Transport: Region's commerce 'will suffer if railway cash cut'

A major report, unveiled today, claims 40,000 firms in just three of the region's urban areas, Leeds, Sheffield and Huddersfield, stand to benefit from rail improvements.

But with the Department for Transport facing budget cuts of more 25 per cent, a research think tank is warning these benefits could be under threat if Ministers fail to prioritise schemes with biggest economic benefits.

Research institute Centre for Cities argues 60 per cent of jobs were located in cities in 2008 and underpinning these was the UK's transport network.

"Typically, the better a city and town is connected internally and externally, the better placed it is to take advantage of economic opportunities," it says in its report, which examines five planned improvements to the rail network. Centre for Cities argues that rail improvements open up new markets and connect people to jobs. And it says the main source of job creation as the country comes out of recession is likely to be large urban areas.

More than 40,000 businesses in Leeds, Sheffield and Huddersfield stand to see potential productivity benefits from rail investment. Wages for workers in these areas could also go up.

Claire Maugham, deputy chief executive at Centre for Cities, said: "We're in a difficult jobs climate – and it's unlikely that future job opportunities will be found on the doorstep. City residents are increasingly commuting to other towns and cities to work. And improvements to the rail network should be focused on helping them do so.

"Rail transport budgets will clearly be under pressure in the years to come. Targeted high return investments should be seen as part of the wider solution to rebalancing the economy."

Paul Plummer, Network Rail's director, planning and development, said: "Britain relies on rail, as this valuable report reveals.

"Our railways are nearly full and every year more people are choosing to travel by train. This is why we are working with government and the rest of the industry to plan ahead for the long term needs of the country..."