Welsh Ministers (Transfer of Functions) (Railways) Order 2018 — House of Lords, 2018-04-16
Topic: Transportation
Denis Tunnicliffe (Labour, Centre-left): My Lords, I, too, thank the Minister for introducing this order. We on these Benches welcome the order, but we welcome it noting that it is fundamentally somewhat second best in the eyes of the Welsh Government in the sense that they would have liked a settlement much closer to the Scotland model than this order provides. I cannot remember which noble Lord mentioned it, but there is an implication that there is a journey and a terminus on devolution. I think that over the next few years, as this order and its effects play out, we may see renewed pressure that railways in Wales should be managed on the Scotland model The order is précised in paragraph 7.2 of the Explanatory Memorandum. It is: "to devolve executive franchising functions to the Welsh Ministers so that the Welsh Government could lead the procurement of the next Wales and Borders franchise, due to commence operations on 14 October 2018. This formed part of a wider agreement that included revised arrangements to enable the progression of two proposed rail electrification schemes in South Wales" This is no ordinary franchise. My judgment of its importance is very much built around the admirable objectives set out in the South Wales Metro proposals. They are somewhat flatteringly modelled on the London experience and envisage a totally integrated railway system around Cardiff and Newport using the Valley Lines. Therefore, the aspiration of the franchise is much wider than any previous one. The franchisee is to be called, "an Operator and Development Partner", and will undertake, "The operation of the Wales and Borders rail franchise … The design and the management of the development and implementation of capital works to deliver a Metro style service on the Core Valleys Lines … and subsequent infrastructure management of the Core Valleys Lines … The operation of rail and related aspects of the South Wales Metro service", and, "The design and development of further schemes to improve rail travel in Wales" My understanding is that that will mean that the ownership of the infrastructure, as referred to by the noble Lord, Lord Wigley, will transfer from Network Rail to either the Welsh Government or their agency, Transport for Wales. Essentially, there will be a change of ownership and responsibility. Could the Minister explain where the powers to make this transfer lie? In which particular Act are they, and who is exercising what powers under it? I remind the House that Network Rail was probably the most undramatic nationalisation in history, brought about by the Office for National Statistics, which said, "It’s yours, Government, and you’d better run it". Perhaps the Minister would like to reflect on the joys of running a railway Has the transfer has taken place and, if it has, what are the details? A number of noble Lords have asked detailed questions about it, but the key issue in the transfer is what the associated financial arrangements are. I think the Minister referred to them in her speech, but I would be grateful if she could spell them out at a bit more length. Do the UK Government have any ongoing responsibility for revenue support, particularly to the railways in the South Wales Metro and the Wales and borders franchise in general? Do they have any responsibility for supporting the capital programme in any way The aspect that frightens one when one looks at the aspirations of the South Wales Metro is that it involves some electrification. I have personal experience of exceeding my budget: if I remember correctly, I spent about £1.4 billion more than I was supposed to, but that was only 70% over budget. Network Rail, in its electrification of the Great Western main line, managed to drive the budget up from £2.6 billion to £5.7 billion, which is pretty heroic—about 120% again. Surely one of the problems of taking ownership of these lines, which by implication are not in great shape now, is that the Welsh Government will be exposed to possible significant increases in the project In a sense, my final question is: who will be responsible for these overruns? These sums of money are not insignificant for the UK Government but could be crippling for the Welsh Government.