Grants to Assist the Provision of Facilities for Freight Haulage by Inland Waterway

Orders of the Day — Transport Bill – in the House of Commons at 8:45 pm on 28th July 1981.

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Lords amendment: No. 17, after clause 33, insert— D.—(1) Where it appears to the Secretary of State that it would be in the interests of any locality or of all or some of its inhabitants for facilities to be provided in that locality or elsewhere for or in connection with the carriage of freight by inland waterway or the loading or unloading of freight carried or intended to be carried by inland waterway, he may make grants in accordance with this section towards the provision of such facilities.(2) Grants under this section shall be made towards capital expenditure which is to be incurred in providing such facilities, and the facilities may, without prejudice to the generality of subsection (1) above, include cargo carrying craft, inland waterway terminals, depots, access roads and equipment for use in connection with the carriage, loading or unloading of freight.(3) Grants under this section shall be made in pursuance of an application made to the Secretary of State by the person who intends to provide the facilities and shall be supported by evidence that the Navigation Authority have given that person their approval for the provision by him of the facilities to which the application relates.(4) The Secretary of State may, in making a grant under this section, impose such terms and conditions as he thinks fit.

Photo of Mr Norman Fowler Mr Norman Fowler The Secretary of State for Transport

I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker:

With this we may take Lords amendment No. 72.

Photo of Mr Norman Fowler Mr Norman Fowler The Secretary of State for Transport

The purpose of the new clause and the related amendment is to provide powers to make grants towards facilities for the carriage of freight by inland waterway.

Hon. Members will be aware that a similar scheme of grants—generally known as section 8 grants—is already available to rail users under the Railways Act 1974. It meets a general desire on both sides of the House that the railways should be helped to obtain a share of the bulk traffics requiring special loading facilities and other equipment without which they would have to go by road. It has certainly been useful in diverting some bulk traffics to the railways.

The objective is to get environmentally unsuitable traffic off the roads and there is no good reason for limiting assistance to the railways. There are undoubtedly circumstances where waterway facilities could usefully achieve that objective and they should be given the same encouragement as the railways. Sir Arthur Armitage reached that conclusion in his report. I have already said that the Government agree with him and that we would want to introduce legislation for that purpose at the first opportunity.

We were pleased to accept the amendment in another place. It will meet an objective which, I believe, is desired on both sides of the House.

Photo of Robin Cook Robin Cook , Edinburgh Central

As the Secretary of State has made clear, the amendment would import into the inland waterways the same arrangements as exist in the railway industry and which were provided for in the 1974 Act.

Those of us who have a connection with the railway industry are naturally touched by the imitation, because all imitative behaviour is the most sincere form of flattery, but it would be right to put on record that the railway industry has been disappointed by the consequences of the section 8 provisions of the 1974 Act.

The take-up of section 8 grants has been well below the expectations enjoyed in 1974 and, in many areas, has been well below the ceiling provided by the Department of Transport for such grants. Therefore, we should exercise some caution about the extent to which we expect grants to be taken up for the more difficult task of diverting freight from road to waterways. There has already been a depressing experience of the difficulty of diverting freight from road to the existing rail network.

As the Secretary of State will be aware, the debate in the House of Lords was brief and was characterised by the succinct nature of the contributions that we expect from their Lordships. It gives rise to a number of questions which I should like to put to the Secretary of State and on which I would appreciate some reassurance.

As the right hon. Gentleman is no doubt aware, the terms of the amendment are slightly more generous than the terms of section 8 of the Railways Act 1974. The amendment provides that a grant shall be payable towards cargo-carrying craft. The section 8 grant under the 1974 Act does not provide any grant towards rail rolling stock, although rolling stock can be a significant element within the investment that is required if a private enterprise decides to divert its freight on to the railways rather than on to road, particularly if it is making that judgment against the background of having a substantial transport lorry fleet.

Will the Secretary of State say why the Government have felt able to accept a change in the law which purports to bring the waterways into line with the railways but provides an additional generous element to the waterways which is not available to the railways? That prompts me to ask the Minister whether he would be willing to consider a similar amendment to section 8 of the 1974 Act, which would enable us to confer a similar advantage on those who seek a grant for a private railway siding, to enable them to get a grant for the rolling stock necessary to operate such a siding.

Secondly, will a separate budget be provided for grants under the amendment, as distinct from the section 8 grants under the 1974 Act? It would be most unfortunate for both parties if they were to end up in competition for a common pool of funds. Will the Secretary of State make it plain that funds available for these purposes will be kept distinct and separate?

Thirdly, has the Secretary of State any notion of how much he expects to disburse by way of grant and what take-up rate he expects under this provision?

I come to the final provision in the amendment, which replicates a similar provision in the 1974 Act: The Secretary of State may, in making a grant under this section, impose such terms and conditions as he thinks fit. That is a rather wide-ranging caveat. It gives the Secretary of State a fairly free hand. I should like to probe a little the terms and conditions that the right hon. Gentleman might think fit to impose in the circumstances of a grant for the inland waterways.

In applying his powers under the provisions of section 8 of the 1974 Act, the Secretary of State—who is merely following the precedent of previous Ministers—has had regard to whether existing road provision was adequate and has tended to take the view, as in the case of Flixborough, that where existing road provision is adequate it would not be justifiable to extend the grant to provide for a separate railway provision.

Will the Secretary of State apply the same test when faced with an application for a grant towards an inland waterway terminal? Will he have regard to existing rail or dock facilities in the vicinity? It might be regarded as unfortunate if one of the consequences of such an amendment were to be the provision of public funds in circumstances where there had already been public investment to provide dock or railway facilities to handle the cargo.

The provision is welcome to those of us with an interest in public transport, because it will provide additional resources for investment in our public transport infrastructure. But it would naturally be of great assistance to those of us with connections with the railway industry if we could have assurances that the administration of the grants under the amendment will be evenhanded with the administration of grants under section 8 of the 1974 Act.

Photo of John Prescott John Prescott , Kingston upon Hull East

It is a matter not only of being evenhanded but of taking into account the consequential effects on port authorities. In the case of the Humber, many small wharves have developed at the direct expense of the port. It must also be taken into account that grants were given to those wharves by the waterways authority with the apparent intention of improving the banks, although at the same time a jetty was built for port traffic.

Photo of Robin Cook Robin Cook , Edinburgh Central

I have taken great care to keep my remarks general and of national application. I cannot speak with any constituency interest for the area that my hon. Friend mentioned. However, I am aware that in that area of the Humber anxiety has been expressed because there is a substantial infrastructure—with substantial employment within it—in dock facilities. Some of that is attached to the railway network. It would be regrettable if additional public funds were to be invested to make possible the provision of private inland waterway terminals, to the detriment of the revenue and passing traffic provision that has already been made at public expense.

When the Secretary of State responds to the anxieties that we have expressed, I hope that he will give us an assurance that in using the wide discretionary powers contained in the amendment he will have regard to the existing public transport infrastructure and to the existing public investment.

Photo of Mr Albert Booth Mr Albert Booth , Barrow-in-Furness

I welcome the Government's acceptance of the Armitage recommendation that the waterways should come within the scope of section 8 grants. It has been the Opposition Front Bench's general aim to encourage developments that will bring about a better apportionment of the freight carried in Britain, as between the railways, waterways and roads. Compared with other European countries, a disproportionately high amount of freight travels on our roads while a disproportionately small amount of freight is carried by the waterways and railways.

To date our experience of operating section 8 grants on the railways has not been one of undiminished success. The Association of Metropolitan Authorities said that the grant has not always been paid in apparently valid cases and that many would-be applicants have been deterred from submitting formal applications after preliminary, informal discussions with the Department of Transport. In addition, a planning consent condition problem has attached to section 8 grants. It would be useful if the Secretary of State could offer some guidance on the thought that he has given to this subject.

Where the planning consent that has been given for an industrial development adjacent to a waterway requires that part of the freight is brought in over a jetty, would that debar the developer from obtaining a section 8 grant? if that problem arose, it would parallel that which has arisen for many developers. As a condition of planning consent, a requirement has been placed on them to have a rail connection. As a result, they have been told that they do not qualify for section 8 grants, because they can no longer demonstrate that section 8 financial assistance is necessary in order for them to develop the rail connection.

I agree with my hon. Friend the Member for Edinburgh, Central (Mr. Cook) that we would like an assurance that evenhandedness will be shown in the conditions that attach to section 8 for jetties, waterway developments and terminals, compared with those for rail. Armitage also raised the question whether 50 per cent. was an appropriate level of grant. Armitage suggested that the level might usefully be increased to 80 per cent. How much additional money will be made available under section 8 with the addition of waterways? Much more money will be needed if section 8 grants are to be provided in two areas instead of one.

I want to develop a point made by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). The Secretary of State will be aware that there are considerable difficulties in the docks areas, which I do not want to go into in any depth tonight but which raise sensitivities about the way the Government assist those who are seeking to draw traffic from one area of dock, activity to another. If the grant is to be used to assist traffic to be taken into an inland wharf as opposed to a dock I hope that the Secretary of State will assure us that he will examine how far the grant will bring about a more sensible distribution of freight between roads and waterways as opposed to creating a problem in transferring freight from one part of a waterway system to another.

Photo of Mr Norman Fowler Mr Norman Fowler The Secretary of State for Transport 9:45 pm, 28th July 1981

I shall try to answer some of the points that have been raised. First and foremost, I thank the right hon. Member for Barrow-in-Furness (Mr. Booth) for his welcome for the intent of what is planned. I think that is probably the view of the hon. Member for Edinburgh, Central (Mr. Cook).

The hon. Member for Edinburgh, Central was not quite correct in his statement about current section 8 grants to the railway industry. Section 8 of the Railways Act 1974 was amended by section 16 of the Transport Act 1968, and railway wagons are covered by section 8 of the Act as amended.

I am confident that we have made adequate public expenditure provision for those applications for grants. If that were to prove not to be so, we should have to consider the position within the overall competing demands for public expenditure.

Concerning entitlement and eligibility, the precise administrative details for the grants have yet to be settled. I must be frank about that. We intend to administer the grants under the same rules and procedures as apply to railway grants. We intend that rail and waterway users will have the same conditions for eligibility.

Photo of John Prescott John Prescott , Kingston upon Hull East

The right hon. Gentleman is discussing ah important point in distinguishing how the grants will be given, but section 8 grants for the railways normally involve someone who might be termed a single user in port terms. That expression is normally used for the miller who is bringing in flour or the timber merchant bringing in timber. It becomes more difficult when someone applies for a grant to become a third party user—that is, he uses and develops it as a port and therefore invites traffic from wherever it may come. If that is the intention for the grant, that will produce explosive conditions in Humberside, as the National Ports Council report showed in 1972.

Photo of Mr Norman Fowler Mr Norman Fowler The Secretary of State for Transport

I should like to take note of what the hon. Gentleman has said and give his points further consideration. The precise administrative details of the grant have still to be settled. As the right hon. Gentleman will know, we are still considering some parts of the Armitage report, including the part which proposes an increase in the percentage of section 8 grants.

In the period that I have been Secretary of State or Minister we have turned down only one section 8 grant for the railways. I do not think that there is any evidence under this Government or the Labour Government of grants being turned down. There is a general welcome for the principle and enabling powers in the measure, as amended. I undertake to make a fuller and more detailed statement on section 8 and how it will work.

Question put and agreed to.—[Special Entry.]