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The Minister of State, Department for Transport (Mrs Theresa Villiers)
It is always a pleasure to serve under your chairmanship, Mr Gale. I congratulate my hon. Friend the Member for Erewash (Jessica Lee) on securing the debate. She is clearly an able advocate for her constituents. She set out with great clarity the benefits that a new station at Ilkeston or in the Ilkeston area could bring them. She has made an attractive case for taking the project forward.
I welcome the opportunity to set out the Government’s view of the proposal. As we have heard from my hon. Friend this afternoon, the provision of a new station has the full support of Derbyshire county council; I understand that Nottinghamshire is also very supportive. My hon. Friend also outlined strong support in the local area, among the population and the business community. That is pivotal; the benefits of the proposed new station would accrue almost exclusively to a localised area. In such cases, the Government look for strong local support if progress is to be made. It is for local authorities rather than Whitehall to determine whether a new station is the best way to meet the transport needs of the community.
I am encouraged to learn that Derbyshire county council has taken a very active role in taking this scheme forward, alongside my hon. Friend. The county council has engaged well with Network Rail and with Northern Rail, the local train operator. My understanding is that in 2009 Derbyshire commissioned a feasibility study, building on work on the proposal that was carried out in 1999 and 2000. That study concluded that a new station would be deliverable in practical terms and indicated that the project had the potential to yield good value for money. The study indicated that income from generated travel—passengers using the station who previously would not have travelled by train—could more than cover the on-going costs of running the station.
The study is significant. The pressing need to address the deficit that we inherited from our Labour predecessors means that we have to take more care than ever to safeguard taxpayers’ money and keep spending under control. It is therefore very difficult for local rail schemes to get the green light if it is expected that they will require an additional ongoing subsidy from the taxpayer. While the studies that have been carried out do not provide us yet with a definitive answer on value for money or commercial viability, they give us some credible evidence that calls at a new station could be deliverable without an additional subsidy.
Assuming that that issue is potentially resolvable, there are three further questions that it would be useful for us to consider this afternoon. First, how could the capital costs of building a new station be funded? Secondly, is it possible to accommodate calls at the new station within existing schedules? Thirdly, will the existing and future franchisee be prepared to call at a new station?
As to the first question, it is for Derbyshire county council as the promoter of the new station to identify funding for the capital costs of building it. It would be open to the county council to prioritise the project for support from the integrated transport block. However the crisis in the public finances means that all councils face difficult choices on how they use limited capital budgets. ITB budget cuts certainly make it more difficult for that funding stream to provide the answer in this case. However, the Government have announced two new sources of money, which could be relevant to the project, and which are well worth considering.
As my hon. Friend has mentioned, one of those sources is the regional growth fund, which is expected to be worth £1.4 billion over three years and is now open for its first round of bids. I am pleased to hear that Derbyshire has been quick off the mark, and expects to be able to put in a bid soon. The fund is designed to stimulate enterprise, encourage growth and create jobs in the private sector. It can be used for investment in transport, because tackling congestion and improving connections between cities and towns to link people to job opportunities can maximise agglomeration benefits; those can be two of the best ways to boost economic growth. I was interested to hear what my hon. Friend had to say about the difficult economic climate for her constituents. No doubt those factors will be relevant in the consideration of the bid for funding from the regional growth fund. I also take on the points made by my hon. Friends the Members for Sherwood (Mr Spencer) and for Erewash about the economic benefit that a new station could generate in the local area.
If an RGF bid is to have a realistic chance of success, the supporters of the scheme, such as the county council, are important. My hon. Friend has worked with private sector partners in the business community; I am delighted to hear that that is what is happening. It is good to hear of support from the Erewash Partnership and others in the business community there. I understand that a local enterprise partnership is being set up in Derbyshire and Nottinghamshire. No doubt its involvement in the project will be very useful in helping to identify private sector support and, potentially, contributions.
A second potential source of support for such a project is the local sustainable transport fund. The coalition has established that fund to deliver local transport projects that stimulate growth and reduce carbon emissions. We expect the fund to contain £530 million over the CSR period—so it is a substantial amount of money—and we will provide more details shortly on how it will operate and how local authorities may be able to bid for and get access to the funding. That funding stream may be relevant and worth considering in this case. Thus there are various options, which the county council and the others who support the scheme may want to explore. I emphasise that my officials are happy to discuss those possibilities further with the county council and the promoters of the scheme.
I now move on to my second question—whether a stop at Ilkeston can practically be accommodated within the existing service pattern. Two regular passenger services pass through the proposed site: the Liverpool-Norwich service run by East Midlands Trains and the Leeds-Nottingham service run by Northern Rail. Following early discussions with the train operators, I understand that the county council concluded that stopping the Leeds-Nottingham service would be the more feasible of the alternatives, although that would not necessarily preclude other services from calling in the future, if it proved to be commercially viable.
The good news is that Network Rail is funded to re-signal the Erewash Valley line and the western approaches to Nottingham station. The work is due to finish by 2013. I am advised that that upgrade could potentially create the additional time in the schedule needed to enable services to call at a new station at Ilkeston. However, services would have to be fairly tightly timed, and that would put some additional pressure on the timetable. It is important to consider the effect of that pressure on reliability and the overall impact of a new station on longer distance passengers. The market for travel between Nottingham, Sheffield and Leeds is growing. There is strong support among local authorities for journey time reductions between Leeds and Nottingham. Making a call at an additional station would run counter to that ambition. Journey times would be about three minutes slower than otherwise.
In essence, as is so often the case with the configuring of rail services, there is a balance to be struck between the local interests of my hon. Friend’s constituents and those of my hon. Friend the Member for Sherwood, and the economic benefits that could accrue across a wider area with shorter long-distance journey times. Careful thought would need to go into getting that balance right. However, the evidence that I have seen does not lead me to conclude that the issue would give rise to an insurmountable barrier to the project going ahead: so that is not a show-stopper either.
Mr Spencer
It is worth putting on record our thanks to the Minister’s Department for the amount of money that is being spent not only in Nottinghamshire and Derbyshire but in the whole of the east midlands. That will, I hope, push forward the east midlands, generate more jobs and drive us out of the disastrous economic position that the Government found when they came to power. Does my hon. Friend recognise how important it is to make transport links—not just new train stations like the one that is wanted at Ilkeston but links to cycle routes and other public transport hubs—so that people can get from their place of residence to their employment, to generate their own income and drive the economy forward?
Mrs Villiers
I am grateful to my hon. Friend. A striking aspect of the comprehensive spending review was the Chancellor’s commitment to continued investment in our transport infrastructure. Past spending squeezes often meant that the axe was taken to a whole range of transport upgrade projects. We have decided not to do that, because those projects can play an important role in generating the growth we need to get out of the economic mess left by the previous Government. Integrating different modes of transport can, of course, yield important benefits for passengers and, similarly, valuable economic benefits, if people have better access to different modes of transport and we try to co-ordinate them.
Nigel Mills
I concur with the Minister’s assessment. The Liverpool-to-Norwich train was taken off from stopping at Langley Mill, and was effectively replaced by the Leeds-to-Nottingham service, which stops twice in my constituency, at Alfreton and Langley Mill. That service has proved very popular, according to the number of people I have seen on that train when I have used it.
I would strongly oppose any timetable changes that removed that service from stopping at either of those two stations in my constituency. This proposal should be an incremental addition to that service, not a replacement. There have been rumours of a threat to Langley Mill station if Ilkeston were reopened. I would urge the Minister not to go down that route.
Mrs Villiers
I am not aware of any intended subtractions of services. As my hon. Friend says, we are discussing today whether it is realistic and practical to add a service and a station at Ilkeston, but he makes a good point.
The third of the questions that I posed at the start of my speech was whether commercial incentives alone would motivate train operators to call at a new station at Ilkeston. That is another important issue that we need to address. Before going ahead, the Department would expect the county council to confirm with Northern Rail whether it would be prepared to stop at a new station. However, its franchise is coming to an end relatively shortly, and it is not easy to predict what approach a future franchisee might take. Although the studies undertaken for the county council indicate that revenue from the station calls would outweigh the costs of its operation, train operators might take a different view of the impact of journey-time changes on longer distance passenger numbers, and hence on ticket revenues.
The Department for Transport is certainly prepared to consider whether it would be justifiable and appropriate to include obligations in relation to the new station in the future franchise contract. As the House will be aware, the Government have been assessing how to reform the franchising process, and we made a further announcement on that today. We want to see a move away from the specification of highly detailed inputs that leave little flexibility for train operators to innovate and respond to the changing needs of passengers. That said, franchise contracts under the new system will continue to contain obligations on service levels. We could consider whether that should include obligations in relation to a new station at Ilkeston.
The issues raised by the third question that I posed look as if they also could be resolvable. However, I would emphasise the word “resolvable”, not “resolved”. It is important to ensure that the commercial case for the station is rigorously assessed, so that the Department, the county council and train operators can be as confident as we can that the new services would be commercially viable. That is pivotal. Without that confidence, it is difficult to see how the project can get off the ground.
I am grateful to my hon. Friend the Member for Erewash for the opportunity to give an indication of the Government’s approach. In conclusion, it is clear that the coalition will face difficult decisions if we are to address the crisis in the public finances that we have inherited and get our economy back on track.
Jessica Lee
I am very encouraged by the Minister’s response, in particular the view that, although there are hurdles and complexities to this project, all have the potential to be resolved. That encouragement will be received well in Erewash.
Mrs Villiers
I am grateful. In these difficult times, there will be issues to resolve about whether funding can be secured, but this is a worthwhile project, and I and my officials at the Department of Transport are happy to continue to work with my hon. Friend and Derbyshire council to see if there is a way forward. The crisis in the public finances puts significant constraints on the funding available but, as I said earlier, the Chancellor has clearly accepted that transport infrastructure projects can often yield high value for money for taxpayers. They can provide economic benefits many times their cost. That is why rail has emerged from the spending review in a far stronger position than most people expected, albeit with some necessary tough decisions on fares. We have broken the recurrent pattern of spending squeezes of years past, which was to take the axe to a wide range of capital infrastructure projects, with rail and roads often the first to suffer.
While proposals for a new station at Ilkeston need to be taken forward locally—rather than through the national rail budget—a number of funding streams might be a source of support, as we have been able to consider this afternoon. Along with my hon. Friends the Members for Erewash and for Sherwood, and others who have taken part today, I feel that this is a worthwhile project. My officials at the Department for Transport remain happy to work with the county council to see if a way can be found to take it forward. I would like to thank my hon. Friend the Member for Erewash for giving the House the opportunity to consider this important issue for her constituents and others in the area.