SHEFFIELD AND SOUTH YORKSHIRE NAVIGATION

HL Deb 22 March 1977 vol 381 cc479-510

7.25 p.m.

Lord HARVINGTON rose to ask Her Majesty's Government whether they will review the case of the Sheffield and South Yorkshire Navigation in the light of their policy for commercial waterways and the duties laid down by the Transport Act 1968. The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. I should like to bring to your Lordships' notice this evening a matter of considerable importance in the transport field which I think is being and has been seriously neglected by successive Governments. I refer to the asset available to the country which consists of those inland waterways which have been under-utilised for freight purposes for many years. It is appreciated that, in the overall aspect of transport policy, freight carrying on inland waterways constitutes a very small percentage of the total transport resources. However, where such facilities exist they make a beneficial contribution to the area which they serve.

I would remind your Lordships, if I may, that in the Transport Act 1968 the inland waterways owned and managed by the British Waterways Board were divided into three categories; namely, commercial, cruising and remainder waterways. The Board were obliged to maintain each class of waterway to suitable standards for purposes commercial, recreational and amenity use. Unfortunately, the will of Parliament has been frustrated owing to the failure of successive Governments to provide the necessary finance, not only for ongoing maintenance of the system but for investing in its facilities. The result is that, over the years, growing arrears of maintenance have accumulated which, in 1970, the Board's engineers estimated at a sum of no less than £22½ The Administration previous to this present Government called in consulting engineers to give them a report on the accuracy of these figures. The Fraenkel Report has been prepared, but has not yet been published, and I am wondering whether the noble Baroness, when she comes to reply, will perhaps tell us why it has not been published, and when it will be published.

It is difficult to imagine how the Government can develop a national transport policy without taking into account the inland waterways' commercial use. The commercial waterways constitute important communication arteries leading to substantial river estuaries. In the North-East, these waterways are the Aire and Calder Navigation; the Sheffield and South Yorkshire Navigation, with which we are particularly concerned tonight; and the River Trent Navigation. They connect Leeds, Sheffield, Nottingham, Doncaster, Gainsborough and Rotherham with the Humber Estuary and the ports of Goole, Hull, Immingham and Grimsby. In the North-West, there is the Weaver Navigation connecting Northwich with Weston Point to the Manchester Ship Canal.

In the South-West, there are the Gloucester and Sharpness Canal and the River Severn Navigation linking Worcester and Gloucester with Sharpness Docks to the estuary of the River Severn. In London, the River Lee Navigation links Enfield with the Thames at Bow Creek. Brentford has an important depot near the junction of the Grand Union Canal with the River Thames. All these towns and cities are within a short distance of the motorway system. The present tonnage capacities of these waterways is broadly speaking as follows. The Gloucester to Sharpness capacity is for vessels of about 1,000 tonnes. The navigation with which we are concerned this evening, the South Yorkshire Navigation, has a capacity of from 500 to 700 tonnes. Most of the other waterways are that or rather below it; except for the part we are particularly concerned with this evening; that is, Doncaster to Rotherham, where only 90-tonnes vessels are possible. It is about this that we are really here tonight.

The total tonnage handled by the British Waterways Board in 1976 amounted to 6¼ million tonnes. Of this, 4.6 million tonnes was moved on the Board's waterways. Traffic actually moved on these waterways during the last two years has increased by over 600,000 tonnes, or 16 per cent. But this is not the whole story. It has been assessed that 50 million tonnes per annum are now being moved on all the inland waterways of the country. The Board also have important commercial depots at strategic points throughout the system. Their organisation provides for a freight service division which, despite the country's economic difficulties, has consistently turned in a profit on its operations.

The Board were encouraged by the Transport Act 1968 to think that a new era had dawned for inland waterways and have been keen to develop the system for the functions which Parliament has given them. However, despite many projects submitted to the Department of the Environment designed to improve the Board's commercial performance, very little attention has been given to the Board's request for that essential requirement, capital money. Indeed, the Government's attitude is summed up in the White Paper, The Government's Expenditure Plans, where it is indicated that provision for maintenance is kept at previous levels, pending the outcome of a joint review of long-term policy which the Board are conducting with the Department of the Environment as set out on page 56 of the White Paper. Under the chapter dealing with capital investment, it is stated (in page 119) that the long-term future of the Board is being considered as part of this over-all review of the water industry. Capital investment is confined to a figure of £2 million for 1976/77. This is the total amount of capital investment which appears in previous White Papers and is utterly insufficient to cover important commercial developments.

All White Papers on public expenditure indicate that no further investment or grant can be made available pending the review of the Board's future policy. These statements have been continually made since 1973 when the Board's undertaking was omitted from the Water Act of that year; and no such review has yet taken place. Instead, their undertaking is under constant threat of legislation or merger with another authority. The latest example is the Green Paper, A Review of the Water Industry in England and Wales—A Consultative Document, which your Lordships will remember came out just a year ago. This document advocated the merger of the British Waterways Board with a new body to be known as the National Water Authority.

My Lords, it is difficult to understand how the Government can contemplate the water industry being responsible for freight activities. One might as well expect the British Navy to bring commercial goods from Cape Town to London. It can only be concluded that the Government's intention is to let freight transport on inland waterways die by neglect; so that the Board's waterways will remain available only for recreational and land drainage purposes. How foolish it is to throw away the only paying means of nationalised transport in this country. What one is forced to believe is that the Government hope that if only nothing is done, this problem will go away. I can assure your Lordships and the Government that it will not go away because there are many resolute Members of this House and of the other place who are utterly determined to see that it never goes away.

I have expressed a little harshly about the Government. Perhaps the noble Baroness will allow me now to give a little "Thank you" to the Government for what they have done so recently in providing the money to repair those Lagan Locks on the Caledonian Canal which mean so much to our beloved Scottish brothers—and I say that with all the feeling in my heart—to the fishermen and to the numerous fleets of pleasure boats which operate on that waterway.

My Lords, when one considers the Government policy with regard to roads, an entirely different situation appears. The Department of the Environment were themselves, until recently, responsible for the construction of motorways. They had a vested interest in ensuring that motorways were built and maintained. To justify investment in a new road, only a 10 per cent. return was required, based on figures provided, until recently, by the same Department who produced the calculations for the waterways. The figures for the road relate only to past trends on all roads. No attempt is made to assess the likely utilisation of a proposed new road on a factual basis. Investment in waterways requires a 15 per cent. return supported by firm guarantees from future users of the system. This is what they say in Paper 5, Transport Policy—A Consultation Document, to which I referred a moment ago.

With regard to investment in British Rail, all infrastructure costs are written off to revenue account and grant aid. A Bill at present being considered in another place provides for increases in grant aid to British Rail. The British Waterways Board, therefore, feel that their position with regard to capital investment is most disadvantageous to them. They have to compete unfairly with a Government Department which has a direct interest in the project for which capital investment is required and with another nationalised industry which has favourable investment terms. In addition, the British Railways Act 1974 enables 50 per cent. grants to be made to industrialists to encourage them to make siding connections to the railways. No such facility is available to the British Waterways Board, the one nationalised authority on whose commercial undertakings a profit is shown. I hope that your Lordships will forgive me if I seek to emphasise this point; but I think it is something that the House will appreciate.

My Lords, despite these severe disadvantages, the British Waterways Board is still in business and has increased its tonnage for traffic moving by waterways in the last two years by 600,000 tonnes, or by 16 per cent. This has been done without investment. How much more could have been achieved if successive Governments had shown any vestige of interest! "Oh ye of little faith!" I can only assume that it is their intention to allow waterway commercial assets to die by default. If this is so, then I hope that the noble Baroness will be courageous and stand up and tell us so this evening.

The improvement scheme for the Sheffield and South Yorkshire Navigation is a very good example of the kind of investment which the Board consider will bring more traffic to the major inland waterways of the country, and which could eventually develop into a very profitable enterprise. It is fully supported by local authorities. I have in my hand a large sheaf of letters which have been sent to me by the county clerks of South Yorkshire from the chambers of commerce throughout the whole length of this waterway begging that the money be made available for this waterway to be improved. The improvement scheme is designed to provide a new trunk transport route for South Yorkshire, to link the industrial areas of Sheffield and Rotherham with the Humber ports. It will provide an attractive economic transport route for freight moving from between 400 and 700 tonne loads. Congestion will be reduced on existing roads, and it would be environmentally attractive, with low noise and low fume levels. My noble friend Lord Kinnoull will say something about what happens to these loads when they reach the estuarial waters, in explanation of how economic the whole project is bound to be.

Before submitting the scheme for approval, I am informed that the Board carried out their own marketing studies and engaged the services of international business consultants. I will not be guilty of naming them, for obvious reasons, my Lords. The consultants concluded that the additional traffic potential ranged from 1.5 million tonnes—that was their lower limit—to 2.4 million tonnes, which was the upper limit. The Board's submission is based on additional tonnage of the lower limit, 1.5 million tonnes only. Notwithstanding the passage of time, I understand that they remain confident that traffic of that order can be developed.

The additional annual cost of improving the waterway beyond the present standard would amount to £850,000, representing interest and depreciation on the investment. The maintenance costs would not increase. If no traffic was secured for the improved waterway, this would be the additional loss and is therefore the annual cost of the risk. It is only fair that I should state that. No one gets anywhere in this life unless they take at any rate some risk. When it is a calculated risk such as this, which is bound to produce a good result, I have no hesitation in standing up here and stating the matter quite fairly.

What is proposed is an improvement of the size of the locks and navigable channel between Doncaster and Rotherham, a distance of about 11 miles. The capital cost was originally assessed at £2 million in 1966. Oh would that the decision had been taken then! But with inflation, the cost is now near £8 million, still not a large sum when one considers the benefits which would accrue.

Nevertheless, although Parliament approved the work, the necessary money has not been made available because the percentage return shown by a discounted cash flow calculation is a few points below the level arbitrarily set for such an investment by Government. I understand that these calculations do produce, however, a return on the money rather better than that required to justify a new major road. I have already referred very briefly to the differing methods of assessing this sort of investment which cannot be regarded by anyone as sensible or acceptable. Why should investment in roads and railways infrastructure attract no interest when the British Waterways Board have to pay? Why is the decision criterion for roads so favourably different?

Because of such obtuse calculations, the nation is apparently to be denied the benefits which would accrue from greater use of our major inland waterways and rivers for commercial navigation. Of the options available, only improvement makes any sense. Note this carefully, my Lords: it provides an opportunity to eliminate the current financial loss, and from the market intelligence there is every prospect of that. Continuation without improvement necessitates expenditure of £2.5 million without any prospect of improving the earnings; indeed, the loss would be greater because all the commercial traffic would cease in a short time. Downgrading this waterway to a cruising length is only marginally better than the former due to the important fact that the estimated unavoidable cost of the waterways is only £47,000 perannum less.

The waterways cannot be eliminated —we have got them, like sex! The cheapest option will cost a great deal of money initially and annually thereafter. For a little extra the nation can have a commercial route with real prospects, which will play an important part in the transport scene as well as add a new dimension to the infrastructure in the area, which needs new industry and greater job opportunity. We are very dependent upon import and export trade, most of which travels by water at some stage. We are members of the EEC Community, and other member countries have for years been developing their inland navigation systems. Arising from that attitude, there has developed new shipping techniques which allow for differing sizes of navigations. All of this because transport of goods by water is invariably cheaper, less damaging to the environment, more saving in energy used per tonne moved, more economic as the volume of traffic moved increases and more able to cope with increased volumes without damaging valuable agricultural land. Underlying all these advantages is the fact that the major navigations are based on natural rivers, the containment of which calls for appreciable expenditure on bank protection and flood relief schemes which cannot be avoided. Surely, it must he sensible to seek to earn money by way of tolls charged on traffic moved to offset the underlying unavoidable costs.

My Lords, I have the greatest respect for those in the professions of accountancy or economics. Their advice is valuable, but they are not infallible. Indeed, the tasks of the Chancellor of the Exchequer would be easy if the advice he received was always correct. Is it not odd, therefore, that when Ministers receive advice on development proposals such as that for the improvement of the Sheffield and South Yorkshire Navigation, such advice should have to be considered absolutely precise? Is there in today's complex society no place for common sense, for judgment and perhaps a little faith? To turn down this improvement scheme for the sake of a few percentage points displays to me a lack of common sense, judgment and faith. Our forefathers made this country great by faith and by investment in matters to do with water and the seas. It is time that we again invested in improving our natural assets. The risk is not great: in fact it is a few percentage points in an economist's calculation. Ministers and Government should reconsider their present attitude and, by foregoing a few miles of motorway or the equivalent thereof, give the waterways the chance to prove their continuing worth in the years that lie ahead.

7.51 p.m.

Lord MOWBRAY and STOURTON

My Lords, we are all, I think, and particularly myself as a part-time Yorkshire-man, most grateful to my noble friend for introducing this very detailed and well-reasoned Question concerning this waterway system. The Question he has asked in the most moderate way, and he has put his case in a well-reasoned and detailed way. Your Lordships may not know that he is one of the most experienced users of rivers and canals in this country and in Europe. So your Lordships could not hope to have a more knowledgeable person putting this case tonight than the noble Lord, Lord Harvington. The noble Lord said he hoped that the noble Baroness would not find him too harsh in his statements. I think that the noble Baroness, sitting there robust and happy as always, knows that our personal affection for her does not stop our using harsh words about her Government's actions. I am sure she knows that no personal malice is involved.

Although this country's waterways account for only 0.1 per cent. of inland freight transport, we must not conclude that the subject of our discussion today is in the least bit insignificant. In the first place, given our present economic circumstances, we cannot disregard even the smallest percentage points when it comes to measurement of economic activity. We must hoard and cherish them the more. Secondly, waterways on the Continent of Europe play a very important role in freight transport. We must not neglect opportunities for future collaboration in this sector. Thirdly, given the world's energy outlook, it would be foolish to put all our eggs into one energy basket. Freight transport by water is highly economical in energy terms, and this is not a factor which we can afford to neglect.

Fourthly, whatever the national figures may or may not be, it would be wholly wrong to overlook the importance of the waterways we are considering today in the economic life of Yorkshire and the surrounding region. That importance is fully acknowledged by the South Yorkshire County Council. As I am sure the noble Baroness will agree, the transport policies which have been followed of late in South Yorkshire leave much to be desired. Indeed, the present South Yorkshire County Council have made a single-handed attempt to defy not only the exhortations of the Government but economic reality itself. They have persisted in a policy of wholly unrealistic revenue support levels against all advice from every quarter, in the midst of the worst economic crisis in our peacetime history. That is the more regrettable, in that had South Yorkshire used their available resources intelligently they would perhaps have been able to find the money for precisely the type of project we are considering today. But I have praise at least for the South Yorkshire council officers over their efforts on behalf of these waterways. They have produced a whole series of papers and reports which set out their case in clear and effective terms.

The 1968 Transport Act is the whole basis of transport policy, possibly, at the moment. Many of your Lordships will remember the lengthy and contentious debates which accompanied the passage of that Bill through this House, and the proceedings in another place were prolonged still further. Nearly a decade later, what is left to show for all that effort? What practical benefits does the user of transport today derive from those tremendous legislative efforts, supposedly undertaken on his behalf? I am not sure whether the noble Baroness might not secretly be only too grateful if the Government should founder in the next few days, in that it would release her from the necessity of venturing into the rather arid desert of her Party's transport legislation, and adding her bones to the whitening remains of her ministerial predecessors who have fallen while chasing the chimera of an integrated transport policy.

We on this side of the House are more than sceptical of the whole notion of an integrated transport policy. We suspect that the practical consequences of integration would be to remove decisions as regards transport planning even further from the user in the market place and put them even more into the control of rigid and monolithic bureaucracies. It is clearly desirable to achieve the optimum use of resources but, to this end, we much prefer a policy of co-ordination, as the noble Baroness will be aware, implying the intelligent and unbiased planning of transport priorities based on consumer choice.

It is my contention that in such planning we must not overlook the contribution which our waterways can make. It is too easy to fall into the habit of assuming that canals went out with the stagecoach and that their only value now is as a recreational facility. That assumption, my Lords, is regrettably widespread in this country, but it is certainly not shared by our major industrial competitors in the EEC. Measured by tonne kilometres, 5 per cent. of French freight transport travels by water and 8.5 per cent. of West German freight, as opposed, as I said earlier, to 0.l per cent. of freight in this country. Obviously, no one is suggesting that even the maximum conceivable development of these South Yorkshire waterways could enable the River Aire or the Selby Canal to rival the Rhine or the Rhone; but, especially in our present economic circumstances, we should be foolish to ignore their potential contribution—or indeed any potential contribution—to the efficient movement of freight transport.

A regrettable feature of the public expenditure cutbacks under this Government is that in the transport sector they have concentrated almost exclusively on investment and capital programmes, while Government subsidies to everyday expenditure have gone on increasing. We shall have to live with the consequences of those cutbacks, I fear, for quite some years to come—poor roads, overcrowded roads and run-down rail services. The quality of our vital transport infrastructure could make a major contribution to our economic recovery, but is lagging behind that of our EEC partners. In particular, our roads are already the most crowded in Europe.

Given that is so, can we really afford to neglect any part of the transport infrastructure which we do possess? That is especially true in the South Yorkshire region, which I know so well, where the whole industrial life of the area may well be revolutionised very shortly by the development of the Selby coalfield. That makes it even more important to secure efficient transport. Also, we have to remember that, although, as I have said, our rivers and canals cannot rival those on the Continent, the very existence of the latter has led to the development of large-scale barge traffic, much of which is potentially cross-North Sea and cross-Channel. We have the BACAT transport, by means of which one can put barges on catamarans and get them across the North Sea or the Channel. It is very important that we do not cut ourselves off from this traffic. This could be a significant factor in enabling us to maximise the economic opportunities which Community membership offers.

One point seemed to emerge from the papers—a point which was made very strongly by my noble friend Lord Harvington. It will cost almost £2 million a year just to keep these waterways going at all. In view of that, and in view of the anticipated increase in traffic, the arguments in favour of a modicum of additional expenditure become rather more important and make more sense than Government policy has been allowed to show so far. I shall look forward to hearing the Minister's reply to the factors which were so fully set out by my noble friend.

South Yorkshire County Council and the British Waterways Board have produced detailed papers setting out the case. I am sure that the noble Baroness and the Department have looked at copies of these papers, and have studied them very carefully. It is not for me to pass judgment on the detailed facts and figurings in these documents, but I found them very impressive and they seem to present a very serious case for increased Government investment in the South Yorkshire waterway network. In particular, the Waterways Board seemed to me to make out a very strong case for the project in terms of the projected rate of return which it might earn, which was mentioned by my noble friend with great persuasion. They also make great sense in terms of discounted cash flow, although obviously there are variable factors such as future traffic levels, or even the possibility of our EEC grant which, I suppose, has to remain speculative.

What I hope the noble Baroness will do is to recognise the concern which exists in this House, and in Yorkshire, about the future of these waterways, and publish a full reply to the studies which have been produced by the Waterways Board and the county council. Of course, the noble Baroness may find certain problems in doing this. My information—and I shall be delighted if the noble Baroness can correct me on this—is that at present no one in the Ministry of Transport has responsibility for inland waterways. I referred earlier to my doubts about an integrated transport policy, and I really think that we have reached the height of absurdity when a Government, nationally committed to such a policy of integration of transport, leaves all responsibility for inland waterways to the Ministry of Sport.

The British Waterways Board are intent on making a contribution to the nation's freight transport resources. Surely they should be encouraged in this, and not wholly assimilated to pleasure craft and sailing schools. It may well be that these latter activities are, indeed, the most important aspect of our waterways today, but that is no reason for wholly disregarding the freight operations. I hope that the noble Baroness will find it possible in her speech to reassure this House, and the interested parties in this debate, that she has taken their case fully on board and that she will give her personal attention to the future of the South Yorkshire waterways and their urgent needs.

8.5 p.m.

Lord FEVERSHAM

My Lords, it is not my intention at this late hour to detain the House for long, but I should like to take this opportunity not only of congratulating the noble Lord, Lord Harvington, on raising this Question, but also of supporting him in his desire to press the Government to review the case of the Sheffield and South Yorkshire Navigation. I am also delighted to have heard the noble Lord, Lord Mowbray, from the Opposition Front Benches. Who knows? After tomorrow night's vote in another place, those of us in this House who are interested in the commercial possibilities of inland waterways may be addressing our questions to the noble Lord, and we will all be very encouraged by the speech which he has just made. It would be a pleasurable business to address this Question to the noble Lord.

However, we have to concern ourselves tonight with the Government that we have, although if you look at the record of successive Governments of every shape and colour, practically throughout this century, you will not find one which has produced a constructive policy towards the commercial use of our inland waterways. Therefore, I cannot really anticipate with any great excitement the reply which the noble Baroness will be making on behalf of the Government at the end of this short debate.

I have great sympathy for the noble Baroness. As has been pointed out, the country is in a desperate economic plight and it is essential to curb public expenditure. The Government are bound to ask whether at this time they can afford to finance improvements on the Sheffield and South Yorkshire Navigation. They will perhaps be tempted to push the matter on one side and say that a project of this nature should be put on ice until we have a better financial climate. Unfortunately, I think there is some urgency in this matter, because if no action is taken to develop the Sheffield and South Yorkshire Navigation along the lines recommended by the British Waterways Board, then even that commercial traffic which is operating on the canal at present will be lost. This is an important point, because one of the last chances open to us in this country to develop our navigable waterways for commercial use will then have gone.

No doubt there are those who regard our canals as dead to the possibilities of development for commercial carrying, and perhaps they would be delighted to see the last nails driven home into the coffin containing the corpse of what they regard as an outmoded transport system. One can only stress to such people the point that was made by the noble Lord, Lord Mowbray, that every other country in the European Economic Community has invested considerable efforts in the development of inland water transport. It is precisely because successive Governments in this country have not done the same that our commercial waterways are in such a derelict state, and why they do not present to some people an attractive alternative for inclusion in any transport policy in this country.

In Yorkshire, there exist exciting possibilities for water transport to play an important role in the transport infrastructure of the region, as the noble Lord, Lord Harvington, pointed out. It is not so many years ago that the broad canals in that region contributed valuable profits to the British Waterways Board. Unless some investment is made to update these waterways, we shall lose for ever the possibility of profitability in the region, with a consequent growing burden on public funds. We have a situation where the important industrial communities of South Yorkshire and West Yorkshire are served by waterways with great commercial potential. If that potential is not recognised, and the necessary investment made, then I believe that we will fail in taking an important step which needs to be taken in the regeneration of our great industrial centres, and upon such regeneration depends the future prosperity of our country.

In connection with the Question put by the noble Lord, Lord Harvington—and I think it is taking up a point also made by the noble Lord, Lord Mowbray—may I ask the Government what system exists in the Department of the Environment to advise the Government on matter concerning commercial navigation on our inland waterways? I know that the Transport Committee of the Inland Waterways Association, in their excellent report Barges to Juggernauts, recommended the setting up within the Department of a small division concerned with the development and planning of commercial waterways, along the lines of, but much smaller than, the commercial highways division. I believe that this excellent suggestion has not been adopted by the Government, and no doubt the noble Baroness will be able to enlighten us as to why not.

Finally, may I express the hope that the Government can give us at least some hope that they are prepared to look again at the matter of the Sheffield and South Yorkshire Navigation so that we do not lose this important asset. I am a Yorkshireman and I know that in Rotherham, Doncaster, Sheffield and throughout the South Yorkshire coalfield, people are expressing the same hope. We in Yorkshire hope that tonight the noble Baroness will not be in the business of driving nails into coffin lids.

8.10 p.m.

The Earl of KINNOULL

My Lords, I rise to support my noble friend this evening on his Question on the Sheffield and South Yorkshire Navigation and to congratulate him, as have others, on his most eloquent and powerful advocacy in setting the scene for this debate. As my noble friend on the Front Bench has said, it is no accident that my noble friend Lord Harvington should make such a distinguished speech on the subject for, if I may be so rude as to say so to him, I think he caught the bug over 25 years ago. Ever since then he has been a loyal Parliamentary friend of inland waterways, as well as an active and not undistinguished handler of boats. Indeed, I notice tonight that the noble Lord is flying a phantom bargee on his tiepin to cheer us all up, in the guise of the ex-Commodore of the Parliamentary Yacht Club.

As my noble friend and other noble Lords have said, the Sheffield and South Yorkshire Navigation Improvement Scheme is no new issue to the Government. It has been knocking around the corridors of successive Governments for almost 10 years, and with almost monotonous regularity it has been argued and shelved and reargued and reshelved. However, it has one unfortunate habit. As my noble friend has said, it simply does not go away. You cannot bury this canal. Indeed, the scheme which was thought up, I believe 10 years ago, at the then cost of £2 million, is now estimated to cost £8 million. Therefore we see that the cost of this scheme is growing bigger and bigger. To many people, and I suspect to the whole of the British Waterways Board, which has been tireless in its efforts to promote this scheme, it is a major test of whether the Government really value our 350 miles of commercial waterways. Do they see them as a relief for our congested roads? Do they see them as a help to employment in certain areas, particularly at present? Do they recognise that transport by barges can save our precious energy? Do they accept that a greater use of commercial waterways can have a dramatic effect on the environment of an area? All these points, as my noble friend has so ably put it, apply, in my opinion, to the Sheffield and South Yorkshire Navigation Scheme.

If the Government value the commercial waterways, the case for granting the £8 million—which one must remember is to be spread over three years—to this particular navigation is as gainful as any Government expenditure on transport is ever likely to be. As other noble Lords have said, one of the most impressive features of this issue is that to anyone who has sought information on the subject it is immediately noticeable that there is total unanimous support in the area for the scheme—besides, of course, the very strong case which the British Waterways Board has put forward.

We see the South Yorkshire County Council, who have included it in their draft structure plan and who stress the planning benefits to employment, industry and transport in their area. We see the Rotherham Borough Council who have in draft a most imaginative Rotherport scheme: a large terminal complex connecting water, rail and road. And we see the Doncaster Borough Council who have set aside 50 acres of land as a potential industrial estate immediately alongside the canal, and who have emphasised the present high unemployment in their area. We see local industry—the Chamber of Commerce—who have been examining very seriously ways and means of trying to raise £8 million. We see the carriers and the boatbuilders, who see this scheme as the advent of bringing back confidence and expanding business—not only home business but also exports. The carriers particularly see the BACAT system of barges as the new generation of waterborne commercial transport.

After the unhappy experience over one carrier who introduced this system about 18 months ago when it was blacked by unofficial union action, it would encourage carriers if tonight the noble Baroness could say whether the Government see a potential in the BACAT system for use on commercial waterways. I hope that in her reply the noble Baroness will be able to include something to that effect.

Beyond all this support we see unanimous local support; we see also the British Waterways Board recommending that the scheme should go ahead. What do we see as the latest Government answer to the scheme? As I understand it, the brief of the noble Baroness may well be an almost classical Whitehall stonewall answer: that the Government are investigating absorbing the British Waterways Board's responsibilities into an even mightier authority—a National Water Authority. From that we must presume that the Government wish not to tie the hands of this authority so that they can decide the issue. However, this reorganisation is, as I am sure the noble Baroness will admit, at least two years away; indeed, after tomorrow it may be even further away. What possible new evidence would this new authority—in fact, it is an existing authority—require to convince them of this case? Why waste another three years and allow the cost to escalate to perhaps £12 million or £15 million?

It has been a flavour of the debate so far that history has shown that when it comes to money all Governments are suspect in supporting inland waterways. I am delighted to have listened this evening with great care to my noble friend speaking from the Front Bench and giving the view of my Party. Nobody today, though, would be so unchivalrous as not to recognise that the Government are faced with a great dilemma in deciding what is urgent and what has priority in terms of the precious, limited funds which are available to the public sector. Equally, the Government would not be unchivalrous if they did not accept, from the various cost-effective studies made of this scheme by both their experts and outside experts, that this investment has a good chance of showing not only a dividend for transport and employment in the area, but also of resulting in a commercial operation.

My fear tonight is that, however hard the noble Baroness, Lady Stedman, tries —she does indeed try, and I have great faith in her sympathy—her brief will restrict her to saying that the Government have just voted £8 million this year towards the maintenance of inland waterways, and that at present any improvement in investment simply is not possible. If that is the case, may I ask the noble Baroness whether the Government have seriously considered a joint scheme with local authorities, local business and perhaps even an EEC loan to promote this scheme, and whether they would welcome an approach of that nature from the area. If the noble Baroness could say that tonight, at least it would be a positive contribution.

My noble friend's Question on this Navigation is extremely pertinent. It is particularly pertinent to the apathy shown by successive Governments to commercial waterways. It is interesting to note that on 14th October 1968, in col. 1154, the then noble and learned Lord Chancellor, Lord Gardiner, when replying, as the Minister responsible in this House, to the Third Reading debate on the Transport Bill, said: If I may humbly say so, I feel that all we waterways enthusiasts have done extremely well by this Bill". I am sorry that the noble and learned Lord could not be present tonight, as I am sure he would have wished to be here. However, I hope that in her reply the noble Baroness will show that the hopes expressed then by the noble and learned Lord have not been thwarted, and that she will have an encouraging answer to make to my noble friend.

8.20 p.m.

Lady KINLOSS

My Lords, I see part of this waterway every time I come by train to your Lordships' House; just after leaving Selby I find myself looking out of the window waiting to cross it. Two weeks or so ago the sun was shining and a barge was gliding along. It was a lovely sight. Some little time later one sees the ALM with heavy lorries belching stinking smoke, and one remembers that there are only relatively few years' supply of oil left whereas the water in this navigation was there even before this part of Yorkshire was populated.

I know that in the debate this evening we are not concerned with aesthetic or purely environmental matters, but I cannot say how great a pleasure the British Waterways Board gives me by the way it keeps this navigation—a pleasure which I feel certain is shared by countless others. It is quite fortuitous that I live in Yorkshire. I have no monetary interests in any business connected with the Sheffield and South Yorkshire Navigation, but it is absurd to allow a good national asset to go to waste when it could provide much needed employment and at the same time lower the cost of transporting goods, once the initial outlay has been made. This may seem a small affair, but we are facing the twin evils of inflation and unemployment and every small action that we can take to alleviate them is surely worth the doing. There can be no universal remedy for these evils; we can only reduce them by chipping away bit by bit.

Seven years ago the British Waterways Board pioneered a new push-tow system which was a most exciting breakthrough. One push-tow barge can carry as much freight as seven lorries and up to three craft can be pushed at any one time. So, unless I have misunderstood, very roughly speaking—less the oil consumed by one specially designed tug—one has saved the fuel consumption of most of 21 lorries. If I could cut my household expenses to this degree—namely, by 21 times—I should be delighted and so, I venture to think, would quite a number of other noble Lords. I am not saying that the British Waterways Board is able to cut our domestic expenditure by 21 times, but it is quite evident that if it is allowed to carry out the Sheffield and South Yorkshire Navigation Improvement Scheme it will surely make some contribution towards it.

Both Government and Opposition know that they are guilty of having neglected this waterway. I should like to see both sides dressed in hair shirts. The Government are asking for quite impossible guarantees in the conditions for providing a grant to improve different sections of the navigation and to enlarge certain locks. The question that the Government are asking is the old, old question of the chicken and the egg—which came first? The Government are asking for guarantees of certain traffic, but firms can provide guarantees only if they can assure their clients that the waterway is capable of carrying the tonnage that they require. Surely, it is perfectly plain that it is impossible for the carriers of freight to give guarantees to their clients until they receive firm undertakings from the Government.

All I would ask from the noble Baroness, Lady Stedman, is that she should be willing to sit down and negotiate with interested parties. One company alone has already had firm inquiries for 250,000 tonnes of carriage per annum on the Sheffield and South Yorkshire Navigation, conditional upon it being improved. But as sensible, cautious Yorkshiremen, they naturally have some uncertainty in their minds. It is a fact that they have not yet discussed the possibility of carriage on this section with their other major customers, and I am informed that unless something can be done the firm will eventually have to close with a loss of 250 jobs in an already depressed area. I need hardly say that I most warmly support the noble Lord, Lord Harvington, and hope that the Government will give the British Waterways Board all the support for which it hopes.

8.25 p.m.

Lord SOMERS

My Lords, at this time of night I am certainly not going to waste much time repeating what has been said by other noble Lords, and said probably a great deal better; but there are one or two points that I should like to emphasise. Your Lordships have heard of course that the waterways in this particular area form a very important system of commercial transport. However, like all other means of transport they need maintenance and, of course, that costs money; but on the whole it costs a great deal less than it does to maintain a major motorway.

Your Lordships have also heard that the cost of leaving the canal which we are discussing tonight in its present state will be £2.5 million; to put it into proper working order will cost £7.7 million. That is not a very great increase when we consider what the enormous returns will be. In fact, to my mind it will be an extremely good investment because a great many things can be transported much more cheaply by water than by road. For instance, liquid fuel can be transported by water for about a quarter of its transport cost by road.

Another important point that I think has not been mentioned tonight is the tremendous desirability of getting as much traffic off the roads as we can. I have tried it in the past by trying to upgrade the railways, without success. Now surely here is a chance to do so with real profit. There is another point. The traffic, as we have heard, which is con- veyed—or which could be conveyed—on this waterway, if it were put into proper working order, would be very largely for export and import, and the barges can easily cross the North Sea and make use of the excellent waterway systems in Europe. Surely that is an excellent way of making use of the assets which we have. We have these waterways. All that needs to be done to them is to put them in proper order and to spend a little money on them and get a great deal more money in return. My Lords, I really should not have spoken tonight. I apologise for not having put my name on the list. I forgot until it was too late. Therefore I shall not take up any more time.

8.29 p.m.

Lord DAVIES of LEEK

My Lords, I must apologise to the House, which, in its assiduity, has followed this debate. Due to the fact that the discussion on the Patents Bill finished earlier than I expected, I was 20 minutes adrift in coming in to what I considered to be an important debate. My second error—and I apologise to my noble Leader—was that I did not put down my name; but I have contributed to the commercial transport magazine on the canals for many years, and in the Stoke-on-Trent and the Potteries areas the canals are now being used commercially. The constructive and dynamic point put forward by the noble Lady, Lady Kinloss, about the work of 21 lorries being dragged along by one tug should make anyone who is a student of economics understand—although I am losing my faith in economists, especially at Brussels. I think we had better send psychiatrists there rather than economists.

We have reached an age in the history of transport where—forget the words "public ownership" or "nationalisation"—we should have a co-ordination of the whole of transport, rail, road, canal. This ridiculous system of accountancy, having fictitious competition between road and rail transport, is landing this country in one of the greatest economic puzzles it has ever had to face. Instead of growing more intelligent and using the artefacts of our forefathers, we are destroying them. If you are a fisherman—there are 3 million of them in this country, and I protect the beauty of their art and their craft—this would not interfere with you. There are stretches of canal that are quiescent, that are delightful and that enrich the soul of mankind. So I do not want the fishermen and the beauty-seekers to feel that the environment is destroyed by the gentle flowing along the canal of a commercial barge, beautifully described by the noble Lady, Lady Kinloss. I shall not speak for more than four minutes, so do not get worried.

There are three things I should like to spike down. First, we should reorganise our investment in transport. It is no excuse to say that, for this first-class Sheffield project, we could not, by a reorganisation of investment in transport, co-ordinate and find this small sum. Secondly, it is wicked of us to destroy the artefacts of centuries of canal engineering. I had the joy to represent a constituency in which Brindley was born. He could hardly read and write, and yet he was one of the finest canal engineers. We are throwing away efforts greater than the pyramids in workmanship, the wheelbarrow, sweat, muscle and blood of the navvies who built them. We throw it away as though it is useless. These new affiliates are now running modern society; they are a shock to mankind.

Finally, this needs an intelligent and constructive approach to the trades unions. It was sad to see the trade union question arising over that valuable, cheap transport of goods from across the North Sea. But I am quite certain that an intelligent British trades union movement would come to terms with, and an understanding of, canal transport if we make a point of approaching them. Last, but not least, I apologise to the noble Lord, Lord Harvington—under whose chairmanship I failed many times to get called in the other place—for not being in at the beginning of his speech, but may I say that I have done my best to support him this evening.

8.33 p.m.

Lord SEGAL

My Lords, as one who came in to listen to this debate with as near as possible to a completely open mind, I must confess I have been enormously impressed by the weight of argument put forward. I speak not with any intention of trying to contribute to the arguments, but I simply list the arguments we have heard. The total cost of £8 mil lion is equivalent to the construction of perhaps five or six miles of motorway, a motorway that will absorb possibly valuable agricultural land; the possibility of tolls on the traffic through the canals; the enormous potentialities of the Selby coalfield; the saving of fuel costs by the far more economical means of using canal transport; the diminution of the pollution of the environment, to which Lady Kinloss referred so admirably.

I would from these Benches plead with the noble Baroness not to dismiss this matter out of hand. We know what a strong case can be made from the Government Bench against the pleas so admirably advanced by Lord Harvington. It is easy to make a case against them. But if we believe in an integrated transport policy, as I am sure we all do from all sides of this House, how can we defend not an integrated policy but a monopolised transport policy, at the cost of our railway traffic, at the cost of our canals, and concentrate only on the development of road transport, with all the inherent disadvantages of which we are all of us so aware? I would from these Benches ask the noble Baroness to give this matter the earnest consideration which it deserves. If she is a free agent in this matter, as I profoundly hope she will be, I would ask her to give in to the pleas so eloquently urged on her from every side of this House.

Baroness WHITE

My Lords, owing to the rules laid down by the late Lord Addison, the constitutional validity of which I entirely appreciate, I am obliged to sit here in frustrated silence as I am a member of the British Waterways Board. But I think it is my duty to make it quite clear to my noble friend that, apart from the major matter of the accumulated neglect of maintenance on the entire canal system, there is really no subject about which the Board is more urgently concerned and more united than this question of the Sheffield and South Yorkshire canal.

8.36 p.m.

Baroness STEDMAN

My Lords, I, too, should like to thank the noble Lord, Lord Harvington, for drawing our attention to the Sheffield and South Yorkshire Navigation this evening, and to pay tribute to his special knowledge and to his extremely good advocacy, and that of the other noble Lords who have spoken with such obvious depth of feeling about the proposals which the British Waterways Board has put forward. Indeed, I feel that I must echo the words of my right honourable friend in another place, during a debate on the adjournment last May, when he spoke of the passion which this canal arouses and has aroused for more than a decade since the British Waterways Board first put its scheme forward in 1966.

My Lords, despite of listening to my noble friend Lord Davies' description of the quiescent and quiet canals he knows, I have a feeling that I am going to be in somewhat stormy and rough water this evening, and I have some difficult locks to get through on the way, both in front of me and behind me. I believe that I should start this evening by reminding your Lordships of the two important factors which were in the forefront of my right honourable friend's mind when he considered the British Waterways Board's scheme last year and which are still of prime importance today.

The first is the Government's general policy on the commercial use of inland waterways for the carriage of freight. This has been stated on a number of occasions, the most recent being in the Consultation Document on Transport Policy published in April of last year. The Government's policy is to encourage the transfer of freight from road to waterways wherever it is economically, socially and environmentally sensible and possible to do so. But the fact is that most of our inland waterways reflect their age in that today they are far too narrow to take the sort of large barges which now use the Rhine and comparable European waterways. We have in any event the great advantage of being an island, which means that coastal shipping fulfils for us much of the function that is performed by inland waterways on the Continent.

The noble Lord, Lord Mowbray, and the noble Earl, Lord Kinnoull, also mentioned the value of BACAT, and I must say that I regret that the service did not have sufficient time in which to try to demonstrate its worth. But again the BACAT barges are small, they are about 180 tonnes, and although they might be attractive in terms of the comparatively narrow and shallow United Kingdom waterways they are really out of scale with the European system of inland waterways, where the trend is towards barges of 1,300 tonnes or more. When my right honourable friend was appraising the British Waterways Board's scheme he was very concerned at the level of new traffic which it was expected that an improved waterway would attract. The financial return, which is so very important and to which I will come back, does depend upon this new traffic. The scheme for the Navigation must be viewed against the steady decline in commercial traffic on inland waterways.

The Earl of KINNOULL

My Lords, is the noble Baroness saying that the system which was withdrawn 18 months ago really was not viable because of its size?

Baroness STEDMAN

My Lords, it was not viable in the sense that it was expected that we might be able to take these barges or that they might come to us from the continental rivers which are so much wider and take much larger traffic than we are able to handle on our canals. When my right honourable friend was appraising the scheme, he was concerned at the level of new traffic which it was expected that an improved waterway would attract and the financial return, which depends on this new traffic. The scheme for the Navigation must be viewed against the steady decline in commercial traffic on inland waterways. Between 1969 and 1974 traffic fell by almost half. Twenty years ago it was five times as great as it is now. The reasons are clear. To some extent inland waterways face the same major difficulties which face the railways—that of inflexibility and lack of speed. They just cannot compete with road traffic's door-to-door service. There must be great uncertainty about the amount of traffic that would be attracted to an improved waterway.

My Lords, it is argued that if the improvements were carried out, new traffic would be attracted, and it is also argued that commercial undertakings will not all commit themselves in advance of seeing what facilities will be offered and at what price. Indeed, the noble Lord, Lord Harvington, referred to the letters of support from the chambers of commerce. However, one cannot always act on letters of support. They, being Yorkshiremen, obviously want to know what they will get for their money when the facilities are there. But the Government can only make a value judgment, and that is as true today as it was last year. My Department's officials made direct inquiries of major users as recently as last May to try to assess how much traffic might use this waterway. The result of these inquiries—and it remains our best estimate—was that new traffic would build up over five years to 1.15 million tonnes.

Before considering the implications of this estimate, I will turn to the other factor which my right honourable friend had in his mind when considering the scheme, and that, my Lords, as I am afraid it is so often at the present time, is finance. In spite of the glowing tributes which have been paid to the British Waterways Board, in 1975 it made a loss of £116,000 on freight services—that is, warehouses and terminal services, docks and freight carrying fleets—and the loss on maintaining and operating the commercial waterways was £2.2 million. The 1976 figures are not yet to hand, but we have no reason to believe that they are very much more optimistic than the ones we had in 1975. The total cost at 1975 prices of the British Waterways Board's scheme is £5.4 million and this includes a substantial amount for arrears of maintenance, most of which will be necessary even if there is no improvement to the waterway. So the net additional cost of the improvement scheme is likely to be £4.3 million.

A basic requirement of all public investment—and this scheme would require public investment as it would be financed by borrowing from the Exchequer—is that it should show a rate of return in excess of 10 per cent. in real terms for low risk projects and a higher rate of return for those projects with a greater element of risk. The uncertainty about the level of traffic on the Sheffield and South Yorkshire Navigation makes it a very high risk project, so the Government would have to look for a return of something above 10 per cent. So we were being asked to sanction expenditure of £4.3 million to finance an improvement programme which would see 1.15 million tonnes of new traffic on the Navigation after five years.

My Lords, 1.15 million tonnes of new traffic over five years is not enough—even assuming very much higher toll charges than there are now—to produce an adequate return on an investment of £4.3 million. Even though allowance was made for the possible loss of existing traffic, if there is no improvement in the Navigation, even though allowance was made for environmental benefits, even though allowance was made for the possibility of additional benefits to users, it still proved impossible to anticipate a level of return above 10 per cent.

In the face of all this the Government's conclusion—and I assure noble Lords that it was a reluctant conclusion—was that it would not be right to commit resources to this scheme at a time when there were severe constraints on public expenditure and the pressure on limited resources was so acute.

Lord DAVIES of LEEK

My Lords, I apologise for interrupting the noble Baroness, but I do not know what computer computed that or who fed in the programme, because the social value of this has not been taken into account at all. If I were computing the programme I would have programmed the saving from 21 lorries which over the years are using millions of pounds worth of petrol and causing wear and tear to our roads and villages. I should have had that recomputed. To me that is absolute rubbishy accountancy.

Baroness STEDMAN

My Lords, if we take account of those 21 lorries, we must also take account of all the lorries that have to bring the freight to the 11 miles of the Sheffield and South Yorkshire Canal and then take it off at the other end. We looked at the environmental position, and I am sure that within that position we also looked at the social benefits of it. The decision made by the Government was not only about whether the scheme was feasible, but about the level of British Waterways Board's borrowing—if the scheme had been seen to be a sure-fire winner, then finance could have been forthcoming.

The noble Lord, Lord Harvington, referred to the Fraenkel Report and asked when it was likely to be published and see the light of day. The Fraenkel Report is now in the Department. Their overall estimates on maintenance at present-day prices are likely to be considerably in excess of the £22½ million which was quoted earlier by the noble Lord. Action on the Fraenkel Report and on the general question of financing the waterways is now being taken forward in the context of the discussions that we have in hand on the British Waterways Board's future. Ministers intend to make public the conclusions of the Fraenkel Report at about the same time as they publish the White Paper on the Review of the Water Industry. Tonight I am advised that that will be in the not too distant future and I take that to mean within a month or so.

However desirable it may be to put all the maintenance work in hand immediately—and the Sheffield and South Yorkshire Navigation's share of that on maintenance alone is £1.5 million—the current constraints on public spending are likely to make it difficult or even impossible to provide the money. The expenditure on maintenance of the waterways is met largely by Exchequer grant. The Exchequer grant for 1977 has already been agreed at £12 million. This includes an additional £600,000 found by Ministers to carry out the essential repairs on the Caledonian Canal and on the road bridges over the Weaver Navigation at Northwich in Cheshire. The Caledonian Canal project was mentioned by the noble Lord in passing. Therefore, there is no likelihood in our present condition of any additional grant being made at this time.

Several noble Lords have mentioned the possibility of alternative sources of finance. These include a partnership with local authorities, but no local authority has yet put its money where its suggestions have been. They include a partnership with industry and commerce; a loan from the European Investment Bank or a grant from the EEC Regional Development Fund. However, the question of the EEC grant is complicated and the essential point is that the competition for EEC grants, if anything, is even fiercer than for grants for projects within our own country. There are always far more applications than can be accepted. To stand a chance of getting accepted, the scheme, first, has to generate new employment; secondly, be in an area of high unemployment and, thirdly, be viable without taking such a grant into account. On the present facts the Sheffield and South Yorkshire Navigation is a doubtful starter on all three grounds. These suggestions, although they are important, anticipate agreement that the improvement scheme would be viable. Regrettably, that is not our opinion. We have still to be convinced that more traffic would be won. Without this, I suspect that hard-nosed councillors, businessmen, bankers and EEC Commissioners are unlikely "to be persuaded" to part with any hard cash.

Noble Lords have mentioned the Transport Act 1968 and the duty that it imposes on the British Waterways Board to maintain this "commercial waterway" at the standards necessary to permit the passage of craft which customarily used it before the Act was passed. So far as I am aware, the British Waterways Board is not in breach of its obligation, and although the Government are aware that standards of maintenance are poor, once again I am afraid that, however desirable it may be to improve standards quickly, the current constraints on public spending have made it impossible to provide the money. The British Waterways Board has the very difficult task of using its limited resources to the best advantage, and this may mean that essential, let alone desirable, works cannot be carried out as quickly as we would like; and the emphasis has to be on safety.

The noble Lord, Lord Harvington, has asked us to review the decision on the Sheffield and South Yorkshire Navigation. We can review the situation, and we shall do so if new factors can be presented to us. But restraint on public expenditure is still tight, and maybe even tighter than last year. We cannot do everything we should like to do; indeed, schemes which show a much more hopeful return than this have already had to be shelved. Therefore, to make such a review worthwhile any new evidence or new proposals must be of a really substantial nature.

The noble Lord, Lord Feversham, was good enough to advise me of the inquiries he was going to make about how and from whom we in the Department got our advice. The Government are advised by the Water Directorate, and they report direct to my right honourable friend on the commercial and the leisure use of waterways. This is normal Civil Service procedure. However, there is also an Inland Waterways Amenity Advisory Council which advises on cruising. They are a statutory body consisting of some 20 members and were set up under the Act.

The noble Lord, Lord Mowbray, wondered why the British Waterways Board's freight activities were under my right honourable friend the Minister of State at the Department of the Environment rather than my right honourable friend the Secretary of State for Transport. I think that we must acknowledge that save on a handful of river navigations the traditional transport role of waterways has gone for good. But, given the increasing amenity role and the interface with the water industry as regards land drainage, water supply, effluent disposal, the waterways "fit" better into Environment than into Transport. I think critics of my right honourable friend's responsibility for British Waterways Board forget his wider responsibility for the whole of the water industry.

I will not rise to the good natured jibes from the noble Lord opposite about my Party's future, except to say that I am reasonably confident that in some 25 hours from now this Government will still be the Government of this country and we will still be grappling with our financial situation, and, I guess, still being exhorted by noble Lords opposite who want to spend millions tonight and then to cut public expenditure. Noble Lords opposite, in or out of office, have to face facts, and they must decide whether they want to cut public expenditure or whether they want a Government to spend freely on all these desirable schemes.

In spite of my rather high feelings on that note, I assure noble Lords that if the merger of the British Waterways Board with the new National Water Authority goes ahead, then my right honourable friend the Minister of State has already said that he will specifically ask the National Water Authority to review the case of the Sheffield and South Yorkshire Navigation in the light of their own resources and priorities. If, in the meantime, noble Lords can produce in evidence something more substantial in regard to this being made a workable proposition, then we shall do what we can to review it and see whether it is possible.