Lord Hendy of Richmond Hill (Lab)

My Lords, the first thing I should say about this group is that the Scottish and Welsh Governments have been intensely involved in drafting the Bill, and both Governments are very supportive of it. I turn to Amendment 21. Clause 4 enables Scottish and Welsh Ministers to make arrangements for their functions to be exercised by GBR, a GBR subsidiary or a company jointly owned. The noble Lord, Lord Lansley, spotted that correctly; he is absolutely right. It is an enabling power designed to support integration where that is considered beneficial. It does not prevent devolved Ministers from continuing to exercise their functions themselves, nor is it intended to provide a general power to delegate functions to any body corporate. Indeed, under Clause 27, Welsh Ministers will continue to designate Wales-only services and Welsh components of cross-border services. Under Clause 31, Welsh Ministers may either provide those services themselves or secure their provision through the award of public service contracts. Similar powers exist for Scottish Ministers under Clauses 26 and 31. Of course, Scottish Ministers can decide to run their services through GBR or through their own operator. The Government therefore believe that the Bill strikes an appropriate balance between preserving devolved responsibilities and enabling closer integration with GBR, where that is desired by Scottish or Welsh Ministers. Amendment 22 in the name of the noble Lord, Lord Lansley, would require the ORR to be consulted. Clause 4 already requires consultation with both the Secretary of State and GBR before such arrangements are made, varied or revoked. That is because GBR is the body that may be responsible for carrying out the function, while the Secretary of State has an interest in the wider operation and integration of the railway system, and because GBR will be operating devolved functions alongside reserved ones. They are therefore the parties best placed to provide input on these arrangements. Although the ORR plays an important role as the railway’s independent regulator, these arrangements concern the exercise of devolved functions and national versus devolved governance, rather than regulatory matters. We therefore do not consider an additional statutory consultation requirement to be necessary. On Amendments 145 and 146, the Government fully support transparency and effective parliamentary scrutiny. That is precisely why we have already published the agreed memorandum of understanding with Welsh Ministers and a framework for the memorandum of understanding with Scottish Ministers. That has enabled Parliament to consider the proposed arrangements alongside the Bill. The memoranda of understanding are intended to provide a basis for joint working between UK Ministers and Scottish and Welsh Ministers on matters relating to rail services and funding. They are not legislative instruments but practical agreements to support effective intergovernmental working. The amendments would require the MoUs to be published at the same time as the rail strategy and would impose a two-month period before they could come into force. However, the rail strategy and the MoUs serve distinct and seperate purposes. The rail strategy sets out long-term priorities and objectives for the railway, while the MoU supports collaborative working between the UK and Welsh or Scottish Governments. Requiring the two documents to be published at the same time would create unnecessary friction and delay. Similarly, requiring a two-month waiting period before an MoU could take effect would add process without materially improving oversight or outcomes.