navigation in the upper reaches of the canal.Mr. Taylor might say that, but the sad truth is that in recent years the company has done little to look for business. Some companies were deeply disappointed by the decision to close the canal. One company was on the point of negotiating with the Manchester Ship Canal Company to bring its raw materials up the canal. That company is a thriving one on the Trafford Park estate.As my hon. Friends said, we have four main anxieties. The first is that the navigation system must be maintained. Secondly, when the company constructed the canal it almost destroyed the existing drainage system for the entire Manchester area, simply because it diverted and destroyed the Irwell and Mersey rivers. We depend on the canal for drainage. The chairman of the North West water authority wrote to the chairman of the company and said:
The canal was constructed for navigation purposes and its hydraulic characteristics are those of a navigable canal and not 1366 a land drainage channel … The canal was constructed for private profit. The company continues to trade profitably by utilising its assets on the lower reaches of the canal and its extensive estates alongside the canal and in the area of Manchester and Salford docks. It is the authority's contention that it is totally inappropriate for a profitable private company to off-load an uneconomic part of its assets on to the public sector.That is an important point, because we are not talking about a company that is starved of funds. The company not only makes fairly massive profits but it has about £40 million worth of fixed assets, about £20 million worth of which is land. The company developed those assets because it was allowed to trade by the good will of Parliament, which established it under the Manchester Ship Canal Act 1885. Now that it has made profits, it wishes to asset-strip and dump the uneconomic part of its operations on the British taxpayer and the ratepayers of the north-west. That is an unacceptable proposal that we shall do our utmost to resist. As long as the company has assets in my constituency and in the constituencies of my hon. Friends the Members for Worsley and for Eccles, we shall argue, rightly, that those assets should be used to compensate for any cost that the company believes it must expend over the years.It is clear to me, as a non-lawyer, that the 1885 Act places an obligation on the company to maintain the canal, first, as a navigable highway; secondly, as a drainage system; and, thirdly, as a safe waterway. The latter point is extremely important to those who live on the banks of the canal, who are anxious to ensure that it is maintained in a safe condition in the interests of them and their children.
On a lighter note, I was interested to learn that, under the Act, I, as a tenant of the Trafford estate, have residual rights to use the canal for the purpose of distributing nightsoil. I shall encourage my neighbours to exercise that right.
As it will require an Act of Parliament to remove my residual rights, I assure the House that I shall resist not just that aspect of the matter but, much more importantly, any attempt by the company to introduce a Bill that is not in the interests of industry or of the people of Greater Manchester. We await with great interest the Minister's speech so that we can know the Government's views on the matter.
§ The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell)The hon. Member for Worsley (Mr. Lewis) has raised an interesting topic for today's debate, and the hon. Member for Eccles (Mr. Carter-Jones) showed that it is significant to the economy of his area. I sympathise with their concern. The ship canal is one of the great national monuments to Victorian engineering, as the hon. Member for Stretford (Mr. Lloyd) explained. It opened to traffic in 1894 and it transformed an inland city into a great port. Manchester undoubtedly owes it place in the world of commerce and industry to the foresight, drive and determination of the canal's promoters. One cannot underestimate the canal's importance in the history of the city of Manchester.
I fully appreciate the close interest of the hon. Member for Worsley in matters related to the ship canal. In 1761, James Brindley, engineer to the third Duke of Bridgewater, completed construction of the first sections of the Bridgewater canal. This canal, which was constructed to transport coal from the Duke's collieries at 1367 Worsley to Manchester, made engineering history. It was the first, at least since Roman times, to be thrown across a river by an aqueduct at Barton, and it led to considerable prosperity in the area, based on the growing need for coal for steam power.
Today is not the time or place to delve into the history of canal building in the Manchester area, though it is a fascinating story and an important part of our industrial heritage. Suffice to say that the stimulus for building the ship canal stemmed from the intense commercial rivalry between Manchester and Liverpool and the wish of the former to free itself from the heavy burden of charges levied on its trade by the railway companies and the then Mersey Docks and Harbour Board. That rivalry still exists today, between the Mersey and Manchester canal undertakings. However, the competitive environment is quite different now, and we must not allow our view of history to cloud our realistic judgment of the needs of today and the opportunities of tomorrow.
I do not intend this morning to comment on the future role of the Manchester Ship Canal Company; it would be wholly premature for me to do so. Any change in the navigational role of the ship canal would, I am told, require statutory authority, and I would not wish to preempt the House's view on any powers which the ship canal company may in due course seek.
My essential message to the House, and to the hon. Member for Worsley, is that the Manchester Ship Canal Company is an independent statutory undertaking which is responsible for managing its own affairs. The company is fully willing to shoulder that responsibility and to take what decisions it sees as necessary to protect the long-term interests of its business. It is important that it should take this responsible attitude, since on its future prosperity as a viable business there depend many hundreds of jobs both on the canal itself and in related businesses.
The hon. Member for Stretford laid stress on the suggestion that the company should use its assets to keep intact the upper canal. I hope that he will not overlook the importance of the company remaining a viable operation, because of the employment of those working on the lower part of the canal.
§ Mr. Tony LloydWe are talking about assets that already exist at the end of the canal, such as land that is held in Salford, Manchester, Stretford and throughout the area. We are talking not about diverting investment from the western end of the canal but about assets that are already at our end of the canal.
§ Mr. MitchellI am grateful to the hon. Gentleman for explaining what he has in mind. However, I do not think that I can enter into what would be a wide and fairly lengthy debate on these matters.
I am aware of the difficult issues facing the ship canal company which led to its recent announcement of its conclusions about the future of commercial traffic above Runcorn. I shall not comment on those conclusions, because there is a long way to go before the company is likely to be in a position to act on them, but I welcome the company's frankness in making public its views and thoughts for the future. There is everything to be gained by a wider understanding, and a public debate should now take place. I also welcome the studies which the company is undertaking to research the drainage function on the 1368 upper canal and to seek less costly ways of discharging it. Hon. Members will be pleased to know that my Department is contributing up to £50,000 towards the costs of this research.
As many hon. Members will know, most of the ship canal's traffic is now concentrated on the lower half of the canal, at Eastham, Ellesmere Port and Runcorn. The company believes that the ship canal between Eastham and Runcorn is sound and successful. It is fortunate that this lower section of the canal is in an assisted area, as this has enabled the company to benefit from the infrastucture grants available under the European regional development fund. Since 1977, the company has received £600,000 in ERDF grant. This has assisted many valuable projects, including the development of container and vehicle terminals, cranage and storage facilities and various improvements at the Eastham entrance to the canal. It is worth recording the important contribution which the European Community has made in that way.
I am sure that the company would be the first to want to see a viable level of shipping continuing to make use of the upper canal and the docks at Manchester, but traffic has declined and activity at the Manchester docks is now very sparse, despite the company's efforts to retain business there. It must be for the company's own commercial judgment to take a measured view of its long-term prospects. Inevitably, it will take a hard-headed view if its undertaking is to remain a viable and competitive operation.
§ Mr. Carter-JonesThere is some concern about this. The Manchester Ship Canal Company is taking part in negotiations and discussions. We should like to know whether it can take action unilaterally and without legislation.
§ Mr. MitchellIf the hon. Gentleman will allow me, I shall seek to cover all the points raised by hon. Members in the course of the debate.
Various factors bear on the prospects of an inland port such as Manchester. First, ships have been getting larger — many are now too large even for the ship canal. Secondly, and in consequence of that, shipowners demand the faster turn-rounds at estuarial port facilities which do not rely on impounded docks. Thirdly, and again linked, deep-sea shipping services frequently call at both a British and a continental port. Ports on the south and east coasts of England clearly have an advantage, especially with the huge improvements in our road and rail networks which have speeded up their links with the main centres of production and distribution.
More generally, the traditional great ports on the west coast have all experienced a marked reduction in trade since we joined the European Community. The movement of trade has been to the benefit of our ports on the east and south coasts. Nearly two-fifths of the volume of Britain's seaborne foreign trade is now with the EC — almost double the proportion a decade ago. This is an inescapable consequence of our membership of the Community, and it would be vain to try to stem the tide.
If we are to keep competitive in international markets, we must expect trading patterns to change as technology and institutions change. Our ports can no more remain unaffected than anything else. To make an omelette one has to break the eggs. The effects of these various changes can be seen in the growth in importance of estuarial ports 1369 such as Southampton and Felixstowe and the decline and demise of facilities such as the upper docks in London, the port of Preston, Middlesbrough dock on Teeside and Newcastle quay on Tyneside, and in the greatly reduced extent of the Liverpool docks.
These are just some of the factors which militate against the economic operation of ports at inland locations which often additionally require costly dredging to keep them operational. Clearly these are issues which will be uppermost in the mind of the Manchester Ship Canal Company. It bears a heavy burden of dredging costs—more than £3 million a year. A significant part of these costs arises on the upper canal where traffic is in sharp decline. This is not to say the position of the canal company is entirely bleak. In tonnage terms, its undertaking is still the second largest private sector port—after Associated British Ports—and in revenue terms it is fourth—after ABP, Mersey and Felixstowe. The company's financial performance is reasonably healthy. Last year it reported a profit, before exceptional items and taxation, of £3.1 million—an increase of £1.15 million over 1982.
§ Mr. Terry LewisI hope that the Minister is aware that the company's drainage costs centre on the need for the waterway to be the drainage system of the area and not simply because it has to maintain a navigable canal.
§ Mr. MitchellI am aware of that, and, if the hon. Gentleman will allow me, I shall deal with that point.
While income was down 4 per cent., expenditure was lower by almost 9 per cent. I understand the concern about employment of hon. Members representing constituencies in the area. I am aware that in recent years the ship canal company has reduced the number of its employees by about 1,500 and that a further reduction may be required. The accumulative cost of these reductions has been around £6 million to the company. Of course, that has to be seen in human as well as industrial terms, and is regrettable, however necessary it is, but the Government have actively helped to rebuild and create jobs, in the enterprise zone area in Trafford and Salford. Here the canal company now offers sites which are fully serviced and will have the benefit of an extensive landscaping scheme, both largely financed by derelict land grants. There are opportunities for new housing and commercial developments. That point has been made by the hon. Member for Eccles.
During the transport debate on 25 April, the hon. Gentleman raised the question of the canal. He said that he wanted my right hon. Friend to keep the canal open as a navigation way all the way to Salford. He also drew attention to the canal's function as a watercourse.
As I have told the hon. Gentleman in correspondence, it is not for me to intervene in a decision taken by the ship canal company on commercial grounds for which the responsibility is clearly its own. I cannot magic traffic out of the air any more than the company can. It is perhaps unfortunate for Manchester that its splendid engineering waterway faces westward and is therefore not well placed to capitalise on the possibilities of developing the great barge traffic opportunities across to the Common Market.
1370 The upper section of the canal also functions as a major land drain, but that falls outside my responsibilities. That crucial role—I recognise the points which have been made by hon. Members about that — will have to continue whatever decision may be taken about the commercial future of the waterway.
I can assure hon. Members that the ship canal company is conscious of that aspect and has been in close touch with central and local government on the problems that it raises. Decisions on the future use and management of the upper canal are complex and will take time to resolve. We are fortunate that the ship canal company's management has brought the matter into public focus in good time so that there is an opportunity to thrash out the matter.
I was specifically asked whether the North West water authority would take over the upper canal's land drainage function. That, as hon. Members will realise, is outside my Department's responsibility and I cannot answer for the water authority in that matter. However, I know that the canal company has had discussions with the water authority. It would he premature for me to comment on that aspect of a complex issue. However, I have noted what has been said on the point and I shall draw those comments to the attention of my colleagues in the Department of the Environment and the Ministry of Agriculture, Fisheries and Food who have the main interest in this matter.
This has been a useful debate. It has provided an opportunity for hon. Members who are understandably anxious about the potential effect on their area of the course of action which the canal company has announced that it is considering to air their concern. I have no doubt that a major debate will now be conducted in the area as well as in the House. This debate has given me an opportunity to answer the major points which have been raised as to the areas of responsibility and where my Department is involved.
I shall ensure that the points made in the debate touching on aspects of the canal outside my Department's responsibility are brought to the attention of my right hon. Friend the Secretary of State for the Environment, who has a particular interest in the context of his Mersey clean-up initiative.
§ Mr. Terry LewisWith respect, the Minister has not yet confirmed that the Manchester Ship Canal Company will need to promote a Bill before any changes can be made.
§ Mr. MitchellThat is a matter for the ship canal company to determine. I believe that it will probably need statutory authority to close the navigation, but whether that is done by way of a private Bill or by applying for an order under the Harbours Act 1964 is for the company to decide. I know that the company has a complex set of statutes and I know that the question raised by the hon. Gentleman touches on a matter of considerable legal complexity.
My right hon. Friend the Secretary of State for the Environment, who has responsibility for the Mersey cleanup initiative, will wish to read with interest the comments which have been made in the debate, and I shall draw them to his attention.