Transport Funding: Wales and HS2

Debate between Craig Williams and Jonathan Edwards

Tuesday 26th October 2021 Westminster Hall

[Jonathan Edwards]

Absolutely; that is the financial reality. We do not even get a population share, which would be 5% of rail investment. People might argue that 11% of the rail network is in Wales, so we should be getting more than our population share. Historical underfunding is a huge problem for us in Wales in terms of developing our economy and moving our country forward. I will return to some of those themes later.

[Craig Williams]

The hon. Gentleman is indeed being very generous. Will he reflect on the fact that a good chunk of the Welsh railway network is in England? We have already alluded to the fact that Shrewsbury station, which I can assure the Chamber is in England, is an important Welsh station. Going from north to south Wales, a large chunk of that trunk railway is in England.

[Jonathan Edwards]

I listened to the hon. Gentleman’s speech advocating the benefits of HS2 with great interest, but he needs to reflect on the full business case for HS2 produced by HS2 Ltd in 2020. According to Professor Mark Barry’s submission to the Welsh Affairs Committee, there is no passenger benefit to Wales at all from HS2.

Returning to my point, the political process in Westminster following the Silk commission was a hatchet job of the worst kind, in which representatives of the two main Unionist parties drew red lines through the commission’s recommendations. Regrettably, the report was torpedoed below the water line. One recommendation taken out of the report was the devolution of rail powers, which meant that the Wales Act 2014, which followed that process, retained the status quo on that vital issue. The financial implications of that decision are sobering in the context of a domineering project like HS2, due to its impact on Welsh Barnett allocations. It has been catastrophic for Welsh funding.

While Scotland and Northern Ireland get a 100% allocation from HS2, Wales gets a 0% rating because the British Government deemed it an England and Wales project. However, the last time I looked at a map—I made this point in a question to the Prime Minister some time ago—all the HS2 destinations are in England. It says everything about how the British state works that a decision of this nature, with such far-reaching consequences, can be made without challenge. In this post-Brexit world, due to the inequity of the financial settlements across the UK, I have advocated the creation of a body apart from the Treasury to allow the various Governments of the UK to challenge financial decisions. At the moment, Westminster is judge and jury; in this case, that is very much to the loss of Wales. As a result, I have voted against HS2 at every opportunity.

The reality is that as spending on HS2 increases, Welsh Barnett allocations plummet. Now that construction has begun on phase 1, the financial impact has become clear. According to the Wales Governance Centre’s analysis, the statement of funding policy accompanying the last comprehensive spending review indicated that Wales would receive 36.6% of its population share of transport funding, while Scotland and Northern Ireland’s shares remain above 90% due to their full entitlements from HS2, compounding the historical underfunding of the Welsh railways. In 2013, the British Government’s own analysis indicated that HS2 would injure the south Wales economy by more than £200 million per annum; given that that analysis was done eight or nine years ago, I suspect the injury to the Welsh economy will be far more severe than what was revealed at the time.

Underfunding has always been a major issue for Wales. In the way the Department for Transport allocates funding, as our railways become less efficient the case for investment is undermined; meanwhile, investment is ploughed into London and the south-east, leading to a conveyor belt of investment which makes the case for further investment. Indeed, when the Prime Minister was Mayor of London, he argued in the Evening Standard that transport spending in London would need to increase by £1 trillion—if I remember correctly—once HS2 was completed, due to the extra passengers arriving from the north of England. Put simply, the current system does not work for Wales, and we need urgent and rapid change.

The hon. Member for Swansea West made an important point about productivity. Even from the Treasury’s perspective, one of the major issues within the British state is the geographical imbalance in productivity. Transport infrastructure investment is a key economic driver, so if all investment is utilised in and allocated to the most high-performing areas, productivity gaps are worsened. The simplest way to address productivity gaps is to invest in the poorer performing parts of the state, as the German Government realised following reunification—and there was a wall between East and West Germany for half a century. Alas, in the UK, all the money is spent in one small corner. Pre-Budget soundings suggest that an extra £7 billion or so will be allocated for expenditure outside London and the south-east, but the key question is how much of that is new money. It may be less than £2 billion. We wait to hear what the Chancellor has to say tomorrow.

To emphasise the point I made to the hon. Member for Montgomeryshire (Craig Williams), in a submission to the Welsh Affairs Committee’s recent inquiry into this issue, transport expert Professor Mark Barry stated that the full business case for HS2 produced in 2020 proved that HS2 had no transport user benefit for Wales. How the British Government can maintain that this is an England and Wales project is beyond rational understanding, so fairness is at the heart of this debate. Welsh taxes are being used to fund an England-only project that will also have a negative impact on our economy, with no recompense via the Barnett formula. Some might say it was ever thus, but to use the phrase of the moment, this is not levelling up; this is levelling down.

If Wales received fairness in real investment, we could be looking at exciting projects such as a comprehensive metro system for the west based on the one in Swansea—a project that I very much support—a north-south line along the western seaboard, opening up the western half of our economy for further economic development; enhancements across the north Wales and Heart of Wales lines; and electrification of the main line to Swansea.

UK-Japan Comprehensive Economic Partnership Agreement

Debate between Craig Williams and Jonathan Edwards

Wednesday 25th November 2020 Commons Chamber

[Craig Williams (Montgomeryshire) (Con)]

As a member of the Select Committee on International Trade, I will try to keep my comments brief. [Hon. Members: “Hear, hear!”] Thank you for that. My hon. Friend the Member for Wyre Forest (Mark Garnier) summed up the thanks the Committee wishes to give the Front-Bench team for the access given. It is interesting to see the CRaG—Constitutional Reform and Governance Act 2010—process in action, given that this debate had been asked for. The fears we heard from Opposition Members about the inadequacy of the CRaG process are clearly not being met in this trade debate. The report was interesting; we looked at those documents and discussed this process with other members of the Committee. We have fed back to the Front-Bench team about areas of possible improvement, but I wish to reinforce our thanks for the openness we saw.

It is a pleasure to follow the right hon. Member for Warley (John Spellar) and his talk about trade links and trade lines. I echo the tribute paid to both embassies for the work they put in behind the scenes and in front of the scenes on this trade deal. I was also reminiscing, as a Welsh Member, about how terrific the Japanese were in hosting the rugby world cup, and their match against England was one to remember.

As chair of the all-party group on international trade and investment, I completely agree with the comments made by my right hon. Friend the Member for North Somerset (Dr Fox) on liberalisation. This is an important milestone as we emerge from the tentacles of the European Union and set out on to the open stage with our own trade deals. It sets again an independent trading story of this island nation, and I certainly want to see that greater liberalisation. He espoused it far better than I can, so I will move on.

The hon. Member for Leeds North West (Alex Sobel) is not in his place, but he accused us of plagiarising the EU treaty and of lowering standards. I say gently that we can either have copied the EU treaty or be doing something differently, but I am not sure that both lines of attack work in the same paragraph.

As a rural Member of Parliament, I wish to reflect on the agricultural nature of these trade deals. I know that my local farmers will particularly take heart from the tone of this continuity extra trade deal. They will be looking at what they can achieve through this sector. The hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) touched on the potential for Wales, and trade between Wales and Japan has been growing at a terrific rate. Two companies in my constituency, Nidec and Invertek, are thriving under new Japanese ownership, and I can only see these bonds strengthening.

[Jonathan Edwards]

Before the hon. Gentleman gets too excited, I am sure he will agree that most Welsh farmers this evening will be looking at the cut of nearly a third in agriculture support that they now face as a result of today’s comprehensive spending review. That is a far bigger issue than the Japan-UK trade deal.

[Craig Williams]

I would not want to be told off by you, Madam Deputy Speaker, as often happens to me in these debates. I will not make accusations about anything that will get me in trouble with you, but if Members look at the detail of the funding supplied by the UK Government and topped up from the EU to the Welsh Government direct, they will see that the Welsh Government and the Farmers Union of Wales need to be very careful with their accusations. We will take that aside after this debate. I wish to focus on the growth of that trade, which has been terrific. It was £250 million in 2018 and we are talking about a 25% increase year on year. Our relationship and that of our companies with Japan is growing. It is hugely welcome, and it is reinforced by this trade deal.



I will finish by commenting on the GIs. It is brilliant to see not just the greatest lamb product in the world, Welsh lamb, recognised in these trade deals, but also the Anglesey sea salt, the Conwy mussels, the west Wales salmon and, of course, the plums from the Vale of Clwyd. They will be going through the normal process, of course, but it is great to see this on the face of these agreements. It is incredibly encouraging. On deals such as these, Opposition Members were incredibly sceptical that we could ever get anything on a par with the EU deal. Their attacks have moved on, and we now have something that is superior. I have no doubt that these deals will continue.