East West Rail plan ‘reclassified’, denying Wales funding

Plans for a £6.6bn Oxford-Cambridge rail line were previously classified as an England-only project meaning Wales should have had extra funding as a result, a politician has claimed.

This week however, the Treasury announced it should have been classified as an England and Wales project, meaning Wales would not receive any extra money, but documents show that the project was originally classified as England-only.

The Treasury said it was a “publishing error” in a 2020 document and the project was always considered an England and Wales development.

Plaid Cymru MP, Ben Lake said the explanation was “completely implausible”.

On Tuesday, the UK government told BBC News the East-West project was being financed through its “rail network enhancements pipeline”, which it said was also funding schemes in Wales.

Lake, the MP for Ceredigion Preseli, accused the UK government of reclassifying the project and “moving the goalposts”.

Funding is allocated for Wales through the Barnett formula, so if the UK government spends on a project in England, then a formula is used to calculate how much money Wales gets to spend as a consequence.

Leading academic Guto Ifan, from Cardiff University’s Wales Governance Centre, said Wales had in fact already received approximately £1.1m of consequential funding from the Oxford-Cambridge project.

He said: “This is not a correction of a typographical error, it is a reclassification of the project and a material change in the formula being used to calculate changes to the Welsh government’s block grant.

“This change, without transparent rationale or consultation, would again underline the arbitrary nature of how the Barnett formula is applied to Wales with respect to rail infrastructure.”

In a statement, the Treasury said: “This was a publishing error which will be amended when an update is published at the Spending Review.”

The HS2 line has also been deemed to be an England and Wales project, so Wales gets no extra cash, which would have been the case if it was England-only due to the way in which Wales receives some funding.

It meant that while Scotland and Northern Ireland received extra cash from the UK government to make up for the spending, Wales did not.

Labour took over from the Conservatives in Westminster last year, prompting politicians in the Labour-run Welsh government to ask their UK counterparts to reclassify HS2 – without success.

Ben Lake told BBC Radio Wales’ Sunday Supplement: “How is it that they can quite easily now, at the stroke of a pen, reclassify a project when Wales loses out from doing so, where, just in January this year, they claimed that in the context of HS2, it was impossible for them to fix the injustice of the classification that they inherited from the Conservatives?

“When it comes to East-West rail they’ve found it very easy to reclassify it, but sadly, in moving the goalposts as they’ve done, Wales has actually lost out rather than gained.”

In First Minister’s Questions on Tuesday, Eluned Morgan defended the classification of the project as England and Wales, telling Plaid Cymru’s Rhun ap Iorwerth that he needed a “lesson on how the Welsh devolution settlement works”.

“Rail infrastructure is not devolved to Wales. You might want it devolved, but that is the situation it is in at the moment.

“What we have is a situation where there is a pipeline of projects for England and Wales. Are we getting our fair share? Absolutely not.”

She said she hoped for some acknowledgement of that via Wednesday’s forthcoming spending review, adding that the railway line in question was “very different to HS2”.

The Welsh government has been asked to comment.