Liz Saville Roberts, Plaid Cymru Westminster Leader
It was hard to conclude anything other than last week’s Spending Review being a disaster for Wales, from its public sector pay freeze, to its cut to farm payments to the centralisation of control over replacement EU funds by Westminster.
But perhaps none is more damaging or indicative of Westminster’s misrule and disdain for Wales than the accompanying Statement of Funding which reduced Wales’s share of funding arising from investment.
Alongside the much-vaunted Spending Review, a whole array of technical documents governing the Barnett formula, the funding system which largely determines the Welsh government’s budget, were published including the long-awaited Statement of Funding. This document, last published in 2015, sets out the relative percentage each devolved nation receives from departmental spending in England.
It was in this relatively obscure document that the UK government decided to drop a bombshell on the Welsh Government, economy and indeed devolution itself. With infrastructure a major beneficiary of the long-overdue ‘levelling up’ agenda, the UK government decided to reduce the relative amount Wales will receive from investment in England from 80.9% in 2015 to just 36.6% in 2020.
This represents a collapse of 44.3% – nearly half – of what the Welsh government will receive from every pound of UK taxpayers’ money spent by England’s Department for Transport. But why?
Since 2015 Plaid Cymru has been arguing that Wales, like Scotland, should receive a full Barnett consequential from the HS2 railway on the basis it is a railway solely for England – not an inch is in Wales. With the project currently expected to cost approximately £106 billion, Wales would receive roughly £5 billion based on our population share using the same formula that all other England-only expenditure is treated with.
But Labour voted against this and Westminster classified HS2 as an “England and Wales” project, arguing that both will benefit from this gargantuan white elephant. This was despite the UK government’s own accountants for the project calculating that HS2 would cost the South Wales corridor alone, including many of Wales’s most desperately underinvested communities, approximately £100 million a year.
It is this injustice that prompted me to tell the Prime Minister about this rail betrayal – that Welsh taxpayers who can least afford it are paying for England’s infrastructure and not getting a fair return – and whether he knew how much investment HS2 is funnelling away from Wales. His response was to play tribal politics and blame the Labour Welsh government’s transport policy.
So not only will Wales now lose out on £5 billion of funding and pay for the privilege of HS2 for England, but through the Statement of Funding, will lose even more funding because of the changes to the funding formula. While the rest of the UK benefits from unprecedented investment through this hollow ‘levelling up’ agenda, Wales has been left out in the cold.
At this point, one could tiredly argue ‘what is new about this?’ After all, Wales has long suffered from underinvestment because of Westminster, so that despite having 11% of the UK’s railway track, Wales has only received 1.5% of the money that UK Ministers have spent on rail improvements.
Westminster has long thought Wales can do with second best – from second-hand diesel former London Underground trains to half-kept promises to electrify our railways. While the rest of the world moves people and goods on electric and now even hydrogen trains, we’re supposed to accept that we should be left behind in the slow lane.
But this falsity also misses the new reality alluded to in the Spending Review as Westminster took control over replacement EU funding in Wales, cut support to Welsh farmers and froze the pay of Welsh public sector workers. In January, we’re all alone in a disunited Kingdom whose natural behaviour is to take from and otherwise ignore Wales except when there’s a Westminster election.
As Wales falls further and further behind, our ability to bear the burdens of its socio-economic consequences is gradually being diminished. From rising healthcare spending to care for our increasingly sick and elderly population, to tightening constraints on our Senedd by Westminster laws to stop us straying too far from a Westminster-imposed path, we are less able to help each other, support ourselves or to meet the challenges of our times.
The injustice of HS2 and the Statement of Funding are indicative of the winner-takes-all nature of politics in the United Kingdom. The need for greater powers for Wales is real, because as HS2 shows, we’re otherwise on the railway to nowhere.