Do they give a fig about Wales?

John Osmond says the decision on electrification of the Great Western rail line to Swansea will signal whether we still register on Westminster’s radar

The Conservative and Liberal Democrat Coalition in London face a simple challenge as we approach next May’s Assembly elections in Wales. Has it given them a moment’s thought? I raise this question in the knowledge that it is poised to announce its response to the Calman Commission into Scottish finances within the next week or so, with a commitment to put their changes into effect ahead of the Scottish Parliament elections being held at the same time as ours next May. Against huge Treasury misgivings the Scottish Parliament is about to be given a major boost to its fiscal powers.

So why the urgency in relation to Scotland, and why is there no sign that they give a fig about Wales? The answer is simple. The chief secretary to the Treasury is Danny Alexander, Scottish Liberal MP for Inverness, Nairn, Badenoch and Strathspey, an area that is highly vulnerable to the SNP in the Scottish Parliament elections. His seat has been divided into two for the Scottish Parliament elections, creating the new seats of Inverness and Nairn, and Skye, Lochaber and Badenoch. Both will be highly marginal with the former leaning to the SNP and the latter to the Liberal Democrats with many predicting that the SNP will take both. As in Wales the Liberal Democrats languish at the bottom of the polls and if anything their propping up the Tories in London is even more unpopular.

Hence the urgency with which Danny Alexander is addressing the financial aspirations of the Scottish Parliament. The Liberal Democrats desperately need a good story to tell in the run-up to the Scottish elections. And the last thing they’re looking at is any change to the Barnett formula along the lines recommended in the Welsh Government commissioned Holtham report. Any move towards a needs based formula to meet Welsh underfunding, as recommended there, would result in the Scots taking a major hit. When Welsh Liberal Democrat leader Kirsty Williams attempted to persuade Danny Alexander otherwise, at a recent meeting, she was given short shrift – which is the kindest way I can think of putting it.

So what can the London Coalition government come up with for Wales? There are not many shots left in its locker. Wales did badly out of the Comprehensive Spending Review, certainly when compared with Scotland and Northern Ireland. S4C took a major hit, while the Severn Barrage was sent packing as was the proposed St Athan Defence Academy. Meanwhile a quarter of the Welsh Parliamentary constituencies are being dispensed with, in the name of giving all constituencies across the UK equal electorates of around 75,000. This will mean a fall from 650 to 600 constituencies – ten of them culled from Wales.

In yesterday’s Western Mail the Secretary of State for Wales Cheryl Gillan made a desperate attempt to put a positive spin on all of this, blaming the Labour legacy (again) and pleading with us to allay judgement until the next Westminster election in four-and-a-half years time. However, the Assembly election is less than six months away.

What can the Coalition government do between now and then to demonstrate that, as with that famous European Commission map showing assisted areas, Wales hasn’t completely fallen off the edge? The acid test surely has to be the decision on electrification of the Great Western line between London and Swansea, expected in about ten days time.

There is speculation that the Department of Transport is considering electrification as far as Bristol, with an option for the Welsh Government to stump up the extra £200 million it would take to extend it to Swansea. If that’s what is in the offing the outlook will be bleak for the Lib Dems next May while the Tories would kiss goodbye to making any gains and would probably lose seats like Cardiff North.

For much more hangs on electrification than upgrading the service and shaving 20 minutes off the journey time between London and Cardiff. At stake is the future of the whole south-east Wales rail network. What we need is the transformation of this into an electrified light-rail system similar to the ones that are so successful in continental Europe, for example in Bordeaux and around Stuttgart.

Plaid Cymru announced this week that is was thinking of committing to taking over the franchise of Welsh railway system when it comes up for renewal in 2018. In the last few years Arriva Trains have made £10m a year profit out of the franchise. If it was run by a Government-owned, arms-length not-for-profit company like Glas Cymru, which runs Welsh Water, this money could be ploughed back.

The template obviously is Welsh Water, which raised finances at very favourable rates on the bond market, with security being the long-term stability of the business. Backed by the Welsh Government, with a guaranteed income stream from the profit from the rail fares, the same could apply to raising long-term finance to invest in the Welsh rail network, and especially the south-east Wales Valley lines linking into Cardiff and Newport.

There is a potential critical mass of users here, as well, further enhancing the returns from the service – so long as the Welsh Government simultaneously uses its powers to restrict car traffic access to the city centres, with park and ride schemes in all the main Valley towns.

But all of this is contingent on electrification of the main line from Paddington to Swansea, without which electrification cannot be extended into the Valleys. So a lot more than a few Liberal Democrat or Conservative seats in next May’s elections is hanging on whether Cheryl Gillan has any clout with the Department of Transport – and more’s the point, the Treasury – in Whitehall.

John Osmond is Director of the IWA.

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