The Secretary of State last discussed the funding of British Waterways with its chief executive on 23 November 2006. Government have consulted closely with British Waterways on the financial pressures facing DEFRA and the impact that these will have on it. Decisions on 2007-08 financial allocations have not been finalised. Government will discuss in detail the impact of any decisions with British Waterways once these are known.
I recently visited a company in my constituency called Bayford Ltd, whose premises are adjacent to the Aire and Calder Navigation. A few years ago the company stopped carrying its freight on the motorways and put it on the canals. Can my hon. Friend assure me that the Government will take no decision likely to threaten such progress, so that no funding problems will occur to prevent that modal shift?
I am delighted to echo my hon. Friend’s enthusiasm for freight going back on to the waterways. In the context of climate change, that is exactly the sort of move we should encourage. Although the exact modality and the use of the waterways is a matter for British Waterways to consider in relation to its management of the waterways, I am sure that my hon. Friend knows of the Olympics project and our desire that much of the freight traffic for the construction of that project should be on the canals and waterways in the area if the development there goes ahead.
British waterways are proving increasingly popular across the country. In my constituency local people intend to build a brand new waterways park. However, the cuts directly caused by the Department’s failure to manage the single farm payments properly will probably result in 180 job losses. Is it right that local people should suffer because of the Department’s incompetence?
The hon. Gentleman is new to these matters and I understand his desire to get up to speed on them, in light of the proposal for the construction of the new Bedford to Milton Keynes canal, but he will have to do better than that. He spoke of the funding cuts related to the Rural Payments Agency. If he had bothered to find out the facts, he would know that of the £200 million that DEFRA had to reallocate in-year within its budget, only £23 million related to that—a little over 10 per cent. If he looks at the funding for the waterways, he will find that this year it represents the fourth highest income level that British Waterways has had in its entire history. Over the past seven years, since 1999, £524 million of investment has gone in from the Government to clear the safety backlog that the previous Government had left before 1997.
Does my hon. Friend recognise that if this year’s sudden grant cuts are followed by further long-term reductions, the magnificent regeneration benefits from the Government’s investment in British Waterways will be reversed, threatening the future of smaller, vulnerable canals such as Caldon canal in my constituency, which would be a disaster for rural and urban areas alike?
I do not accept what my hon. Friend says. The cuts this year, which represent just 6.6 per cent. of the allocated budget at the beginning of this financial year, will not have the effect that she suggests. It is absolutely wrong to link—
What about the 180 redundancies?
The hon. Gentleman talks about the 180 redundancies, but he ought to know that the British Waterways restructuring programme was in train before the in-year cuts ever happened. If he seriously thinks that a 6.6 per cent. in-year reduction in budget could precipitate a restructuring on the scale that he suggests, he should look at the figures and do his arithmetic again.
Last year, there were two breaches on the Llangollen canal. Canals in my area have had huge investment—public, private and voluntary—in recent years. There is significant environmental damage and a risk to water supply. If there is a breach this year, can the Minister guarantee that it will be mended—if necessary, out of the contingency fund?
I am delighted that for once the hon. Gentleman has recognised the vast amount of investment that this Government have put in to clear the safety backlog—[Interruption.] The hon. Gentleman says, “And our Government”, but I have the figures in front of me and that is not the case. In the last year of the Conservative Administration, the total revenue figure, on a like-for-like basis, was £98.7 million; this year, it is £189.4 million. That gives a good indication of the position.
The hon. Gentleman asked for a guarantee about his breaches. He has already received a specific, clear and accurate response on that matter from my hon. Friend the Minister for Local Environment, Marine and Animal Welfare in the debate that took place a couple of weeks ago, when he said that it is a matter for British Waterways to consider and prioritise as part of its managerial responsibilities. It would be completely inappropriate for any Minister to override the managerial responsibilities of British Waterways by giving guarantees of the kind that the hon. Gentleman requests.
I welcome my hon. Friend’s positive response to discussions with British Waterways. As he knows, the benefits that it delivers in terms of education, regeneration, transport and sport, among other things, are the responsibility of many Departments other than his own. In his discussions with ministerial colleagues, particularly those in the Treasury, will he redouble his efforts to ensure the delivery of a secure and sustainable funding regime for British Waterways that secures the future of these valuable national assets?
I recognise the excellent work that my hon. Friend has done over a sustained period in his representation of the waterways. He speaks with great knowledge, particularly about the regeneration effect of waterways and canals. The Government’s record on that is second to none. A maintenance safety backlog was cleared to the tune of £42 million, and there was a maintenance backlog of £280 million that we have brought back down to £119 million. That is the extent of the investment that the Government have put in. There have been impacts on other Departments’ priorities—I mentioned the Olympics earlier. That will continue. I am confident that we will resource British Waterways in future to its satisfaction and that of other Departments as well as DEFRA, for which it delivers so much.
I call Hywel Williams.
The hon. Member for Caernarfon (Hywel Williams) has less hair than me.
British Waterways is an effective and efficient organisation, which makes good use of public money, provides benefits for tourism and biodiversity, and conserves important buildings from the time of the industrial revolution. However, it is bearing the brunt of DEFRA’s catastrophic mismanagement of the budget. The Under-Secretary prays in aid Treasury changes in the rules, but they happened three years ago, so why are the effects being felt only now? Does that mean severe on-going cuts for the much valued organisation?
I must correct the hon. Gentleman again. It is not the case that British Waterways has borne the brunt of the reallocation of £200 million in the Department. The in-year cut, which is only to the grant-in-aid, not the organisation’s total income, is 6.6 per cent. If he considers that as part of the total income, he will realise that the figure is just over 1.5 per cent. of the organisation’s budget. The reallocation was felt throughout DEFRA, and other organisations that do not have the same resources and capacity to attract external funding had in-year cuts of 10 per cent. and more. To say that British Waterways bore the brunt is wrong. I understand the tremendous support that British Waterways enjoys because of its regeneration work throughout the country. We have shown that we value it through our investment. I stress again that we have invested £524 million in it since we have been in office.