Wales is paying for HS2 but it will harm our economy – we must receive the £5 billion we are owed

High speed trains at St. Pancras station. Picture by 0x010C (CC BY-SA 4.0)

Jonathan Edwards, Plaid Cymru MP for Carmarthen East and Dinefwr

Yesterday the government surrendered to vested interests and group-think, approving HS2, a £100 billion project that will become a case study for bad public investment. Despite ballooning costs, dissenting reports and widespread public opposition, Boris Johnson just couldn’t resist yet another big white elephant.

Far more than a costly infrastructure project, HS2 has also shown how Westminster had once again used the flawed Barnett formula to short-change Wales. Despite not a single metre of the proposed HS2 line being in Wales, the Westminster Government has classified the project as benefitting England and Wales, while Scotland and Northern Ireland both receive full Barnett payments for HS2.

This classification is critical as the Barnett formula works by allocating funds to the devolved nations based on their population’s proportion of the UK population as a whole. With Westminster pigeonholing HS2 as an England and Wales project, it means Wales won’t receive full Barnett consequential payments and will lose out on £5 billion of funding.

This is a huge sum of money that could be used to rebuild and revitalise Welsh transport infrastructure. It would more than pay for the costs of a north-south Wales link and would help build the infrastructure for our low carbon future.

I have long been an opponent of HS2 on the grounds that its business case doesn’t add up, its management has been awful and is underpinned by unrealistic expectations. The dissenting Berkeley report into the project estimated an abysmal cost-benefit ratio of only 60 pence returned for every pound of investment.

It’s true that the UK needs more rail capacity. It’s an effective form of public transport and one that will play an increasing role as we decarbonise transport. I also welcome investment in underperforming regions of the UK to boost productivity by improving transport links.

However, HS2 will primarily benefit London, ensuring the South-East of England continues to enjoy astonishing economic growth and rising incomes as Westminster throws more cash at its infrastructure.

HS2 has consistently failed to match expectations or any target throughout its existence. Originally priced at £36 billion in 2009, HS2’s costs have tripled to over £100 billion, without a single metre of track being laid.

In comparison, Wales’ infrastructure is critically underfunded. With 11% of the UK’s railway and 5% of its population, Welsh railways receive only 1% of Westminster rail investment. Simply put, HS2 shows just how little Westminster cares about Wales.

 

Cost

The Westminster Government is being equally dishonest about the supposed economic benefits, particularly to Wales. The Government’s own accountants on the project noted that HS2 would do significant damage to the Welsh economy, particularly in the south of Wales.

By attracting businesses and investment away from Wales, it is estimated that HS2 will cost Cardiff alone £67.95 million and areas as west as Carmarthenshire approximately £12.14 million per annum. These are significant costs for areas already suffering from years of political and economic neglect by Westminster.

HS2 is a disaster for Wales. Not only do we have to pay for a grossly over-budget project that will do long-term damage to the Welsh economy, but we also won’t receive the £5 billion we are owed to help mitigate the damage of HS2 and rebuild Wales’ railways.

Given the sheer harm that HS2 will do to Wales and the injustice of Westminster’s manipulation of the Barnett formula, my Plaid Cymru colleagues and I will continue fighting for the full compensation of £5 billion for Wales. Westminster cannot get away with using the Barnett formula only when it suits them.

More broadly, the HS2 fiasco and Westminster’s broken promises on rail electrification have shown us that they won’t be doing anything to support Welsh infrastructure for years to come. With the UK infrastructure budget consumed by HS2, Wales must push immediately for the full devolution of transport and further fiscal powers so that we can get Welsh infrastructure and the economy back on track.

Ultimately, HS2 has shown us Westminster never has and never will work for Wales. We will never be a priority for decision-makers in London who want to build a high-speed railway in England while Welsh commuters use outdated and overcrowded diesel trains.

Westminster’s gloating over HS2 insults the struggle of my constituents to access basic transport services, let alone electrified rail. Faced with years of local authority budget cuts that have seen fewer bus routes and rising ticket prices, often disproportionately affecting rural areas, Westminster’s recklessness with £100 billion of public money is astounding.

Equally shocking is Labour’s silence on HS2. In Cardiff Bay, Labour have sat meekly on their hands while Westminster ignores its own funding rules and tells Welsh taxpayers to foot the HS2 bill.

HS2 begs the question whether Wales can afford another five years of Labour in Cardiff and the Tories in Westminster taking Wales for granted, or whether HS2 is the wake-up call we need. In 2021, Welsh voters have a choice between the Westminster parties who will sell our interests down the tracks or Plaid Cymru who will always work for Wales.

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Johnny Gamblej humphrysWalter HuntJonathan GammondSteve Duggan Recent comment authors
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Martin Owen
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Martin Owen

I would like some clarity. Are the members of PC that I have been reading over the past few days suggesting a) that the way the Barnett Formula calculates the revenues that come to Wales is wrong , or, b) the island of Great Britain should not have a high speed rail network – like the rest of Western Europe. Conflating the two issues is confusing.

Jason Evans
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Jason Evans

I like politician to have plurality so Plaid politicians or any politicians who would put Wales first need to take on many issues.
Get it right now HS2 isn’t a high speed rail network for Great Britain but for england as england will benefit the most.
Here’s some links for you :-

https://publications. parliament. uk/pa/ld200809/ldselect/ldbarnett/139/9032002.htm
House of Lords select committee Memorandum by PC

https://www.google.com/amp/s/www.bbc.co.uk/news/amp/uk-wales-politics-49111759
UK Treasury funding formula for Wales opaque, say MPs

https://www.google.com/amp/s/www.walesonline.co.uk/news/wales-news/concern-mounts-hs2-means-wales-15308197.amp
Concern mounts that HS2 means Wales will lose out on billions of pounds

https://www.google.com/amp/s/www.bbc.co.uk/news/amp/UK-Wales-51460737
Outrageous rail project will not benefit Wales, transport expert says

Jason Evans
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Jason Evans
Steve Duggan
Guest
Steve Duggan

The article is clear – It does not say GB should not have a high speed rail network – just that the one planned is not value for money and only benefits England. The Barnett formular is not at fault – just Westminster giving the impression Wales will benefit too – it won’t.

Gareth
Guest
Gareth

To say South Wales will suffer is true, but only in one interpretation. Newport is currently 1h40m and Cardiff is 1h50m from London by train, HS2 will make places like Leeds and Manchester ‘closer’ to London essentially growing South Wales’ competition for cities that are easily accessible from London. One of the reasons ONS moved a lot of their senior management from London to Newport ten years ago was because of good transport links. Had HS2 existed back then, places like Leeds and Manchester may have been an equal option. North Wales will benefit. Crewe has been and remains a… Read more »

John Ellis
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John Ellis

‘North Wales will benefit.’

This sort of thing is far from being my field, but the sole forecast of the potential economic impact on Wales of HS2 that I’ve seen thus far predicted a modest boost for Flintshire and Denbighshire, and nothing else. Due to the north-east’s relative proximity to Crewe, as you suggest.

Jason Evans
Guest
Jason Evans

Spot on and the south of Wales is set to lose out on millions and as for the benefit of the north of Wales one word caught my attention more than any other and that’s is “MAY”. Little word with a big meaning

j humphrys
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j humphrys

But we should be independent before phase one is, if ever, done.
High Speed 1 should be completed around 2031.
High Speed 2 to be completed by 2040.
Current budget is at 89 billion.

Gareth
Guest
Gareth

High Speed 1 opened in 2007.

I think you’re referring to High Speed 2 Phase 1

j humphrys
Guest
j humphrys

Not sure, but from general info, Phase 1 target date is 2028.
2 a; target date is 2028 – 31.
2 b; 2035 – 40.
Budget forecasts fluctuate wildly, like Boris’s shirt.

John Young
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John Young

Could someone who understands the Barnett formula and consequentials explain what is going to happen please. Jonathan suggests that the amount Wales should receive is £5 billion that being 5% of the HS2 cost (Welsh population 5% of the UK’s). He says that Scotland WILL receive the full amount which would be about £9 billion (9% of the population) and NI WILL receive £2.5 billion (2.5% of the population). Is that £9 billion and the £2.5 billion guaranteed under Barnett ? Jonathan also says that Wales will not receive full Barnett consequentials because HS2 is classed as an England and… Read more »

O.R
Guest
O.R

Big fat zero

Clive Bradley
Guest
Clive Bradley

I can see no justification for this – HS2 currently benefits Boris because it reinforces the lie that he gives a tinkers cuss about ‘The North’.
HS2 offers no benefit to Wales whatsoever.
Let’s go it alone – before the Tories reduce the judiciary to lap dogs ( please see https://www.theguardian.com/commentisfree/2020/feb/12/protection-law-politicians-judges-courts ) so they can rule unchecked.

j humphrys
Guest
j humphrys

Read Finnish journalist this am, about visiting Redcar where her taxi to the hotel cost the same as a cup of coffee in London. All in all, she concluded that people in France and Germany have more in common than those of North and South England. As for us, we gotta get out of this link.

Huw Davies
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Huw Davies

Recasting a “vanity project” as “one of national strategic value” is a huge mickey take, which Boris plans on executing as he is on a wave of Brexit enthusiasm. Add to this all the other promises plus “essentials” like Trident upgrade and the UK will be bust on its arse within a decade or two. This project is spread over a huge timescale and runs the risk of being “past it” before it’s completed ! Truth is that the essential public investment that should have been undertaken 10-20 years ago was shelved so that parasitic corporates could extract value from… Read more »

Dafyd
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Dafyd

It’s just Tory “austerity” as usual. Plenty of money to go around, but only for the Chosen Ones.

Steve Duggan
Guest
Steve Duggan

It’s plainly obvious that a high speed rail line connecting London and northern England cities will not benefit Wales, we don’t need a degree in geography to realise that. Attaching Wales to England is another way to cut costs at Wales’ expense – nothing knew there, Westminster has neglected Wales for centuries in one form or another. That’s not self pity – it’s a call for action – we must fight, fight, fight for independence – until we achieve it we will always be ignored, neglected and poor.

Jonathan Gammond
Guest
Jonathan Gammond

HS2 is only an issue because the UK plans for high speed rail (and public transport in general) are so miserable compared to what has been organized in France and Spain. Instead all the energy has gone into the musical chairs that is the rail franchise ‘system’.

Walter Hunt
Guest
Walter Hunt

The Great Central Railway Line was surplus capacity and fell to the Beeching axe. That extra North England to South England capacity is now needed: hence HS2. What’s that got to do with Wales? Nothing! The story is Wales is set to lose £5 billion of consequentials arising under the Barnett formula plus whatever Wales loses out in regards inward investment which may go instead to the better connected English Midlands and North. If message potency isn’t watered down by side-swipes, this should be a powerful wake up call for the indy-indifferent that the Union isn’t working for Wales.

Johnny Gamble
Guest
Johnny Gamble

As Adam Price said the other day in Wales we have a 19th Century railway network operating in the 21st Century.
Around 6% of the UK rail network is in Wales yet Wales only receives a total of 1% of the Total UK railway budget.