What is the worst decision since the advent of devolution in 1999?
Well, I would put the turning down by the then Labour administration of Rhodri Morgan back in 2005 of the offer of devolution of rail infrastructure from Tony Blair’s government, top of the list. It wasn’t of course known at the time, but if the offer had been accepted then Wales wouldn’t be facing a loss of billions of pounds from the high speed rail project.
The risk averse response from the Cardiff Bay administration at the time was in stark contrast to Scotland which grabbed rail powers with both hands and has ensured it receives a full Barnett consequential from high speed two (HS2).
Fast forward nearly 25-years and the decision continues to have significant funding ramifications for Wales, which has been exacerbated by high speed rail being classified by the UK Government as a Wales and England scheme – something which to their credit Welsh Tories say is wrong.
Of course if rail had been devolved it would have required a fair funding deal with the UK Government to address what even then were years of significant under investment in the Welsh rail network.
However, civil servants in the Welsh Government’s then road-focused economy and transport department, raised misplaced concern over taking on rail liabilities like landslides. Ministers also had concerns over rail expertise in its civil service team. Well, on the latter if rail had been devolved it would have just needed to have hired in more expertise in and on liabilities, like with roads, managed risk with reserves for contingent liabilities.
In fairness, at the time rail was hardly seen as sexy and having an important role in reaching what are now pressing net zero targets.
Perhaps the thinking of the then Labour administration, where transport came under the responsibility of Andrew Davies, was if it wanted to look at rail enhancement projects all they needed to do was pick up the phone to ‘Tony and Gordon’ to make the case. And if high speed was ever to move out of London toward the Midlands and beyond then surely a Labour Government wouldn’t let loyal red voting Wales down.
And what about Plaid Cymru in this? The party should have made a revisiting of the decision not to take on rail devolution a condition of forming its coalition government with Labour from 2007-11 and which saw its leader, Ieuan Wyn Jones, taking the flagship ministerial role for economy and transport.
Not having the devolved rail ‘golden ticket’ has meant that Wales has been powerless, despite persist calls from the current Welsh Government for a reclassification of high speed two to an England only project, to prevent losing out on a huge Barnett consequential.
Through the Barnett formula, the Welsh Government did until recently receive a so called comparative figure of around 80% from Department of Transport spending – which is not just rail spending, but in other areas too like on roads. That of course is not 80% of all DfT spending, but the percentage of the Barnett calculation for Wales of around 5%. That has now been reduced to around 34% because of the squeeze that high speed rail funding is having on the overall departmental budget. That squeeze doesn’t impact Scotland and Northern Ireland.
Even with high speed now only going as far as Birmingham from London, the loss to Wales – if it continues to be classified as an England and Wales project – is still around £2bn, as opposed to estimates of around £5bn if it had reached the north of England.
The fact the Valley and Coryton Lines, which with electrification will account for around 40% of rail passengers in Wales, are now devolved to the Welsh Government, has not seen the Treasury providing a partial Barnett consequential. That has been parked until 2024 at the earliest.
I was a supporter of high speed reaching Manchester and Crewe (and eastwards to Leeds), providing Wales received a consequential, as it would have freed up much needed capacity across the UK rail network.
However, the decision to only go to Birmingham blows out the water the tenuous line, championed by Welsh Secretary David Davies, that high speed should be seen as an England and Wales project as a connection at Crewe would have provided a link into North Wales – although the North Wales mainline is not electrified.
The UK Government’s own analysis shows that high speed reaching the north of England would have a negative impact of the economies of South Wales and the west of England, by bringing competitive cities in the north closer to London.
To its credit the Welsh Government has set out several billion pounds worth of rail enhancement investments it wants to see the UK Government back in Wales, including the Cardiff Crossrail and Swansea Bay Metro schemes, electrification of the North Wales Lines and additional stations on the Great Western Mainline.
They also support improved rail connectivity between South Wales and Bristol and investment to see the current twice hourly services to Temple Meads increase to around five.
The UK Government now needs to prioritise rail investment in Wales and also other inter-regional projects in the Midlands and north of England.
