Powers of Direction and Guidance to the Strategic Rail Authority

  68.  In our two previous reports on transport issues we recommended that powers of direction and guidance over the Strategic Rail Authority should be conferred on the National Assembly.[136] On the first occasion that recommendation was rejected by the Government which declared itself "not persuaded" that the National Assembly should have a similar powers over the SRA as the Scottish Executive.[137] Our repeated recommendation received a far more promising response. [138] The arguments in favour of conferring on to the National Assembly powers of direction and guidance over the Strategic Rail Authority were set out in our previous reports.[139] Therefore, we do not intend to rehearse those arguments in this report.

  69.  Clause 9 of the draft Bill provides the National Assembly with similar powers to the Scottish Executive in relation to direction and guidance over the Strategic Rail Authority.[140] Those powers of direction and guidance would include "all rail passenger services which are provided under a franchise agreement and which both start and end in Wales". It would also cover those services provided by the franchise which start and finish in Wales, but make stops in England. In practice that would cover all such services provided by Arriva Trains Cymru under the Wales and Borders franchise. In the discharge of that power the draft Bill places a duty on the National Assembly to have regard for all users, regardless of whether they use the service in Wales or England.[141] Those powers of direction and guidance would not extend to intercity services and cross country services. However, the National Assembly would be able to give advice to the SRA in relation to any service which "starts or ends in Wales or makes at least one scheduled stop in Wales".[142]

  70.  The Strategic Rail Authority stated that the draft Bill did not create novel powers but extended to the National Assembly powers which were already exercised by other devolved administrations. Therefore it was confident that it could implement the rail provisions in practice.[143] Chris Austin, Executive Director of the Strategic Rail Authority, told us that the SRA had a positive working relationship with the Welsh Assembly Government and that the proposals should be seen as a "logical progression" of that relationship. [144]

  71.  The Rail Passengers Committee (RPC) welcomed such a transfer of powers to the National Assembly but warned that those powers would have to be cognisant of the wider rail network. In that respect the RPC highlighted the need for devolved Administrations not to plan in isolation and but to "take into account - and involve stakeholders in planning for - services that start or end beyond their own boundaries".[145]

  72.  Carmarthenshire County Council also welcomed the proposals and believed that they would "deliver more "Wales" focused rail services and enable better integration between rail and other transport objectives".[146] CECA argued that they were an important factor in "achieving an efficient integrated transport policy for Wales".[147]

  73.  Several witnesses were somewhat disappointed that the powers of direction and guidance were limited to those services provided by Wales and Borders franchise. The Rail Passengers Committee argued for stronger powers than advice to be given to the National Assembly in respect to cross-border inter-city services serving Wales.[148] Stuart Cole agreed: "The difficulty is that in terms of First Great Western and Virgin Trains there is only advice being offered to the Strategic Rail Authority […] and yet First Great Western in the morning peak, provides something like 60% of the services between Cardiff and Swansea."[149] He believed that there would be merit in extending the direction and guidance over the SRA to those services.[150]

  74.  The Strategic Rail Authority argued that the limitations to the directions and guidance proposed for the National Assembly were necessary to protect the financial position of the SRA and the interests of the GB rail network.[151] Chris Austin from the SRA stressed the importance of this because the SRA needed to take a "GB - wide view of those strategic services which are operated by […] the intercity network".[152] This point was echoed by the Association of Train Operating Companies which stated that "the specification of services within Wales should not unreasonably impede cross-border services".[153]

  75.  Roger Cobbe, Commercial Director of Arriva Trains, considered the proposals an effective mechanism that would create clarity between the National Assembly's transport policies and the SRA as the agency that managed the franchise.[154] In particular, he argued that it would provide a focus "which cannot possibly be achieved by the UK Government based in London".[155]

  76.  We welcome the proposals to confer on the National Assembly powers of direction and guidance over the Strategic Rail Authority. We further recommend that the Government explore avenues to enhance the influence that the National Assembly can bring to bear over intercity services within Wales.

  77.  Clause 9 (5) places restrictions upon the direction and guidance given by the National Assembly. Those restrictions include: directions and guidance to the SRA on services that are not funded by the National Assembly; direction and guidance that would adversely affect any outside rail services; and direction and guidance that was inconsistent with the direction and guidance of the Secretary of State for Transport or the SRA's financial arrangement. Clause 9 (6)&(7) also allows for the Secretary of State, after consultation with the National Assembly, to exclude a service from those over which it has direction.[156]

  78.  Robin Shaw, Director of Transport, Welsh Assembly Government, explained that the Secretary of State for Transport needed to retain an overall view of the priorities for UK transport. To ensure that the Minister could carry out that role he needed to have "a right of veto in relation to anything that [the National Assembly] might specify which then had potentially an adverse impact on services in England".[157]

  79.  Sub-clause 9 (6) reflects the need for the Secretary of State to hold the final authority on the priorities of the UK rail network. Its intention is to ensure that the policies of the National Assembly do not adversely impact on services in England. Whilst this appears to be sensible, it raises the question of the influence that can be exerted by the National Assembly over a service in England that adversely impacts upon services in Wales. We look to the Government to reassure us that in having regard for the protection of English rail services, a similar protection is available to Welsh rail services.

Appointment of Members of the Strategic Rail Authority Board

  80.  In our previous two reports on rail services in Wales we recommended that the National Assembly be given the power to appoint one or more members of the Strategic Rail Authority.[158] The rationale behind those recommendations was that it would provide a clearer link between the SRA board and the National Assembly. In our inquiry into the Provision of Rail Services in Wales we reported that Kim Howells MP, Minister of State for Transport had told us that this was open to discussion. The Report further stated that Richard Bowker, the Chairman of the SRA was also keen to discuss that proposal with the National Assembly.[159] Despite those positive noises, a power for the National Assembly to appoint members of the Strategic Rail Authority was not included in the draft Bill.

  81.  Chris Austin, Executive Director of the SRA, believed that such a provision was not necessary. He argued that the attributes of SRA Board members needed to cover a range of skills and talents rather than appointments being made on a geographical basis.[160] He argued that the desire for representation of Wales on the SRA Board was satisfied by the fact that one of the members of the board was Welsh. The Board used that fact to take account of her knowledge and experience of Wales.[161] Whilst that gave the Board a Welsh flavour, Stuart Cole argued that "We need somebody who speaks out on behalf of Wales […] rather than someone who has an interest in the railways in Wales".[162] The Rail Passengers Committee averred that, in principle, giving the National Assembly the power to appoint members of the SRA Board was "a perfectly sensible proposal".[163]

  82.  We recommend that the Government include in the Transport (Wales) Bill provision for the National Assembly for Wales to appoint one or more members of the Strategic Rail Authority.

A physical presence for the SRA in Wales

  83.  Several of our witnesses commented that they would like to see the establishment of an office of the Strategic Rail Authority in Wales following any transfer of powers of direction and guidance to the National Assembly. Professor Cole commented that the SRA had an office in Scotland. He argued that close proximity of the SRA to the Scottish Executive provided the opportunity for a daily dialogue that was not possible between Edinburgh and London.[164] The Rail Passengers Committee also supported the establishment of an office of the Strategic Rail Authority in Wales.[165]

  84.  Chris Austin of the SRA stated that there were no plans at present to create an office, but that the SRA did not have "any particularly strong feelings" about establishing such an office. That said, he wished to review the situation in the light of the way the arrangements under any Transport (Wales) Act worked.[166] Denzil Jones, Head of Transport Policy Division, Welsh Assembly Government told us that they were aware of the proposal: "The point was made whether [the SRA] should have an office in Cardiff. That has occurred to us and certainly the people who are dealing directly with the Wales and Borders function might well move to Cardiff".[167]

  85.  We conclude that a Welsh office of the Strategic Rail Authority would be beneficial to the management of the Wales and Borders franchise. It would also facilitate dialogue between the National Assembly and the Strategic Rail Authority. We recommend that the Government set out, in the explanatory notes that will accompany the Transport (Wales) Bill, the administrative arrangements necessary for the establishment of such an office.

Agreement with the SRA on Exercise of Franchising Functions

  86.  Clause 10 contains provision for the National Assembly to enter into agreements with the Strategic Rail Authority where the National Assembly is providing financial assistance. Such agreements would ensure that the SRA carried out its franchising functions in a particular way and to the requirements of the National Assembly.[168]

  87.  The draft Bill provides a framework with which the National Assembly may pursue its integrated transport strategy. The Committee concludes that clause 10 is a sensible part of that framework. Detailed discussion on those financial arrangements would be a matter for the National Assembly and the Strategic Rail Authority.

Rail Passengers Committee

  88.  The draft Bill proposes to confer on the National Assembly the power to appoint the Chairman of the Rail Passengers Committee for Wales; and to be consulted on the appointment of the Committee's members.[169] The Rail Passengers Committee welcomed the proposal which would place the Rail Passengers Committee Wales in the same position as the Rail Passengers Committee in Scotland.[170] Colin Foxall, Chairman of the Rail Passengers Committee Wales saw only one potential area of concern. He stated that he was"extremely keen that it is clear that the independence of the chairman of the committee is continued because the structure at the present time is that the chairman of the committees and the committees themselves are appointed as independent and indeed they are autonomous".[171] The maintenance of that independence was seen as key test for the draft Bill. [172]

  89.  Stuart Cole believed that this proposal was a "logical outcome of the powers of direction and guidance over the SRA".[173] However, he agreed with the RPC that the independent voice of the Rail Passengers Committee had to be guaranteed.[174] Chris Austin from the SRA agreed that it was a sensible proposal. He stated that it worked well in Scotland and was sure that it would work well in Wales.[175] John Armitt, Chief Executive of Network Rail, thought the proposal gave the National Assembly "a sense of ownership" and that it was "just a natural sense of fair play". He also believed that a Chairman of the Rail Passengers Committee Wales appointed by the National Assembly would have "a level of credibility greater than that which he would have if he was appointed from London".[176]

  90.  We welcome the proposal for the National Assembly to have the power to appoint the Chairman of the Rail Passengers Committee. We agree with the Rail Passengers Committee that due care and attention needs to be placed upon the principle of independence. We recommend that the Government enshrine that independence on the face of any Transport (Wales) Bill.

137   Second Special Report from the Welsh Affairs Committee, Transport in Wales: Response of the Government to the Second Report of the Committee, HC763 of Session 2002-03, para K Back

138   Third Special Report from the Welsh Affairs Committee, The Provision of Rail Services in Wales: Response of the Government to the Third Report of the Committee, HC 708 of Session 2003-04, page 10 Back

139   Second Report of the Welsh Affairs Committee, Transport in Wales, HC 205 of Session 2001-02, paras 34-38 and Third Report of the Welsh Affairs Committee, The Provision of Rail Services in Wales, HC 458 of Session 2003-04, paras 109-119 Back

140   Cm 6195, page 18, para 26 Back

141   Cm 6195, page 19, para 27 Back

142   Cm 6195, page 19, para 28 Back

143   Ev 59 Back

144   Q1 Back

145   Ev 21 Back

146   Ev 1 Back

147   Ev 28 Back

148   Ev 22 Back

149   Q223 Back

150   Q236 Back

151   Ev 59 Back

152   Q8 Back

153   Ev 68 Back

154   Q61 Back

155   Q63 Back

156   Cm 6195, page 19, para 30 Back

157   Q343 Back

158   Second Report from the Welsh Affairs Committee, Transport in Wales, HC 205 of Session 2002-03, HC 205, para 21 and Third Report from the Welsh Affairs Committee, The Provision of Rail Services in Wales, HC 458 of Session 2003-04, para 121 Back

159   Third Report from the Welsh Affairs Committee, The Provision of Rail Services in Wales, HC 458 of Session 2003-04, para 120 Back

160   Q10 Back

161   Q12 Back

162   Q241 Back

163   Q171 Back

164   Q242 Back

165   Q168 Back

166   Q13 Back

167   Q333 Back

168   Cm 6195, page 20, para 32 Back

169   Cm 6195, page 4 Back

170   Ev 22 Back

171   Q142 Back

172   Ev 22 Back

173   Ev11 Back

174   Ev 12 Back

175   Q15 Back

176   Q16 Back