Saturday, March 22, 2014
Labour let down valleys over electrification
A row that has rumbled on all week is over who pays for the electrification of the mainline from Cardiff to Swansea and the valleys lines. All of this blew up on Monday when the First Minister stood in front of his expensive lectern in Cathays Park and claimed that the UK Government were reneging in the deal they had made with Welsh Ministers.
As Nick Servini explains on the BBC, this turned out to be a bit more complicated than that:
Carwyn Jones wrote to David Cameron last week saying that he was coming under pressure from Network Rail to confirm who was paying for the work and that he wanted urgent clarification from Downing Street.
And in the answer from the PM, it emerged that the UK government is going to pay directly for the electrification from London to Cardiff, and then the stretch from Bridgend to Swansea. He says this was all part of the agreement reached in 2012.
The more observant readers among you will notice that there's a gap between Cardiff and Bridgend.
That gap between Bridgend and Cardiff and the Valleys lines are initially going to be paid for by Network Rail who will then recoup the money in the form of charges to the rail operating company which has the franchise, Arriva Trains Wales.
As there's a substantial subsidy on that franchise paid for by the Welsh government, it appears that the money will ultimately have to come from Cardiff Bay.
David Cameron's letter says: "It appears that a misunderstanding has arisen that the Valley Lines electrification will be directly funded by the UK government but that was never the case."
In his letter, David Cameron says that while the UK government provides indirect financial backing to Network Rail, he does not state that the UK government will pay for the cost in the Valleys, totalling hundreds of millions of pounds.
It seem that Labour's case is based on some interviews conducted iwth David Cameron in which he was very quick to claim the credit for the electrification going ahead with some typically imprecise language as we would normally get in that sort of discussion.
However, the meat of the deal is in the exchange of letters between the two governments, which details what exactly Carwyn Jones and his administration have signed up to and which they are now seeking to back out of. The rest is second-rate political rhetoric on the part of Labour politicians.
In the urgent question to the Transport Minister on Tuesday, opposition politicians set out the terms of the deal the Welsh Labour Government agreed to in more detail. Byron Davies for the Conservatives told her:
In light of the confusion that seems to exist on the part of the First Minister concerning rail electrification to Swansea, I will refer to the relevant correspondence, if I may, which was made between Carl Sargeant and Justine Greening. On 13 July 2012, in a letter to Carl Sargeant, Justine Greening said,
The next Wales and Borders franchise specification should include electric services on the Valleys lines, with a specific access charge on the franchise to repay the infrastructure investment by Network Rail...This will include electrification of the main line between Cardiff and Bridgend. On that basis, I will include electrification between Bridgend and Swansea’.
Carl Sargeant responded by saying, 'Thank you for your letter of 13 July. I too am glad we were able to work together to agree a way of taking forward electrification and I can confirm our agreement as set out in your letter’
Welsh Liberal Democrats Spokesperson, Eluned Parrott added more detail:
Minister, it seems to me that, actually, the deal is quite clear. It says in the letter of agreement that the two Governments agreed that the funding mechanism was that Network Rail would borrow the money and that a fee would be payable on the franchise. Your own business case says that:
'Welsh Government is responsible for the management of the Franchise under the terms of a Joint Parties’ Agreement with the Department for Transport. Welsh Government is also responsible for payment of any sums payable by the ‘Authority’ under the Franchise Agreement.’
That is in section 5.8, ‘Summary of Commercial Case’, page 50 of the Welsh Government’s business case. It also states in section 7.2 that the Welsh Government is the sponsor of Valleys lines electrification
Why is it suddenly a surprise to you when it was there in black and white in the business case that you wrote and the letters of offers that you exchanged between the two Governments that there might be a cost to the Welsh Government? It is as plain as the nose on your face.
Now, Adrian Masters from ITV Wales has added more detail as a result of an interview with the Secretary of State for Wales:
I've seen correspondence between officials in Cardiff and Whitehall from March 2013 which includes a paragraph which clearly states that the Welsh Government 'will pay for the full cost of the work.' It states that 'the Department for Transport will cover the costs in CP5 ' (a budgeting term referring to 2014-19) but that the DfT 'will get this back from WG (Welsh Government) from CP6 (2019-24) onwards.'
I gather the correspondence between officials continued and that that 'side agreement' was finalised and also documented. It adds to other correspondence which has been released in the last week which strongly suggests that there was a formal deal in which the Welsh Government agreed to meet the cost of electrifying the Valley Lines.
That's certainly what Welsh Secretary David Jones believes and it's why he told me he expects Carwyn Jones' government to stick to its deal.
The evidence then is that it is the Welsh Labour Government who are dissembling. They are playing politics with an important and substantial investment and putting the future of the Valleys in doubt. They are letting down South Wales.
As Nick Servini explains on the BBC, this turned out to be a bit more complicated than that:
Carwyn Jones wrote to David Cameron last week saying that he was coming under pressure from Network Rail to confirm who was paying for the work and that he wanted urgent clarification from Downing Street.
And in the answer from the PM, it emerged that the UK government is going to pay directly for the electrification from London to Cardiff, and then the stretch from Bridgend to Swansea. He says this was all part of the agreement reached in 2012.
The more observant readers among you will notice that there's a gap between Cardiff and Bridgend.
That gap between Bridgend and Cardiff and the Valleys lines are initially going to be paid for by Network Rail who will then recoup the money in the form of charges to the rail operating company which has the franchise, Arriva Trains Wales.
As there's a substantial subsidy on that franchise paid for by the Welsh government, it appears that the money will ultimately have to come from Cardiff Bay.
David Cameron's letter says: "It appears that a misunderstanding has arisen that the Valley Lines electrification will be directly funded by the UK government but that was never the case."
In his letter, David Cameron says that while the UK government provides indirect financial backing to Network Rail, he does not state that the UK government will pay for the cost in the Valleys, totalling hundreds of millions of pounds.
It seem that Labour's case is based on some interviews conducted iwth David Cameron in which he was very quick to claim the credit for the electrification going ahead with some typically imprecise language as we would normally get in that sort of discussion.
However, the meat of the deal is in the exchange of letters between the two governments, which details what exactly Carwyn Jones and his administration have signed up to and which they are now seeking to back out of. The rest is second-rate political rhetoric on the part of Labour politicians.
In the urgent question to the Transport Minister on Tuesday, opposition politicians set out the terms of the deal the Welsh Labour Government agreed to in more detail. Byron Davies for the Conservatives told her:
In light of the confusion that seems to exist on the part of the First Minister concerning rail electrification to Swansea, I will refer to the relevant correspondence, if I may, which was made between Carl Sargeant and Justine Greening. On 13 July 2012, in a letter to Carl Sargeant, Justine Greening said,
The next Wales and Borders franchise specification should include electric services on the Valleys lines, with a specific access charge on the franchise to repay the infrastructure investment by Network Rail...This will include electrification of the main line between Cardiff and Bridgend. On that basis, I will include electrification between Bridgend and Swansea’.
Carl Sargeant responded by saying, 'Thank you for your letter of 13 July. I too am glad we were able to work together to agree a way of taking forward electrification and I can confirm our agreement as set out in your letter’
Welsh Liberal Democrats Spokesperson, Eluned Parrott added more detail:
Minister, it seems to me that, actually, the deal is quite clear. It says in the letter of agreement that the two Governments agreed that the funding mechanism was that Network Rail would borrow the money and that a fee would be payable on the franchise. Your own business case says that:
'Welsh Government is responsible for the management of the Franchise under the terms of a Joint Parties’ Agreement with the Department for Transport. Welsh Government is also responsible for payment of any sums payable by the ‘Authority’ under the Franchise Agreement.’
That is in section 5.8, ‘Summary of Commercial Case’, page 50 of the Welsh Government’s business case. It also states in section 7.2 that the Welsh Government is the sponsor of Valleys lines electrification
Why is it suddenly a surprise to you when it was there in black and white in the business case that you wrote and the letters of offers that you exchanged between the two Governments that there might be a cost to the Welsh Government? It is as plain as the nose on your face.
Now, Adrian Masters from ITV Wales has added more detail as a result of an interview with the Secretary of State for Wales:
I've seen correspondence between officials in Cardiff and Whitehall from March 2013 which includes a paragraph which clearly states that the Welsh Government 'will pay for the full cost of the work.' It states that 'the Department for Transport will cover the costs in CP5 ' (a budgeting term referring to 2014-19) but that the DfT 'will get this back from WG (Welsh Government) from CP6 (2019-24) onwards.'
I gather the correspondence between officials continued and that that 'side agreement' was finalised and also documented. It adds to other correspondence which has been released in the last week which strongly suggests that there was a formal deal in which the Welsh Government agreed to meet the cost of electrifying the Valley Lines.
That's certainly what Welsh Secretary David Jones believes and it's why he told me he expects Carwyn Jones' government to stick to its deal.
The evidence then is that it is the Welsh Labour Government who are dissembling. They are playing politics with an important and substantial investment and putting the future of the Valleys in doubt. They are letting down South Wales.
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It's interesting that you missed the last section of Nick Servini's comments in which he asked:
"Why did David Cameron suggest in the interview with me that the UK government was paying for Valleys lines electrification if that wasn't the case?
And why didn't the Welsh government nail down the details on who exactly was going to pay for such a key infrastructure project when it was agreed two years ago?"
Did you run out os space?
"Why did David Cameron suggest in the interview with me that the UK government was paying for Valleys lines electrification if that wasn't the case?
And why didn't the Welsh government nail down the details on who exactly was going to pay for such a key infrastructure project when it was agreed two years ago?"
Did you run out os space?
# posted by 
: 9:17 AM
: 9:17 AM
No I covered Cameron's comments earlier in the post and made the point that what politicians say in interviews on complex matters such as these cannot always be trusted, the detail is in the agreement. As to why th Welsh Government did not nail down the details I put that down to incompetence.
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