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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
It is a pleasure to see you in the Chair, Sir Robert, for what has been a most delightful start to the morning, kicked off by our effervescent colleague, my hon. Friend the Member for Lichfield (Michael Fabricant). I expected nothing less because my hon. Friend brings real passion to the subject, on which he has spoken many times. This morning, my hon. Friend also brought his acting skills to bear and used his American accent. All that has helped us to bring the subject to light, as has the wonderful array of colleagues present. At one point, there were no fewer than 10 Conservative Members here, although I wonder where our Labour colleagues are. Perhaps they are not as passionate about canals as we are.
Rebecca Pow
I of course do not include the hon. Gentleman in that comment. He is ever present in Westminster Hall, and he brought to light the canals in his area. I am going to speak about English and Welsh canals, not Scottish and Northern Irish ones, because Scotland and Northern Ireland sort themselves out and run things themselves. However, it was lovely to hear about the canals in Scotland and Northern Ireland.
What a cornucopia of canals we have heard about—canals from across the country—and I have been struck by the stories that Members told, particularly those about the engagement of volunteers. We have also heard many great names, such as the Erewash canal and the Wyrley and Essington canal, as well as a whole lot from the Cotswolds, which I think my hon. Friend the Member for Stroud (Siobhan Baillie) puts under the Cotswolds hat—the Stroudwater canal, the Gloucester and Sharpness canal, and the Thames and Severn canal, which are all in the area. She is spoilt for choice.
We also heard about the Walsham and Dilham canal, which is small but becoming perfectly formed after all the work. I have had quite an association with the Kennet and Avon canal, which ran right past my school in the centre of Bath. It played quite a big role in my life: we would go out there for art classes and walk along it. I met my first boyfriend on a sponsored walk along the canal from Bath to Bradford-on-Avon, so I have never forgotten it. My husband and his mates always used to do some sort of activity every year, and the very last activity he went on with his group of lads before he died was on the Kennet and Avon canal. It was in November and it was pouring with rain. He was on crutches, but they still had the most magical time. I remember it with great fondness. That is what can be done on a canal.
I now live near the Bridgwater and Taunton canal, which my hon. Friend the Member for Lichfield mentioned. It was a go-to place to walk along during the lockdown, so it was very important. We have heard about all the benefits that our canals bring, including the huge public benefits—enjoyment, leisure, recreation and waterside holidays. My husband went canoeing, and paddleboarding has become incredibly popular; I suppose it is quite good to do on a canal because there are no waves, unless a boat passes.
Canals have all those great benefits, and there is also their history and industrial heritage. There are huge health and wellbeing benefits to walking along a canal. During lockdown, we regularly used to see kingfishers. Even with all those people walking along the path, the kingfishers were not afraid because it was their habitat and home. We have heard about the amazing green corridors that canals can forge through our countryside, and particularly in cities and towns. I take issue with what the shadow Minister said, because the Government are doing a great deal of work on reintroducing biodiversity in nature. We are setting targets for that, and canals form a very important part of it.
The United Kingdom’s largest navigation authority is the Canal & Rivers Trust. As has been said, something like 800 million visits are made to our canals every year, which is pretty phenomenal. That shows just how important they are. Our waterways and navigation authorities have a really important part to play in helping to ensure that this important piece of our infrastructure is resilient to climate change and helps us to meet our net zero targets through sustainable transport, energy generation and the transfer of water.
Water security is becoming an increasingly important issue. I am the Water Minister—I am pleased to say that is one of the hats I wear—and water security is as important as all the other issues that we are tackling, such as water demand. Climate change is triggering changes and extreme weather events. The Government are developing policies to adapt to climate change right throughout the country, and our navigation authorities are exploring ways to adapt the network to climate change.
The infrastructure can also contribute to net zero. That includes examining the feasibility of increasing electrification of the networks and encouraging boaters to switch to electric vessels. Earlier this year, the Broads Authority, with funding from the Department for Transport’s clean maritime demonstration competition, examined the potential for the electrification of the broads hire boat fleet. The Environment Agency has installed a number of electric charging points along the non-tidal River Thames, and the Canal & River Trust has installed electric charging points on a few of its London canals, including a trial eco-mooring zone on the Regent’s canal, part-funded by DEFRA and the London Borough of Islington.
Wendy Morton
The Minister is setting out some fantastic examples of how we can help our waterways to adapt for the future with electric points and so forth, but one thing that really concerns me is our ageing infrastructure. Looking ahead is fantastic and absolutely the right thing to do, but will she reassure me that the Government will play their part when it comes to the maintenance and restoration of the infrastructure that we have today?
Rebecca Pow
I thank my right hon. Friend for that pertinent point. I will refer to it a bit later in my speech, but it is a really serious point. Of course, infrastructure is affected by climate change and extremes of weather, which are putting more pressure on some assets. As well as the opportunities around electrification, there are similar opportunities with active travel and the cycle networks along our canals, which allow people to get away from roadsides and travel in a much fresher and cleaner environment. If we can get more people to take to their bikes, it will help us reduce carbon emissions and tackle the net zero targets.
Let me go back to water security, which is really important. Our navigation authorities have an important role to play in this endeavour in times of both flooding and drought. They can help by managing water levels, and the long dry spells this summer have highlighted how the canal network could increasingly play a role in water transfer, particularly from west to east. My hon. Friend the Member for Stroud mentioned taking water from the wet west to the east. All these things obviously have to be carefully worked out, and I have spoken to the Canal & River Trust about how such opportunities would work. I particularly welcome Affinity Water’s plan to work with the Canal & River Trust to transfer water through the Grand Union canal, and I know others are looking at other such opportunities.
As has been touched on, the network has a really important historic value, with much of it being more than 200 years old. It matters a great deal to people and a lot of restoration work is under way. We have heard so much about volunteers and I, too, thank them. So many volunteers have played a key role in restoring sections of our canals, and I particularly want to mention that I had a wonderful trip to the Monty canal in Montgomeryshire, where I met lots of volunteers and saw the work they were doing. They have benefited from a £16 million levelling-up fund grant. Members have mentioned the levelling-up benefits of canals, and that money is being spent well in the community to restore the fantastic canal in the centre of town.
Ruth Jones
The Minister is talking about funding; when can we expect the funding announcement for the Canal & River Trust that was supposed to be made back in July? Rather than the parliamentary “shortly”, can we have an actual date?
Rebecca Pow
The hon. Lady mentioned that in her speech, as did others, so I will come to it now. Many Members mentioned the annual grant to the Canal & River Trust, so I want to explain a bit about the grant, how it happened and the history around it. The grant stands at £52.6 million until 2027 and currently represents about one quarter of the trust’s annual income, which means that the trust derives three quarters of its annual income from other sources. That distinction is very important, because one of the trust’s objectives when it was created in 2012 with charitable status was that it would be free of the public sector constraints that its predecessor, British Waterways, was subject to. Freedom from public sector constraints meant that the trust would be free to develop other income generation strategies, including by benefiting from charitable donations and legacies, charity tax reliefs, third-party project funding and borrowing on the financial markets.
It is also worth mentioning that in 2012 the trust was endowed by the Government with a significant property and investment portfolio, which is currently valued at around £1.1 billion, and the returns were to be used as income. The clear intent was that the trust would reduce its dependence on the Government grant and foster increasing self-sufficiency by providing access to income streams not available to public corporations and by stimulating new efficiencies.
I agree with my hon. Friend the Member for Lichfield that British Waterways received more funding than the Canal & River Trust: indeed, that was the intent behind establishing an independent charity to undertake that function. However, it is important that we compare like with like when looking at the evolution of Government funding. British Waterways, a public corporation, was responsible for the waterways in England, Wales and Scotland, whereas the Canal & River Trust—which is a charity, with access to charitable benefits and tax breaks—is responsible for England and Wales only. Scottish Canals funding represented £10.5 million in 2011-12, and the existing grant increased by £10 million in 2015-16 and has been inflation-adjusted until April 2022. It is then required by the grant agreement to be flat for the final five years of the grant period.
Wendy Morton
I appreciate the Minister setting out the history behind the finances, but I want to reinforce the point that when we discuss the £52.6 million that the Canal & River Trust is in receipt of, we must not underestimate the huge level of income streams that they are generating, heading towards the target that the Government want them to get to. It is important that the Government do not lose sight of the £4.6 billion-worth of benefits that are coming in in various ways. Also, given that the climate change agenda has changed so much since 2012, does the Minister agree that we are not comparing apples with apples here?
Rebecca Pow
My right hon. Friend makes some sound points. That is why the team in DEFRA is working so closely with the trust to iron out what is required and what would be the right tapering or reduction of rates. That is being carefully calculated, because huge benefits are realised and the pressures of climate change are changing things. Of course, as we have heard, the Canal & River Trust is already attracting grants from other places—the levelling-up fund, the Heritage Lottery Fund, and so on. Some big grants have come in that way as well.
Rebecca Pow
It will have to be quick, because I want to give my hon. Friend the Member for Lichfield a chance to wind up.
Maggie Throup
The Minister has hit the nail on the head, but without realising that the grant that the Canal & River Trust receives is an enabling grant to ensure it can get grants from other sources. Without that enabling grant from the Government, some of the other grants and support would probably not come through, which shows how important the Government’s support will continue to be.
Rebecca Pow
I do not think anybody denies the importance of the Government’s support, hence why so much care is being taken in working out the future of that support. As my hon. Friend the Member for Lichfield noted, the grant was agreed for a period of 15 years, from 2012 to 2027. That was to give the trust a measure of financial stability while working on its other income streams, which it has done very effectively. That includes maintenance of the canal network, which is a significant part of annual expenditure, and it is the trust’s responsibility to decide on its priorities and consider where it needs to spend its money. We are all aware of the Toddbrook reservoir dam incident three years ago, which highlighted how essential it is to put safety at the forefront as a top priority of waterways. I know that will remain the case.
The grant agreement requires that a review of the trust’s grant be carried out at the 10-year point, which is what my Department is currently completing. We are looking with a laser focus at all the issues that have been raised, scrutinising the trust’s performance to date—has the grant been value for money?—and the case for continued funding into the future. As I have said, we are working closely with the trust on this matter; the review has been concluded, and indeed was due to report by 1 July. A range of extraneous influences, politely referred to by my hon. Friend the Member for Erewash, slowed that somewhat, but it is progressing now with speed. I am unable to comment further in detail on the outcomes, but it will be announced forthwith—not shortly but forthwith. The Department and I will continue to work with the new chair, David Orr. I am looking forward to meeting him and going out on more visits.
In closing, I thank my hon. Friend for raising the subject, and all colleagues for giving insights on the joys of canals and getting to the nub of what is concerning people. Funding is obviously of paramount importance. We have to get that right, which is why time is being taken over it. The announcement will be made as soon as possible. In the meantime, I wish the trust all the best with the great work it does. I do not think anybody denies for a minute the enormous benefits we get from our canal network.