Rail devolution a process not an event says Welsh Government

The Welsh Government is now describing its long stated position of seeking rail devolution as a "process and not an event".

While stressing it remains committed to seeking devolution of rail, underpinned with a fair funding settlement that addresses decades of under-investment by successive Westminster governments in Wales' rail network, it hasn't, until now, put a caveat on its ask.

Plaid Cymru said the Welsh Government's failure to demand the immediate devolution of rail showed that "Labour was taking Wales for granted".

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Appearing before a parliamentary transport committee in Westminster, Cabinet Secretary for North Wales and Transport, Ken Skates, made three asks of the UK Government:

On the issue of more rail powers in Wales, Mr Skates said: "The current rail industry model for Wales is the most complex of all UK nations. It needs reform and our starting point remains our longstanding call for the full devolution of rail infrastructure and services along with a fair funding settlement."

"We see further devolution of rail as a process not an event and believe there is significant room for improvement within the current devolution settlement and through a staged approach to further devolution of rail powers."

However, in a 2019 strategy document, entitled A Railway for Wales meeting the needs of future generations, Mr Stakes then Economy and Transport Minister in Carwyn Jones' government was unequivocal in seeking a devolving of rail to Cardiff Bay, with no suggestion it should happen through a phased process.

He wrote in a foreword: "The importance of rail devolution and a fair funding settlement for Wales can not be underestimated. For too long Wales has been denied its fair share of rail infrastructure funding and the Welsh Government has had little choice but to divert our own funding from devolved responsibilities like health and education in order to make essential investments in our rail network, despite it being under the control of the UK Government."

He added: "We have set out our clear, comprehensive, and conclusive case for full rail devolution and a fair funding settlement in our submission to the UK Government through the Williams Rail Review."

"Now, is the right time for the UK Government to put things right and empower us to deliver for our future generations through our exciting vision for the transformative railway development programme for the future set out in the policy."

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In 2004, unlike Scotland, the then Welsh Government turned down the offered of rail devolution.

Lee Waters, who had responsibility for transport in Mark Drakeford's administration, had also become an advocate of a "process rather than an event" approach. The rationale was that a one step move to full devolution could see the Welsh Government's stretched budget being put under even greater strain by having to adapt an ageing rail infrastructure to the impact of climate change.

However, the Welsh Government wouldn't take on devolution of rail without striking a deal with the UK Government that addressed decades of under-investment. Devolution of rail would also ensure Wales received a Barnett consequential for the high speed rail project in England currently classed as an England and Wales project. Although how it spent any high speed consequential would be a matter for the Cardiff Bay administration.

Sir Keir Starmer and the Labour Party has to date dodged the question as to whether, if elected, it would reclass high speed two as an England-only project.

In a speech to the Rail Cymru 23 Conference in April last year, Mr Waters told the audience: "I want to see a clear commitment in the next Labour manifesto for fair funding for Wales, and the devolution of rail powers so that our democratic mandate to deliver on our climate targets can be delivered in tandem with our other powers."

Over numerous five-year investment periods from Network Rail, on rail enhancement projects Wales has received less than 2% of the UK total, despite having approaching 10% of the rail network for Wales and England.

Through the Barnett Formula, the Welsh Government used to receive a transfer from changes to the budget of the Department of Transport (DfT) based on a comparability factor of around 90% against a 5% UK population share calculation.

That transfer was based on any change to the DfT budget. The comparability factor was high because non-devolved items were a very small part of its budget and Network Rail spending was not included.

However, with HS2 and Network Rail spending now included, and a much larger proportion of the DfT's budget, the comparability factor for Wales has fallen to around 34%. That squeeze doesn't impact Scotland and Northern Ireland.

Even with high speed now only going as far as Birmingham from London, the loss to Wales if it continues to be classified as an England and Wales project is still around £2bn, as opposed to estimates of around £5bn if it had reached the north of England.

The unfair funding settlement for rail in Wales has seen the Welsh Government having to invest in non-devolved rail assets, including £160m on upgrading the Ebbw Vale line. This is money that could have been allocated to devolved areas like health and education.

Plaid Cymru spokesperson for transport, Delyth Jewell, said: "Labour's lack of ambition for Wales is clear to see. Astonishingly, their three 'asks' of the UK Government fail to mention the £4bn owed to Wales from England's HS2 project the equivalent of the billions in consequentials that Scotland and Northern Ireland have already received. What's more, they have failed to demand the immediate devolution of rail showing that Labour is clearly happy with the status quo for Wales."

"Plaid Cymru remains, however, resolute in our ambition and our demands for Wales without the full devolution of rail, our communities will remain unconnected, and our economy will continue to suffer as a result. We know that this is not as good as it gets for Wales. Full powers over rail would enable proper investment in our public transport infrastructure and ensure that Wales never again experiences the injustice of paying billions into a public transport project in England."