The £6bn rail line argument that masks what you should be really angry about

Wales Online

20 hours ago

Our community members are treated to special offers, promotions and adverts from us and our partners. You can check out at any time. More info
Over the last few days, there has been one hot topic in the world of Welsh politics - a train line which will run between Oxford and Cambridge. Given these two cities are roughly 200 miles from Wales, you can be forgiven for asking why.
East West Rail is a railway project which will link Oxford and Cambridge at an estimated cost of £6.6bn. Any money spent on it will trigger extra payments to Scotland and Northern Ireland so they can spend it on their transport systems.
But, just as has been the case throughout the HS2 debacle, there won't be any extra money for the Welsh Government. The reason for this is both incredibly simple and reasonable on the surface but devillishly complicated and truly unfair beneath it.
It may not necessarily be a scandal in itself. But it symbolises everything that is wrong with how rail funding is allocated in England and Wales. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
On the face of it, this issue isn't linked to the spending review that has been happening in Westminster for the last six months or more and of which chancellor Rachel Reeves will stand up in the Commons on Wednesday and deliver the conclusion.
Yet it helps shed a light on why that will be enormously complex to understand and why the real story may not be the one you read in headlines that evening. So bear with us while we go through it.
The fury from politicians
Opposition politicians in Wales have been fulminating about East West rail. They say that the rail line should have been classified as an England-only project like Crossrail so that the Welsh Government would get a guaranteed share. Lib Dem MP David Chadwick said Wales will lose out to the tune of between £306m and £363m as a result.
Describing it as another HS2, he said: "Labour expects people across Wales to believe the ridiculous idea that this project will benefit them, and they are justified in not giving Wales the money it needs to improve our own public transport systems.
'It's a disgrace, and it shows there has been no meaningful change since in the way Wales is treated since Labour took power compared to the Conservatives."
Plaid Cymru's leader Mr ap Iorwerth took a similar tack, telling plenary: "For all the talk of the UK Government acknowledging somehow that Welsh rail has been historically underfunded, this is some partnership in power."
Yet, while there's a lot of truth to what they're saying, it's also much more complicated. Which is where the spending review comes in.
Comparability factors
There will be so many numbers in the paperwork that accompanies Wednesday's spending review that finding the most important ones isn't straightforward.
Yet if you want to know just how much of the England and Wales transport pot is going to be sucked into paying for massive rail projects in England like HS2 (£66bn) or East West rail (£6bn) or all the tram/train projects being promised in England outside London (£15bn), then look out for the overall transport comparability factor for Wales.
Very simply, this is the number that the Treasury uses to work out how much the Welsh Government should get for every £1 it spends on transport in England.
The reason everyone has been so, so angry about HS2 and the massive billions being poured is that back in 2015, Wales used to get a comparability factor of 80.9%.
Yet when the number crunchers in Horse Guards Road sat down to work out how much the Welsh Government should get at the last spending review in 2021, that comparability factor fell to just 33.5%. Ouch.
For every £1 spent on transport by Westminster, since the last spending review the Welsh Government has received a population adjusted share (5%) of 33.5%. Or about 1.6p. For context, it used to be around 4p.
If Mr Chadwick and Mr Iorwerth are right and the UK government plans to plough even more money into rail in England in the coming years on projects like HS2, East Coast and what the Tories used to call Northern Powerhouse rail, then the new comparability factor that the Treasury mathematicians will conjure up this time could be even lower.
But even that is massively misleading. Because if the UK government also promises to plough vast sums into rail in Wales then the comparability factor for the Welsh Government would not rise - it would fall further still. Is your mind boggling yet? We said it was complex.
What the Welsh Government wants
Because the Welsh Government isn't responsible for rail infrastructure spending, the transport comparability factor really just reflects how much money is going on rail.
The less that's spent on rail, the higher a share of the overall transport pot the Welsh Government gets. The more that goes on rail, the lower a share of the overall transport spot the Welsh Government gets.
The real problem for Cardiff Bay then is not the comparability factor. Neither is it the fact that East West rail isn't classified as England-only. The problem, as far as the Welsh Government is concerned, is the fact that the England and Wales rail pot itself isn't shared fairly.
HS2 and East Coast rail are the symbols of a system that is broken that pours vast sums into English rail projects while Wales misses out.
Even if they were classified as England-only, the money would go to the Welsh Government which isn't responsible for rail infrastructure spending.
"The way that the system operates at the moment—for years I've been saying—is redundant," Wales' transport minister Ken Skates has said.
"The east-west line, which has been in development, I believe, for around about 20 years now, is part of the rail network enhancements pipeline, where everything in a large footprint, a substantial footprint, including Wales, is packaged together.
"Where you have all schemes in England and Wales packaged together in what's called the regional network enhancement pipeline it means that projects in Wales are always going to be competing on the business case with projects in affluent areas of the south-east, of London. That means that we are at a disadvantage.
"I want to see it change. I've been saying it for years. There's nothing new in this story. I've been saying that we need reform for years and suddenly people have woken up to it."
Wales' First Minister Eluned Morgan has said the same. "What we have is a situation where there is a pipeline of projects for England and Wales. Are we getting our fair share? Absolutely not. Are we making the case? Absolutely."
"I've made the case very, very clearly that, when it comes to rail, we have been short-changed, and I do hope that we will get some movement on that in the next week from the spending review," she said.
What does this mean for the spending review
When Rachel Reeves stands up in the Commons on Wednesday, we fully expect she will announce some funding for rail in Wales, as you can see in our piece here, and our expectation is that will be about the rail stations earmarked in the work by Lord Burns after the M4 relief road was axed. They would be in Cardiff East, Parkway, Newport West, Maindy, Llanwern and Magor.
But what matters is how much and when - and how that compares to the money being spent in England.
Imagine the chancellor announces a few hundred million pounds for those rail stations in Wales in the spending review, what we do not - and will likely not know for many years - is whether that amount is a fair reflection of the mass spending she has announced in England because we know she has also touted £15bn of improvements in England.
It will likely take years for academics to assess what kind of share of the rail pot has been spent in Wales. In the past, it certainly has not been fair.
In 2018, a Welsh Government commissioned report by Professor Mark Barry estimated that the Network Rail Wales route, which covers 11% of the UK network, received just over 1% of the enhancement budget for the 2011-2016 period.
In 2021, the Wales Governance Centre told MPs on the Welsh affairs select committee that had rail been fully devolved to the Welsh Government, Wales would have received an additional £514m for enhancements via Network Rail had rail infrastructure been devolved as it is in Scotland.
So when Leeds West and Pudsey MP Ms Reeves gets to her feet in the Commons on Wednesday, you can pretty much guarantee there will at least one or two headlines relevant Wales. But we may not understand what they really mean for a while yet and East West rail won't help us understand either.