Political reporter, Wales News
Chancellor Rachel Reeves will use her spending review on Wednesday to announce £445m for new rail projects in north and south Wales.
More details are expected on Wednesday, but plans for five new stations in Cardiff, Newport and Monmouthshire, as well as upgrades in north Wales, are on the agenda.
It follows years of complaints of underinvestment in the Welsh railway network.
The Treasury said the package had “the potential to be truly transformative”.
But the Conservatives criticised the lack of support for a new M4 relief road, while Plaid Cymru said the cash was “merely a drop in the ocean compared to the billions Wales is owed”.
The spending review will set out Reeves’ plans for how public services will be funded for years to come.
It was not clear on Tuesday evening what the impact of the announcement might be for the Welsh government’s day to day spending, with cuts to budgets other than health, schools and defence expected.
What Wales gets to spend is determined by a calculation based on how England-only departments – such as health and local government – are funded.
It follows weeks of rows between Welsh and Westminster Labour, as concerns grew over the next Senedd election as polling suggested the party could lose its dominant role in Welsh politics.
According to the Treasury, the £445m will be spent on fixing level crossings, building new stations and upgrading existing lines, and is a combination of direct funding and cash for the Welsh government.
It said it was the “cornerstone of the UK government’s plan to address decades of underinvestment in critical infrastructure that has held back the Welsh economy”.
Rail funding has become a totemic issue in Welsh politics, with the lack of knock-on funding for Wales from High Speed 2 repeatedly raised with the First Minister Eluned Morgan.
The first minister has publicly called for more rail spending from the UK government – one of a list of calls she has made on Sir Keir Starmer in recent weeks.
Politicians say if High Speed 2 had not been classified as an England and Wales project, Wales would be owed between £431m – according to finance secretary Mark Drakeford – or multiple billions, according to Plaid Cymru and previous sums used by senior Labour figures including Welsh Secretary Jo Stevens.
The extra money is not connected to HS2, although Labour was keen to make a symbolic link.
Party sources, and former transport minister Lee Waters, said the sum is more than Wales would have had from the high speed rail project.
PA MediaWelsh Transport Secretary Ken Skates and others have lobbied the UK government figures on a range of projects recommended by transport reviews looking at north and south Wales.
They include new stations at Cardiff East, near the city’s Newport Road, and in the west of Newport.
There are hopes for a station in the eastern Newport suburbs of Somerton and Llanwern, and one that will serve the Monmouthshire villages of Magor and Undy, along with improvements to the mainline to allow local services to run.
The stations were proposed by a review to boost rail transport in a region that has seen an increase in house building in recent years, but is connected via the congested M4 motorway and has a limited local railway service.
The work is estimated to cost £385m.
In north Wales, the Welsh government has been pushing for work on the Wrexham to Liverpool route to enable metro-style services, and upgrades on the north Wales mainline to boost the frequency of services.
It also wants to commence development work to increase capacity at Chester – a hub for trains from north Wales.
Rachel Reeves could also commit more funding to help make coal tips in Wales safer.
The first minister has previously said that £25m allocated to Wales at last year’s October budget was not enough.
Looking ahead to the next Senedd election, a senior Labour figure said: “Labour’s delivered what the Tories wouldn’t, what Plaid can’t and what Reform have no interest in.”
Former transport minister Lee Waters said: “Civil servants calculated that we lost out £431m in Barnett formula funding by the way the high-speed rail project was categorised by the Treasury. This £445 million makes good on that.
“We will have to wait to see what exact schemes the Chancellor is agreeing to but that figure would allow the priority schemes that the Welsh government and the UK Department of Transport had been working on to go ahead.
“Taken together this is a very significant package of rail investment, much more than we ever got from the Tories, and will make a real difference to people.
“We now need to make sure we get a change to how funding works for rail so that this is the beginning of a pipeline of investment into the future”
Another Labour source said the “historic investment” was down to the “work of the Welsh Secretary, Jo Stevens, who has delivered Labour’s promise to right the chronic underfunding of Welsh rail by the Tories”.
Welsh Conservative Senedd leader Darren Millar called it a “kick in the teeth”, complaining of no extra cash to enable an M4 relief road or for upgrades to the A55 and A40 trunk roads.
“The promised rail investment falls well short of the £1bn plus in rail funding planned by the previous UK Conservative government for the electrification of the North Wales line.”
Plaid Cymru’s finance spokesperson Heledd Fychan said: “£445m is merely a drop in the ocean compared to the billions Wales is owed on rail, and what Labour – up until they came into power – used to agree with us on.
“The people of Wales have seen this injustice for what it is – Wales being short-changed by successive Westminster governments. This announcement won’t change that.”
Additional reporting by Gareth Lewis
