The Treasury issued an update on HS2 funding for Wales, stating that there would be no recategorisation of the project and no consequential payment to Wales. This decision by the Labour-led Treasury has reaffirmed the status quo regarding HS2 funding. The issue was raised during Welsh Secretary Jo Stevens’ recent appearance in the Commons, where she was questioned by Plaid Cymru MP Liz Savile Roberts about the project’s classification. Stevens emphasised the need for collaboration with the Welsh Senedd and local authorities to enhance transport services across Wales.
The UK Government’s stance on HS2 funding has been a long-standing point of contention between the UK and Welsh Governments. Under the previous administration, HS2 was classified as an “England and Wales” project, resulting in Wales not receiving any Barnett Formula consequential funding. Despite claims by Plaid Cymru estimating losses of up to £4bn, former Welsh finance minister Rebecca Evans mentioned a figure of £350m as the amount Wales had missed out on due to the misclassification of HS2.
The refusal to revisit the classification or provide Barnett funding has led to calls for a fair approach to rail funding in Wales. Former First Minister Mark Drakeford had considered legal action, and following the cancellation of parts of HS2 by Rishi Sunak, he urged the UK Government to fulfil its financial obligations to Wales. The Welsh Government is cooperating with UK counterparts to ensure equitable treatment in rail investment and is advocating for a review of processes related to rail infrastructure funding.
The continuous debate over HS2 funding exemplifies the complexities of intergovernmental relations and financial allocations within the UK. As discussions progress, stakeholders are striving for transparency, fairness and collaboration to address the implications of funding decisions on Wales’ transport infrastructure and economic development.