High Speed Trains, Electrification, and the Welsh Economy

Yesterday, the UK Parliament began debating the construction of HS2, the proposed high-speed rail link which will initially connect London and Birmingham, and thence proceed to the north of England. Its progress through Westminster is set to be a convoluted journey – not unlike that of the trains themselves.

So far, nobody has been able to come up with accurate costings for the project, and arguments about the route have raged since the proposals first saw the light of day. It's symptomatic of the way in which transport policy in this country has always been cobbled together.

The line is currently set to slice through the Chiltern Hills, an Area of Outstanding Natural Beauty to the north-west of London. Householders in the area (and some Tory MPs, with an eye to their majorities) have objected to this alternative, and would prefer to see it buried out of sight. It would add to the cost, of course, but an extra few hundred million pounds on a multi-billion pound construction scheme seems to be neither here nor there.

A couple of months ago I signed an online petition to save Camden Lock, a major tourist attraction in north London. It was under threat because it would be cheaper to build the new line through the area than to tunnel it underneath. Just over a month ago, the Transport Secretary Patrick McLoughlin announced that the plans had been dropped (Foot, 2014). Unfortunately, Camden Lock's salvation means that the area around Euston will have to be redeveloped instead. The petition is still active, because people are still suggesting alternatives to the original route. It's a Nimby's nightmare already, and the trains haven't gone more than a couple of miles on paper!

In the meantime, the good folk of the East Midlands, Yorkshire and Lancashire are wondering how long they'll have to wait to see the economic and social benefits of HS2. It's taken over four years for the London end to be thrashed out, and the work hasn't even started yet.

With this in mind, it was sobering to read last night's contribution to the dedate from Jonathan Edwards, the Plaid Cymru MP for Carmarthen East and Dinefwr:

As we discuss the Bill, my primary concern is the negative economic impact that HS2 will have on the Welsh economy, as outlined in the independent KPMG report. As things stand, the UK Government will use the general taxation pool, which includes taxes from Wales, to fund an England-only railway without a fair share for my country. HS2 therefore raises a basic issue of fairness in how large infrastructure projects are funded and how public money is distributed in the UK.

Plaid Cymru has fought a three-year campaign for a fair share of HS2 spend for Wales through equivalent Barnett consequentials. One of my first contributions in the House was on the need for Wales to receive its fair share of the many billions of pounds projected to be spent on this project. This issue will be a key dividing line during the Westminster election next year, because it proves that only Plaid Cymru can be trusted to protect the Welsh national interest on one of the biggest spending decisions of this Parliament.

Many parliamentary questions, and freedom of information requests to the Welsh Government, have revealed a complete lack of correspondence or representations from the Welsh Government to the UK Government on the issue of consequentials. Welsh Government spokespersons are for ever quoted in the Western Mail and on the BBC as saying that HS2 is a matter for the UK Government and is a UK-wide project. I remember discussing this issue with Jim Pickard of the Financial Times, and I got the impression that he was similarly confused by the Welsh Government’s approach. It is funny what can happen to a Welsh Government position following a call from a journalist on the Financial Times of London. Within days, the Labour Government had done a U-turn, although it seems that they had already received confirmation that they would receive a consequential of £35 million for 2015-16 for spending on HS2. That is despite the Welsh Government not making any representations. According to recent parliamentary questions, they still have not made any representations.

After the Welsh Government announced the consequential money, there was huge confusion between the two Governments. I am happy to say that, on this occasion, the Finance Minister Jane Hutt was not wrong. The Treasury admitted that it had made a mistake. However, it also said that no further consequentials would be paid in further spending rounds and that it was minded to claw back the money paid in error.

Anyone who takes even a cursory glance at a map can see that the HS2 network will be an England-only project. It will connect Leeds, Manchester, Birmingham and, of course, the dark star, London. Over last summer, it became apparent that the cost of HS2 was beginning to spiral. Treasury estimates doubled to nearly £50 billion, which should by rights mean a consequential of £2.5 billion for Wales. Many independent analysts put the project’s costs as high as £80 billion, which would nearly double the consequential for Wales to £4 billion. That is important for two reasons. HS2 will dominate all transport infrastructure spend for a generation. It will be the only game in town. Anyone not on the route will lose out. A fair share for Wales would enable us to revolutionise the transport infrastructure in our country.

The UK Government have a terrible record of investment in Welsh transport. It is nowhere near the 5% that our population share demands. Recent evidence to the Welsh Affairs Committee suggested that the long-term historical trend for transport investment in Wales was between only 2% and 2.5%. Network Rail infrastructure investment in Wales stands at only 0.7%. The KPMG report suggests that Wales will be hit hard: Bridgend will lose out on £11 million, Cardiff on £71 million, Carmarthenshire on £12 million, Port Talbot on £1 million, Newport on £37 million, Swansea on £16 million, Monmouthshire on £8 million, Pembrokeshire on £9 million and Powys on £6 million. Outside the major cities and towns, south Wales central will lose out on £29 million and south-east Wales on £19 million. The annual economic loss to the south Wales economy will be more than £220 million.

Michael Fabricant: Does the hon. Gentleman agree that Wales needs a powerful voice to make a real impact on the Department for Transport? Does he also agree that Carwyn Jones, so powerful in Wales, has no voice here in Westminster?

Jonathan Edwards: That is an extremely valid intervention. I am grateful to the hon. Gentleman for making that point.

Evidence to the Welsh Affairs Committee indicates that as a result of HS2 there will be 24,000 fewer jobs in Wales by 2040, yet the Labour Government have apparently done a U-turn. What has been most interesting about the debate from my perspective and the Welsh perspective was the shadow Secretary of State’s response to my question when she said that even in the event of a Labour Government following the next election, she could not commit to Barnett consequentials on HS2. I am sure that message will be heard loud and clear in Wales.

The moral and political argument for a fair share for Wales is clear. That is why we will be voting against the Bill and in favour of the reasoned amendment unless there are guarantees that my country will get fairness in future comprehensive spending reviews.

(HC Deb 28 Apr 2014, vol 579, col 617-618)
http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm140428/debtext/140428-0003.htm

It's clear from Mr Edwards' figures that Wales will be completely sidelined by this England-only scheme. It wouldn't be the first time. The Welsh Government and the Westminster Government can't even decide who's supposed to be picking up the tab for electrification of the so-called Valley Lines. Wales currently doesn't have a single kilometre of electrified railways. In Europe, that puts it on the same level of development as Albania and Moldova. Electrification is gradually making its way west from Paddington, but will it reach Cardiff? Even if it does, will we in the Valleys still be stuck with hand-me-down DMUs which are at the end of their useful life? I know what I think. A couple of weeks ago I even read a suggestion that the electrification money should be spent on building a relief motorway near Newport instead. Surely pouring more traffic onto the road network isn't a solution; it's just creating another problem. Aren't we supposed to be encouraging people out of their cars and onto public transport? Or maybe I just made this last bit up.

Obviously there isn't a bottomless pit of money available. Even so, it's a bit much to expect the Welsh taxpayers to part-fund a railway development which will not have the slightest benefit on our country. Yesterday, one of my Facebook friends shared this inspired piece of satire from Viz comic:

I added a comment that, even if that were true, the Internet would still get to us long before the first electric high-speed trains leave Cardiff Central.

FOOT, T. (2014) "Transport secretary Patrick McLoughlin confirms Camden Town section of HS2 project will be axed", Camden New Journal, March 17, 2014 (retrieved April 29, 2014)