Crossing the border: road and rail links between England and Wales - Welsh Affairs Committee Contents


2  Cross-border rail services

8.  Over 8 million passenger journeys were made by rail between England and Wales in 2009-10. This represents more than a quarter of all rail journeys beginning or ending in Wales. Cross-border rail travel is thus an important everyday occurrence for Welsh commuters, business people and visitors. Cross-border services have seen significant growth in passenger numbers in recent years, and it is expected that demand will further increase in the future.[8] First Great Western said that its Cardiff to Bristol service had seen particularly high growth due to an increase in commuters between South Wales and Bristol.[9] Arriva—which operates several cross-border services—told us that its cross-border routes had seen the highest increase in passenger numbers in recent years, with passenger numbers increasing by around 8-13% a year.[10]

Government investment in cross-border rail services

9.  The Government has announced significant investment in cross-border rail routes between England and Wales in the last two years, as well as key commuter routes in South Wales. This amounts, directly and indirectly, to almost £2 billion. Electrification of the Great Western Main Line (GWML) will be extended to Swansea, and the Cardiff Valleys lines will also be electrified, at a cost of £350 million (in addition to the £1 billion electrification programme already announced for the GWML). Passengers between South Wales and Heathrow will also benefit from a £500 million commitment to build a rail link between the GWML and Heathrow. The previous Secretary of State for Wales Cheryl Gillan described these commitments as "the most significant infrastructure announcement for Wales for decades."[11]

10.  Since then, further progress has been made on the case for electrification of rail lines in North Wales, an area with historical under-investment in rail infrastructure. There is also an ongoing debate about how the Government's proposed new high speed line from London to the north of England will affect Wales, and whether Wales can be part of a future high speed network. We explore each of these issues below.

Electrification in South Wales

11.  The use of modern electric trains rather than older, diesel engines can improve reliability and performance and reduce journey times. The cascade of electric rolling stock onto electrified Welsh lines would also release carriages to provide additional capacity for other cross-border services. Our predecessor Committee looked at the benefits that electrifying lines previously served by diesel trains would have for passengers travelling between England and Wales, and recommended that the whole South Wales Main Line be electrified in order to significantly improve services available to passengers.[12] The DfT subsequently announced in March 2011 that the GWML would be electrified from London to Cardiff but that there was not a viable business case for electrification of the line between Cardiff and Swansea.[13]

12.  Following this announcement, we pressed again for electrification on the GWML to be extended to Swansea in our February 2012 Report on Inward Investment in Wales, because we believed there was a strong business case for doing so.[14] This view was reinforced by the evidence submitted to this inquiry.[15]

13.  In July 2012—during the course of our inquiry—the DfT confirmed the further electrification of the GWML to Swansea, in addition to electrification of the Cardiff Valley Lines. This followed agreement between the DfT and Welsh Government ministers on the terms under which the UK Government would fund these enhancements.The electrification of the main line to Cardiff is expected to be completed by 2017, and to Swansea by 2018.

14.  Carl Sargeant AM, Minister for Local Government and Communities in the Welsh Government, told us that the electrification of the South Wales lines was "excellent news",[16] particularly as two-thirds of the population of Wales lived along that transport corridor. DfT Minister of State, Simon Burns, told us that the Government's commitment on electrification would see Wales's rail network and communications "improved significantly", with subsequent benefits for communities and businesses in South Wales.[17]

15.  We welcome the Government's decision to extend the electrification of the Great Western Main Line from Cardiff to Swansea, and to electrify the Valley lines into Cardiff. These are both issues that we have pursued with vigour in recent years. These improvements will allow passengers to benefit from shorter journey times and longer and newer trains, and we believe will increase economic and employment opportunities throughout Wales.

16.  The co-operation that took place between the UK and Welsh Governments to secure electrification in South Wales was highlighted by witnesses as a welcome example of effective joint working between the two administrations. Mark Barry, a transport consultant, told us:

The work that was undertaken on the business case for extending the Great Western line electrification to Swansea and the Valley lines resulted in much greater interaction between transport officials in Cardiff and those in the DFT. There is a richer relationship now than there perhaps was previously.[18]

The Welsh Government Minister was largely positive about the relationship and working practices between his department and the Wales Office, particularly around electrification. He highlighted, however, that it had been difficult to secure agreement in respect of some aspects of the electrification programme: for example, he claimed it had been difficult to persuade the former Secretary of State for Wales and the Welsh Government to publicly agree on a position on electrification of the Valley Lines. He recognised that the relationship between the Welsh Government and Wales Office on transport issues required further work.[19]

17.  The collaborative working between the Wales Office, Department for Transport, Welsh Government, and other key stakeholders to secure further electrification in South Wales is hugely welcome. This demonstrates what can be achieved by all parties working together. We trust that the lessons learned from this experience can be applied in the future, not only for other strategic cross-border transport decisions, but more broadly on issues where interests should be aligned, such as economic growth.

Electrification in North Wales

18.  Witnesses identified the electrification of the North Wales Main Line and other lines in North Wales, including the 'Borderlands' Wrexham-Bidston route, as the next priority cross-border rail investment. Many witnesses, including the Rail Freight Group, Welsh Ports Group and Professor Stuart Cole, supported calls for electrification in North Wales.[20]

19.  The North Wales transport consortium, Taith, also highlighted that cross-border rail traffic between North East Wales and North West England was likely to increase following the creation of Enterprise Zones in Deeside and Anglesey in Wales and the Mersey Waters Enterprise Zone, which includes the Liverpool Water and Wirral Waters projects.[21]

20.  The Welsh Government Minister agreed that the electrification of the North Wales Main Line and Wrexham-Bidston line was the next priority for rail infrastructure in Wales. He said he had begun discussions with the DfT on this matter.[22] DfT Minister of State, Simon Burns, noted that the cost of electrification of the Wrexham-Bidston line was likely to be high, but confirmed that the Government would consider any business case submitted on this scheme for the next stage of rail investment from 2019 to 2024.[23]

21.  Since then, the Secretary of State for Wales has held a meeting with stakeholders in Llandudno to discuss electrification in North Wales, following which he said "The sooner we can start working up a business case for the next HLOS round the better."[24] In January, the Welsh Government committed to developing a robust business case for electrification of the North Wales rail line, in co-ordination with Taith.[25]

22.  Rail connectivity between North or Mid Wales and England has been overlooked for too long. Good rail connections between North East Wales and North West England will be increasingly important in the future following the creation of the Mersey Waters Enterprise Zone in the North West of England, and the Deeside and Anglesey Enterprise Zones in Wales.

23.  We urge the Department for Transport and Wales Office to support the Welsh Government in developing the business case for electrification of the North Wales Main Line so that it can considered as part of the next round of rail investment. We expect the business case to meet the same high standards as that made for electrification in South Wales.

Cross-border services from Mid Wales

24.  Much attention is often given to the rail connections between North and South Wales respectively and England, but rail options from the more rural areas of Mid Wales across the border are particularly limited. We experienced this first-hand during our train visit to Aberystwyth from London: a four and a half journey requiring a transfer at Birmingham. Currently there is a service every two hours between Shrewsbury and Aberystwyth on the 'Cambrian' line. The Welsh Government's National Transport Plan of 2010 committed to establishing an hourly service by 2011. This improvement has been delayed and is not now expected to happen until 2015.

25.  Arriva Trains Wales told us that the infrastructure needed to deliver an hourly service was now in place, but discussions were required with the Welsh Government about when hourly services would commence.[26] The Welsh Government Minister explained that there had been delays due to problems with the new signalling system in North Wales and the difficult economic climate.[27]

26.  Another possible improvement to services between Aberystwyth and England would be the re-establishment of a direct service to London. Arriva Trains Wales told us that it did not currently have plans to re-launch a campaign for a direct service because the routes previously identified for such a service were no longer available. Arriva believed a direct service was therefore "not a realistic proposition".[28]

27.  We are disappointed that the Welsh Government's commitment to establish an hourly service between Aberystwyth and Shrewsbury by 2011 will now not be in place until 2015. We urge the Welsh Government to give serious consideration to how this much-needed improvement could be brought forward.

Connections to UK airports

28.  Almost one in five of the 4.3 million air passenger journeys starting or ending in Wales each year pass through Heathrow Airport.[29] Connections to Heathrow Airport are particularly important to businesses in Wales because of Heathrow's role as the UK's hub airport. Mark Barry, a transport consultant, told us:

I talk to businesses. If you are looking at foreign direct investment in south Wales and ask what their consultants advise, they say, "We may set up in the UK. How far away are you from Heathrow and from London?"[30] […] For now, Heathrow access, for the business community, is still the most important form of access we need.[31]

In July 2012 the DfT announced as part of its aviation strategy that £500 million would be spent on a new link from the Great Western Main Line near Slough to Heathrow Airport. This could provide "significantly improved connections" from South Wales to Heathrow, with journey time savings of up to 30 minutes.[32] DfT Minister, Simon Burns, told us that a "considerable amount of work" had been done on the project but no preferred route had yet been decided. The earliest date that the new link could be in operation was between 2020 and 2022.[33]

29.  It has been suggested that improved rail links between South Wales and Heathrow could also create growth opportunities for Cardiff Airport. A group of transport experts and entrepreneurs developed a £250m plan to turn Cardiff Airport into the "Atlantic Terminal" of Heathrow Airport, with a high speed rail link between the two airports.[34] When questioned, the Welsh Government Minister appeared supportive of the proposals: "There is lots of talk about Heathrow and a new airport [in the South East]. Well, why shouldn't it be Cardiff?"[35] He said he was keen to support Cardiff Airport in its discussions with the DfT on this matter. The Welsh Government has since stated an intention to purchase Cardiff Airport.[36]

30.  Witnesses also wanted improved transport connections to other UK airports. Taith was working with transport partners in North West England to campaign for a direct rail link from North Wales to Liverpool John Lennon Airport.[37] It also wanted more regular train services from North Wales to Manchester Airport.[38] Bristol Airport said it was already "well served" by both rail and road connections from Wales but, given the "increased importance of Bristol Airport to air travellers to and from Wales", called for these connections to be maintained and improved.[39]

31.  Wales would clearly benefit from improved connections to those airports serving South and North Wales, including Cardiff, Liverpool, Manchester, Bristol and particularly Heathrow. Better connections to these airports would reinforce Wales' potential to play a full part in the global economy. We welcome the announcement that a new link will be developed from the Great Western Main Line to Heathrow Airport, which will improve connections between South Wales and Heathrow. The development of faster links to other airports should be encouraged.

High Speed Rail

32.  High Speed 2 (HS2) is the proposed high speed rail line between London, Birmingham, Leeds and Manchester. The initial phase of HS2, between London and Birmingham, is expected to begin operation in 2026, costing an estimated £32 billion. The onward lines to Leeds and Manchester are to be completed by 2033. Plans for a high speed rail network were initially developed by the previous Government, which published the case for an HS2 line and its preferred route in 2010.[40] The Coalition Government launched a major public consultation for HS2 in 2011,[41] and announced the decision to proceed with Phase 1 of HS2 in January 2012.[42] The Government has since announced its preferred route for the onward links to Manchester and Leeds.[43] This includes a stop at Crewe, which will create opportunities for connections with services from North Wales.

IMPACT OF HS2 ON WALES

33.  The vast majority of witnesses told us that failure to include a high speed rail line between England and Wales as part of the HS2 scheme would put South Wales at a disadvantage compared to other areas of the UK. The South East Wales Economic Forum argued that HS2 was likely to have a negative economic impact on South Wales unless the region's own rail networks were significantly improved.[44] The Chartered Institute of Logistics and Transport (CILT) Wales Cymru said that the benefits from HS2 would be limited to the areas served by the line, and this could be detrimental to the competitiveness of South Wales in particular.[45] The Institute of Civil Engineers (ICE), as well as several other witnesses, stressed the need to improve cross-border rail links between the Welsh rail network and those areas served by HS2.

34.  On the other hand, we were told that North Wales could benefit from improved connections to London due to additional capacity on the West Coast Main Line. Taith, the transport consortium for North Wales, considered HS2 to be a "big ticket issue" for this reason.[46] But Taith too stressed the importance of good connections from North Wales to those areas served by HS2.

35.  The Welsh Government has concluded that the exclusion of Wales from HS2 will put Wales at an economic disadvantage.[47] It produced two reports which stated that areas not served by HS2 would be at danger of losing jobs and people, as businesses relocated along the HS2 line.[48] The Welsh Government Minister told us that Wales's exclusion from HS2 would mean more would have to be made of the existing rail network in Wales: for example, the new Wales and Borders franchise would need to be connected to areas served by HS2.[49] When questioned on the impact of HS2 on Wales, DfT Minister, Simon Burns, said that the DfT had not conducted any assessment of the impact of HS2 on Wales.[50]

36.  We also received contrasting evidence about whether the Welsh Government had been sufficiently involved in the decision-making process for HS2. The DfT Minister believed that the DfT and Welsh Government had had "ample discussions" when the preferred route for HS2 was announced.[51] But the Welsh Government Minister said:

[W]e did not have a part in the decision-making process, but we did present our views at the Cardiff stakeholders' day from the Welsh Government's position on that.[52]

Other witnesses such as transport consultant Mark Barry suggested that the Welsh Government had been late to enter discussions around HS2, and as a result was unable to significantly inform the debate.[53]

37.  The overwhelming view of the evidence we took is that South Wales will lose out from its exclusion from the High Speed Two (HS2) proposals. Indeed, there is a risk that HS2 could have a serious negative impact on the South Wales economy due to its relative proximity and the potential for businesses and people to relocate eastwards across the border. We are therefore concerned that the DfT has not attempted to assess the economic impact of HS2 on Wales.

38.  We recommend that the UK and Welsh Governments work together to assess the economic impact of HS2 on Wales as a matter of urgency. Should any adverse impacts be identified we expect the UK Government to consider possible mitigation measures.

A HIGH SPEED RAIL NETWORK

39.  The Government considers HS2 to be the first step of a wider high speed rail network in the UK. Our predecessor Committee concluded in 2009 that Wales would benefit enormously from a high speed line linking South Wales and London.[54] However, no such link is being considered as part of the Government's current proposals for a high speed network.

40.  Witnesses told us that Wales would be at a disadvantage if excluded from a future high speed rail network. A study commissioned by Greengauge 21 showed that the impact of excluding Wales from a high speed rail network could result in 21,000 fewer jobs in Wales by 2040, and a reduction in wage growth of 0.04% per annum.[55] The ICE Wales Cymru argued that high speed rail links between all UK capitals should be prioritised, and that the next major high speed rail project should link Wales to the high speed rail system.[56]

41.  Some witnesses argued that the Great Western Main Line (GWML) could be upgraded to a high speed line to connect London and South Wales. Greengauge 21 and the Great Western Partnership[57] have developed proposals to explain how the GWML could be progressively upgraded over 25 years so that it formed part of a national high speed rail network.[58]

42.  DfT Minister, Simon Burns, told us that HS2 was seen as a "spine" from which there would be other potential spurs.[59] He said that "Wales is an obvious place for it [the high speed rail network] to be extended to, but that is a matter for the Welsh Government and others to look at in due course."[60] The Minister was not familiar with the Greengauge 21 proposals to upgrade the GWML, but undertook to examine their proposals.[61]

43.  Wales would benefit from the development of a high speed rail link to England. This would be an important boost to the Welsh economy and help to achieve the aim of successive Governments of rebalancing the UK economy. It is disappointing that the UK Government and Welsh Government are not currently developing plans for such a link as part of a wider high speed rail network. We call upon the UK and Welsh Governments to begin developing the case for a high speed line between England and Wales. This should consider whether upgrading the Great Western Main Line to a high speed line would be the best way to establish high speed connections between England and Wales.

FUNDING IMPLICATIONS OF HS2

44.  There have been calls for the Welsh Government to receive a £1.9 billion "Barnett" consequential payment[62] following the UK Government's decision to proceed with HS2, as some consider this to be an "England-only" scheme rather than a UK-wide project. Several witnesses, such as transport consultant Mark Barry, argued that the Welsh Government should receive a consequential payment, which could be used to improve the transport network in Wales.[63] HM Treasury has confirmed that the Welsh Government would receive a consequential payment in relation to spending on Crossrail, another major rail project.[64]

45.  The UK Government's position is that the HS2 project would not result in a consequential payment for the Welsh Government because funding for rail infrastructure is not devolved.[65] This was challenged by the Welsh Government Minister who told us the matter was "slightly unclear". He said the Welsh Government Finance Minister was in discussion with the Treasury on this point.[66] The Welsh Government subsequently wrote to us on this point and stated "it would not expect to receive consequentials" in respect of HS2:

The Welsh Government continues to engage with the UK Government to ensure that Wales receives all of the consequentials to which we are entitled. In relation to the recent HS2 announcement, no budget allocations have been made for the construction of either phase in the current Spending Review period.

Rail infrastructure is not devolved and as such we would not expect to receive consequentials. An exception is in relation to transport projects in London where the Welsh Government can receive consequentials, an example of this is the Crossrail project for which a consequential was paid to the Welsh Government.[67]

46.  It is not clear why the Welsh Government should be entitled to a "Barnett" consequential payment in respect of the Crossrail project but not HS2. We recommend that the UK Government ensures that all England-only transport infrastructure projects result in the appropriate Barnett consequential.

47.  In order for the Welsh economy not to be left behind by the construction of HS2, the Government must continue to invest in the improvement of cross-border roads and rail services between England and Wales.

Cross-border rail franchises

48.  The DfT specifies[68] and funds three of the four rail franchises which provide cross-border rail services between England and Wales, with the Welsh Government being largely responsible for the fourth, the Wales and Borders Franchise. The Wales and Borders franchise provides cross-border rail services to Manchester, Shrewsbury, Birmingham and Crewe, in addition to all rail services wholly within Wales. The contract for the Wales and Borders franchise was awarded to Arriva Trains Wales by the DfT in 2003. The Welsh Government subsequently took responsibility for this franchise in 2006. The franchise ends in 2018 and the Welsh Government is currently pursuing discussions in relation to the new franchise.

49.  A major issue with the current Wales and Borders franchise is that it was let on a "no-growth" basis, meaning that there is no provision in the franchise for the operator to increase capacity for services in response to rising demand. We were told that passenger numbers had increased on cross-border services by 8-13% a year since 2003,[69] almost twice that of numbers on Wales-only services. Yet, under the terms of the franchise, if the Welsh Government wished to increase capacity significantly on overcrowded services, it would need to fund these changes itself. Arriva Trains Wales told us it had identified and implemented some marginal increases in capacity on its cross-border services, such as changing timetables and redeploying trains.[70] But train operators and local transport consortia representatives agreed that the future franchises would need to include some mechanism to allow for passenger growth. [71]

50.  Carl Sargeant AM, the Welsh Government Minister, raised concerns that the DfT had the power to interfere with the Welsh Government's preferences for the specification of the new Wales and Borders franchise. Although the DfT's evidence states that the Welsh Government is responsible for specifying and funding this franchise,[72] Carl Sargeant AM told us it was for "the Secretary of State for Transport to make the ultimate decision [on the franchise] with consultation and agreement with a Welsh Government Minister."[73] He was also keen for the new franchise to connect cross-border rail routes with areas served by HS2.[74]

51.  The Wales and Borders franchise is due for renewal in 2018 and it is important that the Welsh Government can develop a suitable franchise package that provides the best type of service for Wales. Given the importance of the Wales and Borders franchise to cross-border links between England and Wales, we urge the UK and Welsh Governments to work together on developing the new franchise ahead of 2018. Key considerations should include ensuring the new franchise enables the further growth of cross-border rail travel, and also provides for adequate connections to areas served by HS2.

52.  There may be scope to increase the frequency of some other cross-border rails services, such as the London Paddington to Swansea service. We recommend that the UK Government and Welsh Government work with train operators to identify cases where the frequency of cross-border rail services could be increased, without the need for additional public subsidy.


8   Q100 Back

9   Q63 Back

10   Q65 Back

11   'Welsh railways investment a monumental boost for economy', Wales Office, 16 July 2012 Back

12   Cross-border provision of public services for Wales: Transport, HC 58 Back

13   'Intercity Express and rail electrification', DfT, 1 March 2011 Back

14   Inward Investment in Wales, HC 854-i Back

15   Qq 38, 52, 99 Back

16   Q238 Back

17   Q173 Back

18   Q152 Back

19   Qq 203-4 Back

20   Ev 57, Ev 64, Ev w22 Back

21   Ev 60 Back

22   Q238 Back

23   Q190 Back

24   ''Sooner the better' for north rail electrification case', BBC News, 23 November 2012 Back

25   'Step closer towards electrification of North Wales rail line', Welsh Government, 9 January 2013 Back

26   Q76 Back

27   Q211 Back

28   Q78 Back

29   Bristol Airport estimate derived from CAA Passenger Survey data (cited in their evidence to the Commission on Devolution of Wales, May 2012). Back

30   Q139 Back

31   Q160 Back

32   Para 2.84, Draft Aviation Policy Framework, Department for Transport, July 2012 Back

33   Q193 Back

34   'Cardiff Airport: Western Gateway plan for Heathrow hub', BBC News, 31 October 2012 Back

35   Q239 Back

36   'Welsh Government to consider purchase of Cardiff Airport', Welsh Government, 18 December 2012 Back

37   Q21 Back

38   Ev 60 Back

39   Ev 39 Back

40   High Speed Rail, Department for Transport, March 2010 (CM 7827) Back

41   High Speed Rail: Investing in Britain's Future, Consultation, DfT and HS2 Ltd., February 2011 Back

42   'High speed rail', Written Ministerial Statement by Rt Hon Justine Greening MP, 10 January 2012 Back

43   'High Speed rail', Written Ministerial Statement by Rt Hon Patrick McLoughlin MP, 28 January 2013 Back

44   Ev 47 Back

45   Ev w5 Back

46   Q22 Back

47   Ev 48 Back

48   Regional and Local Economic Impacts of Rail Investments, Welsh Government, January 2012 Back

49   Qq 215-6 Back

50   Q170 Back

51   Q166 Back

52   Q215 Back

53   Q152 Back

54   Cross-border provision of public services for Wales: Transport, HC 58 Back

55   'Consequences for employment and economic growth', Greengauge 21, February 2010 Back

56   Ev w3 Back

57   The Great Western Partnership is an action group representing major businesses and public authorities in the South West of England and South Wales, and was formed in response to the High Speed Rail agenda in the UK. Back

58   'Great Western Conditional Output Statement', Great Western Partnership, March 2012 Back

59   Q165 Back

60   Q172 Back

61   Q175 Back

62   The Barnett formula is the mechanism used by HM Treasury to adjust the public expenditure allocated to the devolved administrations. A Barnett consequential is a payment in relation to a change in spending levels by the UK Government.  Back

63   Q143 Back

64   Funding the Scottish Parliament, National Assembly for Wales and Northern Ireland Assembly, HM Treasury, October 2010 Back

65   Q52, Responsibilities of the Secretary of State for Wales, HC 816-i, 11 December 2012 Back

66   Q218 Back

67   Ev 87 Back

68   The Government outlines the services a franchisee will have to operate under a rail franchise by specifying the required services in the franchise agreement. Back

69   Q65. The 8-13% refers to typical annual growth for certain key cross border service groups. The exact average annual growth figure on all cross border services since the start of the franchise is 12.18%. The equivalent figure for Wales-only services is 6.87% average annual growth. Back

70   Qq 64, 70 Back

71   Qq 27, 90 Back

72   Ev 69 Back

73   Q219 Back

74   Q223 Back


 
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Prepared 6 March 2013