6. Statement by the Cabinet Secretary for Economy and Transport: Update on Welsh Government Requirements for Other Rail Franchises Serving Wales and Rail Infrastructure Investment

Part of the debate – in the Senedd at 5:25 pm on 17 July 2018.

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Photo of Ken Skates Ken Skates Labour 5:25, 17 July 2018

Can I thank Russell George for his contribution and questions? First of all, I'd say, with regard to the devolution of funding for rail infrastructure, that of course, we are severely constrained by our inability at present to be able to direct Network Rail, and that has resulted in a number of projects being delivered beyond their predicted time frame and over budget. In order for us to be able to deliver the sort of infrastructure that's required to modernise passenger services on the rail network, we need the ability, in the very least, to be able to direct Network Rail.

With regard to investment across Wales and, indeed, across the border, I think the Member makes a very good point that investment in rail infrastructure at key areas just across the border can have a major impact on services that we are able to offer to passengers in Wales. You can take, perhaps, Chester station as a good example of this. Chester station currently has capacity problems, particularly on the Chester east junction, that impact on services from the east. There are also capacity issues in terms of the provision of platforms, which, in turn, limit the ability to provide more regular services into north Wales.

I think, probably, the biggest example, though, of how investment in England can benefit, or, if invested wrongly, can have a pretty devastating consequence for the Welsh economy, is with the HS2 hub proposals. If the right proposal for the Crewe hub is taken forward, there could be significant, huge benefits for the economy of north Wales, with some parts of north Wales seeing an increase in output of something in the order of £37 million a year. But if the wrong solution is selected for HS2 and Crewe, then there will be a major impact in terms of the services that go from Manchester to Cardiff. Also, we need to ensure that there's full integration of the route with onward journeys through onto the north Wales main line.

I am asking for a new funding regime to be established, because there is now ample evidence to show that for many, many years, the existing regime has favoured those areas where there is the most congestion, favoured those areas with the highest density of population. The Institute for Public Policy Research recently carried out an analysis of planned transport spending in the 2016 national infrastructure and construction pipeline, and it showed a stark gap between London and the rest of the country. Indeed, it showed a huge gap: £1,900 per capita planned for London from 2017 onwards compared to just £400 per capita in the north of England. There's no reason to disbelieve any suggestion that a similar gap will exist between London and Wales. Indeed, our own analysis of rail infrastructure spending in Great Britain has shown that we've received little more than 1 per cent of rail infrastructure spend, as I say, despite having 11 per cent of the track in England and Wales.

I think I'd also draw Members' attention to the fact that, on the same day that the electrification of the Great Western main line to Swansea was cancelled, the go-ahead for a business case for a £30 billion Crossrail 2 programme was given the go-ahead, once again, in my view, demonstrating that under the current funding regime it's the south-east that stands to gain the most. And so I've asked my officials to examine the potential of developing a new way of funding infrastructure that better reflects the need to rebalance the UK economy. It would be, of course, for the UK Government to adopt any new workable regime, but I do hope that the UK Government is willing to consider one.

And in terms of our programme of investment in infrastructure across Wales, well, this is captured within the national transport finance plan, and in many parts of Wales we are spending a record amount on transport infrastructure. I know that the Member is very keen to see the completion, on time and to budget, of the Newtown bypass. There are many other schemes, including the pinch-points scheme, the A494 red route scheme, improvements to the A483, and, of course, improvements to other trunk roads across Wales that are being taken forward at pace. Our case, put to the UK Government, is one of, 'If we can spend the money on this side of the border that benefits many travellers going to and from England, then surely you can also step up and apply a significant amount of spend on the English side of the border, and of course rebalance the inequity in terms of rail infrastructure spend by allocating more for the Wales route.'

I'd flag a particular case that we've been working on concerning the A5. I'd like to put on record my thanks to Owen Paterson. We've had great help from Owen Paterson in being able to demonstrate that, as a consequence of the Welsh Government's willingness to spend money on improving and increasing capacity on the A5 and the A483 on the Welsh side of the border, the Department for Transport in Whitehall should also consider dualling at least segments of the A5 on the English side of the border. I think by working together on that cross-border basis, we can make good progress, and I think that, in terms of some of the projects that we've been able to develop and work up in recent times, that is the case and it's proven.