UK Government set to announce £445m for Welsh rail projects

Emily Price 

Chancellor Rachel Reeves is expected to announce £445m for Welsh rail projects in her spending review today.

The UK Government said the funding will be spent on schemes in north and south Wales  to help "enhance connectivity between cities, towns and centres of advanced manufacturing".

The cash will be spent on fixing level crossings, building new stations and upgrading existing lines.

It is understood to be a combination of direct funding and money for the Welsh Government.

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'Transformative'

A treasury source said: "With this Government Wales will thrive, and the Chancellor has prioritised bringing forward a package that has the potential to be truly transformative."

The insider added that the funding will form the "cornerstone" of UK Government plans to address underinvestment in critical infrastructure that has held back the Welsh economy.

It comes following an ongoing row over the Treasury's classification HS2.

The operation of the railway in Wales is a Welsh Government responsibility.

But infrastructure planning and the funding of Network Rail in Wales remains reserved to the UK Parliament.

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HS2

The situation is different in Scotland, where infrastructure planning is also devolved.

Under the previous Conservative government in Westminster, the £100 billion high-speed rail link was classified as an "England and Wales" scheme despite none of the track crossing the Welsh border.

The classification meant no extra cash was released to Wales by the Treasury.

Some politicians believe £4 billion is owed to Wales in rail consequentials through the Barnett formula – the method used to calculate additional funding for devolved administrations.

The Welsh Government’s most recent calculation of how much money is owed to Wales for HS2 stands at £431m so far.

A Labour source said: "This historic investment is down to the tireless work of the Welsh Secretary, Jo Stevens, who has delivered Labour’s promise to right the chronic underfunding of Welsh rail by the Tories.

"This investment is more than Wales would have had so far had HS2 been Barnettised. It will make a massive difference economically and politically."

'Fair share'

Former Transport minister Lee Waters made similar comments.

He said: "Civil servants calculated that we lost out £431 in Barnett formula funding by the way the high-speed rail project was categorised by the Treasury. This £445 million makes good on that.

"We will have to wait to see what exact schemes the Chancellor is agreeing to but that figure would allow the priority schemes that the Welsh Government and the UK Department of Transport had been working on to go ahead.

"The agreed pipeline included the main recommendations from the two Burns Commission reports for north Wales and south east Wales.

"The key congestion busting measures along the Newport M4 corridor, an upgrade to the line that now mainly carries freight trains, and a suite of new stations to divert commuters away from the roads.

"And in north Wales improvements to Wrexham - Liverpool line and money to improve North Wales Coast.

"Taken together this is a very significant package of rail investment, much more than we ever got from the Tories, and will make a real difference to people.

"We now need to make sure we get a change to how funding works for rail so that this is the beginning of a pipeline of investment into the future"

But Plaid Cymru and the Welsh Conservatives say Wales is owed more than £445m.

'Injustice'

Plaid's spokesperson on Finance, Heledd Fychan MS said: "£445m is merely a drop in the ocean compared to the billions Wales is owed on rail, and what Labour – up until they came into power – used to agree with us on.

"The people of Wales have seen this injustice for what it is – Wales being shortchanged by successive Westminster governments. This announcement won't change that.

"Unlike ambitionless Labour who will settle for less to save their Starmer's blushes, Plaid Cymru will keep demanding that Wales is given every penny its owed and for the full powers over our rail infrastructure."

Leader of the Senedd Tories Darren Millar said: "This spending review is a kick in the teeth to the people of Wales, who have been taken for granted by Labour for far too long.

"The promised rail investment falls well short of the £1bn plus in rail funding planned by the previous UK Conservative Government for the electrification of the North Wales line.

"And it is disappointing that there is no extra cash to enable either the delivery of an M4 relief road or upgrades to the A55 and A40 trunk roads.

"Whether it's the Family Farms Tax, the Jobs Tax, or today's spending review, Eluned Morgan in Cardiff Bay and Keir Starmer in Westminster have failed, forgotten and fleeced the people of Wales."

Oxford - Cambridge

A fresh rail funding row was sparked earlier this month when Liberal Democrat MP David Chadwick uncovered the Oxford to Cambridge rail scheme would be designated as a England and Wales project.

It later transpired that in the 2020, 2021, 2023, and 2024 editions of the UK Government’s Statement of Funding Policies, the railway line was classified as an England-only project.

The project’s designation was then altered by the new Labour government to be an “England and Wales” scheme.

The Welsh Lib Dems and Plaid say this reclassification will deprive Wales of an additional £360 million in consequential rail funding for its own network.

Chadwick said: "Residents of mid Wales deserve a more regular train service than the 5 trains a day they get at the moment. Investing in the Heart of Wales Line would boost economic growth outside of our big cities."

Calls have been made for the UK Government to bring forward legislation to devolve rail powers fully to the Welsh Government.