I welcome the opportunity to discuss on the Floor of the House the future of Britain's canals. This is the first Adjournment debate on waterways matters since 1988 when the Manchester ship canal was discussed, and I congratulate my hon. Friend the Member for Halesowen and Stourbridge (Mr. Hawksley) on securing the time to discuss this important matter. He has a long history of commitment to the canal network of the United Kingdom and it is good to see that he is able to bring that to our debate tonight. I am also delighted to see my hon. Friend the Member for Fulham (Mr. Carrington) in his place, because he has taken a close interest in the waterways network as it affects London. What a pity it is, however, that this important debate has not been graced by a Labour Member. Labour has demonstrated all too clearly tonight that it simply does not care about the waterways.

Many people have a strong affinity for the waterways, and I count myself among them. I have been closely involved in the examination of waterway issues in this House, both as a former chairman of the all-party waterways group and as a member of the Environment Committee which examined British Waterways a few years ago. Indeed, after my wedding reception in the House, I and my bride were taken down the Thames by my very good friends Chris and Val Coburn in their narrowboat Progress. I have a strong commitment to canals, and it was a pleasure to me to become the Minister responsible for inland navigation because I have been able to see a good deal more of the canal network, including the Caledonian canal, the Brindley Place and Gas Street basin in Birmingham, the Huddersfield narrow canal and the Sheffield and Tinsley canal.

I was delighted to visit the inland waterways display just a couple of weeks ago in the Upper Waiting Hall organised by the Association of Waterway Cruising Clubs, the Inland Waterways Association, the Royal Yachting Association and the British Marine Industry Federation. I also met recently a delegation led by my hon. Friend the Member for Reading, West (Sir A. Durant) and the hon. Member for Normanton (Mr. O'Brien) to discuss a range of canal issues. As my hon. Friend is retiring from the House at the forthcoming election, I take this opportunity to pay tribute to him for all his work both as my predecessor as chairman of the all-party waterways group and as my successor in the same role. I have little doubt that he will continue his interest even though he will not be a Member of this House.

There has recently been a rise in public interest in funding for the waterways. My postbag, prompted by the various waterway organisations, has had a significant increase in the number of canal-related letters. It seems, therefore, timely to set out the Government's role.

There are about 3,100 miles of operational canals and navigable rivers in the UK. The majority are managed by public organisations—British Waterways with 2,000 miles, the Environment Agency with 500 miles and the Broads Authority with 125 miles. That leaves around 475 miles which are managed by various other bodies such as local authorities, private bodies and charitable trusts. The Government sponsor directly BW, the Environment Agency and the Broads Authority. In view of the points made by my hon. Friend, much of what I say will be in relation to British Waterways.

It is often said that cities such as Birmingham, and perhaps parts of London, were built on the back of the canal system. They made use of the canals not only as a transport link, but as a means of drainage, waste disposal and water supply. It is fair to say that canals continue to play an important part in many aspects of modern life. In particular, they are important to leisure and recreation, heritage, tourism and the environment. They have provided the focus for a range of urban and rural regeneration schemes.

Waterways provide an important catalyst for urban and rural regeneration. One of BW's aims is to promote and accommodate conservation and regeneration. In doing so, it works with a range of partners in the private, public and voluntary sectors. An excellent example of the role of canals in regeneration is the Birmingham waterfront, where more than £300 million of private sector finance has been attracted to developments alongside BW's canals. Another success story is the joint investment of £7 million by BW and Gloucester city council in Gloucester docks, which has attracted more than £30 million in private finance. The shift in the city's focus to the docks has seen the number employed there rise from 100 to 2,000 and tourism visits rise from a few thousand to more than 1 million. In Scotland, the millennium link, aided by £32 million from the Millennium Commission, will create 4,200 permanent jobs and attract £400 million of private investment along the 70 mile waterway corridor.

One of the most important areas of regeneration involves trying to cope with our housing needs. We are all familiar with the forecasts of an extra 4.4 million households; it will be much better if some of that housing can be provided alongside canals, regenerating disused sites and former industrial sites, rather than going into our green belt. It is a great pity that people such as the mayor of Berkhamsted, Mr. Peter Such, seem to think that it is not Government policy to build alongside the canals, when it clearly is. That policy can do a lot to regenerate our urban areas.

The profile of inland waterways has also been raised by the publication last April of the Inland Waterways Amenity Advisory Council's consultative report, "Britain's Inland Waterway: An Undervalued Asset". As a former member of IWAAC, I take great pride in the fact that it has produced a report which has provoked an interesting and lively debate. The Government and British Waterways will be required to respond to its conclusions and recommendations in due course.

The Government's policy is to maximise the benefits of the canals while taking account of the needs of all interests. To be more specific, there are five things I want: first, improved services and amenities for all users and beneficiaries of the canal network; secondly, a more strategic approach to the day-to-day use, planning and future development of navigations; thirdly, the protection and enhancement of the natural environment and the man-made heritage of buildings and structures; fourthly, a balanced approach so as to avoid conflicts between different uses; fifthly, a commercial approach, adopting cost-effective solutions and efficiency improvements to ensure good value for money for the taxpayer and payers of charges.

I value the considerable commitment and enthusiasm demonstrated by canal restoration societies and others in restoring canals. The Government have provided financial help to a range of projects through the land reclamation programme grant and the environmental action fund. Canal restoration schemes are also eligible for money from the various lottery distribution boards.

My hon. Friend is aware that there continues to be pressure on public spending, so all expenditure is carefully scrutinised. In recognition of the importance that the Government attach to the waterways, not only have they been cushioned from that pressure more than other spending programmes, but our contribution to the waterways has increased.

In the last Budget, for example, we announced an extra £5 million for BW in each of the next three years—an increase of almost 11 per cent. above original provision That compares with cuts of 9 per cent., 12 per cent. and 14 per cent. in the DOE's total expenditure over the next three years. In addition, I recently announced an extra £1.233 million for this year to enable BW to carry out additional repairs and maintenance to the network. That will bring the total grant in aid from Government in 1996–97 to more than £51 million. By any standards, that is a significant slice of public money.

I am fully aware of the survey that BW undertook last year, which identified a £100 million backlog of maintenance. As I have said, I have seen a number of the sites where urgent work is required. The Government recognise the seriousness and urgency of the problems, especially on the Caledonian canal, and have responded by providing immediate funding of £2.8 million. Only last Friday, my right hon. Friend the Secretary of State for Scotland announced a further £3.2 million for BW over the next four financial years to help with future repairs to the Caledonian canal. Taking into account all the extra Government money and BW's own efforts, that should enable BW to make major progress in dealing with the backlog over a realistic time scale.

As a nationalised industry, BW is responsible for the day-to-day management of its estate. Government objectives for BW require it to act commercially and in a manner which is commensurate with its statutory responsibilities. That includes meeting its costs as far as possible from charges on users and revenue from its property. I recognise that BW licence fee increases have not been well received. Nobody likes paying more, but it was a commercial decision for BW, and one I fully support. If the Government are giving an extra 11 per cent. a year to BW for the next three years, boaters must also play their part in helping BW to continue to invest in the future of the waterways.

It should be remembered that grant in aid and licence fees are not the only sources of funds available to BW; it generates its own income via its property, commercial and leisure interests, and for 1996–97 it expects income of more than £38 million from such sources and forecasts more for 1997–98.

In addition, a range of other funding opportunities is available to BW. This year, for example, BW has benefited from £10 million from the Government's single regeneration budget challenge fund for a London-wide canal regeneration programme and £3.6 million for a project on the Calder and Hebble navigation at Sowerby bridge. BW has also been a partner in lottery awards this year of £25 million for a programme of heritage and environmental conservation and visitor improvements on the Kennet and Avon, £2.7 million for the Ribble link—a new waterway linking the Lancaster canal to the Leeds and Liverpool—and £14.8 million for the Huddersfield canal. Two non-BW canals, the Ashby and the Rochdale, have also received £1 million each from the Government's rural challenge fund. BW also received more than £1 million from local authorities and expects to receive £1.5 million in grants from Europe in the current year.

BW has worked hard to attract funding from a wide range of sources. It is a reflection of its enterprise and commercial ability that, over the past seven years, it has increased self-generated income from £21 million to £43million. It certainly deserves credit for its performance.

My hon. Friend expresses an interest in finding a way to get the whole waterway network designated so that it is eligible for European grant aid. As I have just mentioned, BW already bids for funds from a variety of sources, including Europe. It continues to look at ways in which it might increase revenue, including options that would allow greater flexibility in generating additional income for the canal network.

A new national designation for the waterway system is one of the conclusions the Inland Waterways Amenity Advisory Council drew from its examination of inland waterways. That is an issue that I will wish to consider as part of the Government's and BW's eventual response to IWAAC's report.

My hon. Friend is keen to extend the use of casual labour and youth training to help with the maintenance and repair of the waterways. I particularly pay tribute to the waterway recovery group, which provides the opportunity for volunteers to work on all aspects of canal restoration. In his 1995 Budget, my right hon. and learned Friend the Chancellor of the Exchequer announced a pilot initiative, project work, to help long-term unemployed people. The project, which has recently been extended due to its success, offers a programme of intensive jobsearch help and practical work experience for people aged between 18 and 50 who have been out of work for at least two years. As my hon. Friend said, there is a history of canal projects being used as opportunities for job creation. People on project work carry out work of value to the local community, which certainly includes work on the waterways.

There is plenty to be positive about. The total amount of money going into the canal network from a wide variety of sources is greater than ever. There is renewed interest in the canal system for a range of different activities—leisure, recreation, tourism, regeneration, conservation, education, and in some areas still for commercial traffic.

Only a few months ago, I agreed to the upgrade of the Sheffield and Tinsley canal—the first upgrade since 1983—following significant public and private investment in the area, including a commitment from Sheffield city council to meet the costs of the additional work required to maintain the canal to cruising standard for 21 years.

Of course BW has a significant backlog of work, but as I said it is taking positive action to tackle the problems and invest in the future of the waterways. With all the activity in the public, private and voluntary sectors, we can look forward with confidence to the future of Britain's canals. I congratulate my hon. Friend on this important debate, and wish him and the canal system well for the future.