Exclusive: The Treasury's Welsh mistake

Plus some key inside info on Reform in Wales

Good morning,

Today’s newsletter is a good one. We have for you:

• Some inside info on how Reform are targeting Wales

• A genuinely ridiculous “mistake” made by the Treasury

• The Welsh Conservatives telling untruths

• The UK Government’s terrible treatment of disabled people in Cymru

Before we go into it, I just want to thank all of you for the support you have given to the newsletter. The growth has been humbling in recent weeks and it is all down to readers spreading the word. This is enabling me to make some really exciting announcements in the coming weeks. Diolch yn fawr.

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Reform intel

(Copyright: Rob Norman/HayMan Media)

At the moment I am working on a documentary on Reform in Wales. As part of this I have been having some conversations with people within the party and I wanted to share some of the info I have gleaned because I believe they offer real insights into the party’s plans for Wales and the situation in Welsh politics.

• They have stopped monitoring the Welsh Conservatives. Reform spend a lot of time monitoring what the parties in Wales are posting on social media. They have noted that Plaid have been putting a lot of energy into ads and videos while they believe Labour have “upped their game” recently after being poor before. However they say they’ve stopped even tracking what the Welsh Conservatives are posting because it gets so little engagement.

• There is a big injection of staff. Reform have just hired four new staff who will be focussed full time on Wales. Winning in Wales in 2026 is the party's main focus at the moment, it is being referred to as “ground zero” within the party.

• The party is testing different strategies in Wales. I understand that Reform have been approaching the various council byelections that have been happening in Wales in different ways. They have been varying the literature and messaging each time to try and test what people are responding to. This is a far more professional and focussed operation than in its previous incarnations as UKIP or the Brexit Party.

• They are desperate for a high turnout. From Reform’s point of view, the higher the turnout, the better they will do. This does make sense. Historically, most people who vote in Senedd elections tend to be engaged in Welsh politics. By their own admission, Reform’s typical voters are not. It is a problem that the Welsh Tories have had since 1999 that most of the people inclined to vote for them are disdainful of the Senedd so won’t turnout. Reform are therefore making detailed plans for how they will get their voters to turnout on the day. They managed it for the Brexit vote, but the Senedd election will be a lot harder.

The great mystery of Wales’ railway shafting

There is something very odd going on. What the Treasury is saying and what it says in their documents simply does not match up. This raises serious questions and is really bizarre so stay with me on this.

Last week there was a lot of attention on how a railway line between Cambridge and Oxford was being treated as an “England and Wales” project meaning that Wales misses out on several hundred million pounds of funding. Much like HS2 this has generated a great deal of attention. If you want a refresher you can watch this video I made:

This is the situation:

• There is a railway development called East West Rail. It connects Cambridge and Oxford.

• Welsh Lib Dem MP David Chadwick asked the under-secretary of state in the Department for Transport Simon Lightwood if it was designated an England and Wales project?

• Mr Lightwood confirmed it was.

• This would mean that Wales, unlike Scotland and NI, loses out.

However, this is where it gets weird. Because if you go to the Treasury’s Statement of Funding Policy, (their Bible, which lays out how different projects are being designated for the devolved nations) it says the exact opposite.

Under the section “East West Rail” it lists Wales as having a 100% comparability factor. This is the same as Scotland and NI. This means that it has been listed as an England only project.

This means spending on it would trigger a consequential and Wales would get a population equivalent in cash. So why are the UK Government saying it won’t? After all, it would save them lots of criticism and headaches if they hadn’t said it was an England and Wales project.

So I went to the Treasury and asked them about this inconsistency.

They came back to me and said that it was erroneous and will be rectified in the next version of the document.

They said that this was a publishing error which will be amended when an update is published at the Spending Review. They indicated that “East West Rail carries a 0% comparability factor in Wales as heavy rail infrastructure is a reserved responsibility of the UK Government across England and Wales”.

But this is actually even odder because this wasn’t a one-off error.

Wales’ railways have long being underfunded compared to other parts of the UK (Copyright: Matthew Horwood)

It has been given a 100% weighting (essentially classified as an England-only project) since it first appeared in the Statement of Funding Policy way back in November 2020, and remained at 100% in all subsequent iterations, up to the last Statement of Funding Policy Addendum published in October 2024.

I spoke to Guto Ifan from Cardiff University’s Wales Governance Centre. He is a leading expert on public finances and how decisions made by the Treasury impact devolved nations.

He told me:

“What I take issue with is the description of it as a “publishing error”. If the East West Rail project changes to a 0% weighting in the next Statement of Funding Policy, 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 means that Wales will now receive less than it would have previously. He added:

“Changing the weighting to 0% in future years will have a material impact on future funding levels. Other regional, heavy rail infrastructure projects have been given (and retain) a 100% weighting in the calculations of Comparability Factors (e.g. Crossrail since 2007). 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.”

So what does this show in simple terms? Basically for four years they have treated the Oxford to Cambridge line as an England only project. They have now decided to change that despite the fact that similar projects have not been treated like this.

Frankly it shows that the Treasury is a law unto itself. It has arbitrarily changed the classification of a project midway through after four years.

It also begs the question, how the hell has the all knowing and all powerful Treasury not managed to notice an error until a journalist asked them about it?

Plus does it no indicate that it is indeed possible to change the classification of projects like HS2? Could Wales not have started getting its fair share as soon as Labour were elected?

Nothing is better at demonstrating how fairness is utterly lacking from the way decisions regarding funding for Wales are made. You can see the results of this funding “system” every time you try to travel around Cymru. We are an afterthought on a spreadsheet full of broken formulas.

Welsh Conservatives bag the Brass Neck Award

I promise I am not going to keep talking about trains for long but I have to show you a statement put out by the Welsh Conservatives.

Not a lot surprises me when it comes to politics but the audacity of a statement that they put out made me audibly gasp.

After the news about the Oxford to Cambridge project classification was announced the Welsh Conservative shadow minister Transport Sam Rowlands MS, said:

“With this rail project highlighting further unfairness in funding, it is clear that the Welsh Labour Government has no sway with their counterparts in Westminster.

“We were promised two governments working in partnership to deliver what is best for Wales. Instead, we’ve had broken promise after broken promise, leaving Wales shortchanged on critical infrastructure investment.

“The Welsh Conservatives have consistently called for Wales’ fair share of HS2 funding and maintain that this new project must also deliver fair consequential funding. To ensure transparency and effective use of resources, this funding must be allocated directly to Network Rail to deliver for the needs of people in Wales.”

It is hard to put into words how ridiculous this statement is. Let’s break it down:

1. “We’ve had broken promise after broken promise, leaving Wales shortchanged on critical infrastructure investment.” I spent years challenging the Welsh Conservative Government in Westminster over HS2 and they were relentless in arguing why it was a benefit for Wales. David TC Davies said when he was Secretary of State for Wales that it would help people in North Wales to get to London quicker. He actively defended the classification. He is now the chief of staff for the Welsh Tories. They either have no shame or the memory of a goldfish.

2. “It is clear that the Welsh Labour Government has no sway with their counterparts in Westminster.” When he was Welsh Tory leader and his party were also in charge in London, Andrew RT Davies told me repeatedly that he was making the argument that HS2 needed to be reclassified. He told me he had made this point to Johnson, Truss and Sunak. How that party can now criticise Labour for being just as irrelevant to their London colleagues is hilarious.

3. “The Welsh Conservatives have consistently called for Wales’ fair share of HS2 funding”. I am sorry but this is just bullshit. The Welsh Tories did eventually call for a HS2 consequential for Wales but for several years before they rejected this idea. They only changed it when the issue started gaining traction with the public. I still have the quotes from them in my emails.

4. “This funding must be allocated directly to Network Rail”. Buried at the end of the statement is this madness. They are not actually calling for Wales to have the money at all. They are just calling on Network Rail, to spend the equivalent in Wales. They basically don’t want the money to go to the Welsh Government. Nothing says “we know we are never winning an election” like trying to stop the Government you're hoping to form, getting cash.

No wonder Reform has stopped monitoring them…

Just how bad the disability changes are for Wales - and the ultimate slap in the face to Wales’ most vulnerable

Remember in the previous newsletters we showed how Wales is going to be the hardest hit by the disability benefit changes?

Remember how the UK Government had done no direct analysis of how it would impact Cymru?

Remember how Welsh Labour had said they would await the results of the consultation?

Well nothing says “we don’t give a crap about disabled people” like the decision made last week.