Order. Before I call Sir Peter to speak, I urge all those Members who want to take part in the debate, and a terrific number do, that we have a limited amount of time. May I ask the Minister and the Front-Bench spokesmen to bear that in mind, too? I shall try to call as many Members as possible, and I hope that they bear my request in mind when making interventions. An overlong intervention is not helpful, and if other Members are going to make a speech, it just uses up a lot of time.

Thank you, Mr. Hancock.

The Minister may not feel that he needs my sympathy yet, but I have considerable sympathy for him. He is standing in for his hon. Friend the Under-Secretary of State for Environment, Food and Rural Affairs, who would normally deal with these matters, and I thank him for doing so at such short notice. I had intended to express my sympathy to the Minister whom we might have expected to reply, because the budgetary problems of the Department for Environment, Food and Rural Affairs did not occur on his watch. However, the Minister of State who is to reply was on watch, and he may well be able to respond to some of the issues that predate the appointment of his colleague.

I have some sympathy for the Department, because it is under siege from farmers and people concerned about the Rural Payments Agency. We should have some sympathy for the Minister and his colleagues, too, because although the waterways, canals and rivers are a national asset of the highest profile, delivering valuable outputs, those outputs are for the most part not the direct responsibility of his Department. In brief, he and his colleagues must feel that they are taking the rap for problems that they did not cause and dealing with issues that are far more important to other Departments than their own. They also deserve our sympathy because they may well feel that DEFRA can do little about the situation when the Treasury is breathing down its neck. I intend to suggest what the Minister and his colleagues can do about it, and why it is vital that they take action.

The debate is not about how the Department got itself into that position, which is a matter for debate elsewhere, but about the impact of funding cuts on British Waterways and what needs to be done about that. Whatever the reasons for the cuts, they are absolutely nothing to do with British Waterways—indeed, they are nothing to do with any other bodies affected by the DEFRA budget crisis.

British Waterways is one of this Government’s major successes. [Laughter.] Opposition Members may laugh, but the Government have invested in British Waterways on an unprecedented scale. That has brought new confidence to all of us who care about the waterways, it has shown that the Government are prepared to invest, and that investment has been followed by the investment of many others who have seen renewed confidence and vigour in the waterways.

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

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

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

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

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

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

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

I agree entirely with my hon. Friend.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I shall happily move on to that topic immediately.

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

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

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

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

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

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

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

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

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

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

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

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

rose—

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

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

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

I also have, however, another canal in my constituency—the Wilts and Berks canal—which I share with my hon. Friend the Member for North Wiltshire (Mr. Gray). That canal is at a stage in its development at which it needs grant to be able to benefit the local community in the way that we all know canals can. I have in mind not only the people who work on them, but the downstream activities that flow from them. At one part of the canal, in Melksham, there are plans to make the canal a valuable local tourist asset, but they will probably have to be put on hold if the cuts go through. In addition, we have problems at the Caen Hill flight on the Kennet and Avon canal, and, again, there is a risk that we will not be able to proceed if the cuts go through.

Will my right hon. and learned Friend give way?

No. Perhaps my hon. Friend would like to intervene on one of the Front-Bench spokesmen. As I promised, I must be brief.

I want to make three points. One is that the canals are a local as well as a national asset. In my constituency, many people secure their employment one way or another from the canals. If the canals are allowed to decline again, that employment will once again be at risk. The Government must see the canals not only as a tourist question, but as an employment and economic question.

The second point is that the canals—particularly the Kennet and Avon canal—have been the recipients of enormous amounts of public money in one way or another. They received not only the direct grant from British Waterways, but, in the case of the Kennet and Avon canal, a lottery grant for £21 million, which was one of the largest lottery grants ever given. That public money has brought enormous benefit, but if the cuts go through, the Government will undermine the effect of spending that public money. The cuts will mean not only that the canals will not improve further, but that they will decline, and that money will have been wasted. I am sure that the Minister will not want to see the effect of public money undermined in that way.

I have a third and rather esoteric point, and I share an interest in it with the Deputy Prime Minister—he and I are among the few people in the House who occasionally mention it. We live in a time of climate change and global warming and we saw this summer the kind of drought that can occur in this country. At some moment in the future, our canal system may be essential to creating a working water grid throughout the country. If we undermine that system now, we may well live to regret it. Savings today may create unacceptable costs tomorrow, in terms not only of the money that will have to be spent to restore the canals that will have gone downhill, but of the essential assets that will have been lost in all our local communities.

I congratulate my hon. Friend the Member for Leicester, South (Sir Peter Soulsby) on securing this important and timely debate. I particularly want to draw attention to my local canal—the Caldon canal—which is a small, local canal that feeds into the Trent and Mersey canal. It does not have the same status as canals that create a route through to the national canal network, so it is far more vulnerable. It has already suffered because it has not had the same level of maintenance as other canals. The cuts this year, and, just as importantly, the long-term potential cuts to the funding of British Waterways, create a tremendous threat to the survival of such canals.

In the early 1960s, the canal was in a derelict state. Volunteers from the local Caldon Canal Society put in hours of work and lots of fundraising to put it back into operation, and it was reopened in 1974. Within living memory, therefore, we have seen the canal return from dereliction. That has brought huge economic, recreational, sporting and social benefits to my constituency, which has seen the decline of the textile industry, small engineering firms and farming, and where tourism is therefore a vital area of expansion. If more maintenance is denied to the Caldon, key structures, such as dams and embankments, could collapse. As a result, the canal could become derelict, which would have a devastating impact on the local economy.

During the outbreak of foot and mouth, many areas of my constituency were denied to walkers, and that had a real impact on the local economy. Understandably, a lot of people talk about the 29,000 boat owners, but I do not want to make a point about boaters, because, to some extent, they are the tip of the iceberg. Let us talk about the walkers, bird watchers, anglers, canoeists, cyclists and people who just enjoy living by the canal. Let us talk about the impact on local businesses, such as the public houses, restaurants and boating establishments that would be affected.

My local area in Leek does not make enough of the canal. There are no signs from the industrial estate where the canal comes to an end to demonstrate to boaters and others who use the canal that the lovely town of Leek is just down the road, offering supermarkets, pubs and restaurants. The Caldon and Uttoxeter canal group, however, has an ambitious plan to open up the whole Leek arm of the canal, which would bring huge benefits. Sometimes, the towpath can be impassable, because certain areas get very muddy. However, it is still regularly used, and if we want to cut some of the congestion locally around the Britannia building society in Leek—a big national mutual building society that is known to many people—the towpath should be used for cycling; that part of it should be opened up, not closed down.

The Leek canal, however, is now likely to turn into a stagnant, dirty ditch. It will not be something that people want to live beside, but something that they want to avoid. It is important that such canals are regularly dredged; otherwise, a canal as valuable as the Caldon could end up being deprived of traffic. The local Beatrice boat organisation puts on trips for special needs children in a specially adapted boat. Its members fear that if the dredging does not take place, they will no longer be able to operate the boat. That would be not only sad, but criminal, because the children look forward to those trips.

The Government’s agenda is all about regeneration, improving the environment and encouraging healthy lifestyles and exercise, and the waterways press all those buttons. As I said, the local canal society is investigating developing the local canal in Leek to ensure that it will be the sort of recreational hot spot that it should be. The canal runs alongside the local heritage railway through the beautiful Churnet valley.

I therefore want the Minister to tell us today that he will rethink the cuts for this year. Just as importantly, however, we must draw back from the brink of even more damaging cuts in the long term. To some extent, the canals could sustain cuts for one year, but a lower level of funding in future years would be absolutely disastrous; it would turn back the clock many decades and, in some cases, more than 50 years. I therefore hope that DEFRA and Ministers in other Departments will come to the aid of our canals.

I congratulate the hon. Member for Leicester, South (Sir Peter Soulsby) on securing the debate. The number of hon. Members here today shows how important the issue is felt to be. I want to concentrate on the Rochdale canal. I know that other hon. Members will concentrate on others.

The Rochdale canal was opened on 21 December 1804, and after a century and a half of use was closed to navigation in 1952. After many years’ campaigning, especially by the Rochdale Canal Society, the Millennium Commission agreed to support its recommissioning. The local authorities of Manchester, Oldham, Calderdale and Rochdale put forward a bid for lottery funding, as well as to the Northwest Regional Development Agency and other public bodies. They were successful in bringing the canal back into navigation, at a cost of more than £25 million, in 2002. In December that year, the canal was officially opened by Fred Dibnah. That investment has brought significant regeneration, as the hon. Member for Staffordshire, Moorlands (Charlotte Atkins) described in her speech, along the entire length of the Rochdale canal.

Since it opened, the Rochdale, which is 33 miles long and links the Aire and Calder navigation in Yorkshire with the Bridgwater canal and Huddersfield narrow canal in Manchester city centre, has been enthusiastically used by boaters and been managed and maintained by British Waterways. The four local authorities that I mentioned provide annual revenue funding to British Waterways via the Waterways Trust in excess of £500,000 a year. They are committed to doing so for the next 50 years to support the operation and maintenance of the canal.

All that has now been placed under threat. We have been told this year that £600,000 has been cut from the maintenance budget of the Rochdale canal. Since it opened, in addition to its leisure use, the canal has inspired social, environmental, community and economic regeneration along its length. The authorities have collaborated to produce a widely acclaimed canal strategy, which highlights the benefits and opportunities that the restored canal will bring. However, so that the work completed with lottery funding would be done in time, it was always envisaged that further significant expenditure on the regeneration of the canal would be needed. Indeed, there is still work outstanding, at a cost of more than £10 million; it needs to be done to bring the Rochdale canal back into use fully. Lock gates need to be replaced and embankments strengthened, and other key works are needed. That work has been programmed for the next 10 years.

As other hon. Members have said, a small amount of money is involved in overall Government terms. It is a small amount of money in DEFRA terms, but it is important for what the hon. Member for Leicester, South described as one of the jewels in the British crown. I hope that Ministers will reconsider whether they can, if not necessarily restore the grant, at least find other ways to enable British Waterways to fund its expenditure. Unless that happens, the Rochdale canal, like many others, faces an uncertain future.

British Waterways, along with the Government, the Waterways Trust and the other agencies, and a huge number of volunteers, has done a fantastic job in recent years. I am proud to represent a constituency that includes part of the National Waterways Museum, which has been defined as a nationally important collection in its context. Its context is not a sterile atmosphere, but the locks and basin where it belongs, alongside the sister museums mentioned by my hon. Friend the Member for Leicester, South (Sir Peter Soulsby). That collection is in jeopardy, for two reasons: first, because of the potential knock-on effects of the decision that we are discussing; secondly, because we are continually battling with the Department for Culture, Media and Sport to get the museum included in the list of free-entry museums.

The Prime Minister today responded to my hon. Friend the Member for Hendon (Mr. Dismore) about how successful free entry has been for museums. It has been enormously beneficial to the museum sector, but it has been detrimental to those smaller museums that have been left outside. Will my hon. Friend the Minister have a word with his friends in the Department for Culture, Media and Sport? There are important messages to get across.

As my hon. Friend the Member for Leicester, South said, the matter is one that crosses Departments. It concerns education, the economy, tourism, culture and heritage and the environment. Huge benefit spins out from the work that is undertaken on canals. One need only look at the centres of cities such as Birmingham and Manchester to see how urban regeneration has really worked around the canal sector. I was pleased during the summer to host a private visit by the Deputy Prime Minister, who opened one of the new sections of the museum. He, undoubtedly, is on board, and we need to exploit the support that exists in Government to minimise the risk to the archive in Ellesmere Port and to the historic vessels. The Government have done a fantastic job in leading the restoration of the waterways. Let us now make sure that the work carries on.

I agree with all that has been said, and do not intend to repeat any of it. I shall make a few quick points.

I was fortunate in an earlier incarnation to have ministerial responsibility for British Waterways. One thing to be remembered is that of the outgoings of British Waterways—its costs—a small part can be covered by licence fees for users, although that applies only to the boat users. As the hon. Member for Leicester, South (Sir Peter Soulsby) said, much of the use—80 per cent.—is by walkers, ramblers, canoeists, cyclists and anglers. They cannot be charged, so only a very small proportion of canal users are charged for use. Innovative ways of obtaining extra income can be found, such as by laying optical fibres along the route of the canal, as we managed to do, and some money can be raised by development, such as at Paddington basin; but British Waterways’ land bank is by definition finite and much of it has already been used. As has already been said, money for development will be levered in only if developers are confident that the overall environment will continue. Therefore, the cuts will have a real impact, because it simply will not be possible to cross the gap; work will not be done and parts of the canal system will fall into disrepair. There is no other way to deal with it.

DEFRA is in a hole. That is because of the single farm payment. We shall not go into that, because it is for another debate, but there have been all sorts of circumstances in the past that have put Ministers in difficulties. I was the Minister of State at the Ministry of Agriculture, Fisheries and Food during the BSE crisis. No one predicted that crisis, and we were for ever going to my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), who was then the Chancellor of the Exchequer, and asking for contingency payments. We got them. We said that we had not anticipated the situation—how on earth could anyone have anticipated it?—and we got a contingency payment from the Treasury. I urge the Minister, therefore, as well as the Secretary of State, seriously to consider going to the Treasury and saying, “It is ridiculous to have to make across-the-board cuts in all aspects of DEFRA spending, which have nothing to do with single farm payments, and where there will be long-term effects.”

There is also a matter of principle involved. Part of DEFRA’s problem is that it faces a fine from the European Union for failing properly to deliver on the single farm payment scheme. Is it right that a single Department should meet that fine? Is not it a contingency that should be paid by the Government collectively, out of the Contingencies Fund? Otherwise, as a consequence of one part of DEFRA’s budget going awry, all its departmental heads are likely to be put out of kilter for a long time to come. That does not have to be so. If we consider precedent, and if the Treasury is reasonable, it will be possible to get DEFRA out of the situation that it is in. It is a matter for Ministers to have the competence to form up and go to see their Treasury colleagues, and tell them, “These cuts are unsustainable and insupportable and we need Treasury help. This is not going to create some unhallowed precedent; indeed, it has happened within the machinery of government since time began.” By the way, surely it should be a principle of government that fines from the European Union should be paid collectively from Treasury contingency funds, rather than from individual departmental budgets.

I thank my hon. Friend the Member for Leicester, South (Sir Peter Soulsby) and congratulate him on securing this debate. Reference has already been made to the impact that the regeneration of the canals has had on our urban areas. If Birmingham and Manchester are held up as being among the greatest regeneration achievements of the 21st century, surely the clearest logic tells us that we should protect, maintain and improve our canal system for future generations. That is the crux of my argument.

After 40 years of inaction and abandonment, the canal system was in a dire condition. Yet after only a few years of an organised, well targeted and—crucially—funded approach, the change has been remarkable. Is it common sense to cut funding in spite of such progress? No, it is not. Cuts have already not only threatened but had an impact on the British Waterways winter programme of refurbishment and maintenance on Ashby canal, the Birmingham canal navigations, Birmingham and Fazeley canal, Grand Union canal, Kennet and Avon canal, Leeds and Liverpool canal, Peak Forest canal, Ribble link, Rochdale canal, the River Severn, which is close to my constituency and that of my hon. Friend the Member for North-West Leicestershire (David Taylor), the River Trent and the Weaver navigation. About £5.5 million has already been cut from the winter programme, and that will continue.

Is it common sense to cut the budget in the middle of the financial year? I liken that to a football manager being forced by his chairman to play the second half of the season with only seven or eight men. That is not common sense. Reference has been made to the status of British Waterways—whether it should be public or private, and whether it should review its status, which might enable it to borrow against its capital assets. I shall deal with that by referring to the report on British Waterways by what at the time was the Monopolies and Mergers Commission. It stated that British Waterways

“has to maintain a 200-year-old canal system in a safe condition. This outstanding heritage from the first industrial revolution has many fine listed structures which are expensive to keep in good repair. Indeed the whole canal network is part of the nation's heritage and many canals are themselves listed. British Waterways also has extensive environmental responsibilities, including over 60 sites of special scientific interest (SSSI) and hundreds of conservation areas and areas of special landscape character. Given the history of the system, it is unlikely that the Board can ever run its affairs on a wholly commercial basis. It is therefore inevitable that British Waterways will continue to rely on public funds for a significant proportion of its annual turnover.”

I guess that that view and judgment are supported by many hon. Members in this Chamber.

I can only add my views to those already expressed by hon. Members. I ask DEFRA to look again at the issue, please. Perhaps the cuts, having been imposed this year, are not going to be wound back. Some of us might not be happy about that, but we can understand it. But for God’s sake, do not let us get ourselves into a downward spiral in which the new reduced base budget of grant aid to British Waterways becomes the base for further cuts next year and in consecutive years. We would then end up with huge cuts in the totality of the British Waterways budget and that would be extremely detrimental. DEFRA, please think again on this one.

I congratulate the hon. Member for Leicester, South (Sir Peter Soulsby) on securing this debate, which has attracted huge interest. I shall try not to repeat points that have already been made.

There are three canals in my patch. The Llangollen canal runs across the north and has the Pontcysyllte aqueduct, built by Thomas Telford—a potential world heritage site so attractive that a couple of years ago Harrison Ford and Calista Flockhart went across it. It attracts large numbers of international tourists. There is the Ellesmere development around the wharf on the Llangollen canal, and it is very much centred around it.

I stress the economic impact of the canals. If the Llangollen canal could be extended into the centre of Whitchurch and the inclined plane developed, that would echo our success elsewhere. The Montgomery canal, for example, has been developed under Governments of both main parties—I stress that Frankton locks opened in 1997, and the stretch from Frankton to Queen’s Head opened in 1996. That dead end attracts 2,000 boats a year and has since been extended further south. A business such as Barry Tuffin’s at Maesbury exists entirely because what was a dry canal 15 to 20 years ago is now a live canal. Michael Limbrey, who has done such great work on the restoration, reckons that 100 to 120 long-term jobs will derive from phase 1 of the restoration of the Montgomery canal. With associated developments, that could increase to 250 or 300. The Shropshire Union canal runs north up to the Mersey, going through Market Drayton, and is a substantial and lively generator of economic activity there.

All that is at risk. The numbers are simple: last year, British Waterways’ turnover was £190 million—approximately £100 million from its own income, £60 million from subsidy and £30 million from the Heritage Lottery Fund and other sources.

Some £115 million is needed just to maintain the network and keep it safe. All that has been put in jeopardy. It is not just about the money, which, as my right hon. and learned Friend the Member for Devizes (Mr. Ancram) said, has been put through in previous years, but all the future development. Why? It is because of the staggering, cretinous incompetence of DEFRA in handling the single farm payment. I had better not dwell on that, because I shall not be able to keep my language temperate. DEFRA is facing £130 million in fines from the Commission and £40 million in compensation to farmers. Frankly, it is not acceptable that some of my farmers should not yet have been paid; by Christmas, Welsh, Scottish and French farmers will already have been paid for this year. My constituents are furious about that.

I should like the Minister to answer two quick questions. First, if there are breaches—there were two on Llangollen canal last year—will the Minister absolutely guarantee that they will be repaired? As my hon. Friend the Member for Banbury (Tony Baldry) said, there is a contingency fund. If there are breaches, we risk losing the huge economic activity, as well as suffering the environmental damage. I want a categorical guarantee from the Minister this afternoon that breaches will be repaired.

Secondly, if there are breaches, will the Minister also pay attention to the water supply? The Llangollen takes water from the River Dee to Hurleston for Chester. As my right hon. and learned Friend the Member for Devizes said, in future we shall need that network to transfer water from the west to the south-east of the country.

I shall be brief. Clearly, my constituency has more to lose than many other parts of the country, given that the Stroudwater canal is being reopened. Stage 1B has already taken about £20 million, which has come largely from the lottery. There is another bid to the Big Lottery Fund for more than £20 million for stage 1A. There are also all the opportunities in Gloucester around the docks themselves.

I shall concentrate on two important issues that have not been dwelt on. The first is the loss of jobs. The Gloucester-Sharpness canal reorganisation, which pre-empted this issue, will involve the loss of a number of bridge keepers. That has brought a lot of heartache, and although it has been possible to get redundancies and people taking early retirement, the process is not easy and we are losing an awful lot of expertise. Although it seems the easiest way—even, in a sense, although it sounds bizarre, the least painful—it is counter-productive. I put it on the record that we ignore it at all our perils.

The other issue has already been mentioned but I want to emphasise it: the role of volunteer back-up to the canal network. I hope that my hon. Friend the Member for Derby, North (Mr. Laxton) does not mind my mentioning Steve Davis and Paul Woollams, who gave him information. They are complete volunteers and spent hours putting things together. I am not saying that they wrote my hon. Friend’s speech, but such people put in an enormous effort as volunteers. It is matched by the physical effort that is put in on weekends and every day by the people who keep the waterways alive. I hope that the Minister understands that there is a wealth of good will out there but that if people are upset and good will is thrown away, it will not be replaced. I hope that that message will encourage the Department for Environment, Food and Rural Affairs to reconsider the cuts and work with everybody to restore the figures.

I can say what I have to say about the wonderful Wilts and Berks canal in my constituency in a minute or thereabouts if I cast away the substantial amount of information that I had planned to place before the House this afternoon.

There is an important point to be made about a potential canal such as the Wilts and Berks. It does not apply to mighty canals such as the Kennet and Avon in the constituency of my right hon. and learned Friend the Member for Devizes (Mr. Ancram). That canal is a fantastic asset that can be used in all sorts of ways, and people can be charged to use it. What I have in my constituency is a muddy ditch that needs to be made into a canal and which requires substantial investment.

The difficulty with the announcement that the Department for Environment, Food and Rural Affairs made, particularly the method used to make the announcement, is that it puts at risk the funding that we need from all sorts of bodies to restore the canal. Recently, an enormous amount of money was spent to open the gateway between the Kennet and Avon and the Thames. It was raised by private funding and by government funding of one sort or another. Those funders are now saying, “Hang on a minute; the whole thing is at risk.”

I would ask the Minister, irrespective of what he might think about existing canals, to spare a thought for the Kennet and Avon and the many other potential canals in England that need the support and confidence of the Government and of independent funders if they are to achieve the fantastic vision of linking the Kennet and Avon with the Cotswold canal system.

I, too, congratulate my hon. Friend the Member for Leicester, South (Sir Peter Soulsby) on securing the debate.

The canal network in the black country is a proud link to our industrial heritage, a vital part of our contemporary lifestyle and an essential resource for our future. The canals south of the Rowley-Dudley chain of hills are connected to the waterways north of the hills by a series of tunnels. That is the vital link that I want to ensure is kept open.

Only the Netherton tunnel is well used. It is of recent construction—in terms of canals, that is. The canal from Netherton tunnel runs through Dudley, North and Dudley, South, through the Delph and Stourbridge flights, and eventually joins the Staffordshire and Worcester canal at Stourton, where there is an arm that links Stourbridge to the canal network at the foot of the lock flight.

Like many canals in the industrial black country, the Stourbridge fell into disuse at the end of commercial carrying and became derelict, although it was never formally closed. At that time, various campaigners tried, mostly unsuccessfully, to get boats through, but eventually the locks fell into dereliction. Feelings about that ran so high that it was agreed to hold the annual national rally in Stourbridge to bring the canal’s plight to a wider audience. As a result, there was a campaign in the early 1960s to restore the canal to navigation, primarily the Stourbridge lock flight. Using volunteer labour—it was one of the first cases of volunteers turning out in their masses—the locks were restored, albeit with a few political confrontations along the way, and the rally was a great success.

Since then, the canal has been gradually upgraded and has become a joy and a benefit to the local community. It has been key to much of the regeneration in the past few years, and there is currently a scheme to use the canal as a basis of regeneration for a new development on the former Stuart Crystal site at Amblecote.

During the early part of that period, British Waterways was strapped for cash. Netherton tunnel was closed, as it was in a dangerous condition because the bottom was moving as a result of subsidence, which causes difficulties across my area. It was closed for more than five years. When it finally reopened, the whole of the canal was overgrown. It was not navigable, and the whole of Stourbridge was cut off. I am here today to ask the Minister to revisit the funding issue and to ensure that Stourbridge is not cut off from the rest of the navigable network.

I call Lynne Jones next. If you are very quick, we will be able to get everyone in.

Birmingham is said to have more canals than Venice, and very proud of them we are. I regularly cycle across my constituency along the Worcester and Birmingham canal out to Wast Hills tunnel, one of the longest and most ancient tunnels in the country, and from the other end into the city centre at Gas Street basin. My constituency also has the Stratford-on-Avon canal, which is a spur from the Worcester canal, and the Lapal canal, which, unfortunately, was filled in in the 1960s. There has been a campaign for several years to get it reopened, and the first phase of that work at Selly Oak is supposed to take place as part of the regeneration around a retail development.

Campaigners were very disappointed by the cuts in the budget—our hopes were immediately dashed. I believe that three people have mentioned Birmingham and the regeneration of the city centre, which has been a great success. Its renaissance is down in no small part to the restoration of the canals there. One can go there any day, seven days a week, and see lots of Brummies. It is a great visitor attraction.

The vibrancy and colour around Brindley Place and the Mailbox are determined by the number of narrow boats that are there. Very little waterway traffic originates in the Birmingham navigations. We depend on access from other parts of the network. My hon. Friend the Member for Stourbridge (Lynda Waltho) mentioned the Netherton tunnel. I understand that it recently was closed for investigation of the brickwork in the base of the canal, and we do not know whether there will be funding for it to be reopened. Both sides of the towpath have been closed.

Order. May I ask the hon. Lady to wind up?

The Rowington embankment and the Wast Hills tunnel are other access points. What would happen if major investment were needed there?

We in Birmingham are very concerned about the cuts. If we cannot restore the funding this year, I hope that at least there will not be declining budgets in the future but that we can go back to the good days when the Government saw the canal network as something in which to put more, not less, investment.

I call David Heyes. You must be brief.

I shall not abuse your generosity, Mr. Hancock. I have thrown away three of my four pages of notes.

Throughout the urban centres in my constituency—Ashton-under-Lyne, Droylsden and Failsworth—the waterways have been at the heart of regeneration activity and have been a key driver in making a success of such projects. I want to get on record the irony that it is urban regeneration work such as I have described in my constituency that should be put at risk because of the failure of the Rural Payments Agency. It is desperately unfair that the agreed funding to British Waterways is being retrospectively clawed back, through no fault of British Waterways, to be used to pay for failings elsewhere in the Department for Environment, Food and Rural Affairs.

I can only add to the urgings of so many Members to the Minister to do all that he can to ensure that British Waterways funding is restored to former levels, and to change the agenda so that its pot of money is not seen in the future as the one that can be regularly raided if difficulties arise elsewhere in DEFRA budgets. That is vital if the Government’s commitment to the benefits of inland waterways in terms of leisure, recreation, heritage, environment and the regeneration that is of such importance in my constituency is to be honoured.

I, too, congratulate the hon. Member for Leicester, South (Sir Peter Soulsby), not only on securing this debate but on the constructive manner in which he made his contribution. He set out the productive way in which British Waterways has used the public money that has been put at its disposal and also the fact that the benefits that come from canals and other waterways cross many Government Departments. I encourage the Minister to respond to his challenge to find a method of funding British Waterways, because it has a lot going for it.

The other advantage of such a debate is that it gives the opportunity for hon. Members, and the public, to demonstrate the huge support for canals and waterways. Sometimes we need such a challenge to do that. Indeed, the number of hon. Members that have turned up would almost have done justice to a debate on the Floor of the House. They would have given us a huge description of the beautiful countryside and towns that canals go through.

DEFRA is a serial offender in terms of budget mismanagement. Recently, it has been an under-spending Department and it has now run into terrible trouble with the single farm payment. However, I do not want to dwell on that.

Canals and waterways have a number of benefits that are valued by the public, first in terms of tourism and the local economy. There are 300 million visits to 2,000 miles of inland waterways. Not only that, but they encourage people in this country to take their holidays in this country, boosting the local economy and cutting back on carbon emissions. Regeneration has been dealt with, as well as conservation, biodiversity and heritage.

British Waterways is not a passive recipient of Government largesse, but generates increasing income. It has been said that 180 jobs will be lost, and that is a huge blow to those individuals, as the hon. Member for Stroud (Mr. Drew) said. Their expertise in building partnerships and getting match funding will be sorely missed by British Waterways. Although the cuts on the canal bank are not that great, the expertise is fundamental in maintaining the work done by British Waterways. It is not only about ensuring that the maintenance of canals is carried out but about encouraging tourism with new attractions, new developments and a sense of adventure when people go on the canals—they need to see something different and to have a new experience.

The cuts penalise a successful and well-run organisation. They are a setback to our tourist industry and put back progress on regeneration and extending biodiversity. Indeed, what is probably more worrying to the Minister is that they will probably affect those who, as Ratty said in “The Wind in the Willows”, like

“simply messing about in boats.”

They are an increasing constituency in this country. I urge the Minister to take on board the suggestion made by the hon. Member for Leicester, South and to investigate among his fellow Ministers to see whether support can come from other Departments for this worthwhile cause.

I congratulate the hon. Member for Leicester, South (Sir Peter Soulsby) on securing the debate and you, Mr. Hancock, on enabling everyone to speak on this important subject. I am sure that everybody agrees that British Waterways has done a tremendous job in regenerating our canal network and reinvigorating the surrounding economies. Along its 2,200 miles of canals and rivers, there are now a record 29,000 boats—more than during the height of the industrial revolution. I hope that all hon. Members have signed early-day motion 50, which my hon. Friend the Member for East Surrey (Mr. Ainsworth) tabled and I co-sponsored. For the record, it has so far attracted the support of 110 hon. Members.

We are here today because British Waterways has to save £7.2 million, although it could be as much as £9.1 million, in net expenditure from its budget this year to rebalance its books. In his response, I hope that the Minister will provide a thorough explanation, especially considering the very short notice that has been given of those budget cuts. Users of British waterways recognise the unfairness of the cuts and many have been driven to protest and demonstrate. On the weekend of 25 and 26 November, thousands came out in their boats across the country to show DEFRA their disappointment. The “Save our Waterways” campaign organised blockades and demonstrations in Banbury, London, Gloucester and Northampton to name but a few, and more are planned. Those waterways mean so much to them, but sadly so much less to DEFRA.

The Kennet and Avon Canal Trust has predicted that the canal will have to close because of the parlous state of lock gates and the impact that the cuts will have on their replacement. Does my hon. Friend agree that that will have an enormous impact not only on small businesses and users of the canal but on other businesses, such as pubs and village shops, that benefit from the burgeoning tourist trade on the canal?

I think that my hon. Friend would be very surprised if I did not agree with him. He is absolutely right and makes an important point.

If the Government still doubt the strong feeling against the cuts, I hope that they will pay particular attention to the flotilla that is planned to pass by Parliament in January. It is easy to think that the Government are completely out of touch with the public and canal users on this matter. While the Government seem to want to claim that the cuts will be harmless and will not have any dramatic or noticeable impacts, the truth seems somewhat different. When questioned about the cuts, Lord Rooker claimed:

“I don’t think it will lead to the cutting of British Waterway’s programme of work.”

However, a briefing note on the cuts provided by British Waterways states:

“The possible sources of funding to balance the budget are: cuts in revenue expenditure such as core waterway maintenance and administration expenses, cuts in major works expenditure, and increases in income.”

So, who told Lord Rooker that the programme of work would be unaffected?

Furthermore, Tony Hales, the chairman of British Waterways, has stated:

“Defra’s cuts, not just the amount but their suddenness for reasons that have nothing to do with the waterways, clearly cause us problems. They could threaten the long-term stability of the system and our vision to expand it, unless strong action is taken.”

What strong action is being taken? We have the Under-Secretary of State bravely stepping up to the plate and stating:

“The Government are working with British Waterways…to minimise the impact of the current restructuring.”

Perhaps when the Minister responds to the debate, he will be able to elaborate on what has been discussed and planned in the new budget that, as Lord Rooker claimed, will not lead to a cutting of British Waterway’s programme of work. The Under-Secretary has also claimed that one of the reasons for the cuts at British Waterways was that it was “good financial management.” He stated:

“As a matter of good financial management, DEFRA keeps its budgets and spending under regular review and challenge, and adjusts them as new pressures and demands arise.”—[Official Report, 7 November 2006; Vol. 451, c. 1067-68W.]

I am sure that hon. Members will disagree with him; good financial management does not involve cutting millions from budgets at short notice and creating difficult financial challenges for others to respond to. That is challenging, yes, perhaps testing, but hardly good financial management.

Moreover, a substantial proportion of DEFRA’s financial problems are the result of its incompetent handling of the Rural Payments Agency. That is frustrating for those affected, not least because it could have been avoided. I must draw to the attention of the Chamber that I received £49 in a single farm payment. If the then Secretary of State for Environment, Food and Rural Affairs, now the Foreign Secretary, had bothered to listen to and act on the criticism levelled at the RPA and DEFRA by people such as myself, we could have been debating British Waterways’ successes instead of budget cuts.

Is the hon. Gentleman aware that the budget problems in DEFRA that have led to the hole in the budget have little or nothing to do with the single farm payment and the Rural Payments Agency? In fact, any disallowance that might result from that will further increase its problems and lead to an exacerbation of the situation.

I am grateful for that intervention, but I am not sure that the hon. Gentleman is quite right. We will wait and see what the Minister has to say in his response. According to British Waterways’ spokesman:

“The network is in the best shape it has been for 150 years, but that is now at risk.”

He went on to state that British Waterways was being penalised for DEFRA’s incompetence, which is rather contrary to what the hon. Gentleman suggested.

I hope that when the Minister responds, he will be able to explain why British Waterways, the work that it does and the 180 workers who will be made redundant have to suffer because of DEFRA’s failings elsewhere. I would also be grateful if the Minister is any closer to explaining the reasons for the cuts. We understand that DEFRA needs to save £200 million from this year’s budget, but during oral questions the other week the Minister was able to account for only £33 million—DEFRA must save £10 million for bird flu, which we in the Conservative party understand is important, and £23 million on the RPA for the single farm payment fiasco. That leaves £167 million unaccounted for, and it would be helpful if the Minister could explain the reasons for the cut. The only explanation given at the time—he said it himself—was:

“The rest is needed for other reasons”.—[Official Report, 2 November 2006; Vol. 451, c. 455.]

On top of the cuts to British Waterways, the maintenance of our waterways and canals is also threatened by the £27.7 million cut to the Environment Agency’s budget. The network of waterways that was once built to support our industrial growth is now used to support our tourism and leisure industries and was fast becoming a valuable asset for communities, jobs and homes. However, while all those benefits are under threat, we discover that there has been a lack of joined-up government in trying to manage the situation, as has been mentioned. Last month, in a written answer, the Under-Secretary stated that he had had no discussions with his ministerial colleagues specifically about the funding reductions for British Waterways or their impact on the environment, the economy and regeneration. When we consider how much regeneration and investment is involved, it is improper that the impact of those cuts has not been discussed with ministerial colleagues in other Departments.

With so many potential benefits at stake, I am somewhat saddened. I wonder why the Government are jeopardising them by cutting British Waterways’ budget for this year and planning further cuts that will amount to between £50 million and £60 million over the next five years. Is it not odd that the Under-Secretary should have confirmed that he and his colleagues have not discussed the British Waterways cuts with the Chancellor? I hope that the Minister will take the opportunity to explain why. Should the cuts continue, waterways will have to be closed, vital maintenance postponed or cancelled, and regeneration projects halted. I am sad to close by reporting that the Rochdale, Peak Forest and Ashton canals now face cuts in their works programme and that, as a result, closure may be on the cards.

I congratulate my hon. Friend the Member for Leicester, South (Sir Peter Soulsby) on securing this debate. The high attendance—in my experience, it is exceptional—shows that it is a matter of great interest not only to those who use our inland waterways but to all who are involved in their restoration and heritage. I pay special tribute to my hon. Friend for the excellent progress that British Waterways made while he was a member of its board.

The Under-Secretary of State for Environment, Food and Rural Affairs is sorry not to be here to answer the debate. He is attending an event with the Prince of Wales and the Prime Minister in connection with his biodiversity responsibilities. If hon. Members will allow me, I shall ask him to respond in writing to the specific and individual constituency concerns raised during the debate. As Minister with responsibility for waterways, my hon. Friend has seen how much British Waterways has achieved in the last 10 years and the tremendous contribution it has made to stimulating regeneration and delivering benefits to the public in general. He and my right hon. Friend the Secretary of State have held a number of meetings with British Waterways’ chairman and chief executive in the past weeks and months to discuss the funding situation.

A number of hon. Members have fallen for the misapprehension that the funding challenges faced by DEFRA are all due to the single farm payment and the Rural Payments Agency. As my hon. Friend rightly said, it is only a small proportion of the £200 million—approximately 11 per cent.—that we have to save this year. It is not quite true to say that it is all the result of the single farm payment.

The in-year reduction for British Waterways was 7 per cent., not the figure suggested by the hon. Member for Leominster (Bill Wiggin), and considerably less than the reduction that we asked of the core Department and the other parts of the DEFRA family. Those reductions have averaged between 10 per cent. and 15 per cent, but we made efforts to protect British Waterways. It is also right, as my hon. Friend said, that the reductions should be seen in the overall context of British Waterways’ turnover of £190 million and the massively increased investment in British Waterways over the past 10 years. Its income has risen by 200 per cent. in that period; I doubt whether many organisations have seen such an increase.

Like hon. Members, however, the Government do not wish to see that wonderful track record and those improvements and achievements undermined. Indeed, that record was acknowledged by the hon. Member for Castle Point (Bob Spink), who is no longer in his place, and the right hon. and learned Member for Devizes (Mr. Ancram). Although I cannot give hon. Members the assurances that they seek on budgets for 2007-08 and beyond into the 2007 comprehensive spending review period, I assure the House that we are actively working with the management of British Waterways to ensure that its funding is sustainable. Some of the figures that my hon. Friend suggested for possible cuts are, as far as I know, pretty speculative and do not bear much relation to the figures that I have heard being discussed within the Department and with British Waterways.

Will the Minister say whether breaches will be mended and filled in—if necessary, out of the Contingencies Fund?

No; that is a matter for British Waterways. It is not for the Government or Ministers to dictate its priorities within its resource allocations. It is up to British Waterways to decide how best to apportion its budget in relation to its activities.

I welcome the fact that British Waterways is taking a positive approach to its funding and to putting its budget and finances on a firm footing. The Department is waiting for its proposals for a long-term agreement on funding. We hope that it will be based on a realistic assumption of the likely funding levels. Many hon. Members were in the Chamber earlier for the pre-Budget report. They will have heard that a number of Departments are going to face stringent spending restrictions and that some will face flat cash cuts in the next comprehensive spending review settlement. The massive growth in public spending of the past few years will therefore be maintained, but not to the same level as in the past few years. We hope that our agreement with British Waterways will give it greater financial security, provide it with funding certainty, allow it to plan with confidence, and make it less dependent on Government subsidy.

I shall respond to some of the constructive and positive points made by my hon. Friend and the hon. Member for Brecon and Radnorshire (Mr. Williams). Although we acknowledge that British Waterways has made tremendous progress in recent years by becoming more self-sufficient, it needs to continue along that path. I am mindful of what my hon. Friend said about the need to consider the statutory constraints. Last year, British Waterways earned slightly less than £100 million through trading. That was the highest ever figure, and it accounted for more than half of its total income. British Waterways’ income has tripled over the past seven years. The rest of its income derived from Government grants and third-party contributions. We think that it still has considerable potential to increase its income—for example, it still sits on considerable assets, and we believe that it can better exploit their potential.

With the suggestion of my hon. Friend in mind, I shall ask for the statutory constraints on British Waterways to be reconsidered. I can tell him that British Waterways is actively exploring with the Cabinet Office whether its development powers might be widened under the Legislative and Regulatory Reform Act 2006.

In the few minutes that remain, will the Minister answer my hon. Friend the Member for Banbury (Tony Baldry) and tell us whether British Waterways has approached the Chancellor for emergency contingency funds in the way he described?

I have not had such discussions, but Ministers in all Departments speak to their Treasury colleagues regularly on all funding matters. I cannot speak for my colleagues or for the Secretary of State on whether British Waterways has been mentioned.

My hon. Friend and other hon. Members also mentioned British Waterways’ place within Government. My hon. Friend was right to say that British Waterways, as part of our heritage, could fit into a number of Departments, but I ask him to be slightly cautious about assuming that, were it to come under another Department, everything would suddenly be much rosier—not least because of the spending restraints on other Departments as a result of the next comprehensive spending review settlement. I also point to DEFRA’s having delivered a record increase in funding for British Waterways while my hon. Friend was its vice-chairman. DEFRA’s record is honourable and people should not assume that if British Waterways were to come under the remit of another Department—assuming that another Department wanted it—it would fare any better.

My hon. Friend seems to have missed the point slightly, which is that British Waterways is an asset that has huge cross-Department benefits and that there ought to be a cross-Department solution, perhaps led by the Cabinet Office.

As I said, the Cabinet Office is actively involved in discussions with British Waterways. My hon. Friend is right to say that many areas of public life cross Departments, and it is always important that hon. Members should seek to ensure that Ministers and Departments work effectively together.

We have had a constructive debate. I hope that I have given my hon. Friend the Member for Leicester, South some reassurance about what the Government are doing to address the problem. I shall certainly pass on his comments and those of other right hon. and hon. Members to my hon. Friend the Under-Secretary. I put on record our gratitude for the excellent work that British Waterways is doing to maintain our wonderful waterways network. I hope that it will continue to do so in a sustainable way.

I would like to thank the three Front-Benchers for the courtesy they have shown during this debate. I think we have broken a record for a one and a half hour debate: 16 Members took part and six others intervened. I thank everyone for their courtesy. We will now move on to the next debate.