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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,

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

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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 be promoted down towards the towns in the borders, but eventually it will extend to Carlisle. The last part will have to be 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

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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.

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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.

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