This is an awful way to run a country

Plus there is growing anger within the Welsh Conservatives

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So what are we looking at today? Given that the last few newsletters have been pretty comprehensive deep dives, this time I am going to look at several topics but not in as much depth. We will start with a little HS2 update before moving on to the absolute nest of vipers which is the Welsh Conservative Party at present. 

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Why HS2 symbolises so much that is wrong with how Wales is governed

For those of you who didn’t read my Guardian column on HS2 and aren’t aware of how the high speed rail project royally shafts Wales, I will sum it up for you in five bullet points so you are up to (high) speed:

• HS2 doesn’t go through Wales.

• But the now departed Conservative UK Government has classed it as an England and Wales project

• This means that Wales misses out on about £4bn in consequential funding (unlike Scotland and NI who get bonus cash).

• £4bn would utterly transform Wales’ railways which are the most underfunded of the UK nations.

• Despite calling for it while in opposition, Labour seemingly has no plans to give Wales the money it is owed now they are in power.

Great, you're caught up.

Now I don’t want to spend too much time on HS2 but there have been several developments in the last week that impacted Wales, and I think are useful in summarising the issues with how Wales is governed. 

The line is extended to Crewe

Though not yet officially confirmed, LBC are reporting that the UK Government is looking to extend the line from Brimingham to Crewe. The original plan was for it to run all the way to Manchester but Rishi Sunak abandoned that saying that it would just go to Birmingham.

Now however, the light blue part of this map (phase 2a) will also occur:

The first thing you will notice looking at that map is just how English this “England and Wales project” is. However, it is worth noting that extending the line to Crewe will likely have a positive impact on the north of Wales because it will increase capacity and speeds for those travelling from there to Birmingham and London (though it will cost the south Wales economy £200m in changes to capacity).

This relatively small benefit to North Wales is key because it is one of the excuses that the Treasury and Conservative Party have long given for classifying the project as “Welsh”. Indeed the second the news of the Crewe extension broke, my emails and notifications were full of people arguing that I was overlooking the benefits of the project to the north of the country. To this I would make two points:

1. Losing out on £4bn because people in some parts of Wales will now be able to travel to England quicker is a terrible exchange. Professor Mark Barry (who does a very detailed blog on Welsh railways) suggested that this money would allow us to electrify the North Wales mainline, build Swansea and Cardiff metros and connect Aberystwyth and Carmarthen. That puts getting to England quicker into perspective…

2. It has long been argued by people (usually outside of Wales) that the way to increase the prosperity of Cymru is to make it easier to get to London. For me, the idea that the only way for Wales to be prosperous is to make it easier to leave, epitomises  why Cymru is struggling so much. Travelling within Wales is horrifically slow, improving internal transport would make an infinitely more positive impact on the lives of people here.  

Celebrating that HS2 going to Crewe improves rail travel for some Welsh people when they go to England is like being fine with your house being burgled because they tarmaced your drive for you on the way out.

When First Minister Mark Drakeford considered legal action against the then Tory UK Government over HS2 funding. Now Labour are in power that money is nowhere to be seen

The upcoming budget…

Now you might think that Wales was only being left in 2nd class in relation to HS2. But actually the debacle over the high speed rail classification is symptomatic of a wider problem - that consideration of Wales’ needs are not taken into account at all when it comes to the UK budget. 

In less than two weeks the Chancellor Rachel Reeves will deliver a budget. When she does I will be trying to analyse what her spending announcements mean for Wales.

For example, if she says “we will give £10bn extra to the health service”, this could mean several things for for Cymru:

• As health is devolved, any new spending on the NHS by the UK Gov in England gives Wales cash automatically. If England spent £10bn on health, Wales would get roughly £0.5bn.

• BUT this depends if it is “new money”. If the Chancellor was taking that £10bn out of education (which is also devolved) to fund this increase in health spending it would mean that Wales would get no extra cash.

• If half the money is coming from education and half from increasing taxes, Wales will get about £0.25bn.

The crazy thing is, when I am sat trying to work out what it means, the Welsh Government are doing exactly the same thing. The elected government of Wales finds out at exactly the same time as everyone else what is happening with the budget, and therefore their budget. 

This is, when you think about it, a bloody awful way to run a country. It means that the funding Wales gets is totally based upon the needs of England.

At no point does the Treasury think “what is the situation in Wales and what do they need financially to manage that?”. They simply plan what is required for England’s services (when it is a devolved area) and Wales gets whatever the formula says it is owed. 

What we really need in Wales is the Treasury to make funding decisions based on needs. Wales' population is older, sicker and more spread out. It is bonkers that is not taken into account when deciding funding priorities in the budget. 

If Wales has, for example, loads of coal tips that need removing but England doesn’t, there will be no clear facility for dealing with this because the budget is based on what England needs. 

Plus, the fact that the Welsh Gov only finds out at the last minute the size of its future budget makes long term planning incredibly hard. Wales has many deeply entrenched issues, the only way to deal with them in long term planning.

These issues were highlighted recently in a report by the Senedd’s Finance Committee. They called for a “cultural shift in relations between Cardiff and London to stop the undermining of the Welsh Government by the UK Treasury”. 

The demand is in response to what they described as a “lack of mutual respect and parity of esteem” experienced by the devolved institutions in Wales when trying to engage with the previous UK Government on financial matters. 

The report found that the “whims or personalities of Treasury ministers” has been the overriding factor when it comes to communication between London and Cardiff. 

The Committee is also calling for the Welsh Government to have a greater role in the categorisation of big projects like this to avoid the Treasury making subjective calls on decisions that have a significant impact on funding levels in Wales. 

Peredur Owen Griffiths is the chair of the Finance Committee (and a Plaid MS). He said:

“Too often, politicians in London seem to pretend that devolution doesn’t exist, showing a disregard to the devolved institutions when making spending announcements.”  

This report shows that the relationship between the UK Government and the Welsh Government is strained and often ineffective – but there is hope for the future according to the committee who wrote: 

“The Committee is calling for maturity between the Welsh and UK governments. Informing the devolved governments about spending announcements that affect them should be built into the system, not just up to individual ministers.”

Will this happen? I doubt it. Though Labour politicians barely missed a moment extolling the virtues of having “two Labour Governments at both ends of the M4” we have yet to see it bear much fruit for Wales.

Just as an aside, that “two ends of the M4” slogan was really annoying because the M4 goes on for over 40 miles after Cardiff… Not the biggest deal but it really grated on me, especially as it seemingly meant nothing anyway.

Welsh Conservative leader Andrew RT Davies is very unpopular with his own Senedd Members. But who will move against him? (Picture by Matt Horwood)

The Welsh Tories are in a mess