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.

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.

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.

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.

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.

Thank you so much for your co-operation in taking evidence on the LCMs.

09:48

Meeting suspended.

09:51

On resuming—

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.

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.

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.

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.