The first minister has welcomed an admission by the UK government that spending to improve Wales’ railways has been at “low levels” in recent years.
Eluned Morgan said it was the first time UK ministers had admitted that the Welsh railways were underfunded.
The letter does not commit new money, although Morgan said she hopes there would be “significant” investment on new stations to come.
It follows a long-standing row over the lack of extra funding for Wales from the High Speed 2 (HS2) rail project.
The Plaid Cymru said the letter did not commit to righting “the wrong” of HS2, while the Welsh Conservatives said they would continue to call for extra funding.
A UK government source said UK ministers “cannot fix that inherited injustice” but recognised Wales “has suffered chronic underinvestment”.
Because HS2 was designated as an England and Wales project, despite none of the track reaching Wales, Wales gets no additional funding as a result.
Differing figures have been given for how much politicians think Wales is owed from HS2, from £4bn suggested by Plaid and the Welsh government in the past to £350m in the most recent figures from Welsh ministers.
Speaking on The Phone-in on Radio Wales, Morgan said money had been “poured” into HS2 which had been classed as a England and Wales project, “even though not one inch of track was laid in Wales”.
That was a “fundamental injustice”, she said.
“For the first time, the UK government has recognised that we have been underfunded,” she said.
Morgan said conversations had “already started” on a “long list of projects” that could be invested in.
Morgan, asked if there would be consequential funding from HS2, suggested there would not.
“It would probably be in the shape of new stations,” she said.
In a letter to the Welsh government from UK government Transport Secretary Heidi Alexander, and Welsh Secretary Jo Stevens, the ministers said: “We recognise that railways in Wales have seen low levels of enhancement spending in recent years, particularly in the context of major investments such as HS2.”
The letter stated that decisions on extra cash will be up to the Treasury, saying that the Chancellor, Rachel Reeves, “has been clear on the position of the public finances bequeathed by the last government”.
She said the prioritisation of rail service projects proposed by the Welsh Rail Board, which the two governments are a part of, will inform work with the Treasury ahead of the spending review, due in the spring.
‘We cannot fix inherited injustice’
A UK government source added: “We recognise that Wales has suffered chronic underinvestment under successive Conservative governments, including through HS2. We cannot fix that inherited injustice.
“But we can and will fight for a funded pipeline of future rail projects across Wales for the first time in decades.”
The letter said the ministers agreed that recommendations of transport commissions in north and south east Wales should be prioritised.
The commission in south Wales proposed five new stations – Cardiff East, Newport West, Somerton, Llanwern and Magor & Undy – at an estimated cost of £335m, plus £50m to improve the mainline itself.
Improvements have also been proposed to the Wrexham to Liverpool line. The UK government letter praised both sets of proposals, saying they “have the ability to drive economic growth”.
‘If Labour were serious, we would get £4bn’
Plaid Cymru’s Llyr Gruffydd said: “The first minister has clearly been reading a very different letter to what we’ve read.
“It doesn’t reference the unfairness of HS2 nor does it say Labour will right the wrong of the full £4bn consequential owed to Wales. Eluned Morgan is conflating two very different issues.
“If Labour were serious about giving Wales fair play, then they would give us the full £4bn we are owed, just as they said they would.”
A Welsh Conservative spokesman said: “Welsh Conservatives have been consistent in making the case for Wales to receive consequentials from the HS2 project in England.
“Based on spending to date, this would be in excess of £1.5bn, but with further spending set to rise, we’ll continue to call for further Barnett consequentials for the total final amount spent.”
