Official Report 557KB pdf
09:15
Our second item of business is consideration of a legislative consent memorandum and a supplementary legislative consent memorandum on the Railways Bill. The bill was introduced in the United Kingdom Parliament on 5 November 2025, and its main purpose is to establish Great British railways as a new publicly owned body with responsibility for rail infrastructure and passenger services across Great Britain. It also makes wider provision in relation to railway funding, access to infrastructure and passenger representation.
The Scottish Government lodged an initial legislative consent memorandum on 5 November 2025, followed by a supplementary memorandum on 20 February this year, reflecting amendments made to the bill during its passage through the House of Commons. I note that the Delegated Powers and Law Reform Committee has considered the memorandums and, although it has drawn attention to limited information on one new delegated power, it has made no recommendations in relation to consent. The committee issued a targeted call for views, and I place on record the committee’s thanks to those who were able to respond within the very tight timeframes with contributions to our scrutiny.
This morning, we will hear from the Cabinet Secretary for Transport before considering what recommendations to make to Parliament on the Scottish Government’s draft legislative consent motion. I therefore welcome to the meeting Fiona Hyslop, the Cabinet Secretary for Transport; Bill Reeve, director for rail reform, Transport Scotland; and Debbie Blair, lawyer, Scottish Government.
Before we move to questions, I think that the cabinet secretary wants to make a short opening statement—I keep asking for short statements, but no one listens. Over to you, cabinet secretary.
Convener, I want to start by acknowledging the very serious fire incident near Glasgow Central station over the weekend and paying tribute to the emergency services for their exceptional efforts throughout Sunday and into Monday. That there have been no reports of serious injuries is a great relief to all, and it is testament to the professionalism and dedication of those services.
You will be reassured to hear that I have been constantly briefed throughout. Yesterday morning, I met Network Rail and ScotRail as they assessed the on-going challenging implications of plans to restore the use of, and services at, Glasgow Central station, when it is safe and able to be reopened.
Turning now to the purpose—
Before you do so, cabinet secretary, I want to thank you for those comments. I know that all of these things come with a risk to those who are trying to solve the problem, but it might be useful if you can give the committee any update on when rail services might be restored. I think that parliamentarians got some letters yesterday, but do you know any more than what is in those letters about when services might be restored to Glasgow?
Obviously, the Scottish Fire and Rescue Service will have to give permission for access to and use of the station. I refer everyone to the Network Rail and ScotRail updates, which, today, have communicated that the station remains closed, but there is low-level traffic that can still use Anderston station, for example. They will communicate as soon as they can. I know that there is a topical question on the matter this afternoon, and there might be more updates by that time.
Okay, thank you. I am sorry to have interrupted you, but I think that it is a fundamentally important issue. Do you want to move on to talk about the LCM now?
Turning to the purpose of this agenda item, I thank the convener and the committee for inviting me to give evidence on the Railways Bill legislative consent memorandum and the supplementary memorandum.
I have repeatedly called for the full devolution of rail in Scotland to strengthen the integration of track and train, but the UK Government is not prepared to make that change at this time. I have therefore made it clear that Scottish ministers will not accept any reduction in our existing devolved powers and that Scotland must benefit from rail reform to the same extent as the rest of Great Britain. As presented, the bill respects those requirements and I and Transport Scotland officials have had long and extensive engagement with the UK ministers and Department for Transport officials to secure that position for Scotland.
The Railways Bill was introduced in the House of Commons on 5 November 2025 and amended at committee stage in January. The Scottish Government considers that the bill, as amended, engages the legislative consent process because it contains provisions that will alter the Scottish ministers’ executive competence, so we lodged the LCM on 12 December. The Delegated Powers and Law Reform Committee reported on 5 March. Following welcome UK Government amendments, we then lodged a supplementary LCM on 20 February. The Scottish Government’s clear position is that both should be approved.
The bill will create a new body—Great British railways—that will operate, maintain and allocate access to rail infrastructure across the UK. GBR will also deliver passenger services that are currently the responsibility of the secretary of state. Scottish ministers will retain current devolved responsibilities, including securing the provision of ScotRail and Caledonian Sleeper services and specifying and funding rail infrastructure in Scotland.
The bill will introduce new provisions that will strengthen Scottish ministers’ accountability for rail infrastructure in Scotland, including a new and improved infrastructure funding regime and, importantly, new powers for Scottish ministers to issue guidance and directions to GBR on areas of rail outputs that we specify, fund and for which we set strategy. My officials at Transport Scotland will undertake a detailed options appraisal to identify the best approach for Scotland’s railway. As part of this work, they will engage fully with industry partners and stakeholders. This Government is clear in its commitment to retaining the benefits of ScotRail delivering services in public ownership, and the bill does not change that.
Under the legislation, Scottish ministers will have the power to commission GBR to deliver rail passenger services on their behalf, which could enable passenger services to be delivered in a more integrated way, but that is by no means a requirement of the bill and no decisions have been made on that option at this stage. Approval of the LCM simply acknowledges that power, should Scottish ministers ever want to use it at some point in the future.
I support the policy intent of the bill, particularly its ambition to maximise the benefits of greater integration while respecting devolved arrangements. That support, of course, remains subject to full scrutiny of the final bill text and to the Scottish Parliament’s legislative consent process, should there be final House of Lords amendments. I am, however, keen that the elements securing the powers and responsibilities for Scottish devolution are secured and supported by this Parliament in this parliamentary session, if that is at all possible.
I know that the committee will have questions on the Scottish Government’s position on the bill, and I look forward to addressing them.
Thank you, cabinet secretary. Our briefing tells us that it is a fairly complicated bill, which might be an understatement. There is an LCM and a supplementary LCM and there are likely to be several more LCMs before the process is complete. Will you reiterate why you asked the committee specifically to consider this before we had all the LCMs and other details in front of us?
There are two reasons for that. The substantive part of the bill, as presented, was the result of the prior involvement of ministers—a good example of what should happen—so a lot of our issues about protecting and enhancing Scotland’s devolved position were agreed in advance of the bill’s publication. Building in devolved sensibilities at the start is always a good idea.
The bill is complex. There are provisions for Scottish ministers throughout the bill and that is why a lot of clauses require the LCM approach. We lodged the LCM in December and the Delegated Powers and Law Reform Committee did the right thing by taking time to go through everything, and I am confident that it has done that. There is no controversy about the bill’s contents and the legislative consent applications have been applied appropriately.
Protection of devolution is really important for everybody, and we have managed to do that. My main concern, however, is that, having secured that, we do not know what will happen next. If Parliament sets out an assertive position that we have protected and, to an extent, enhanced the powers of the Parliament, that would be a strong message to whoever is looking at the bill at Westminster thereafter.
The problem is probably the interruption of the Scottish Parliament elections, although I should not call it an interruption, because it is an important democratic event. What that will mean is that the new committee that is established will not have the same experience as this committee has. It will also have much less time—weeks as opposed to months—to consider the bill. The House of Lords will be the final place for amendments, and it will likely deal with them when it comes back from recess, so the time and opportunity for the future committee and Parliament to have a view is limited. The substantial amendments have already been lodged, and we do not anticipate major amendments at the next stage. However, if there were such amendments, the committee would have to look only at those aspects of the bill and the final text, and I think that that process would be restricted and limited.
I would also add that the supplementary LCM addresses a point that this committee identified, which is what happens to the provision of services at the end of the period of control of assets, when assets may be transferred. The supplementary LCM that we asked for has been provided and reflects what the committee identified when it considered the Passenger Railway Services (Public Ownership) Act 2024. An important responsibility for Parliament is to tidy up our responsibilities, this side of the election, on the substantive elements of the bill, with the statement of the LCM, as the bill stands. That is the view of the Government.
I am smiling slightly, because, although the next committee may be short of time, this committee is not exactly flush with time, given all the things that we have to do. It is good to have had that explanation.
Your explanation is that the Railways Bill would deliver deeper integration across the network. If ScotRail, the Caledonian Sleeper and Network Rail in Scotland are still the responsibility of the Scottish Government, how will that integration work? Can you give us some examples to help us to understand that, cabinet secretary?
There is far more integration here than in the rest of the United Kingdom. The Railways Bill tries to replicate, across the rest of the UK, the benefits that we have had from the integration of track and train. Lord Hendy, the rail minister, has publicly stated that. Currently, integration is handled through an alliance and agreement between ScotRail and Network Rail. The bill will enable a far more formal position on that. The form that that takes will be up to us, but there are provisions to ensure that, on any issues relating to Network Rail, there will be a greater connection between the Secretary of State for Transport and us. In some respects, that will depend on what option is taken, which will be for a future Parliament to scrutinise. The framework of the bill allows us to decide which way we want to go, but it will be for a future Scottish minister and a future Parliament to assess that.
We could base things on the existing alliance. There could be the potential for a joint venture or for a subsidiary. The important point is that the secretary of state, in some instances, would make agreements with us. Indeed, there are elements throughout the bill that provide for consultation with us, should decisions be made by the UK Government and the secretary of state in relation to Network Rail. Normally, it is the other way around. A lot of that is still in play, and that will come later.
Good morning. A key part of making the new arrangements work effectively is the memorandum of understanding that will be developed between the Scottish Government and the UK Government. Can you give us a bit of insight into how things stand in that regard? Do you envisage it significantly changing the existing relationship that the Scottish Government and Transport Scotland have with Network Rail?
09:30
You will be aware that there is already a memorandum of understanding, but the bill makes the relationship statutory, which provides an important underpinning. The new memorandum is still being developed, but it will ensure that the relationships are strong in terms of the co-operation that will still be required. We will have powers for what we fund and for which we set the strategy, and we will also be able to provide direction and guidance to Network Rail, in relation to aspects of GB rail, which we have never done before.
Prior to the publication of the bill, I had three meetings with Lord Hendy, the Minister for Rail, and two meetings with Heidi Alexander, the Secretary of State for Transport, both of whom want to ensure that the memorandum of understanding is strong and that it helps us to administer the arrangement. The memorandum is still being drafted. There is no requirement for it to be published at the same time as the bill, but the fact that there is a requirement in the bill for there to be a memorandum on a statutory footing is important.
Given the underpinning of the MOU in statute, I presume that there will also be an opportunity for parliamentary scrutiny at some point once it has been finalised.
I assume so. Everyone would be interested in that. I gave evidence to the Westminster Transport Committee, which was looking at the legislation from a UK perspective and wanted assurances about how it would impact devolution, and it also expressed an interest in scrutinising the memorandum after it is published.
You mentioned the memorandum of understanding. Will it include things such as dispute resolution? If there was a conflict because, for example, ScotRail services and cross-border services wanted to use the track at the same time, would that situation be covered by the MOU? How would it be handled?
We are developing the heads of terms for the MOU. Access and freight are the two issues that are of interest to everybody UK-wide and which seem to be coming to a head. It is helpful that the bill already states that we have to be consulted about access issues that affect Scotland. The heads of terms have not been completed by any means, but Bill Reeve can discuss the content.
The heads of terms have not been completed, but they are keeping us busy. Our engagement with colleagues in the Department for Transport has been constructive and it is just about the best that we have experienced. There is a genuine desire from them to respect what we have achieved, which is reflected in the UK bill.
The MOU focuses on how we give effect to the bill’s intent through practical arrangements for matters such as dispute resolution. The MOU is about exactly the sort of issue that Mr Lumsden has described and how we give effect to the bill’s intent; that is what we are fleshing out. So far, we are encouraged by the constructive engagement and we look forward to being able to consolidate a draft. The final MOU will need to reflect any further amendments to the Westminster bill.
I am a big fan of open-access operators. Are you assured that they will not be squeezed out by the services that will be operated by GB rail?
We would not want that to be the case. The access arrangements are still reserved, so those issues are primarily for the UK Government. As I reflected, the bill gives us some locus on access and how that affects our services, including cross-border and freight services. Those issues will be an important focus for the operation of GB railways.
Are you confident that open-access operators will not be affected by the bill?
That is not for me to determine; it is an issue for the UK Government. I will be ensuring, from a Scottish perspective, that they will not be affected. If you want to be confident about it, you will need to engage directly with the UK Government. I am sure that my counterparts at Westminster will be doing that.
Can I press you slightly on that? I believe that open-access operators have helped to keep the price of tickets down. Their prices seem to be lower than those of other operators, so it might be dangerous to lose them, especially if they are operating services from London to Edinburgh and Glasgow and perhaps beyond in future years, depending on how we go with electrification.
I agree with you. Bill, do you want to come in?
To recap, there are three broad types of open access. There are the operators that you are referring to, such as Lumo, which runs services across the border. We also have important open-access operators such as the Jacobite, which runs a steam train in the west Highlands that does a lot of good for the economy. Importantly, all freight trains are also open access.
The UK Government is providing assurances to open-access communities in the bill, but it is fair to say that not all parts of those communities are yet satisfied with those assurances, and some amendments are likely to be proposed in the House of Lords, although that is not for us to say.
The bill will give us more influence over such decisions in Scotland than we have at the moment, and it will give us the opportunity to reflect our policies of support for such operations more effectively. It is not as effective as if we were completely devolved, which remains our preferred approach, but within those constraints, the bill takes us a step forward.
Your last point is noted. On your first point, it is relevant to note that you are aware of the issues and of how important open-access agreements are and that you will continue to push for them. I am sure that it would vex the next transport committee if such agreements were to disappear.
Mark Ruskell has some questions to ask.
Will the role of Transport Focus change at all as a result of the bill?
The role will be strengthened. There will be some consolidation of powers in Transport Focus, as the rail ombudsman will move in there and some work that is currently conducted by the Office of Rail and Road will be consolidated in Transport Focus. The bill will result in a useful strengthening of the functions of that independent body.
That will be on a UK-wide basis. Do you expect any changes in how the organisation operates in Scotland?
The impact on passengers runs through what the UK Government wants to do as part of the Railways Bill. As far as the operation of devolved aspects is concerned, an important part of the development of the railway is that public ownership means that we can focus on passengers and make sure that the organisations that represent passengers can have input and make an impact. Obviously, what we are doing now is dealing with the bill as it stands, as opposed to the operation of services and how they will be run. That issue is separate from the legislation.
On the wider vision of what the railways can achieve going forward, the Associated Society of Locomotive Engineers and Firemen’s submission talks about having a publicly owned freight operating company that could drive some of the strategic work that needs to be done on freight. It also talks about moving away from using private sector rolling stock leasing companies, which ASLEF believes is not delivering good value for the taxpayer.
Is there room for that agenda in the work of GBR? How do you see the opportunities for freight opening up? Would you support having a public sector freight operating company?
We are very much in favour of promoting rail freight. We have strong targets. We have invested considerably in freight, which is currently driven primarily by private sector arrangements. I do not think that anything in the bill will prevent Scotland from doing more on public freight operators if we choose to. That would require investment, as would a different funding arrangement for the railways. I welcome ASLEF’s submission, but a lot of the aspects that it referred to were more UK-wide.
We are limited by our borrowing arrangements, so our funding does not create new money. There are ideas about using bonds, for example—the Scottish Government also wants to use them—as a different type of funding, but that would not necessarily increase the amount of funding, because our borrowing is capped.
What do you think about a publicly owned freight operator? Does the Scottish Government have a view on that? Are you content for just ScotRail and Caledonian Sleeper to be in public ownership? Does it stop there?
I can give you my view—I am a minister for a few more weeks. I think that we should be open to that, but it would not be appropriate for me to tie the hands of a future Government minister, who might want to make choices in that area. That possibility is left open.
What about the rolling stock companies?
I was saying that we need a different form of funding arrangement. The issue is how much we can borrow in order to have a different form of funding. Again, this is not necessarily to do with the bill, but I am keen on looking at Eurofima, which involves a cheaper form of funding. Green bonds are a good suggestion, but that is limited by how much we can borrow. We must not think that that is a magic bullet—it could work only if we had far more fiscal powers than we currently have.
Obviously, the limits of devolution kick in there.
That is not for this legislation.
I will leave it there.
Are there any other questions?
I have a couple of points to ask the cabinet secretary to clarify. In your opening comments, you mentioned the creation of a new rail infrastructure funding mechanism for GBR. With the creation of GBR, is it the intention that rail infrastructure investment in the future will still be undertaken through the control period process, as at present, but that it will operate differently, or will there be a completely different arrangement from the existing CP arrangements?
I will bring in Bill Reeve on the detail. We have funding of £4.2 billion in the current CP. The new arrangements mean that we will have direction and guidance on what we fund and set a strategy for. That is the whole point of the bill—it will change the relationship with the ORR. The ORR will still have a role, but we will have a stronger role in how the direction can be set. From an accountability point of view, that is really important because, once a control period is agreed, we have to rely on the ORR to monitor it and ensure that the delivery is at pace and to the required level.
I am keen for the Parliament to provide letters of consent. That is one of the significant changes in the bill that will enhance Scottish ministers’ powers. It is anticipated that control periods will be folded into the new operation of GBR, which will give us more powers over the areas that we fund and set a strategy for and so on.
There will still be five-year funding settlements for the infrastructure. At the moment, we issue a specification and an indication of funding, and the ORR determines how much we should pay. If Network Rail did not deliver what we paid for, we would have no accountability mechanisms for redress.
There will still be a five-year funding settlement, and we will still need to issue our specification and an indication of our funding. The ORR will advise on how much that specification should cost and how efficient GBR should be, but the important change is that it will be for Governments to decide on the level that is appropriate for the five-year period. There will then be accountability mechanisms that will allow us to hold GBR to account in Scotland for its performance against delivery.
That is really a transfer of powers from the ORR to the Scottish Government in relation to a substantial amount of funding. From your previous experience, Mr Matheson, I know that you will appreciate that we have had limited authority over that, despite the vast amounts that are being expended.
That is helpful. I was trying to clarify whether we are still going to have a five-year period, as with the existing CP arrangements, so that we have a clear line of sight on what the infrastructure investment profile looks like. That is important for the industry, and for many of those who operate in our railway network on the civil engineering side, to understand.
I seek clarification on another point, as I may have missed something. Given that we are operating ScotRail and the Caledonian Sleeper under operator-of-last-resort arrangements, will the new structure enable you to step out from that, using those powers, or will there be a continuation?
09:45
That is determined by the Passenger Railway Services (Public Ownership) Act 2024, which the committee looked at. That strengthens the position on ownership.
I know that the committee has very limited time and a lot of work pressure, but the supplementary LCM precisely addresses what was left outstanding from the public ownership legislation. What is needed for the 2024 act and the bill is to make sure that we—and, indeed, the UK Government—have powers in relation to the transfer of assets at the end of a period of ownership or after a change of decision, whatever that decision might be, by a future Government.
I want to come back in after the deputy convener’s questions. I am thinking of a real-life example. There are disability access issues at Inverurie station. Who will be responsible for ensuring that disability access is put in place? Will that rest with GBR? Would the Scottish Government call on GBR to address that? How will it work in practice?
Frustratingly, although we had thought that it would be simple to transfer responsibility for access and equalities, it has been decided to keep that within the UK reserved area. When it comes to ScotRail services, we will certainly do what we can to have better-planned integration of works so that access, accessibility and equalities issues can be addressed at the same time. Greater integration will help us, but we still do not have the powers that we think we should have on straightforward things such as access.
Are you saying that that will still rest with the UK Government?
Not specifically railway accessibility, but accessibility legislation generally is reserved to the UK. We pressed for a transfer but, unfortunately, it was not on the table. Notwithstanding that reserved power, having a more integrated railway body in Scotland—whatever options we determine on after analysis—will in practice allow us to ensure that accessibility is built in with the bricks of our specification and will allow us to get improvements wherever we can, as part of the normal business of the railway, in an integrated fashion.
I am trying to think of who to lobby as we go forward. Will it be you, cabinet secretary, or the UK Government?
It will probably be both. We can probably do a better and improved service, but we cannot do as much as we would like to do, had we got more powers.
It may not be the cabinet secretary, because she might not be here in the next parliamentary session. I do not think that you are standing, cabinet secretary—are you? It will be your successor, whoever that may be.
Thank you very much, cabinet secretary. We will later consider in private the evidence that we have heard, which will inform the report that we put to the Parliament.
I will briefly suspend the meeting to allow for a changeover of witnesses.
Thank you so much for your co-operation in taking evidence on the LCMs.
09:48
Meeting suspended.
09:51
On resuming—