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Baroness Carnegy of Lour: My Lords, the question I had in mind to ask the Minister was a very simple one; namely, what does the order mean when it says that Scottish Ministers and a Minister of the Crown will act concurrently? I then heard the Minister's explanation which was of enormous complexity. Indeed, it was quite difficult to follow precisely what will happen. I am sure that we trust the Minister in that he has a full-proof scheme. But, following from the noble Earl's questions, I understood the Minister to say that the department would decide the amount that would be given to the franchise holder until the year 2004, and that that money would be passed to the Scottish Executive which would, in turn, pass it on. After 2004, I presume that it will be for the Scottish Executive to decide the amounts that might be given in grant.

Can the Minister say how the funding of the Scots Parliament will actually be arranged in that case? Will an earmarked amount be provided by the department? Alternatively, will the government of the day make a sort of "stab" at the amount that the Scottish Executive might want? It seems a rather peculiar arrangement to me, because grants to railway companies are not quite like the other services that the Scottish Executive has to fund. Can the Minister give us an idea--I believe that this is what the noble Earl was asking--of how the funding will be decided? That is an important matter.

Lord Macdonald of Tradeston: My Lords, the noble Earl, Lord Mar and Kellie, demonstrated, as ever, a very impressive grasp of the background both of the legislation and of rail matters. As regards some of the noble Earl's more detailed questions about the nature of rail services in Alloa--I am aware of his commitment to Clackmannanshire--I am sure that he would not expect me to deal with the details involved.

However, through the rail passenger partnership scheme, which is one of the areas where we shall continue to work through our concurrency with rail services in Scotland, a pre-qualification bid has been received from Clackmannanshire council and is

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currently being evaluated. As the noble Earl will know, the proposal is to build a new station at Alloa and to introduce an hourly Alloa to Glasgow rail service. That is an example of the rail passenger partnership scheme offering the prospect of help inside Scotland, in addition to the services provided by ScotRail under contract.

Looking at the way that these payments are committed, I should emphasise to the noble Baroness, Lady Carnegy, that the franchise payments made before 2004 are contractually committed. Subsequent to 2004, the funding of the replacement Scottish franchise will be met by Scottish Ministers out of the Scottish-assigned budget; in other words, out of the block grant that is negotiated for Scotland.

I turn to the question of concurrency that the noble Baroness posed. It is important for us to be able to invest in Scotland in parallel with the other commitments that we have through franchise. Incidentally, I should just clarify that, although money goes from the Government, it does not go to the franchise owner in the first instance, as has been suggested; it goes to the Strategic Rail Authority and is then passed on to the franchise owner--in this case, ScotRail. As I said, after the year 2004, it will be paid for through the block grant.

Again, as I am sure the noble Earl is aware, we have been making it clear that the DETR will remain responsible for paying the grant to the SRA, in order to fund railway improvements in Scotland. Through the rail passenger partnership scheme that I mentioned, we shall also be able to improve the railway services in Scotland; we shall also be able to do so through the SRA contracting directly with Railtrack for enhancements to the network, if that is required. The Scottish Executive will continue to be able to fund rail projects directly, rather than via the SRA through its existing powers. For example, such payments can be made from the Scottish Executive's public transport fund. Much more money has been made available in the context of the Spending Review 2000 for transport matters, and that increases the chance that I mentioned of 20 per cent per year for transport matters. Although the authority over the spending of that money is delegated to Scotland, it will also be available for the improvement of transport.

As far as concerns freight grants, there is no need for more orders because all of those powers are already devolved to Scotland. I hope that my answers do not add to the complexity mentioned by the noble Baroness, and that the order will commend itself to the House.

The Duke of Montrose: My Lords, before the Minister sits down, perhaps he could confirm whether I understood the situation correctly. After the year 2004, it sounded to me as though it will be up to the Scottish Executive to lobby for the necessary increase in grant that will be needed to cover the investment that has previously been made directly. Am I correct in my understanding?

Lord Macdonald of Tradeston: No, my Lords. Subject to Parliament voting the main Supply

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Estimates for the year 2001-02, the Scottish Executive would receive transfers arranged by the DETR of £111 million for 2001-02, as I mentioned, £108 million for 2002-03 and £107 million for 2003-04. Those are the amounts required on current estimates to fund the fixed payments under the existing ScotRail franchise. However, there may be some extra public expenditure until 2004, which would be affected by, for example, the decisions made by the rail regulator on track access charging and how that applied in Scotland. Subsequently, from 2004-05 and onwards there will be a new spending review period.

From 1st April 2004, it will be for the Scottish Executive to include provision for the Scottish rail franchise in its own spending plans. But those would be funded out of the Scottish Executive's block grant, so the lobbying, if you like, would be part of the much larger negotiation about Scotland's share inside that spending review period.

The order we are debating today allows the Scottish Ministers to make grants to the SRA for the purposes specified in the schedule to the order. The levels of

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funding to be provided will be determined by the public expenditure mechanisms, some of which I have outlined. However, as I say, the more general mechanism comes into play in 2004.

On Question, Motion agreed to.

Leeds Supertram (Land Acquisition and Road Works) Order 2001

Leeds Supertram (Extension) Order

The report by the Chairman of Committees and the Chairman of Ways and Means in the House of Commons, pursuant to Section 3(5) of the Statutory Orders (Special Procedure) Act 1945, that no petitions had been presented against the Leeds Supertram (Land Acquisition and Road Works) Order 2001 nor against the Leeds Supertram (Extension) Order 2001 was laid before the House and ordered to lie on the Table.

        House adjourned at nine o'clock.

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