Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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The Minister of State, Department for Transport (Andrew Stephenson)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for Swansea West (Geraint Davies) and right hon. and hon. Members for their contributions. We all understand the great importance of transport and levelling up the United Kingdom. All the Members spoke eloquently about the need for more transport investment in Wales, an issue that the Welsh Affairs Committee looked at recently.
Let me assure Members that a key focus of the Government is to ensure we have a transport network that is not only fit for purpose but, above all, able to deliver a better and more prosperous future for all those we represent. HS2 is one of the many schemes that the Department for Transport is pursuing. It will free up capacity on the conventional rail network and support a shift of passengers and freight from road to rail. I stand here as the HS2 Minister, convinced that HS2 will play a vital role in levelling up all parts of the United Kingdom. However, as we have heard, HS2 is not the only matter at hand, so I will first focus on rail funding more generally in Wales and other points raised, before turning the HS2.
Let me be clear: we are investing in Wales. The current control period has seen a record £2 billion revenue settlement for Network Rail in Wales. Of that settlement, almost £1 billion will be spent on renewing and upgrading infrastructure to meet the current and future needs of all passengers, such as the complete restoration of the iconic Barmouth viaduct in Gwynedd. Investments in new stations are being made apace, such as at Bow Street in Ceredigion; line enhancements are being made in north, south and mid-Wales; major upgrades are being made to Cardiff Central station; and level crossing upgrades are being made to the Wrexham-Bidston line. That work is happening now, but a lot more is coming down the pipeline, including the opening-up of opportunities for work, travel and leisure for Wales and across the UK.
Members will of course be aware that the interim report of Sir Peter Hendy’s Union connectivity review was published earlier this year. It identified that rail capacity and connectivity issues need to be addressed in north and south Wales. In response, the Prime Minister made £20 million available to assess options on the road and rail schemes, which the review has identified as crucial for cross-border connectivity. I am glad to say that my officials are working closely and collaboratively with the Welsh Government and delivery bodies to identify potential projects to be supported, in line with our continued support for the Welsh Government in their ambition to have greater control over Welsh rail infrastructure. That is evident in our collaborative approach to working with our partners to divest the core valley lines to the Welsh Government. We expect the final Union connectivity review report to be published in the autumn, when the Government will consider Sir Peter’s recommendations to improve connectivity across the UK.
I will touch on a few of the investments that are currently under way. As we speak, important work is going on to transform Cardiff Central station. The rail network enhancements pipeline has allocated funding of £5.8 million to Transport for Wales for that work, supported by funding of £4 million from the Cardiff city deal. The design and business case work is expected to be completed next year, and it is an example of the strong collaboration in place between the UK and Welsh Governments.
The Cambrian line upgrade will bring the line’s digital signalling up to date. That much-needed upgrade will in turn enable the introduction of new trains and allow the system to work seamlessly with other digital signalling schemes. Further funding for that upgrade has been allocated to deliver the work by May 2022. A third example of a recent project is the Conwy valley line, which includes the longest single-track railway tunnel in the UK. Some £17 million was spent to repair and restore it, making it fit for passengers again after multiple floods in the past five years.
Such projects have an enormous effect on communities, and I know that there will be many more enhancements in the years to come. The north Wales metro strategy board has been established by Transport for Wales to integrate the proposals for transport improvements in the region, building on the exciting opportunities highlighted by those at Growth Track 360, for example, whom my hon. Friend the Member for Vale of Clwyd (Dr Davies) and I met last year, to transform north Wales and deliver 70,000 new jobs over the next 20 years.
The Department for Transport and Network rail are supporting the work of the board in providing advice on progression of the programme. There are plans to reduce journey times on the north Wales coastline between Crewe and Holyhead. The outline business case proposes an increase in line speeds, with the goal of improving journey times between north Wales, the north-west of England and other major UK centres.
Transport for Wales has recently commissioned a further strategic study into timetable optimisation and connectivity into northern powerhouse rail and HS2. It will also consider the case for further infrastructure enhancements including decarbonisation options for the line. Finally, in March, the Chancellor of the Exchequer confirmed funding of £30 million for the establishment of a global centre for rail excellence in Wales.
Jonathan Edwards
All the schemes that the Minister has mentioned are extremely noble, but what is the total percentage allocated to Wales in the control period? Is the reality not that, compared with investments across the rest of the UK, especially in HS2, Wales is being offered crumbs under the table?
Andrew Stephenson
I thank the hon. Gentleman for bringing me to that point. [Interruption.] I have a nosebleed; I will try to power through, but I apologise for any sniffing, Sir Edward.
Sir Edward Leigh (in the Chair)
If you wish to sit down and speak, you may.
Andrew Stephenson
It is fine. The Network Rail regulatory financial statements and expenditure breakdowns show that Wales received around 4% of all Network Rail spending in 2011-12 to 2015-16, and 6% in 2016-17 to 2018-19. In 2018-19, the spend on Wales was 6.1% of the England and Wales figure, or 5.4% of the England, Wales and Scotland figure. The figures include Network Rail’s spending on operations, maintenance, renewals and enhancements. Does that clarify the hon. Gentleman’s point?
Liz Saville Roberts
We understand that to be the total spend, but we also understand that the spend on investments, development and improvements is where the spend in Wales is so much spectacularly lower than we would expect, in terms of the 11% of the rail infrastructure that we have and in comparison with the conventional Barnett formula of per head of population.
Andrew Stephenson
I thank the right hon. Lady for her point. The UK Government work collaboratively with the Welsh Government on putting forward business cases. As she will be aware, we do not allocate set proportions by region across the United Kingdom; we work on where the enhancements deliver the best possible value. We have worked collaboratively with the Welsh Government to bring forward a number of business cases for further investments. We hope to continue to do so. The figures I have just outlined show that an increasing proportion of the Network Rail budget is spent in Wales—something I am sure the right hon. Lady would welcome.
Liz Saville Roberts
I want to be clear on this, because that, of course, includes Barmouth Bridge in my constituency, which is more than 150 years old. We will have to do work on it, if it is to be maintained as a line. I take issue with the Minister on levelling up. I rarely find myself trying to argue the Union point, as I do here, but if we are talking about levelling up, those areas of the United Kingdom that most need infrastructure will not receive it unless it is given by central Government. Wales is a classic example of this, yet we see that infrastructure investment in railway, the electricity grid and all the infrastructure needs we will have in the future to change to net zero—those are the areas where Wales is lacking. I would welcome the Minister showing us his future intentions on these arguments.
Andrew Stephenson
On this point we are going to have to agree to some extent to disagree. Through the Union connectivity review, the Government are demonstrating their real desire to invest more. We are investing record sums in rail across the whole United Kingdom. The £4.8 billion levelling up fund, of which at least £800 million will be allocated to projects in Scotland, Wales and Northern Ireland underlines the Government’s commitment. Changes to the Green Book will directly help projects in Wales in the way that I hope they will help projects in the north of England, where my constituency of Pendle is located.
I think we all share a desire for projects to be moved forward at pace. As a Rail Minister, I will not argue against even more investment in rail, but the statistics I have put on record today show that we are working collaboratively with the Welsh Government in order to deliver significant projects that the right hon. Lady’s constituents and other constituents want to see across Wales.
Geraint Davies
The Minister will know that, having left the European Union, Wales will no longer benefit from convergence funding of the order of billions of pounds and that the UK shared prosperity fund has not kicked in to do anything about that. He will also know that convergence funding is focused on alleviating poverty through building skills and productivity and employment opportunities. He has also mentioned that the Department for Transport reaches its criteria on the basis of best value, as opposed to the criteria for convergence funding. Therefore, will he look again at those criteria, given that we are losing convergence funding based on poverty and building productivity, as opposed to best value, which just rewards existing productivity? In particular, given that his list of projects seems to end at Cardiff and, of course, west of Cardiff, there is a lot of Wales with a lot of needs. As has been pointed out, if we had had our fair share of HS2, we would have had another £5 billion, which is a lot more than the totality of what he is talking about.
Andrew Stephenson
The hon. Gentleman tempts me to go on to matters that may be covered in the spending review or the Budget on convergence funding and other issues. I do not wish to tempt fate by speculating about what may be announced later this week.
I will just return to the points that were made by several Members in relation to the Welsh Affairs Committee’s report on rail infrastructure in Wales. The report emphasised that it is clear that a joined-up approach to Welsh infrastructure needs is required in order to unlock investment. Therefore, we have responded positively to the Committee’s recommendation for a Wales rail board and are currently working with the Welsh Government to establish that. The board will build on the excellent collaborative arrangements in place between the two Governments to address the effects of the pandemic on transport in Wales and across the border.
I have tried to cover in detail some of the rail projects and proposals that are in the pipeline; there are many more that I could mention. I wanted to do that to give right hon. and hon. Members a sense of the momentum that is building behind this work. We all want the same thing: for Wales to benefit from improved transport infrastructure that will increase productivity and give people a greener way to travel, leading in many cases to a better quality of life.
My Department has also been working closely with the Welsh Government on identifying road investment priorities along the border between Wales and England. This work has secured joint funding from both Administrations for National Highways to develop the long-mooted A483 Pant-Llanymynech bypass. We hope that further joint funding will be made available for its construction and to examine the options for other priority cross-border links. Also, the UK-wide levelling-up fund, which I mentioned before, will invest £4.8 billion in local infrastructure, including local transport, regeneration and culture, over the four years between 2021 and 2025, and at least £800 million of that will go to Scotland, Wales and Northern Ireland.
Finally, I turn to HS2. HS2 is a low-carbon transport system for the future. It will take lorries off the road, benefiting the whole of the UK in the future and playing a role in achieving our transition to a carbon net zero future by 2050. HS2 will also contribute to sustainable growth in towns, cities and regions across the country, spreading prosperity and opportunity more evenly.
Let me start by saying something about the costs of HS2, because they were mentioned by the hon. Member for Swansea West and other Members. The phase 1 full business case, published in April 2020, set out the full cost of the HS2 network at £98 billion—a figure that is, of course, subject to decisions that will be made shortly in the integrated rail plan. Phase 1 has a target cost of £40.3 billion, and my parliamentary report last week showed that, despite covid, delivery remains on track and within budget. The project also retains cross-party support from the three main UK political parties.
I recognise that there is some concern, which we have heard again in this debate from several hon. Members, that Wales may not benefit from HS2, with the recent Welsh Affairs Committee report recommending that HS2 be reclassified as an England-only project. However, the regenerative effects of HS2 will be felt across the whole of the UK and not just along the line of route. As the Welsh Affairs Committee report acknowledged, the project has several thousand jobs as part of its supply chain that span the UK, including Wales. More than 20 businesses in numerous Welsh constituencies have already won work for HS2, including businesses in Bridgend, Montgomeryshire and Swansea West. For example, I understand that Wernick Buildings, a business based in Port Talbot, has already worked on HS2. Hon. Members can review the HS2 supply chain map to see the geographical spread of the businesses that have delivered work on HS2, including in their own constituencies.
On the services side, HS2 will enable quicker and more train services to north Wales. The HS2 route to Crewe, for which the west midlands-Crewe section gained Royal Assent in February, will provide shorter journey times for passengers, benefiting those who are interchanging at Crewe. Such shorter journey times are currently possible on the west coast main line to Holyhead. HS2 will also free up capacity on the existing west coast main line, which could of course be used for additional services, including for rail freight, which will remove lorries from the UK road network.
Also, as has been pointed out by my hon. Friend the Member for Montgomeryshire (Craig Williams), HS2 will dramatically increase capacity for Birmingham, which of course will free up capacity on the existing lines. That will benefit my hon. Friend’s constituency.
Turning to the Barnett point made by several right hon. and hon. Members, the fundamental difference with Scotland is that the Department for Transport has responsibility for heavy rail infrastructure policy across England and Wales and therefore spends money on heavy rail infrastructure in Wales, rather than providing Barnett-based funding to the Welsh Government in relation to heavy rail spending in England. That is consistent with the funding arrangements for all of the reserved UK Government responsibilities and within the statement of funding policy.
However, due to the use of departmental comparability factors in the Barnett formula spending reviews, the Welsh Government have actually received a significant uplift in their Barnett-based funding due to the UK Government spending on HS2. I hope that reassures Members as to why there is a difference. I have set out how we are expanding the amount of network rail funding that is going into Wales. On top of that, there have been significant Barnett consequentials provided to the Welsh Government.
To conclude and to reiterate, investing in Welsh transport infrastructure is an investment in future generations. Ensuring that our transport capability matches our great ambitions for our constituents’ prosperity and wellbeing is a priority for the Government, and one that I know all Members across the House share. We owe it to our hard-working constituents to invest in the most sustainable forms of transport for the future, delivering both on the green industrial revolution and on our pledge to build back better from the events of the past two years.