Transport Funding: Wales and HS2

I beg to move,

That this House has considered transport funding for Wales and HS2.

Bore da. Good morning. It is a pleasure to serve under your chairpersonship, Sir Edward. I am here to talk about HS2 and particularly funding for the railways in Wales. We are all aware that tomorrow the Chancellor has his Budget, that next week is COP26 and that the Government have been talking about connecting the Union, levelling up and net zero. When we think about all those together, there is a compelling case that the Chancellor should look to give Wales our fair Barnett consequential, akin to the Scottish one, so that we can tool up, gear up, connect up and help move the UK towards net zero with more rail investment.

The Welsh Affairs Committee, on which some of us here serve, recently recommended that Wales should receive the same Barnett consequential share as Scotland. Simply put, Scotland gets 91.7%, as a proportion of population, of its share of the total costs of HS2. If Wales got 91.7% of our 5% share of HS2, and if for argument’s sake HS2 cost £100 billion, Wales would get something in the region of £4.6 billion. If HS2 ended up costing twice that, we would get something in the region of £9.2 billion. I am sure that we will hear about this from the Minister soon, but we have heard that the projected costs have moved from £38 billion to £100 billion, and now there is talk of costs of £160 billion to £200 billion.

HS2 is obviously a UK scheme. However, it is a north-south spinal scheme, so it will clearly benefit Scotland more than Wales. One could argue that Wales should receive a higher proportionate share than Scotland, but that is not what I am arguing; I am simply arguing that we get our fair share.

I know that the Minister is a great expert in HS2. Phase 1 was originally due to be completed in 2027. That has been kicked forward to 2033, and the latest news from the hon. Member for North West Leicestershire (Andrew Bridgen) is that we are looking at something like 2041. Given the timescale for action that is projected by COP26, we really must get a move on. There is a very strong case that Wales should have its share of the money to get on with shovel-ready schemes in both north and south Wales, to help build productivity and connectivity, to help with levelling up and to help deliver net zero.

We know that the Leeds section of HS2 has been cancelled. We also know that, because of the amount of concrete that will be used, HS2 will take 100 years to become carbon neutral, and that two thirds of the woodlands cut down will be burned by Drax power station, which will affect carbon emissions and air quality.

However, let us assume that HS2 is going ahead full throttle—namely that phase 1 might be over by 2041. We in Wales then have a case to get moving now and to get schemes delivered on the ground. I should disclose that, as people may know, a long time ago I was the leader of Croydon Council. I delivered the Croydon Tramlink scheme, a light rail electrified orbital tram system, which is 26 km long and connects Beckenham, Croydon and Wimbledon. That cost £200 million gross, but £100 million net, because it was a public-private partnership. That scheme, which connected three constituencies, cost the Exchequer only £100 million. With HS2, we are talking about £100 billion—a thousand times that scheme. My point is that there is a lot to be said for small, cluster-based schemes around the country, particularly on an east-west basis. I am talking about the northern powerhouse as well as connectivity to Wales and, very importantly, within Wales.

The situation in terms of relative competitiveness is that I can go from London to Manchester in two hours and 10 minutes, and from London to Swansea in about three hours. With HS2—if it does happen—we will be able to get to Manchester in one hour, so we have to ask what investors are going to do. We have already seen Virgin pull out of Swansea and go to Manchester because of this, and KPMG did a study some years ago showing that we will lose tens of thousands of jobs from south Wales unless we get some investment of our own to connect up, in particular, the clusters of Swansea and westwards with Cardiff and Bristol, to make that engine turn faster.

To return to the point the hon. Gentleman made about speeds and time, what is the rationale for the Severn tunnel being the dividing line? To the east of the Severn tunnel, a person can travel at 125 miles an hour, but we are supposed to accept that, for some reason, to the west of the Severn tunnel, the speed is 100 miles an hour at best. Why should we accept that as a rationale, when other times for travelling are being so spectacularly improved?

I completely agree with the right hon. Lady. Obviously, there are engineering and geographical issues here: Brunel originally had a straight line going through to Swansea, which would have taken half an hour—clearly, it used to loop around to pick up coal and that sort of thing. But one of the things about time, of course, is that if you increase frequency, you reduce average time. I appreciate that the Minister may have a different view on HS2, but I think there is too much focus on gaining a few extra minutes when what we really need from HS2 is greater capacity: bigger trains and thicker tracks, or whatever, not necessarily going faster. If I can go to Edinburgh in three hours, which is the same time it takes me to get to Swansea, do I really want to spend £100 billion or £200 billion to gain that extra bit of time?

In the meantime, although I know Members will talk about the benefits for Wales, it is sad that the current plan does not contain the direct link between Crewe and Manchester, which would help Wales. As we know from our own line, after we zoom through to Bristol and then to Cardiff, there are a number of smaller stations, and the train has to stop and start and that sort of thing. If HS2 had lots and lots of different stations, it would have to stop all the time, so that has been ruled out, but it means that people have to travel a long way to get to HS2 and connect with it. If we do not have this Crewe connection—which we will not—the benefits for Wales will be very small, much less than for Scotland. My minimum ask is that we agree the Welsh Affairs Committee’s cross-party report, which said we should get the same share as Scotland, as opposed to more, because Scotland will benefit and we will lose out.

I am sure it was an omission by my hon. Friend—I call him that because he is Welsh—that he did not mention the Cambrian line, which goes through the heart of mid-Wales to Birmingham. Will he reflect on the hub of Birmingham, and how that impacts on Wales and HS2? He has talked about Crewe, Manchester and Bristol, but mid-Wales looks east to west, and that Birmingham exchange is incredibly important to my constituents.

The hon. Member makes an important point. Overall, having a fast north-to-south link along the spine of the United Kingdom is good for the UK, and obviously the connections with Birmingham are important as well. My central point is that we are going to spend all this money, but Scotland will benefit much more than Wales: at minimum, we should get our fair share. My secondary point is that a lot of shovel-ready schemes are available, many of which have been devised by the Welsh Government and are ready to roll. If we are serious about being a Union, connecting the Union and building productivity, we should do just that.

The productivity situation, of course, is that unfortunately the gross value added in Wales is about like 70%.In other words, the average wage is about 70% of the UK average. Of course, productivity is generated by skills, technology, access to markets and investment, and the productivity of the actual line is low. Traditionally, the Department for Transport’s formula for investing money, in terms of its cost-benefit analysis, rewards previous investment. In the south-east of England people have expensive houses, and the train network is basically made to spoke into London more and more so that people can work in London and live further and further away, with HS2 and other connectivity. What happens, obviously, is that house prices are bid up, so no one can afford to live in London. People spend half their time going back and forth on a train, using a lot of carbon, and even if the line is electrified the electricity must be provided somehow or other, and the energy of the world is being consumed.

We should look at a more regional basis—a cluster basis—that would take advantage of what we all know now about Zoom technology to allow people to work from home, and that sort of thing. Post-pandemic and post-Zoom technology, in our new environment, we should look at how best we can spend money on building localised economies more quickly, rather than having much more grandiose schemes for the long term. I am not speaking against those things as such, but it seems to me that we need to bring forward these other projects.

It is a pleasure to serve under your chairmanship, Sir Edward. I want to make a couple of political points and to reflect on what my hon. Friend the Member for Swansea West (Geraint Davies) said—I will continue using “Friend”, as we are mostly Welsh in the Chamber.

This debate starts from the premise that HS2 is not good for Wales and I completely dispute that. On the political map of Wales, above the Brecon Beacons, we find one Labour MP. I think that is a reflection of the political circumstances of Wales. To put in a nutshell what is being alleged today, the political reality of the Labour party in Wales is that it is in south Wales, and only south Wales, so anything that matters to any one above the Brecon Beacons is not Welsh and not helpful for Wales.

In my intervention, I alluded to the Cambrian line. The Montgomeryshire economy looks east and west. It looks to Birmingham. Our railway line goes straight into Birmingham. Our international airport for mid-Wales is Birmingham International airport. In terms of a political ideological point about the Welsh nation, I get why people go on about north-south links, but the reality of our economy and transport is that we look to Birmingham. That is just a day-to-day part of life.

I am sure the hon. Gentleman shares with me the concerns that historically there were north-south links. There is a deep irony that anyone who wants to use a train for a north-south link now, even in my constituency, has to use a steam train, which is very effective, but not indicative of a country in the 21st century or of our needs. We need these links in Wales, to build the nation of Wales, alongside all the talk of building the Union.

I agree to a point, but it is ironic that since the creation of devolution we have seen the public transport network in Wales deteriorate. I speak as somebody who served as a director of a bus company. The funding to our bus companies in Wales and to a lot of things in devolved areas has completely wiped away capacity in the nation of Wales. I would reflect on what our Welsh Parliament has done to those north-south connections.

I occasionally commute to my constituency office by steam train—the right hon. Lady has been on the line from Llanfair Caereinion to Welshpool—and it does not reflect the modern, dynamic Wales we want, but the heritage railways are incredibly important.

I want to come back to my main point before the hon. Member intervenes. I will, of course, give way; he was very kind. The premise of this debate does not reflect mid—Wales. It does not reflect north Wales, our priorities and the fact that we fall back on the spine of the UK railway network. I put it to Members that HS2 is as much about capacity as it is speed. In Montgomeryshire, we look to London as much as we look to Cardiff, and anyone in my constituency who uses the UK network could see that it had huge capacity problems, pre covid. In Montgomeryshire, we can see the need to invest in that spine. We can see as businesses and constituents that we need additional capacity.

The hon. Member for Swansea West mentioned COP26 and the modal shift; if we are going to have those kind of shifts to public transport, we need the capacity. If we are going to have the capacity for mid-Wales, and the UK, we need new lines. I will give way if the hon. Member for Swansea West wants to intervene, and then the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts)—why not two at once?

Because it is impermissible.

I have been arguing that we need more connectivity within Wales—in south Wales and north Wales—but also between south Wales and the south-west, between north Wales and Liverpool and Manchester, and mid-Wales and Birmingham. We need connectivity to connect the Union, but to do that we need our fair share of investment. That is my simple point; I am not trying to cut off Wales, and I am certainly not saying that south Wales is the be all and end all. However, it is the case, as my father found when he was in charge of economic development in the Welsh Office, that the connectivity between south Wales and the south-west and between north Wales and the north-west is greater than between north and south Wales.

Before I give way to the right hon. Member for Dwyfor Meirionnydd, I will reflect on the fact that this debate is very premature. The Union connectivity review is yet to come out, and those are the exact issues that Peter Hendy has been looking at. The review is the vehicle for delivering this. There is a pressure, at times, that unless we give money to the Welsh Government we are not giving money to Wales—that is not true at all. The UK Government invest in Wales as well as the Welsh Government. We have two Governments that look after Wales: the UK Government, in terms of strategic assets such as transport links, and the Welsh Government in terms of devolved responsibilities. I was in Machynlleth, at the black bridge, with Peter Hendy some months ago; as constitutency Members we know that that was a multi-million pound investment to sort out the Cambrian line by Network Rail and the UK Government. That should be the UK Government’s role, and I expect that after the publication of the Union connectivity review there will be a significant investment into Wales.

Of course, we do share the Cambrian coast line that runs through Montgomeryshire; it serves Ceredigion and Gwynedd as well. One of the issues that has arisen from HS2 is the way that it distracts from other possible places of investment. I would argue that for many of the hon. Gentleman’s constituents, as with mine, improvements at Shrewsbury would make a far greater difference to connectivity in the immediate term than improvements to Birmingham.

I agree on that point. That is under the franchise of Transport for Wales; although Shrewsbury is an English station it comes under the Welsh franchise and Transport for Wales operates it. My hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) and I are campaigning, along with other Shropshire MPs, to get direct services from Shrewsbury to London, and improve the connectivity across the UK in terms of the Cambrian line. I will give way once more, and then I will make some other cheap political points before I shut up.

This is very much a debate about Wales, transport and HS2, but the hon. Gentleman has referred to Union connectivity. I would ask whether it is possible to consider us in Northern Ireland, who travel from Belfast to Liverpool to Wales, or go down south to come across on the ferry to Holyhead. When it comes to connectivity, we must improve everything within Wales, but we must do that for the benefit of the whole of the United Kingdom of Great Britain and Northern Ireland—including for us in Northern Ireland who wish to travel to Wales.

Order. As a general rule, if you want to make an intervention, you should be here at the start of the debate.

I will remember that for the future, Sir Edward.

The hon. Member for Strangford (Jim Shannon) makes an incredibly important point, and it is one that I hope the Union connectivity review does look into. While I am not suggesting a bridge or a tunnel from Holyhead over to Northern Ireland or the Republic, I am suggesting that we need to look at the importance of Holyhead as a UK strategic port, and some better way of connecting into the UK rail network. That is exactly where I want to see the investment from the UK Government going—into our Welsh railway network. The north Wales coast line is an incredibly important strategic railway for the whole of the United Kingdom, not just Wales. I am delighted that that remains—and long may it—the competence of the UK Government, because that is the only way we will see real investment.

I return to the opening speech by the hon. Member for Swansea West and the south Wales orientation of Welsh Labour, be it at parliamentary level or at that of the Welsh Government. On behalf of my constituents, I feel that especially with respect to the Cambrian line. I know from north Wales Members that there is a strong feeling in communities of neglect by the Welsh Government and a complete orientation towards Cardiff and south Wales.