Latest Rail News

09.09.13

Wales argues for millions in compensation for HS2

The Treasury could have to pay £1.8bn compensation to Wales for HS2, as the country will not directly benefit from HS2, a new analysis shows.

The Financial Times reported that the Welsh Government is looking at ‘consequentials’ it could be entitled to receive under the Barnett Formula, which adjusts public expenditure across the UK.

When spending is approved on an England-only project, the Treasury sometimes has to give compensation in the form of Barnett consequentials to Wales, Scotland or Northern Ireland.

A spokesman for the Welsh Government said: “We are working to ensure that Wales receives the consequential resulting from this decision and to ensure we maximise the potential benefits for Wales from this major infrastructure investment.”

The DfT argues that HS2 is a national project, and so would not be applicable for Welsh compensation.

Based on the amount Wales received for the London Crossrail project, compensation for HS2 could be almost £700m up to 2021 and £1.8bn for the whole project.

A Department for Transport spokesperson said: “HS2 will be a vital part of our national infrastructure, boosting regional growth across the country and providing vital capacity the UK needs to compete in the global race. Barnett consequentials will be determined at the next spending review. Under existing arrangements we would not expect the Welsh Government to receive Barnett consequentials of spending on the national rail network.”

Tell us what you think – have your say below, or email us directly at opinion@railtechnologymagazine.com

Comments

Chris Morley   09/09/2013 at 17:40

I'm sorry, but is clear that North Wales will benefit from journey time cuts to Crewe, especially when HS2 phase 2 opens in 2033. What's more if the North Wales coast line is electrified it is likely that HS2 trains will serve it directly.

Anon   10/09/2013 at 13:01

Questions over why rail is so expensive, why costs escalate, the reasons the economy is suffering despite all the cutbacks... here is one of the answers.

Brian   14/09/2013 at 08:34

Next N.Ireland will be claiming compensation because HS2 won't extend to Belfast. You couldn't make it up!

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