HL Deb 13 June 2002 vol 636 cc449-54

7.48 p.m.

Lord McIntosh of Haringey

rose to move, That the draft order laid before the House on 2nd May be approved [29th Report from the Joint Committee].

The noble Lord said: My Lords, in rising to move this order, I should like, with the leave of the House, to speak also to the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2002.

The orders before us are principally constitutional in nature. The first is made under Section 30(2) of the Scotland Act and concerns an amendment to an area reserved by Schedule 5 to the Scotland Act 1998. The result of this is a change in the legislative competence of the Scottish Parliament. The second is made under Section 63 of the Scotland Act and provides for Scottish Executive Ministers to exercise executive powers in areas where primary legislation continues to be a matter for this Parliament. This is commonly known as "executive devolution".

Noble Lords may care to note that Ministers in the lead policy departments have been fully involved in preparing both orders before the House today. In the case of the Section 30 order, the lead policy department is the Department of Transport, and in the case of the Section 63 order it is the Department of Transport and the Department of Trade and Industry.

The first order is made under Section 30(2) of the Scotland Act. Schedule 5 to the Scotland Act forms part of the definition of the legislative competence of the Scottish Parliament and sets out the matters that are reserved for the purposes of the Act.

Section 30 of the Scotland Act provides a mechanism whereby Schedules 4 or 5 to the Scotland Act can be modified by an Order in Council, subject to the approval of both Parliaments. This allows the boundaries of the Scottish Parliament's legislative competence to be adjusted, either by removing existing reservations in whole or in part, or by adding new ones.

Following devolution, railways are a matter reserved to this Parliament. However, commitments were made during the passage of the Scotland Bill in 1998 to devolve a number of measures relating to railways in Scotland. What is known as the McLeish settlement ensures that Scottish Executive Ministers have a significant level of control over Scottish passenger rail services within the overall Great Britain framework. Elements of the package have already been implemented by previous orders under the Scotland Act. Other elements of the McLeish settlement were implemented by the UK Transport Act 2000.

The order amends Section E2 of Schedule 5 to the Scotland Act. It transfers to the Scottish Parliament legislative competence over powers for the promotion and construction of railways in Scotland. Once implemented, project promoters will be able to apply to the Scottish Parliament for all the necessary permissions to initiate projects. They will no longer have to go to Westminster to do so.

The order fulfils the commitment made in the McLeish settlement to ensure that promoters of railways, stations and maintenance depots would be able to seek the powers for proceeding with construction from the Scottish Parliament. Until now, all projects involving the construction of railways in Scotland have been scrutinised at Westminster. This has been done either through the order-making procedures of the light railways Acts or through the Private Legislation Procedure (Scotland) Act 1936.

In future, permissions for railway projects that are wholly within Scotland will be granted at Holyrood and only cross-border developments will continue to be dealt with at Westminster. Scottish projects, which I understand will be dealt with by private legislation in the Scottish Parliament, will include both heavy and light railways. Procedures for Private Bills were updated and improved by the Scottish Parliament in November 2000.

Powers for the development of heritage railways have traditionally been granted through light railway orders. These light railway orders will continue to be made, but by Scottish Ministers.

Noble Lords may be aware that a number of new railway projects in Scotland are currently being considered that will require legislation, including the link between Stirling and Alloa. The order is being enacted in advance of any Private Bill associated with these projects being lodged.

The second order, the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2002, is made under Section 63 of the Scotland Act. Section 63 provides a mechanism to allow functions of a Minister of the Crown to be exercisable by Scottish Ministers in or as regards Scotland instead of, or concurrently with, the Minister of the Crown. The order is being brought forward today primarily as a result of joint efforts between the Scotland Office and the Scottish and Northern Ireland Executives to establish ferry services between Ballycastle in Northern Ireland and Campbeltown in Kintyre.

At the end of 1999, Sea Containers, which had run summer-only commercial operations on the route since 1997, was encountering heavy losses and indicated that the service would not return in summer 2000. The service had been established to take advantage of the strong historical and cultural links between Kintyre and Antrim. It was also to build on the potential tourism benefits of linking these two neighbouring regions of outstanding natural beauty. Loss of the service would affect both already fragile local economies. Moreover, both Ballycastle and Campbeltown had newly built and publicly funded port facilities in danger of becoming permanently redundant.

Having identified that a service could operate only with a public subsidy, the first task was to investigate whether a subsidy could legally be paid by declaring a public service obligation. Following discussions with Commission officials, and having seen the evidence provided by consultants, Commission officials agreed informally that a ferry service would not infringe state aids legislation.

Section E3 of Schedule 5 to the Scotland Act reserves responsibility for financial support for shipping services that do not begin and end in Scotland. The uniquely peripheral nature of the Highlands and Islands is such, however, that the primary purpose of any new ferry service to Northern Ireland would always be to assist economic development rather than merely as a commercial transport link. It was on that basis that both the Northern Ireland and the Scottish Executives have from the start of this process undertaken that any eventual subsidy would be found from within devolved resources.

Scottish Ministers have requested this order to allow them to make payments directly to an operator of ferry services between the Highlands and Islands and Northern Ireland. In future, the Scottish Executive will be able to take action to promote ferry services to Northern Ireland to support its economic development role in the Highlands and Islands. It will be for the devolved administrations to decide how to make use of these powers and to take forward the tendering processes. I beg to move.

Moved, That the draft order laid before the House on 2nd May be approved [29th Report from the Joint Comntitiee].—(Lord McIntosh of Haringey.)

The Duke of Montrose

My Lords, I thank the Minister for enlarging on what is contained in the order as regards the question of the modification of Schedule 5. As the Minister said, there have been quite a few modifications to the schedule since it started. When we consider that originally, the provision and regulation of railways", was to be totally reserved to the UK Government, we can see that it has been devolved in very many ways.

As far as concerns both my understanding and that of my party, the Scots are, by and large, satisfied with the various modifications that have taken place. During the debate that took place in another place on this modification regarding the promotion and construction of railways beginning and ending in Scotland, it emerged that the Scottish Executive may become the one promoting the new railways, if necessary. That raised immediate concerns about funding and where it would come from. I gather that the Minister in the other place seemed to think that the grant that is given to the Scottish Executive would be quite adequate to cover this project. I presume that the Scottish Executive has discussed the matter and is prepared to play along with this. That is the only comment that one can make.

Under the transfer of functions order, we are dealing with a subject with which the Scottish Executive is no doubt very familiar in general; namely, the subsidising of ferry services. Most of these are devolved. However, it was interesting to note that the Explanatory Notes attached to the legislation spoke of the Scottish Executive carrying out a continuing review of the subsidising of ferry services. I believe that there also remains an obligation on the Government in Westminster to monitor such subsidisation. Does the Minister have that in mind? Further, can he say whether that review will be an ongoing process?

The Earl of Mar and Kellie

My Lords, noble Lords on these Benches have no difficulty in approving this transfer of legislative competence. It certainly fulfils part of the McLeish settlement and completes the measures of railways devolution. If we think a little about what this enables the Scottish Parliament to deal with, it is clear that it relates to railways on routes which have never previously been used. We had a fairly recent example of that on the Island of Mull, with a light railway between Craigmuir and Torosay Castle. It also deals with the re-opening of moth-balled railways. The Minister will not be surprised to hear those words, Stirling, Alloa and Kinkardine. But perhaps I may also add Larkhall and the Edinburgh cross-rail, which, I am happy to say, have in fact just opened, thereby extending the railway system down towards Dalkeith; and, more critically, towards the Edinburgh City bypass. There is also the restoration of abandoned routes, which would deal especially with border rail, about which I shall say something later.

On a slightly anecdotal note as regards Stirling, Alloa and Kinkardine, the Scottish Executive had to hold a debate as to whether one could claim to be rebuilding the route because the railway line is still there—or whether it would be better to have new legislation. It was decided that the 1846 Act relating to the Stirling and Dunfermline railway did not hold sufficient powers and was subject to challenge. It was decided that it would be safer to have a new railway order.

The issue of renewing the railway on the abandoned border route poses a small problem. I can see that, to begin with, the railway will he promoted down towards the towns in the borders, but eventually it will extend to Carlisle. The last part will have to he considered by this Parliament, whereas all the extensions down the Waverley route towards the Border can be dealt with by the Scottish Parliament. I look forward to that, although it may not happen, for a long time.

With regard to the implications, having twice been commissioner on the Private Legislation Procedure (Scotland) Act 1936, I am disappointed to see that it has been abandoned, because I believe that the local public inquiry is a good process. The power to use the Light Railways Act would be helpful, but one wonders about the issues of health and safety. Initially the light railways were designed to be lightly laid and used in very rural areas.

Like the noble Duke, I have been trying to define railway devolution and reservation. The question is: where does the line go? By that, I mean the Schedule 5 line. It is tempting to say that it runs between the rails. But it is also difficult to find out exactly where the reserved devolved line runs. Not only has there been railway devolution in modifications of Schedule 5; it has also taken place through transfer of functions orders and through other Acts. Definitive answers as to exactly what is reserved and what is devolved in Scottish railways are still eluding me. Therefore, I want to ask whether there is a single record of all the transfers of functions. Clearly the modifications of Schedule 5 are much easier to track. That said, we are very happy with the railway order.

I move on to the ferry order. We certainly approve of this transfer of ministerial function. Of course, this is likely to take place in a constituency familiar to these Benches and to my honourable Scottish friends Alan Reid and George Lyon. The transfer obviously provides the opportunity to subsidise the Campbeltown to Ballycastle ferry and presumably any other ferry between Northern Ireland and the Highlands and Islands that anyone might like to dream up—in theory, at least.

It is a clearly a transport, tourism and economic development measure. It is certainly part of remote areas policy, and I suspect that the new renewable energy equipment factory in Machrihanish could benefit if it chose to export into the Irish market. That will clearly have an impact on the Scottish Parliament's budget. It also depends on co-operation between the Scottish and Northern Ireland Executives. I suppose that it brings to my attention that there is a very small constitutional problem here. Despite all the architecture of dispute resolution within devolution, it is all aimed at dealing with disputes between the United Kingdom Government and a devolved Parliament or Assembly. At present there is no architecture to deal with disputes between devolved Parliaments or Assemblies. I hope that that will not happen, but it could.

Finally, I want to ask three questions. First, has the power to make.such changes yet been transferred to the Northern Ireland Assembly? Secondly, will Caledonian MacBrayne be allowed to tender for the service? I felt that it was somewhat unfairly excluded on the previous occasion, especially as it had to supply the ship. Finally, can we clarify the wording in the schedule to Article 2, which refers to "shipping services carrying passengers"? Presumably the ferries will be allowed to carry cars, lorries and freight as well as passengers. However, I take the point that primarily it must be a passenger-carrying ferry service.

Lord McIntosh of Haringey

My Lords, I am grateful to both noble Lords for their welcome for these orders. I shall deal with the points that they raised which are properly the concern of this Parliament. The noble Duke, the Duke of Montrose, referred to the implication from a Minister in another place that the block grant was adequate for the purpose. It is not really up to us to say whether the block grant is adequate for the purpose. We need only know that it will be financed entirely from within the block grant. Frankly, anything beyond that has nothing to do with us. It is up to them to decide their own priorities.

The noble Duke asked whether, since these are specific circumstances of potential economic gains from a subsidy for ferry services, there were any other circumstances where these might occur and whether we would monitor such cases from Westminster. We are not aware of any other circumstances but, of course, if there were any, the Department of Transport would continue to monitor them.

I believe that most of the issues raised by the noble Earl, Lord Mar and Kellie, were entirely matters for the Scottish Parliament. However, my understanding is that—

The Earl of Mar and Kellie

My Lords, perhaps the noble Lord will give way. At this moment, they are the responsibility of this Parliament because we have not yet devolved these issues.

Lord McIntosh of Haringey

My Lords, if the orders are approved—I have not heard any opposition to them—they will complete the devolution of responsibility for railways within the confines of the orders. Therefore, all the matters which he raises about differences between light railways and other railways, and the difference between abandoned lines and so on, will be entirely matters for the Scottish Parliament, and I would not wish to trespass on them. My understanding is that the Northern Ireland Assembly has the powers to carry out its side of the bargain. The question relating to Caledonian MacBrayne is entirely a matter for the Scottish Parliament and the Northern Ireland Assembly. As for the definition of "shipping-carrying passengers", of course that does not exclude carrying anything else. Indeed, if it were to work, I believe that it would have to carry coaches and coach parties.

The noble Earl, Lord Mar and Kellie, suggested that there is no architecture for devolved administration disputes, but we can set up joint ministerial committees to resolve such disputes. They would be attended by the United Kingdom Government and by the devolved Parliament and Assemblies. I hope that, on that basis, the order can be approved.

On Question, Motion agreed to.