Subordinate Legislation
I welcome to the committee Lewis Macdonald, the Deputy Minister for Enterprise, Transport and Lifelong Learning, and Karen Martin, James Howe, Jonathan Moore and Caroline Lyon, who are officials from the Scottish Executive.
Scotland Act 1998 (Modifications of Schedule 5) Order 2002 (draft)
The draft Scotland Act 1998 (Modifications of Schedule 5) Order 2002 is laid under the affirmative procedure, which means that Parliament must approve the instrument before it comes into force. I ask the minister whether he wants to make any introductory remarks and ask him to be brief, given the constraints on our time.
I will take that advice to heart, convener.
The context of the order is schedule 5 to the Scotland Act 1998, which, as you know, is that part of the act that provides for the areas on which we may not legislate. The devolution settlement was not intended to be fixed in stone and therefore, as well as the provisions in schedule 5, there is provision in section 30 of the Scotland Act for modification of that schedule by order in council, which would allow the legislative boundaries of the Scottish Parliament to be shifted in one direction or the other.
The McLeish settlement in 1998 made it clear that there would be devolution in the rail industry in forms that modified the schedule 5 reservations, specifically in a number of areas within which devolution has already taken place. For example, since the creation of the Scottish Parliament, orders under section 30 and other orders have amended the effect of the devolution settlement in order to give us the power to issue directions and guidance in relation to the Scottish rail passenger franchise and to fund that franchise. We have also been given powers to administer the freight facilities grants and track access grants within the rules that are common in the UK, and powers to appoint the chairman of the rail passengers committee Scotland. Other measures concern the laying of reports by the Strategic Rail Authority and the rail regulator in the Scottish Parliament. There are one or two other measures that we need not go into in any detail today.
This order amends section E2 of part II of schedule 5 to the Scotland Act 1998 to transfer to the Scottish Parliament legislative competence for the construction and promotion of railways in Scotland. Once that is implemented, project promoters will be able to apply to the Scottish Parliament for the necessary permissions to initiate projects without any requirement to seek permission from Westminster. The order fulfils the commitment made in the McLeish settlement to ensure that promoters of railways, stations and maintenance depots will be able to seek from the Scottish Parliament the power to proceed with construction. That does not apply to cross-border schemes, which will continue to be dealt with at Westminster. It will apply to heavy and light rail schemes that begin and end in Scotland, such as the link between Stirling and Alloa, into which we have already made considerable investment. The order is being enacted in advance of any private bill being lodged in relation to that route.
The order represents the completion of the McLeish settlement, which relates to the devolution of railway powers to the Scottish Parliament. I hope that the adjustments are uncontroversial, but I believe that they are historic in the sense that they complete the package that was agreed by the UK Parliament at the time of devolution.
Do members have any questions?
I do.
I ask you to be brief.
If, for example, someone wanted to promote the electrification of the east coast main line from Aberdeen to Edinburgh, would the order allow that?
The order deals with the building of new railways.
Not the refurbishment, upgrading or conversion of existing railways?
I do not think that that would require any additional legislative provision. The maintenance of the existing railway infrastructure is the responsibility of the infrastructure owner, which will be the successor company to Railtrack. The strategic oversight of that lies with the Strategic Rail Authority, to which we issue advice and guidance.
Essentially, the order deals with the promotion and construction of new sections of railway. I have already mentioned the Stirling to Alloa line; others might include links to Edinburgh and Glasgow airports, Borders rail and other such projects that are in the public domain. Alterations to the existing infrastructure would not be affected. Furthermore, the order would cover any proposal for the east coast or anywhere else that involved the construction of new track in order to accommodate alterations to traction.
There is still one small stretch of single track on the Aberdeen to Edinburgh line. Is the order also required to cover any alterations to that particular section?
Again, it would depend on what action was taken to address that. I am familiar with the single-track section at Usan bridge near Montrose. The order would be required only if a new stretch of track needed to be constructed outwith the existing line.
Thank you for that clarification.
My point of clarification might be obvious. Would any new stretches of track automatically come under the aegis of Railtrack's successor organisation and the Strategic Rail Authority?
That is a reasonable assumption, although the position of heritage railways, of which there are several in Scotland, might be slightly different. However, any additions to the railway network would come under the ownership of the network authority.
If there are no further questions, I ask the minister to move the motion to approve the order.
Motion moved,
That the Transport and the Environment Committee recommends that the draft Scotland Act 1998 (Modifications of Schedule 5) Order 2002 be approved.—[Lewis Macdonald.]
Do any members wish to debate the motion?
I would just like to give the development an enthusiastic welcome.
I think that the whole committee shares that sentiment.
Will the order make the development of the Borders rail network more or less likely?
The order makes it possible for the project to be undertaken through the Scottish Parliament. I therefore contend that it is now more likely to happen, simply because the procedure will not have to be referred to Westminster.
So can the headlines read "Minister says Borders rail network development more likely now"?
You are responsible for your own press releases, John.
Motion agreed to.
Scotland Act 1998<br />(Transfer of Functions to the Scottish Ministers etc) Order 2002 (draft)
We now move to the second piece of subordinate legislation that we have been asked to approve today. I invite the minister to make some opening remarks.
It is worth highlighting the context behind the order, which is the Executive's wish to assist the reintroduction of a ferry service between Campbeltown in Kintyre and Ballycastle in Antrim. The order represents a key stage in making that possible.
The political initiative to re-establish the service is shared by the Scottish Executive, the Northern Ireland Executive, the Scotland Office and the UK Government. Members will be aware that the previous commercial service that operated on that route was withdrawn in 1999. We realised that re-establishing the route would require joint working among the arms of Government that I have mentioned. The Scotland Office played a key part in bringing forward the initial proposals to make that happen, and through the ferry action group worked with a range of local interests on both sides of the North channel to put together a case.
In policy terms, the order neatly brings together transport and enterprise interests, in that we acknowledge that the economic development potential of the route will assist the economically disadvantaged communities in Kintyre. The Northern Ireland Executive shares that perspective in relation to north Antrim. The Vestas Wind Systems turbine factory at Machrihanish is also part of the context within which the order has been introduced.
We have taken the lead in the tendering process since the three Government bodies made the joint announcement at the end of January. To establish a public service obligation on the route, we will be required to meet state aid guidelines that are set by Europe. That will involve competition for the ferry subsidy. The PSO can apply to route services between peripheral areas of the community or to thinly served routes that are vital to economic development. We believe that this route meets those criteria. Subject to the committee's support of the motion, I will make an announcement later today of the formal commencement of tendering procedures. I will leave draft copies of that press release with the clerks for your information. As we want to move ahead speedily, I seek your support for the order.
I shall explain briefly the nature of the order. We are using an executive devolution process because the legislative responsibility is, in large part, reserved by the Scotland Act 1998. The service runs from a Scottish port to a port outwith Scotland, and schedule 5 to the Scotland Act 1998 reserves to Westminster the power to finance such a service. However, there was agreement among all the parties that Scottish ministers should take the lead in the tendering process.
Sections 7 and 8(1) of the Industrial Development Act 1982 give powers both to UK ministers and to Scottish ministers, but to enable us to use those powers outwith Scotland we must devolve the Crown minister's part of that responsibility. That is what the order does—it gives us the power to use the 1982 act to provide a subsidy to such a service under the public service obligation. The order is therefore a vital stage in making the service happen, and I invite the committee to support it on that basis.
Thank you, minister. Do members have any questions?
I want to say how much I welcome this substantial investment in Kintyre. The area around Campbeltown has been depressed for many years because of various factory closures. The reinstatement of the ferry, together with the Vestas investment, is very much to be welcomed. I also welcome your announcement that the tendering process will start today.
When do you expect to close the tendering process? I ask you to bear in mind the fact that timetables for the ferry service need to get into holiday brochures in early autumn so that people can use it properly next year. Part of the problem with the previous ferry service was the fact that it was not properly marketed. We must ensure that this one is.
We are keen to move forward as quickly as we can. However, the requirements of the European process mean that we have to advertise in the Official Journal of the European Communities. We hope to make the announcement later today and place the advertisement in the next few days. Thereafter, a draft service specification will have to be prepared and published. That will be along the same lines as that which we are producing for the west coast ferry services that are operated by Caledonian MacBrayne. Following that process, we will invite tenders according to the service specification. Once we have consulted on the draft service specification, we will invite tenders on the final service specification, which we expect to publish later this year.
The initial contracts will be for five years, according to European PSO rules. We hope to have made significant progress towards having a service in place by the early part of next year. I do not want to be more specific than that, as several procedures must be followed over which we do not have complete control. Nonetheless, we hope that, following a successful tender process, we will have a service in place by summer 2003.
What about the advertising of the details of that service? How soon can we expect to see that?
Those with responsibility for promoting and marketing the service will need to make their own judgments on that. However, I expect VisitScotland and others with an interest on this side of the route to use their discretion in producing promotional material in advance of the final completion of the process. The timing of that will be a matter for them to judge, but they will clearly keep a close eye on the progress of the tendering process.
I welcome the order, which, as the minister put it, connects two disadvantaged communities. I want to help by suggesting that the minister make it part of his thinking and part of the tendering process that those two disadvantaged communities should be connected to another community that is less disadvantaged, which is Troon.
We must focus on the instrument. I realise that Maureen Macmillan strayed over the line into other issues as well, but I want people to focus their questions on the power that is being transferred to Scottish ministers.
If you will forgive me, I think that the viability of the service should be important to the Government. The service would be much more viable if it were connected to somewhere on the Scottish mainland. Such a service could boost industry and tourism.
I am happy to respond to John Scott and I take the point that he has made. However, the order specifically makes provision for a connection between the Highlands and Islands and Northern Ireland. The order is for the executive devolution of a power that extends only as far as the provision of a subsidy for a service between ports in the Highlands and ports in Northern Ireland. Clearly, if the operators of such a service found that there was a profit-making route with which they could connect, they would need to make a judgment on that. However, the order is specific about the areas for which public subsidy will be provided.
I hope that Des McNulty's question is not to ask that the route connect to Milngavie.
No, but I am interested in the flexibility of the definition that allows Kintyre, which is neither an island nor part of the Highlands, to become part of the Highlands and Islands.
Can I presume that the reason that the minister did not present a similar order for the Rosyth to Zeebrugge service is that state aid was not required in that context, whereas it is required here? For state aid, is the Executive required to do anything other than ensure that there is a tendering process? What other stipulations must be met of which we should be aware?
Kintyre is within the Highlands and Islands under the definitions that apply to the Highlands and Islands.
Are those definitions legal rather than geographical, then?
They are geographical. I remind you how the king of Norway dragged his longship across the end of the Kintyre peninsula to demonstrate that Kintyre was indeed an island and was therefore under Norwegian sovereignty. However, that was a little time ago.
In modern times, we must deal with European requirements. We made an investment in the Rosyth to Zeebrugge service, but not in the provision of the ferry. Our investment was a freight facilities grant for the creation of capital infrastructure in Rosyth. There is no public service obligation on the route, nor should there be as it is a commercial, profit-making route. We assisted with the capital infrastructure because of the environmental benefits that that would bring to Scotland.
The requirements for the Campbeltown to Ballycastle service are different because of the public subsidy on the route. The European Commission is not in a position to take a firm view on a PSO before the application is made, but we are proceeding on the basis that we are confident that the arrangements will meet with the Commission's requirements. There should be no difficulty there. One requirement for PSOs is that, once the service specification has been set, the contract should be awarded on the basis that provides best value for money. The competitive process must be seen to be transparent and equitable. We are quite content to follow that requirement as we think that it will provide value for money for the taxpayer.
Having visited Campbeltown last year, I want to make the brief observation that I cannot think of a town on the west coast of Scotland that is more deserving of this extra investment.
I would not disagree with that.
Motion moved,
That the Transport and the Environment Committee recommends that the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2002 be approved.—[Lewis Macdonald.]
Motion agreed to.
I thank the minister and his officials for attending.