Well I never knew you needed a permit to cycle on a towpath. As others have pointed out, there are loads of cyclists on the canals, no doubt without these permits. Most of them seem very considerate and responsible towards walkers. Although they can sometimes give you a surprise when they creep up behind - the 'Two Tings' on the bell, as recommended on the website, is a very good idea. It's surprising how few cyclists use a bell nowadays.
But overall it does seem a bit pointlessly bureaucratic.
