UK Government could help revive Relief Road plans
Business editor Sion Barry on whether the M4 Relief Road could be revived and why Wales needs a full Barnett Formula consequential from England’s HS2 rail project...
COULD the M4 Relief Road, despite being decisively rejected by First Minister Mark Drakeford on environment and cost grounds last summer, have a Lazarus moment?
Despite an independent inspector’s report concluding that a new section of motorway south of Newport was the best solution to alleviate growing congestion on the existing and ageing M4, particularly at peak times at the Brynglas Tunnels, Mr Drakeford was not minded to proceed with the project, with its, at the time, indicative cost of around £1.3bn, minus VAT.
There were those in his cabinet who were supportive, notably the scheme’s sponsor in Economy and Transport Minister Ken Skates.
However, there were those also vehemently opposed, particularly in Mr Skates’ deputy Lee Waters, who, and there is evidence to back this up, believes that the benefits of new road infrastructure are only short-lived before being also hit by congestion with far too many cars in circulation.
However, Prime Minister Boris Johnson continues to makes noises calling for the Welsh Government to get on and build an M4 Relief Road – although it is solely a devolved matter.
With his government already committed to increases in capital expenditure of £100bn over the next five years – although with government departmental cost-cutting revenue spending could be squeezed – there will be a capital consequential upside for the Welsh Government of around £5bn.
However, any transfer of cash from the UK Treasury will remain a matter for the Welsh Government to decide how it is spent. So, any attempt by Mr Johnson putting conditions on, like the delivering of a relief road, would no doubt be firmly rejected by Mr Drakeford – and in my opinion rightly so.
The previous offer of financial support for an M4 Relief Road, initially £500m, but then with a further £300m, was a long-term borrowing facility from Whitehall to Cardiff Bay.
So, let’s see what next week’s Budget could bring with any new offer to the Welsh Government.
However, if the UK Government agreed to finance in full an M4 Relief Road, and not a case of just greater low interest bearing long-term borrowing, it would put the ball back firmly in Mr Drakeford’s court. However, the Welsh Government has already been hit, with just weeks left in the current financial year, with a Treasury claw back raid of £200m from its capital budget, so it will be wary of any offer without thoroughly checking and getting clarification on
the detail.
But what if the UK Government attempts a blitzkrieg raid on the devolved settlement, by enacting legislation to get the M4 Relief Road built? Well, that would be an assault on devolution.
Mr Johnson has seemingly more on his plate, with the spread of the coronavirus and a self-imposed hugely tight deadline of seeking a new trading agreement with the EU by year end, than trying to row back on the legal status of what to this point has been an evolving, although slowly, devolved settlement for Wales.
If he did it could only increase support for Scottish independence and a second referendum, and yes support here in Wales too, and show that his colourful description of the “Fab Four” nations of the UK working in partnership and respect, being anything but.
I was supportive of the M4 Relief Road, despite its high costs, but fully respected that as a devolved matter, it was Mr Drakeford’s call.
The place to challenge his decision is through the ballot box of a Welsh Assembly Election hue.
The outcome of next year’s Assembly Election, if latest polls are to be believed, could see Labour potentially out of office. There are many permutations, and even a coalition between Plaid Cymru and the Tories, cannot be totally ruled out.
Plaid Cymru was opposed to the Black Route and in favour of the so called Blue Route through Newport itself, which the inspector’s report was decisively dismissive of.
However, I am not sure the issue will be of much consequence on the election campaign outside of Newport and perhaps Cardiff.
Moving to rail, the current Welsh Government needs to continue to press the case for a full consequential from the roll out of England’s high speed two (HS2) project.
The UK Government, despite being repeatedly asked, has not clarified the position for Wales on Barnett for a project, even though it will seek ways of trimming the total bill, could still come in at around £100m.
Simply, Wales is entitled to its fair share, against the backdrop of Tory ministers talking inanely at every opportunity of wanting to level up the UK economy, without any intelligence around what this actually means and how it will be measured.
So, we need new Chancellor Rishi Sunak, and his new best friends at No 10, to confirm that Wales will get a full Barnett consequential, regardless of the fact that rail infrastructure is not a devolved matter unlike in Scotland – although alongside the hopefully soon to be confirmed transfer of the Valley Lines to Cardiff Bay, we will also see all rail devolved in Wales.
So far around £8bn has been spent on HS2, and for which the UK Government in 2015 confirmed a £755m
Barnett consequential for the Welsh Government.
From that there remains £290m, which will be assigned to the Welsh Government’s 2020-21 budget.
But what have they spent the money on to date?
A Welsh Government spokesman said: “It is not possible to identify where individual elements of the increases have been spent.”
As you would imagine the Welsh Government continues to push for a full Barnett consequential from the roll out of HS2 which could come in at around £5bn.
Moreover, UK Government’s own figures shows that bringing northern cities closer to London and with improved inter-city train speeds between places like Leeds and Manchester, will have a net negative impact on the Welsh economy, despite marginal benefits for north Wales, of around £150m a year.
A Welsh Government spokesperson said: “We are still awaiting clarity on the implications for Wales. We will continue to call for Wales to receive its fair share of the additional spend promised by UK Government on infrastructure, including HS2. On the planned investment in England on rail alone we should be receiving £5bn.” However, back the M4 Relief Road. If the UK Government makes a genuine offer to pay for an M4 Relief Road, then the First Minister could have some serious thinking to do and shouldn’t dismiss it out of hand.
And it wouldn’t be an embarrassing U-turn, as part of his reasoning for not proceeding last year was the project’s cost. So, if the UK Government took that financial pain away, with no strings attached, he could legitimately take a “when the facts change, I change my mind”, stance.
Then with consequentials from increased UK Government capital spending over the next five years, as well as long-term from HS2, the Welsh Government would have significant fire power to concentrate on and invest in improving integrated rail, bus and active travel infrastructure and services across Wales – including extensions of the South Wales Metro and delivering Metro projects too for the Swansea Bay City Region, as well as in north-east and north-west Wales.