Waterways: Commercial Use

HL Deb 25 July 1983 vol 443 cc1398-413

4.48 p.m.

Debate resumed.

Viscount Hanworth

My Lords, in the 19th century we had a network of canals of over 4,000 miles of navigable waterways covering most of the country. The reason for the decline of the network as a commercial proposition was primarily that most of the canals could accommodate only narrow boats with a carrying capacity of about 30 tons. The decline was hastened by often quite unscrupulous competition by the railways, who usually built their new tracks on alignments adjacent to the canals. Today there are still some 2,000 miles of usable narrow, or fairly narrow, gauge canals, which are being used for an ever-increasing number of leisure craft. Some people hope that, to some small extent, they may again be used for commercial purposes, but this would make very little difference to the overall national transport position. There is, however, a tremendous potential for the wider waterways leading from the Humber, the Mersey, the Severn and the Thames, and for bringing such wide waterways further inland.

The continent has a network of wide canals taking boats with a carrying capacity of 1,500 tonnes, and even more. Their use in general on the continent tends to increase. Water transport may be fairly slow but not always slower than the railway goods train. Traffic which comes from the continent by sea could in fact be quicker if the whole journey is made in one boat without unloading. Moreover, the increasing congestion on the roads and in concentrated dock areas would be avoided.

Water transport for heavy goods is the cheapest method of transport. As has already been said, from an energy point of view it is at least five times as efficient as a lorry and about twice that of rail. Already there is a very substantial amount of inland and estuarial waterways transport. A recent survey estimates it at over 2,000 million tonnes annually, compared with about 80 million tonnes on the waterways owned by the British Waterways Board. The concept therefore of making it possible for the traffic to move further inland is a sound one. Quite apart from lessening heavy lorry traffic, it can provide useful competition if only it is given even handed treatment and some encouragement.

No doubt the Government will stress the recent opening of the Sheffield and South Yorkshire Navigation, but the history of the project, costing not more than £16 million, has been one of 10 years of Government fiddling and prevarication. Without denigrating too far the result, the point must be made that the carrying ability of boats able to use the new canal should have been 1,500 tonnes, not 700 tonnes, the reason being that continental boats are predominantly of this larger size. It is questionable how many 700-tonne boats are in fact available for this new traffic. I ask myself whether once again we are seeing the dead hand of the Treasury making savings, resulting in enormous expenditure at a later date. Clearly this is what they have done on the motorways. A 10 per cent. cost improvement in the specification should have given perhaps another 15 years' life to some of the motorways instead of failure after as little as five years. We do not want to be penny wise and pound foolish in this new area.

Having in some respects criticised governments for inaction and other failures, I do bear in mind that today we have to make economies. In very general terms, what I think the Government should do is to ensure that the improvement and extension of our waterways has the same priority and help that other methods of transport already receive. Only very recently have commercial waterways been put on a level with railways for improvement grants. Why was this so long awaited? Capital loans with interest charges seem somehow to be lost in the overall loss-making of, for example, the railways. And the new roads, at £1 million a mile, seem to be financed without too much trauma.

At a recent council meeting of the Inland Waterways Association some members thought that perhaps the British Waterways Board should come under the Department of Transport and not the Department of the Environment. I do not believe that this is so, but there is a possible case for putting the commercial waterways under the Department of Transport. At least it is worth thinking about.

What I now ask the Government to do is to press ahead with the Severn scheme of producing a commercial waterway to Worcester, and hopefully beyond. But the Government seem to have forgotten about the extension of the River Trent to Gainsborough and Newark.

One cannot end without mentioning the unhelpful attitude of the dock unions in this extension of waterway use. I very much hope that in the future they will not take the narrow view which has led to so much unfortunate redundancy in our London docks.

4.55 p.m.

Lady Kinloss

My Lords, this afternoon we are discussing one of the great assets of our island, which so sadly is too little used—its inland waterways, many natural, some manmade. It is however our good fortune that the majority of this system, created largely before the 18th century, still exists. Indeed, some waterways were already in use in Roman times. What in York we call staithes were elaborate quays which served a highly developed system of transport. Although water transport was one of the earliest methods of moving goods on a large scale, after the coming of the railways and tarmac roads the waterways had little further investment and became the poor country cousin of rail and road transport. As a result, the potential of transport on waterways has almost been ignored—I think to our future detriment. I am very glad that in the past few years, whichever Government have been in power, they have shown a slight but most welcome change of thought on our waterways potential.

In June of this year the Sheffield and South Yorkshire Navigation, after major improvements were completed, was reopened for use. When speaking in your Lordships' House on the Sheffield and South Yorkshire Navigation in March 1977, I mentioned that whenever I come to London on the train from York I pass between Selby and Doncaster the canal that is part of this navigation, and from time to time see a few barges moving slowly in the sunshine—a very pleasing sight. In fact, I saw two this morning. But 40 minutes later we pass through Newark, beside the A1(M), and there one sees lorries, one after the other, with black exhaust smoke pouring into the atmosphere—quite horrible. One can imagine the smell of the fumes, whereas on the canal there is little noise, pollution or visual intrusion. On the contrary, canals are pleasant to look at. I understand too that there are very few accidents, which is surely very reassuring.

May I ask the noble Lord the Minister who is to reply why it is that whenever the Secretary of State has been asked to make a statement in answer to a question on Section 13 of the Transport Act 1978 the replies have invariably referred to the British Waterways Board's network of inland waterways. The British Waterways Board's commercial waterways comprise 350 miles only—about one-third of what is in fact available for freight: some 900 miles. Would the Minister not agree that all the waterways should be considered as a whole? For the life of me I cannot see why not. Why is there not a national policy for the whole of the waterways? Why mention only 350 miles when 900 miles are actually available?

I know many people think of water transport as a slow means of getting freight from A to B. Surely, when much of that freight has travelled by sea—hardly the fastest method—a 70 miles per hour mad career on the motorways would seem hardly necessary for the last part of the journey. And surely it is far more expensive. I have said once before—last time I said it I am told that I convinced certain noble Lords, so I shall say it again—that one tug can tow, or that a large craft can carry the equivalent freight of roughly 20 juggernaut lorries. This is surely a saving of oil of every kind, and also less pollution of the atmosphere. I am told that the Government wish to beat inflation. All power to them. Can the waterways not help them in that battle? I think that they can.

5 p.m.

Lord Davies of Leek

My Lords, I do not intend to keep the House for very long, and I hope that my speech will be short. The noble Lady Kinloss, has put forward a fundamental argument about the volume of cargo that can be carried by the canals compared with roads. I believe that the country does not take into account the daily accidents on motorways which are murdering people nearly every hour. The economic cost to the country of road transport has never really been worked out. For too long, the road lobby has dominated the British parliamentary system. We need a balance, and we need co-ordination between rail, water and roads. This has not yet been achieved but it should be the duty of one Parliament, even it if it did nothing else in its five years of power.

Having said that I shall be brief, I wish to pay tribute to my noble friend Lord Plant for having raised the issue of the canals and for the assiduity with which he prepared his speech. He said nearly everything that could be said about canals and it would be pendantic and reiterative of me to merely repeat masses of statistics. The statistics are there, but your Lordships will get none from me because it would only be repetitious.

However, I wish to add that the time has come for us to look at the waterways also from the point of view of their therapeutic value to society. Tens of thousands of people now enjoy our waterways during their holidays. The value of these quiet and lonely places in providing people with cheap holidays is inestimable. More and more people are enjoying that kind of holiday, and more and more are the waterways—to pay tribute to the board—trying to compete and to make available the services needed by those people who enjoy boating on our canals.

I have two other small points to make in this four minute speech, and then I shall sit down. First, I am sure that botanists and others will join with me in saying that here, if ever, there is a chance of recreating on our canal banks many of the wild flowers which have been killed off by the poisonous industrialism which pollutes our atmosphere. I wish the Government would undertake to re-create upon our canal banks the herbage, the flora and the hedgerows which make Britain beautiful. One must not forget that in respect of tourism our waterways are of great value to the British public and are a great joy also to foreigners who come here. Secondly, I wish to thank once again the noble Lord, Lord Plant. I shall now keep my promise to speak only three or four minutes and will sit down.

Viscount St. Davids

My Lords, I am deeply grateful to the noble Lord, Lord Plant, for raising this Question this evening. I listened to him with great care and found that I agreed with every word he said. If I had any criticism to make of his remarks, it would not be to subtract anything from them but rather to add a few small items in odd corners. I am also very grateful to the noble Lord for the remarks he made about our present chairman of British Waterways, Sir Frank Price, who I believe has done wonders.

I must say that, as a fairly well-known member of the Inland Waterways Association, when Sir Frank Price first took up his post I was a little doubtful. It was a time when a great many prominent members of the Labour Party were taking up various posts in nationalised industries, and I wondered a bit. I have since ceased to wonder. The great majority of them have shown themselves to be magnificent managers. The only remark I might make is that very few of them now seem to remain members of the Labour Party; I wonder why? But Sir Frank did particularly well. The noble Lord, Lord Plant, mentioned the increase in cargo carrying on the waterways. This was one of the notable achievments for which Sir Frank ought to be praised. This achievement came at a time when other industries—in a period of financial crisis—were going down; but cargo carrying on the inland waterways was quite markedly going up, far above any figure one might normally expect.

When I heard recently that Sir Frank Price was likely to be replaced, I was rather sorry and rather surprised. I was rather less surprised when I heard that a replacement had been postponed. Sir Frank will be a very difficult man for whom to find a successor. If I might slightly alter the words of an old music hall song, To find a face like our old Price You've got a long way to go". Indeed you have; and when a successor is found he will have to be a very good man or matters will have taken a turn for the worse.

When Sir Frank came to the chairmanship of British Waterways, he inherited what was almost a load of all old rubbish. The cargo carrying waterways were too small. In many ways they still are, but improvement has started. There are fresh schemes, as everyone knows, on the Severn; and I understand that another is scheduled for the Trent. No doubt we shall see more. A great deal can be done about our cargo waterways but I shall not speak on that aspect this evening because that has been done so magnificently by the noble Lords and the noble Lady who have preceded me.

The only point I should like to add to what they have said is that all this has taken place in the areas of what might be called the new ports. Our old, traditional ports—London, Hull and the rest—are being left out. This is largely because of the old Dock Labour Board scheme which continues to debilitate them. There is no reason why they should be left out. The water still flows to Hull, to London, to Liverpool and to Bristol the way it always did—and the ships can go there just as they always did. It is only the slow movement of the law that is delaying this.

I should like to mention two other forms of waterways with which Sir Frank has had to deal. One was the pleasure waterways; the narrow canals which cannot be made into cargo carrying canals because they are too narrow. One cannot widen them because if one did, one would need bigger locks. The locks would need more water and the reservoirs cannot provide it—it just cannot be done. I wish it could, but there it is. Nevertheless, the narrow canals serve a most useful purpose. Their primary purpose is actually carrying water, but they also have a great value in fishing, pleasure boating and all other manner of amenities.

In the case of pleasure boating, there have been some truly remarkable changes. Last summer, I brought my brand new electric drive cruiser right across England, from Evesham to London, through the inland waterways. In a season when hirings of leisure traffic were rather worse than usual, there were a great many boats on the move. It was noticeable also how many of their crews were foreign. Navigating our waterways were Swedes, Danes, French and Germans. Indeed, it appears that the Dutch prefer our smaller, more intimate waterways to their own grand, wider waterways. What is more, I learnt that while we ski upon the Swiss mountains, the Swiss are around their fires studying maps of our canals. That is altogether as it should be. It shows that there is a very considerable amount of foreign currency earned on our inland waterways, quite apart from the fact that those waterways are keeping very large numbers of people happily at home who would otherwise be going abroad and spending foreign currency.

I have only one word to add to that and that is to congratulate Her Majesty's Government on the amount of money they have been able to find to help solve some of the problems which were affecting our cruising waterways, the big, most notable ones being Boddington Reservoir and Blisworth Tunnel, which I understand will be back in action next spring. I congratulate the Government on this help.

I want to say a word about the remainder waterways, and this really is the load of rubbish area. You can do practically nothing with a waterway that has been closed. It loses all revenue, not only loses all revenue but goes on spending money because breaches in the banks, blockages in the below-level culverts and all the rest are extremely expensive. They not only yield no revenue but if they are not dealt with they damage the countryside, flooding it on the contours above the canal by lack of drainage, and flooding it by damage from breaches in the banks in the ancient waterway, downhill damage to farmland and to housing. A canal never fails safe. You can close a road and let the grass grow over it, and in the end it becomes a nice walkway like an old Roman road. But you cannot do that with a canal; if you leave it alone it always goes wrong.

The remainder waterways were an invention by Act of Parliament. The idea was that they should be treated in the cheapest possible manner. You could not get rid of them; you just had to spend the least amount of money you could on them, and that was right. But the question was, what was the cheapest manner? Recently the British Waterways Board asked an eminent firm of consultants what should be done about about the Montgomery Canal, over 30 miles of waterway wandering about along the rural edges of Wales. Road bridges had been lowered over it in places. In places it was dewatered. One or two small patches had been made navigable for various purposes. But in general it serves no great purpose. The question was: what was the cheapest thing that could be done with it?

The consultants came up with a remarkable answer: the cheapest thing would be to reopen it as a cruising waterway as quickly as possible. The figure they gave for the cost of reopening it was somewhat under £10 million. From that would be subtracted sums provided by local authorities, by voluntary bodies and by the use of voluntary labour. There would be a continuing cost to the British Waterways Board for upkeep work after reopening of £86,000 a year, a large sum. Then they went on to the happier side. The 30-odd miles of waterway when reopened would be a very considerable amenity in its area. Well, in these days of tight cash we are not really prepared to spend £10 million merely towards amenity. But what they then said was that it would provide, strangely enough, many millions of pounds a year in revenue to the area that it ran through. The waterway in fact from the Treasury point of view would be a very good investment indeed. They also pointed out that when the waterway was complete and running they had identified some 860 permanent jobs along the reopened waterway. Some would be on the waterway itself no doubt, but the others would be hotels and shops, all the things which would be needed by the users of the waterway. The bargain was one of the best I have ever seen. No doubt the Treasury have already taken it into their account, so possibly I need not go much further, except that I thought your Lordships would like to hear about it.

There is a great deal that can be done on all these waterways. We simply must stop treating them the way we treat roads; we must treat them in a different way from the way we treat roads. How many roads have been closed in recent years? I do not know that any great length of road has been closed recently. We do not seem to take these matters into account. We are costing it on the waterways; I wish we would cost it on the other forms of transport as well. Costing it on the waterways, it appears to come out as a very good bargain, both to enlarge our cargo waterways, as the noble Lord, Lord Plant, has told us, and to keep in good nick our pleasure waterways, and now it appears that the remainder waterways should be put into the cruising system as soon as they can be because they are a very good bargain indeed. I do not put this forward as a way of spending money but as a way of saving money to the community. Therefore. I commend the Question put by the noble Lord, Lord Plant, to Her Majesty's Government, who I think may have some very pleasant things to say about it, possibly not tonight but at some moment.

5.17 p.m.

Baroness Gardner of Parkes

My Lords, I too should like to thank the noble Lord, Lord Plant, for giving us the opportunity to debate this topic tonight. I find it very difficult to follow the noble Viscount, Lord St. Davids, because I think there is no one who knows more about the canal system and the waterways of this country. No one has done more good for people through the wonderful schemes he has had for training young people on the canal basins in London, something that really must be commended.

I was chairman of the London Canals Consultative Committee for three years, and a member of the Inland Waterways Amenity Advisory Council. It was during those times that I had so much to do with the work being done to improve the canals in London. At that time all the riparian boroughs were involved. We used to take trips through the London canals to study what the situation was and what improvements could be made. It is quite fascinating to me now to see that nearly all those plans have been realised and that the canal in London is now a great amenity and an advantage for those who enjoy both the use of it and the view of it.

I find one thing still quite comical. This has applied in different areas. I was a Parliamentary candidate in Blackburn, and the same thing was said to me in Paddington. When I said to people, "How lovely to have that view of the canal at the very end of your garden", the answer was "It is nothing but a nuisance. We do not like it. People throw things in it, and we are afraid of the children falling in it". Views on canals are surprisingly mixed. I happen to be a canal enthusiast and therefore I see only the good in it, but I was quite surprised at how commonly the other view was taken. There are lovely streets which overlook the canal. Blomfield Road is the classic and famous street in London. There is also the lovely St. Marks Crescent in which there is a house where one of your Lordships has the pleasure of living. There are other areas where people overlook the canals but where they are not making the best use of that lovely amenity.

The freight issue is quite different. It is this subject we are here to debate tonight. The remark by the noble Lady, Lady Kinloss, that one large vessel will carry as much as 20 juggernauts brings to us both the good and the bad of the canals. It is wonderful in terms of efficiency. It is wonderful in terms of what it could do. But at the end of the line, when the goods eventually arrive somewhere, probably 20 juggernauts are needed to transport the goods to wherever they are wanted. That is, unfortunately, the disadvantage of the canal system; that the canals do not go from where the goods are to where they are wanted. The canals and the waterways are on fixed routes. It is therefore important, if we are to develop a freight system which makes use of the waterways, that we develop terminals and ways in which to co-ordinate the various means of transport. Indeed, this point was made very well by the noble Lord, Lord Davies of Leek. He said that what we need is co-ordination between roads, rail and waterways. That is true. If we have waterways taking goods somewhere where they are not going to be needed or used and there is no way of moving them on, the freight system will never really take off.

I am sure that your Lordships are already aware that in order to carry freight on the waterways one must have a much higher standard of dredging. Heavily laden vessels sink much lower in the water. That is a point that has again been made by a number of noble Lords. Therefore, although there are 900 miles of canals that could be available, only 350 miles are actually in commercial use. I can see that the cost of dredging is one of the problems. The amenity use, on the other hand, is great and the use of waterways for pleasure cruising is fantastic.

In London of course every day one can see the barges of London rubbish going down the Thames. In spite of that commercial use of the Thames we have seen an upgrading in the standard of the water and 300 varieties of fish have now been caught in it. It is sad to realise that the London Docks have gone completely. There is no way that I can see the London Docks ever coming hack. Indeed, plans are already afoot to establish industry and homes for people in those areas. Therefore, the suggestion that goods could come by sea from abroad and then travel all the way to their destinations within this country by water is a fairly limited one. It is a question of the size of the navigable waterways, the areas to which the goods are going and where they are coming from.

There are many aspects of this question to be considered. Everyone of us must, environmentally, support the maximum use of canals for freight. But I am a practical person. I am very much involved in transport and the planning of the transport of goods to people in London. I therefore accept that wishing for something and thinking that it should be nice to have is not enough we are to see the canals come hack into a really productive and useful freight carrying role then greater attention must be given to the development of co-ordination and systems at the end of the canals so that this can come about.

5.24 p.m.

Lord Underhill

My Lords, I am certain the whole House will be grateful to my noble friend Lord Plant for tabling this Question on the use of our waterways. We are also grateful for the very detailed information which he gave in his comprehensive speech. I hope that other noble Lords have the same feeling as I do: that those who have been taking part in this debate have included a number of noble Lords who have expert knowledge and experience of this subject. This again proves the value of debates of this kind in your Lordships' Chamber.

As the noble Baroness, Lady Gardner of Parkes, said, the Question is mainly directed at freight and goods transport on the waterways. However. I hope the Minister will have a few words to say about the other development of the waterways—on the emphasis that has been given to the cruising waterways and their value for tourism and for health and recreation.

I clearly recognise that any investment of public funds must have practical possibilities and serve a constructive purpose. I readily appreciate the point which the noble Baroness, Lady Gardner of Parkes, made on the need for co-ordination. So often we talk about the integration of transport, but we must talk about it in practical terms. The points made by the noble Baroness today emphasise that we do not have a number of separate systems—road, rail, pipelines, waterways and coastal shipping. There should be the maximum possible co-ordination and integration between them.

In recent years the British Waterways Board has demonstrated practically the possibilities of the use of the waterways. I was pleased to hear a number of noble Lords pay tribute to the work of the present chairman, Sir Frank Price, and his colleagues. I have known Sir Frank for the best part of 40 years and I am not surprised that he has proved to be an excellent chairman of the hoard, having seen his outstanding service in local government in Birmingham. It is not only a question of practicalities and acting as a good chairman of the board: he has been really enthusiastic about the waterways. He is also a fervent believer in public service.

I was pleased that my noble friend Lord Plant emphasised the comprehensive nature of the services which the hoard now has. I remind your Lordships of what he said. The service for customers now covers an integrated system of depots, docks, wharves and warehouses. It must be emphasised that in 1982, despite the recession, the increase in the freight carried on the British Waterways Board's own system was 11 per cent. That indicates the development that has taken place and is taking place.

It may be argued—but I hope the Minister will not—that this is still unimportant and that the conveyance of just 5 million tonnes of freight is only a small fraction of the whole. It is only a small fraction, but the figure relates to freight carried on the British Waterways Board's commercial waterways only. I was pleased that the noble Lady, Lady Kinloss, stressed that this relates only to the 350 miles of the commercial waterways covered by the BWB.

In that connection, it is interesting to note that only a short while ago the Marine Transport Centre at the University of Liverpool issued a report which stressed that the use of the inland waterways in the United Kingdom for freight transport is far greater than the figures that I have mentioned suggest. It asked: what is the definition of waterways? I will not go into it now, but the Marine Transport Centre at the University of Liverpool gave a new definition of waterways and, by including estuaries. it came up with the figure that no less than 63 million tonnes are moved. Further figures show that 35 million tonnes were moved more than 25 kilometres and over 30 million tonnes were moved more than 50 kilometres. We can see a different picture when we are given a report of that nature.

The references to the Severn and South Yorkshire Navigation indicate that the figures may be more important when one looks at them region by region. It is possible to deal with them by regional importance and not just nationally because in many parts of the country there are no waterways of any importance at all. We have to keep in mind the increasing importance of our trade with other European countries. The main estuaries of the Humber, Thames and Severn are vitally important.

I should like to emphasise what one or two noble Lords have said. I do not want to enter into a road, rail or waterways lobby. Mine is a transport lobby. We should get the utmost value that we can in all directions from our transport. Today we are talking about waterways. It must be emphasised that, unlike road improvements, improvements to waterways carry a burden of interest charges which has to be reflected in the toll revenue. That means that the customers—the people who want freight conveyed on our waterways—are helping to pay for them.

Viscount St. Davids

My Lords, the noble Lord mentions interest charges, as have many other noble Lords, but they have all failed to mention also that the unfortunate waterway has to repay the capital some day.

Lord Underhill

My Lords, absolutely. I was coming to that later when I referred to the outstanding debts. It is a factor that has to be considered. Nobody charges road hauliers the interest charges or costs of maintaining the roads. Therefore in that respect there is not equality of treatment between road and waterway freight.

Again I hope that the Minister will accept that operating costs of waterway transport are low. Reference has been made to the number of lorry loads that can be carried in one modern barge. I should like to bring the figure right up to date, as we are to have the 38-tonne lorry. No less than 18 38-tonne lorry loads can be moved in one modern barge. We know of the worry about the increase of lorry weights to 38 tonnes. Containerisation and container-carrying barges are being developed. Low profile coasters are being designed as a compromise between seagoing vessels and the barge. There is the development of barge-carrying ships, which could be vital for trade direct from inland areas along the waterways to the estuaries and even across to the Continent. The board is also developing modern handling equipment.

Practically all your Lordships emphasised the development of the Sheffield and South Yorkshire Navigation. It has always proved successful. The much criticised South Yorkshire Metropolitan County Council contributed £l million to the cost because it saw the value to the area. Local authorities generally recognise the value of waterways for freight transport and most also recognise their value for recreational and tourist purposes. Local authorities all along the Severn have recognised the value of developing the Severn Corridor, to which my noble friend Lord Plant referred. It will open up the corridor for larger vessels. I hope that the Government will support that move and give it every possible encouragement. A consultant survey commissioned by the hoard has estimated that 1.1 million tonnes of extra freight traffic could he obtained by the development of the plans for the Severn Corridor.

I am pleased that the Section 36 grants were referred to. I had the pleasure of moving the amendment, which was supported by other noble Lords. I am pleased that it was accepted by the Government. We now have the same opportunity for freight facilities on the waterways as on British Rail. We were also pleased that in June this year the Secretary of State was able to approve the first grant under the new Section 36. In the Department of Transport press notice, issued only on 27th June, Mr. Tom King, the Secretary of State for Transport, referring to the development of an inland wharf, said: Modernisation of this inland wharf will enable bulk cargoes such as steel, cement, paper bales, timber and grain which would normally travel by heavy lorry to and from east coast ports to he transhipped at Gainsborough, thereby saving about 50 miles of road travel". That is not me speaking from this Front Bench but an observation made by the Secretary of State for Transport, which indicates the value of Section 36 grants and also of the development of freight transport by our waterways. I am hoping that, as a result of our debate tonight, the publicity given to Section 36 grants may cause other organisations (both local authorities and private concerns) to see the value of this, make inquiries and possibly develop grants under Section 36.

I do not want to weary the House with figures, but total public expenditure on transport for 1983–84 is said to he £5,170 million. Grants to the British Waterways Board were just a fraction under £35 million. It might be argued that the £5,170 million is for all transport expenditure. But let us have a look at grants and subsidies: for all transport £1,767 million: for the waterways, £35 million. As the noble Viscount, Lord St. Davids, reminded us, over and above this the capital has still to be repaid and the interest still to be paid on the original capital debt. I can recall the debate that we had in your Lordships' House when attention was drawn to the outstanding maintenance for all the waterways—not just the commercial waterways, but the cruising and remainder waterways—of some £150 million because the constant delays have now put up the original costs four or five times. That was shown clearly in the consultants' report.

The waterways are there. No one in their right mind would say that we could let them deteriorate. That is another point that the noble Viscount made. There has been sufficient emphasis on the environmental considerations and on energy saving. Bearing those considerations in mind, we should do everything we can that is economic to use this other means—our waterways—of conveying freight, particularly when urgency is not so important. The waterways are suitable for bulk cargoes. It has been stressed that the board believes that the safety of water transport makes it ideal for the movement of dangerous and hazardous goods. I recognise that we are in tight financial circumstances, but I hope that the Government will accept all the views expressed by everyone who has spoken in the debate and clearly indicate that they will have a forward look at the development of waterways, particularly to encourage freight transport, even though we all recognise that the waterways convey only a fraction of our goods.

5.39 p.m.

Lord Lucas of Chilworth

My Lords, at the outset may I join those noble Lords who have thanked the noble Lord, Lord Plant, for having put down this Unstarred Question and enabled us not only to have an extremely enjoyable debate but also to set down the various views. I am aware, as many of your Lordships are, that the noble Lord was with the British Waterways Board for many years. He was vice-chairman from 1977 until 1980.

When he opened this afternoon's debate, the noble Lord drew attention to Section 31 of the 1978 Act. Perhaps I may remind your Lordships that it was my noble friend Lord O'Hagan, when speaking from Benches opposite, who succeeded in persuading your Lordships to accept the amendment which now requires us as a Government, to promote a national policy for the use of inland waterways for commercial transport. So there can be no doubt that my noble friends and my right honourable friends in another place have been, and remain, committed to this ideal.

A number of your Lordships spoke of Sir Frank Price, and I am reminded that Sir Frank is the longest serving public sector chairman. I endorse the general tribute that has been paid to him. Certainly Sir Frank has pursued his job, and his great interest, as chairman of the British Waterways Board with very great energy.

The Government are fully seized of the case for the use and development of the waterways of Britain for carrying freight. But waterways freight must be looked at in the context of the general policy that there must be fair competition between the alternative modes of freight transport and the relative roles of both public and private sectors. As I have previously said in debates of this nature, the customer himself determines the mode of transport that he chooses. While certainly varied modes have developed differently with various economic aspects, at the end of the day it is the customer who makes the choice and pays the price.

The noble Lord, Lord Underhill, and other noble Lords, have referred to the study by the Marine Transport Centre of Liverpool University, which was completed in 1982. The study found that there were 2,351 kilometres of waterways capable of taking vessels over 50 tonnes. Sixty-three million tonnes of freight were carried, involving 2.3 billion tonne-kilometres. That is the point that the noble Lord, Lord Underhill, made. However, this traffic was only 1.8 per cent. of all freight movements in that year by all modes. The British Waterways Board's network accounted for only 0.1 per cent. of all traffic by all modes. So one must accept the fact that traffic on inland waterways has only a very small sharé of all freight traffic, and most of that is within the private sectors of operation. Nor did the MTC study find any significant change in the overall volume of waterways traffic, when comparing its results with those of a study carried out nearly 10 years earlier, in 1973, by the Inland Waterways Association.

We hope to commission further studies from which we shall be able to see changes in trends and amounts of traffic. Meanwhile we are not going to block any reasonable attempt to attract more freight on to the waterways. The noble Lord, Lord Plant, pointed out the way in which interest charges are made, and I have to say that in fact he was wrong over that. Interest is paid out of the required real rate of return, not in addition to it. He also spoke of the EEC Treaty of Rome, but this will not apply because of the way that interest charges are treated in the appraisal of the investment proposals.

The noble Lord mentioned in particular, as did a number of other noble Lords, the opportunities that there were. He said that we have to grasp any opportunity, and among a number of opportunities he suggested that the River Severn development was one. In 1979 the board commissioned a firm of market research consultants to examine and report on prospects for commercial traffic on the River Severn, both in the short term and up to the year 2000. In 1981 the board announced its general attitude towards a strategy for the River Severn; but the board has never sought prior approval of the department to this strategy, and it is understood that the board does not envisage any major investment requiring departmental approval. In fact no specific proposal has yet been put before the department; and I hope that the noble Viscount, Lord Hanworth, will accept that in answer to the specific point that he made with regard to the Severn.

Inside British Waterways Board's network and elsewhere the opportunities which there will be for grasping will depend very largely on imaginative marketing policies and realistic investment policies geared to the special advantages of the waterways in certain commercial situations and to making the best use of the assets that are already there. Much of this will be for the private sector to judge in relation to its own investment, because, as we have all accepted, it is the British Waterways Board which operates the smaller number of kilometres, or miles—whichever way one likes to put it—of our commercial waterways. The Government themselves must look closely at this in respect of the board's investment proposals.

It is sometimes suggested—and perhaps it was suggested this evening—that we treat the board unfairly compared with investment in other modes, but I do not think that this is so. All investment proposals require appraisal. In the case of investment in the commercial sector the Department of the Environment needs to be satisfied that the investment would earn a 5 per cent. real rate of return. That is the same real rate as applies in the public sector generally. It is not in addition to the interest payable on borrowings by the board from the National Loans Fund.

But we must face economic facts. As I have said, there seems to have been no change in overall traffic volumes on inland waterways in recent years. The apparent attraction of fuel cost savings by taking domestic traffic on to the waterways is rapidly outweighted by the additional costs of transhipment at either end of the journey. The MTC study showed that traffic to and from the open sea accounted for 81 per cent. of total waterways traffic. Most of this traffic used rivers such as the Thames and the Medway—certainly not part of the board's network for either domestic or international traffic.

In 1982 the British Waterways Board's 547 kilometres of commercial waterway cost £11.1 million to maintain. It attracted 5.12 million tonnes of traffic, which paid only £770,000 in tolls and dues—as against the maintenance cost of £11.1 million. In other words, every tonne was subsidised by the taxpayer by £2.11p. The noble Lord, Lord Plant, and I think all noble Lords who have spoken in the debate, have mentioned costs and have said that we must be cost effective. Is a general subsidy of £2.11p for every tonne moved cost-effective?

Overall the board received grant aid from the Government of £33½million. The grant was paid in recognition of the very heavy maintenance requirements throughout the board's total network of 3,285 kilometres. But there is a backlog of maintenance which will cost anything from £120 million to £150 million to clear. The noble Lord, Lord Plant. the noble Viscount, Lord St. Davids, and my noble friend Lady Gardner of Parkes spoke about these costs.

We have through Government financed around 75 per cent. of the annual maintenance expenditure for a number of years: but again over the same period the total freight traffic on the board's network has generally declined. It is also sometimes suggested that roads are favoured over waterways but no one really today can seriously suggest that roads enjoy anything like the level of subsidy given to waterways. Roads are financed from Government revenue on a pay-as-you-go basis in which returns from road users in general cover the costs involved. I know that the noble Lord, Lord Underhill, in particular, will remember the change in the last Budget that related to true track costs of heavy lorries. This position has remained the case with vehicle excise duty having been raised, as promised by the Government when we debated Armitage.

We recognise the environmental attractiveness of waterborne traffic in some circumstances. We have a grant scheme to attract traffic off the roads where there would be a clear environmental advantage. The two grants are the rail freight facilities grant, under Section 8 of the Railways Act 1974, and also the inland waterways freight facilities grant. to which noble Lords have drawn attention today, under Section 36 of the Transport Act 1981. These grants were extended by the Act of 1981 as part of a policy of fair competition. Such facilities are very much more expensive than the comparatively simple facilities needed for freight transport by road.

I need not repeat the details of the grants that my right honourable friend the Secretary of State for Transport announced in June last year. Other noble Lords have done so. We are determined to make effective use of these grants in our continued commitment to waterways and to reduce the effect of lorries on the environment. I underline what the noble Lord, Lord Underhill, had to say when he suggested that private enterprise should make better use of these grants. We hope so, too. Indeed, the Government consider that we are giving enough encouragement to the development of the waterways for freight purposes. We believe that we deal with the waterways fairly compared with other methods. Taxpayers' money is, however, not unlimited. We have to be realistic and businesslike.

I wish to turn now to one or two of the points that noble Lords have made. The noble Viscount, Lord Hanworth, reminded us, in his usual measured tones, of the tremendous opportunities in a number of areas. The Government will listen to any proposal that comes forward either from the board or the private sector. However, when the noble Viscount says that water movement is the cheapest form of transport, I can only accept it if I discount the transhipment costs. These are considerable.

Viscount Hanworth

My Lords, I made the point, I thought, that in many cases transhipment could be entirely avoided by the 1,500-tonne ship being able to go directly to where it wanted to unload.

Lord Lucas of Chilworth

My Lords, I am much obliged to the noble Viscount for reminding me of that. That may be so. Nevertheless, the general argument that I have put forward still pertains.

I have mentioned the Severn scheme to which the noble Viscount referred. The noble Lady, Lady Kinloss, spoke of one of our greatest assets. She referred particularly to the coming of the railway and of—I think this was her term—tarmac, which reduced the effectiveness and the use of waterway's. That is an absolute fact of life. As cheaper and more convenient freight movement modes are developed, perhaps one rises and perhaps one loses. Certainly, inland waterways did lose in those days.

In comparing all the waterways, the noble Lady mentioned the 350 miles against the 900 miles. It is right that in many ways they are considered as a whole. That is why grants are given for environmental reasons as well as for actual freight movement. The noble Lady will recognise that the waterways do not make up a total network. So it is absolutely necessary to consider each on its merits. We believe that we are doing that.

The noble Lord, Lord Davies of Leek, in a remarkably short speech which I should have liked to emulate hut which I cannot, spoke particularly of the reclamation of canal banks. That is why we want the British Waterways Board to be able to clear up the maintenance backlog—this estimated £120—£150 million worth of work to be undertaken. It is a long job, but a start has been made. Initiatives are going on in the Birmingham area making use of urban development grants to create canal walkways.

Not surprisingly the noble Viscount, Lord St. Davids, made a splendid contribution to our debate. I wondered for a moment whether he and I would share some time in discussing the merits of the electrically propelled vehicle whether on the waterways or anywhere else. Like other noble Lords, I accept and acknowledge the noble Viscount's immense knowledge of waterways, particularly in the leisure and amenity section. Notwithstanding that, his contribution is greatly appreciated. If I have missed any particular point with regard to freight, I shall certainly write to the noble Viscount.

My noble friend Lady Gardner of Parkes made a typically pragmatic speech. She made the point, which I endorse, that there has to be a balance between the existing dock facilities and furthering any other facilities that may make one or the other at some time surplus. As she reminded us, the grants will encourage really worthwhile development.

The noble Lord, Lord Underhill, ranged over a number of topics. I was a little surprised when he reminded us of some up-to-date figures, taking the example of a 38-tonner and pointing out that one boat would carry 18 lorry loads. I have to ask him "Where to, and where from?" We are talking now of 38-tonners, one of the main objects of which is to move large quantities over wide areas. Sadly, the waterways would not provide that kind of mileage or network.

Lord Underhill

My Lords, I thank the noble Lord for giving way. The same problem of "From where to where?" can arise with a 38-tonne lorry. Some of their loads will have to be transhipped as well.

Lord Lucas of Chilworth

My Lords, that is true. But, as the noble Lord and myself know, the whole object of that lorry is to take a larger amount of goods more miles than hitherto before they have to he transhipped—a long, long way from where they started out.

Investment in waterways has to be economically justified. The noble Lord, Lord Underhill, stressed this in his closing remarks. We have to pay regard, he said, to the economics. This is a phrase frequently heard nowadays. Even though we hear of it frequently, this does not means that we should not take even greater notice of it. The methods that we use to appraise whether it would be justified are even-handed compared with methods used for investment in other transport modes. Waterways are treated on the same basis as rail for the purpose of grants where there would be environmental advantages from switching traffic from roads. In short, we have no prejudice and, if I may say so, on my own behalf, I have no prejudice against waterways as a means of carrying freight.

I hope that this short debate, initiated by the noble Lord, Lord Plant, will have served to clear up any misunderstandings there may have been. I look forward to the waterways growing in importance, but on their own merits, as an economic and environmentally attractive way to carry goods.