The Chancellor, Rachel Reeves, has unveiled a £445 million rail investment for Wales, part of the UK Government’s broader Spending Review aimed at renewing the UK economy.
This marks the largest real-terms financial settlement for the Welsh Government since devolution in 1999, averaging £22.4 billion per year.
Transforming Welsh transport
The major rail upgrade will connect Wales’s industrial regions, improve daily commutes, and open up economic opportunities. The investment covers both North and South Wales, including upgrades to existing lines, new station builds, and improvements to level crossings. A key focus is enhancing connections between advanced manufacturing hubs in North Wales and strengthening transport links between Cardiff and Bristol.
“This strategic investment tackles years of underfunding in Welsh transport infrastructure and is a key part of our Plan for Change,” said the Chancellor. “We’re reconnecting communities, supporting industry, and driving sustainable growth.”
Supporting key industries
Beyond rail, the Spending Review includes significant investment in Wales’s industrial sectors:
Steelmaking in Port Talbot: Up to £580 million will be invested to secure the future of the site and transform it into a clean energy hub. This includes £500 million for Tata Steel’s Electric Arc Furnace project, safeguarding 5,000 jobs while cutting emissions.
Aerospace and Defence: Continued funding supports the growth of Wales’s aerospace and automotive industries, which employ over 15,000 people. Investment in zero-emission technologies will drive innovation in these sectors.
The Chancellor reaffirmed the Government’s commitment to raise defence spending to 2.6% of GDP by 2027, creating UK-based jobs and supporting national security.
Addressing legacy issues
An additional £118 million will be provided from 2026 to 2029 for the maintenance and safety of disused coal tips—following a previous £25 million allocation for 2025-26. This funding will secure hazardous sites, protect homes, and unlock land for future development.
Local growth and business support
Welsh businesses will benefit from:
£130 million through the British Business Bank to improve access to finance across Wales.
Continued support for Investment Zones in Cardiff, Wrexham, and Flintshire—each receiving £160 million over the next decade.
A new local growth fund, equivalent in value to the Shared Prosperity Fund, targeting up to 350 communities across the UK, including in Wales.
A record settlement for public services
The Welsh Government will receive an average of £22.4 billion per year—the highest real-terms settlement since 1999. This funding will help deliver key public services and support the Welsh economy.
UK government commitment to renewal
Secretary of State for Wales, Jo Stevens, said:
“This UK Government is investing in Wales’ future and driving economic growth across the country.
We promised we would deal with the historical under-investment in Wales’ rail network and the funding announced today in this Spending Review shows we are delivering on that pledge.
Along with a record financial settlement for Welsh Government to improve public services, £118m more to help keep coal tips safe and investment in growing industries like aerospace, we are backing Wales’ potential and delivering for working people.”
The Spending Review is central to the UK Government’s Plan for Change, aiming to rebuild infrastructure, boost industry, and ensure all parts of the UK benefit from national economic growth. Photo by Phil Richards from London, UK, Wikimedia commons.