Wales will not get a multi-billion pound Barnett Formula consequential from the high speed two rail project in England Transport Secretary Grant Shapps has confirmed.
Work on the project, which could cost 拢80bn or more, has started which will firstly connect London to Birmingham. It will then be extended to cities in the North of England such as Leeds and Manchester.
As a capital project in England, which will free up capacity on the existing network, the Welsh Government said it should get a Barnett Formula consequential of around 拢5bn, which it would then decide how to spend.
However, Mr Shapps said the project, which Welsh taxpayers are contributing to, has been deemed a 海角视频 project so there wouldn鈥檛 be a Barnett consequential for Wales, but stressed there would benefits for North Wales put at 拢55m per annum with connections to the high speed network when it reaches Crewe. However, other government research shows that the economy of South Wales will suffer a detrimental impact of around 拢200m a year.
Mr Shapps said with the pandemic now was not the right time to consider the Welsh Government鈥檚 request for the entire rail network in Wales to be devolved. In March the Core Valley Lines in South Wales were devolved after an asset transfer deal between the two governments and Network Rail was finalised.
Over the last two decades, despite having around 11% of the 海角视频 rail network, Wales has only received around 2% of rail enhancement project investment from the 海角视频 Government.
Asked if he accepted there has been a significant under spend on rail enhancement projects in Wales Mr Shapps said: 鈥淔irst of all I am very keen not to dwell on the past, but look to the future. I know those figures are hotly disputed in lots of different directions. I have read stats showing it depends on whether you take into the account the number of passenger journeys and distances travelled then it is not stark.
But let鈥檚 just say for the sake of argument that I except that, what we want to do with our railway, and particularly here in Wales, is really to get things moving.鈥
Last week Mr Shapps announced 拢343m of funding for rail projects in Wales, including 拢5.8m, from a 拢58m funding pot agreed last year, for detailed design work for the redevelopment of Cardiff Central Train Station so it can accommodate future passenger growth, as well as 拢196m for the electrification of the Core Valley Lines, having previously agreed 拢125m.
On a Barnett consequential from high speed two he said: 鈥淣o, it is judged as a 海角视频 wide project, but I suppose the equivalent question would be will Wales get the benefit? And the answer is yes, as when the railway goes to Crewe for example, people in North Wales will get a specific benefit with faster journey times up to Scotland eventually and down to Birmingham etc. I have seen a survey that suggests a 拢55m boost to the North Wales economy through HS2. So it is by the nature of where it geographically happens to be located specifically an England project, but a Scottish one as well as it will eventually run up to Edinburgh.鈥
On evidence it will have a negative impact on the economy of South Wales and the west of England by bringing northern cities closer to together and with London too he said: 鈥淚 don鈥檛 buy that argument. The idea that when you improve somewhere you disadvantage somewhere else is completely a case of looney economics. I don鈥檛 take the view that when one part of our union succeeds it disadvantages the other, in fact it lifts us all together. And if we really want to connect up the union, which I desperately do, then let鈥檚 get on with the M4 Relief Road.鈥
Last year the First Minister Mark Drakeford ruled out a 拢1.2bn M4 Relief Road south of Newport, despite an independent inspector鈥檚 report recommending the project as the best way to address growing traffic congestion of existing ageing M4, on cost and environmental grounds.
The matter is a devolved issue. However, Mr Shapps said: 鈥淲e haven鈥檛 given up hope. I deal with Mark Drakeford and the Welsh administration every week in different ways and we often come to see eye to eye. The Core Valley Lines for example took quite a lot of discussion and negotiation and a 拢196m package which devolves it. Things don鈥檛 stay in aspic forever. I don鈥檛 see any argument against it. Why would you want to see traffic jams? Why would you not want to connect up Wales鈥 biggest market [England].鈥
On evidence that new roads soon become congested themselves and the issue of carbon emissions, he said: 鈥淚 want to do something with roads, which is actually to decarbonise them. I drive an electric car. People are starting to buy them in much bigger numbers and the 海角视频 Government is putting billions into the charging network, and of course you drive the car and it doesn鈥檛 create the environmental emissions.鈥
The Welsh Government has called for the entire rail network to be devolved. On that Mr Shapps: 鈥淭hey may say that, but right now I think, given the perilous state of rail given the numbers travelling, that is probably a question for a different day.
鈥淲e can always look at the way that these things are structured, but the good news is that Cardiff Central Station, the Cambrian Line signalling, the upgrade to the Severn Tunnel etc, there is lot of investment coming in [to Wales].鈥
On increasing rail services between South Wales and Bristol 鈥 currently just two an hour to Temple Meads compared to six between Manchester and Leeds 鈥 as a key building block to develop the Western Gateway initiative of seeking to drive the competitiveness of the economies on both sides of the Bristol Channel through greater collaboration, he said:鈥淚ntuitively it sounds like the answer should be yes, but I would argue that we should always aim to increase transport and that should be road as well as rail, which brings us back to the relief road.鈥
Mr Shapps effectively nationalised the rail franchises in England back in March, due to the pandemic and the resulting collapse in passenger numbers, with the Department for Transport taking on the revenue and risk and paying a flat management fee to rail operating companies. In Wales, as a devolved franchise, some 拢60m has been provided to support the Wales and Borders franchise operated by KeolisAmey. The agreements in England elapse in September while in Wales it runs until October.
On support for rail operators going forward he said: 鈥淲e will work on what comes next, but I think it is true to say that we already recognised before coronavirus that the system was too fragmented with the franchises that we have had over the last 20 plus years. And although it has driven a massive increase in use and a renaissance of the railways, with twice as many travelling, twice as many journeys and distances, the whole thing wasn鈥檛 hanging together very well.
So, we saw the May 2018 timetable debacle and that sort of happened because no one was in overall charge and there wasn鈥檛 what the media would say is a鈥榝at controller鈥 with an overview of the whole thing. So, we wanted to change that anyway and it may well be that coronavirus has helped to speed that up.鈥
A Welsh Government spokesman said: 鈥淲e will continue to call for Wales to receive its fair share of the additional spend promised by 海角视频 Government on infrastructure, including HS2. On the planned investment in HS2 in England on rail alone we should be receiving 拢5bn.鈥
Wales did received consequentials from increases to the Department for Transport capital budget in the 2015 spending review of 拢755m over the period 2016-17 to 2020-21, which were driven by increases to HS2 funding.
Northern Ireland and Scotland will receive consequentials from high speed two. Heavy rail is a reserved mater in England and Wales.
At spending reviews the Barnett Formula applies to the overall change to DfT鈥檚 budget, not individual programmes. So the Welsh Government would receive additional Barnett funding in the event that departmental funding (this includes road and buses) increased as a whole, but not due to HS2 in itself.
