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Column 463percentage of private finance over which the Government will support a scheme; each scheme will be different and each will need to be examined in detail on its merits.
We are expecting the private sector to play its part. Light rail can make a healthy operating profit; the current systems in operation in Britain amply demonstrate that. Where a transport scheme brings benefits which are primarily local in character, it is not unreasonable to suggest that central Government should not be expected to foot the whole bill.
I should like to make some general points on the policy context in which light rail schemes are set. There is no doubt about our commitment to the general principle of supporting light rail schemes. We know that they can play a role in relieving urban congestion in some of our major cities. Government funding has already supported schemes such as the docklands light railway, the Greater Manchester metrolink and the south Yorkshire supertram. On 13 December 1994, in the last settlement, we set aside funds for two new schemes--the Croydon tramlink and the midland metro line 1.
Other towns and cities are developing proposals for light rail projects, but one of the most important things to remember is that these schemes are expensive and are not the only answer to urban transport problems. Even in Manchester, where metrolink has been a great success, its overall contribution to reducing congestion is to remove just three cars in a thousand from Greater Manchester's roads. Manchester metrolink is an excellent system and is very effective at serving passengers on the Bury to Altrincham line, but it illustrates the fact that no single light rail line can be the whole solution to a city's congestion problem.
That said, this Government see light rail as well worth support where it can play a significant part--and every car removed is significant. The presence of such a scheme allows the local authority to think of sensible vehicle restraint measures allied with the light rail scheme, which can have a substantial effect on the levels of congestion to which my hon. Friend referred on the spine road from Fareham to Alverstoke.
If light rail is to receive Government support, it must contribute to the Government's overall policy aims for local transport. Those are, broadly, a policy for urban areas to make cities better places in which to live and to improve the quality of urban life. To underpin that, we need to reduce car use wherever that is possible. We are trying to do that not only by reducing traffic congestion but by encouraging the use of alternatives to the private car, while, at the same time, preserving access to traditional urban centres. There is no doubt that to bring about a reduction in car use there needs to be a modal shift--a transfer from cars to public transport. If that does not happen, we are merely suppressing economic demand and social activity in a way that the community will not accept. There must be a balance. We also need to improve facilities for walking and cycling. In the longer term, we are looking to policies that put the places where people live, work, shop and enjoy their leisure time closer together, so obviating the need for travel.
Column 464In 1994-95, the then Secretary of State introduced what was called the package approach to local transport funding.
Mr. Michael Trend (Windsor and Maidenhead) indicated assent .
Mr. Norris: That is something on which my hon. Friend the Member for Windsor and Maidenhead (Mr. Trend) is an acknowledged expert and master, and I am glad to see my hon. Friend in his place and taking such an interest in tonight's debate.
The package approach is an important development in the way in which the Government support spending on transport by local authorities. It says to local authorities that they should not bid simply on the basis of individual schemes that are specific to one local authority. Instead, recognising the fact that most of those transport issues are wider strategic issues, it tells local authorities to bid, as part of a package of authorities, for a package of schemes that allow us to develop strategic alternatives. The approach has been very much welcomed by local authorities of all political persuasions, and it has produced some very effective and imaginative conclusions this year. It is essentially about the strategic approach that considers transport in the round and demonstrably gives us better results than those that continue to consider measures in isolation.
It is for local authorities to decide the detail of those transport strategies. They need to consider all forms of transport and they need to tailor their plans to the circumstances of the district. Sometimes, that will mean light rail, but often--I say that in the general context of considering such schemes--other policies and schemes will be more effective, and considerably cheaper, than light rail.
It is important therefore that one should consider the light rail scheme as growing out of a local authority's coherent overall transport strategy, not simply as a nice piece of froth superimposed on top of it. A problem must have been identified for which light rail is the best solution. It is not enough that local authorities think that it would be a nice idea to have some shiny new trams. That being the context in which one regards those light rail schemes, I have to say to my hon. Friend the Member for Gosport that, as we have previously said, there is, at this stage at least, an outline case to be made for the Fareham-Gosport-Portsmouth line to which he refers. No event that has transpired since he received that earlier assurance would cause the Department to change its mind in that regard.
Let me say a word about the processes that it will be necessary to pursue from here on in. Since the passage of the Transport and Works Act 1992, to which my hon. Friend the Member for Gosport referred, the promoters have needed to seek an order under section 1 of that Act to obtain the necessary powers--that Act essentially replacing the private Bill process with which we were all previously familiar. I understand that Hampshire officials have held discussions with my Department's processing unit about the Transport and Works Act procedures, and I can confirm that we shall be happy to provide any further help that Hampshire requires in that respect.
Column 465Briefly, those procedures require the application to be made to the Secretary of State. It must be accompanied by several supporting documents, including full plans, and an environmental statement, which is obviously important in any scheme of that type these days, and the notices must be published in the London Gazette and in one or more local newspapers.
Objectors have their rights. They have six weeks in which to lodge objections and, if there is a sufficient number of objections, a local public inquiry would be held by an independent inspector. The Secretary of State would then have to decide whether the scheme should be approved, having taken into account the conclusions and recommendations of the inspector.
It is difficult, in all honesty, to predict how long in practice that process takes, unless one has any idea of what type of objections may be circulating. My hon. Friend will appreciate that, in the case of a scheme such as the one that we are discussing, which generally is likely to be extremely well received locally, objections can, in effect, still be petitions from those with property interests in the area or with other commercial interests that they feel will be affected by the scheme.
Until one is aware of the totality of the objections, it is difficult to give a more concrete guidance on how long the procedure will take. Given that the inquiry might last about a month, it should be possible for a decision to be announced in about 18 months from the date of the application.
In view of the quasi-judicial nature of the Secretary of State's role in the process, I hope that my hon. Friend will understand why I cannot comment specifically on the detailed merits of the council's scheme at this stage. That is why I have taken the time available to outline the process and show our general interest in allowing that process to continue.
The promoters have to establish whether the LRT scheme is worth building. An outline financial and economic case leading to a bid for Government support needs to be prepared. Because light rail systems are so expensive, detailed assessments of individual schemes must be completed before a decision is made on whether assistance from public funds is appropriate. Given the prohibitive level of capital costs, it is highly unlikely that anyone would be able to build and operate an LRT scheme profitably without grant.
My hon. Friend was right to refer to section 56 of the Transport Act 1968 which permits the Secretary of State to give a grant for certain large new public transport infrastructure projects where there are exceptional reasons for using specific grants to spread the cost beyond users and local charge payers. The grant is used to fund these light rail schemes and the other schemes to which I referred. It is for the promoters to establish whether the light rail system is the best possible option. They have to look at patronage, potential local benefits and at the reduction in congestion. Underpinning all that is the question whether
Column 466the benefit to the economy will be greater than the cost. Light rail schemes are appraised on the basis of commercial viability and are supported by a full cost-benefit analysis covering benefits to users as well as to non-users. The non-user benefits are particularly important.
I have already said that light rail is expensive. It has high costs compared with roads, new railway stations, public transport interchanges, bus-based park and ride, and so on. However, expensive though that may be, Manchester has shown that, in many cases, it can be worth it.
As I have said, the funds which we have will depend on competition from all other local transport projects. It stands to reason that, if we can increase the level of private and local finance for the schemes, we should be able to support more light rail schemes over a shorter time scale.
When a local authority is promoting a scheme, the Government will expect it to examine the scope for private sector involvement in construction and in the operation of the scheme. The Department will also expect local authorities sponsoring projects to use the competitive tendering process wherever possible. In some cases, it might be appropriate to have a single contract for the design, build, operation and maintenance--the DBOM concept --and for the whole of that single contract to be put out to tender.
In those cases, the amount of grant will be based on the amount required by the successful tenderer. Normally, that tenderer will be the bidder requiring the least public sector subsidy. In other cases, it may be appropriate for different elements of the scheme--design and build and operation and maintenance--to be treated as separate projects. There is sufficient flexibility in the section 56 arrangements for that to be taken into account.
The advice that my hon. Friend was given in 1988 was and still is correct. It is because light rail systems are so expensive that that sort of long and detailed assessment of individual schemes has to be performed before a decision is made on whether assistance from public funds is applicable.
My hon. Friend has put his case with great clarity. He has made it clear that he does not expect me to produce a signed cheque from my pocket this evening--I am grateful for that, because I fear that I do not have it with me. I hope that he will have gathered that we recognise that the concept of light rail has real value in solving some of the more deep-seated problems of urban congestion and that we recognise that the Hampshire study has revealed a case that can realistically be taken forward. I hope that that is the assurance that my hon. Friend sought.
I am sure that Hampshire will want to examine the record of tonight's proceedings and I must say that it is important to try to do as much of the work as possible to establish the--
The motion having been made at Ten o'clock, and the debate having continued for half an hour, Mr. Deputy Speaker-- adjourned the House without Question put, pursuant to the Standing Order. Adjourned accordingly at half-past Ten o'clock.
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