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The flaw in the UK Government's decision making on rail spending that leads to Wales and other less wealthy regions being sidelined has been exposed in a new report.

MPs on the Transport Committee argue that the way schemes are assessed will “always favour London” and “work against the UK Government’s intention to rebalance the economy”.

They say the real funding gaps between London and regions in need of economic regeneration will worsen if not addressed more directly.

The report was partly sparked by the decision last year to cancel the electrification of 60 miles of track between Cardiff and Swansea.

This was at the same time that the Westminster Government awarded £6.6bn worth of contracts as part of the next phase of the high-speed rail network between London and Birmingham.

Schemes in the North, Midlands and the Lake District were also cancelled.

The report, Rail infrastructure investment, claims that the current transport scheme appraisal methods will always favour London as they are weighted heavily towards the reduction of congestion and journey time savings.

Because of the dense population of the south east, this actively disadvantages more rural and less economically buoyant regions.

Although the publication of the Government’s Rebalancing Toolkit in December last year acknowledged the need for change, it is only supplementary guidance.

The Committee said it was not convinced it the tool kit would make a material difference unless made mandatory, kept under regular review and put at the heart of Department for Transport’s investment decisions, rather than an afterthought.

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The Chair of the Committee, Lilian Greenwood MP, said: “The Secretary of State’s cancellation of three rail electrification schemes in the Midlands, south Wales and Lake District only to be followed four days later by the announcement in principle to fund Crossrail 2 in London unsurprisingly re-ignited the debate about disparities in rail infrastructure investment between London and other regions.

“The Treasury’s own data shows that spending per head in London in 2016/17 was more than ten times that of the East Midlands. Regional economies will never be able to catch up with London while such inequalities exist.

“While we accept that annual snapshots of comparative regional investment can be problematic, and that investment in one area can lead to benefits in another, some regions have faced decades of under-investment in their parts of the rail network.

“They deserve to have a clear sense of what the Government is doing to help them attract transport investment and grow economically. The Northern Powerhouse and Midlands Engine will struggle to live up to their names without tangible change.”

At the time the Transport Secretary Chris Grayling said journey times between Cardiff and Swansea will not be affected, as new bi-mode trains – which will switch from electric to diesel at Cardiff Central Railway Station – will be just as fast as if the section was electrified.

The report was critical of this approach as it “ignored the environmental cost”.

The Committee urges the UK Government to do more to support the development, testing and ultimate deployment of new technologies on the network.

Ms Greenwood said: “Our inquiry considered the electrification debate and the timing of the cancellation announcement – a process which has been complicated by the less than candid approach of the Secretary of State.

“We are disappointed he did not engage more openly with our scrutiny of his decision. The Government should have been more honest with Parliament and the public about the real reason for the decision. An announcement made by Written Statement on the last day before summer recess offered limited opportunity for debate and scrutiny.”

The report said that if the Department and Network Rail are to restore their damaged reputations and instil greater confidence in the railway industry to invest in its workforce, skills and innovation, the committee also recommends: