Draft Railways (Interoperability in Northern Ireland) (Convention on International Carriage by Rail) (Amendment) Regulations 2026
(1 day, 21 hours ago)
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The Committee divided: - Ayes: 12 / Noes: 4 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Transport (Keir Mather)
I beg to move,
That the Committee has considered the draft Railways (Interoperability in Northern Ireland) (Convention on International Carriage by Rail) (Amendment) Regulations 2026.
It is, as ever, a pleasure to serve under your chairship, Sir Desmond. The regulations implement the United Kingdom’s rail interoperability obligations under the Windsor framework and update domestic legislation, implementing the convention concerning international carriage by rail, commonly known as COTIF. The regulations establish the technical requirements that railway vehicles, infrastructure and component products must meet before being marketed or brought into service in Northern Ireland.
Interoperability ensures that trains, rail infrastructure and equipment can operate safely and effectively across connected rail networks. Northern Ireland’s railway is unique in the United Kingdom because it connects directly to the Republic of Ireland’s network. Regular Belfast to Dublin passenger services mean that technical compatibility is essential for safe, effective cross-border rail. The interoperability framework in Great Britain is set through the Railways (Interoperability) Regulations 2011. Under the Windsor framework, the UK must apply directive 2016/797 in Northern Ireland where it concerns placing on the market, putting into service and the free movement of railway products. These regulations create a dedicated Northern Ireland framework, supporting interoperability between the Northern Irish and Irish networks and giving industry legal certainty.
The Joint Committee on Statutory Instruments did not draw the regulations to either House’s special attention. The Secondary Legislation Scrutiny Committee raised several questions, and I shall briefly address each directly. The Committee questioned the time between the UK’s obligation to implement the Windsor framework requirements and the laying of these regulations. The UK had not implemented the directive before leaving the European Union. Introducing these arrangements therefore required careful work to ensure that the distinct rail framework to Northern Ireland and Great Britain could continue to operate effectively.
Developing the regulations involved substantial technical and legal work across areas including vehicle authorisation, rail interoperability and safety. It also required close engagement with the Department for Infrastructure and the European Union Agency for Railways to ensure that the new arrangements operate effectively from day one. Substantial implementation work was also required to make the regime operational, including the development of Northern Ireland national technical rules to supplement the EU specifications.
The Committee also questioned the Department’s understanding that domestic legislation was required to implement this directive in Northern Ireland. We have been clear that legislation is necessary and have worked to put the framework in place as soon as is practicable. While the legislative framework was being finalised, the Department introduced interim administrative arrangements to enable the new interoperability regime to operate in practice. We also informed the European Commission of this work while legislation was in preparation. Therefore, many of the requirements in the directive already reflect practices and standards in operation in Northern Ireland.
The Committee also asked why COTIF-related updates are being brought forward only now. The amendment reflects the UK’s position following EU exit. While the UK was an EU member state, the issue was addressed through EU arrangements. Following EU exit, it became necessary to reflect the UK’s position directly in domestic legislation.
The Committee questioned why the Government did not undertake a formal public consultation. The Government carefully considered this issue. The regulations implement obligations that the UK has already entered into under the Windsor framework and COTIF. As the policy approach was shaped by international obligations, the Department therefore undertook targeted engagement with organisations most affected, including the Department for Infrastructure, Translink, the Office of Rail and Road, the Rail Safety and Standards Board and conformity assessments bodies. The Government consider that targeted engagement was proportionate, given the nature of the regulations and the limited scope for alternative policy options.
During scrutiny, concerns were raised about the differing regulatory arrangements in Northern Ireland and Great Britain, including in a submission from the hon. and learned Member for North Antrim. I recognise those concerns, but it is important to be clear about the purpose of these regulations specifically. They do not create the UK’s obligations under the Windsor framework; those obligations are set out in the withdrawal agreement. Their purpose is to implement those obligations through a clear and legally operable framework for industry and regulators. The Government continue to work closely with the Department for Infrastructure to manage any future impacts arising from divergence between the regulatory frameworks in Great Britain and Northern Ireland.
In conclusion, these regulations provide legal certainty and a clear, workable framework for the railway industry in Northern Ireland. They implement obligations that the UK has already entered into, support the continued safe and effective operation of cross-border rail services on the island of Ireland and update domestic legislation to reflect the UK’s international rail commitments. Although technical in nature, the regulations perform an important function by providing clarity for industry and regulators. I therefore commend the draft regulations to the Committee.
Greg Smith (Mid Buckinghamshire) (Con)
It is a pleasure to serve under your chairmanship, Sir Desmond, and also to be across the Floor from the Minister for the second time today. This morning we discussed the coach industry in Westminster Hall, while this afternoon we are discussing an issue that goes to the very nub of our constitutional settlement as a union of nations.
As the Government reference in the documents published alongside these regulations, the operation of the railways in Northern Ireland has always been slightly different from that in the rest of the United Kingdom. For example, the 1843 compromise with the Board of Trade on a 5 feet 3 inches gauge and the subsequent Railway Regulation (Gauge) Act 1846 set the railways of Northern Ireland on a different technical path.
However, despite acknowledging that long history, I wholly recognise the concerns that have been raised, and that I expect will equally be raised today, specifically those relating to how the new regime alters the 2011 regulations that cover the whole of the United Kingdom.
The hon. and learned Member for North Antrim has already set out in detail, as I am sure he will again later, his concerns about the impact that this could have on Northern Ireland, particularly in relation to divergence within the United Kingdom. In their impact assessment of the proposals, the Government comment that, outside of the Windsor framework, the main advantage of these proposals is that they will
“provide more certainty to businesses as to which technical standards and processes apply to rail projects being undertaken in Northern Ireland.”
However, what is not clear is why clarity could not be offered under the regulations set out in 2011, even if that must be under a slightly altered regime. Merely because clarity is offered, it does not necessarily mean that the situation is better.
I recognise that in response to concerns about the impact, it has been said that the Department for Transport and the Department for Infrastructure in Northern Ireland have agreed a common framework establishing mechanisms for officials to monitor and avoid regulatory divergence impacting the UK internal market. Even though this is the only risk noted, it is not an insubstantial one. Divergence between the two markets could easily put parts of Northern Ireland’s supply chain at risk. While there is a role for European elements, the requirement for UK goods to have an EU declaration of conformity is a further burden which should not be necessary.
There is also the broader point that, moving forward, we need to ensure that technology and progress in the rail sector in Northern Ireland is able to work within the framework of its relationships with the Republic of Ireland and the United Kingdom more widely. I fear that removing so much power without even consulting those affected could begin to create significant discrepancies that will have a significant impact.
I appreciate the status of these measures within the framework, but ultimately, we need to ensure that our legislation serves all the people of the United Kingdom of Great Britain and Northern Ireland. I am afraid that these measures simply will not achieve that.
Olly Glover (Didcot and Wantage) (LD)
It is a pleasure to serve under your chairship, Sir Desmond.
The Liberal Democrats support this legislation. I made my first ever trip to Northern Ireland in the spring of 2023, to do work with Northern Ireland Railways as part of Translink. That network has had huge investment this century and the user base is benefitting vastly from it.
As the shadow Minister said, it has some unique features: not just its gauge but it has remained state owned throughout and is run jointly alongside state-owned buses. It also jointly operates with Irish Rail, the second, undeservedly less famous, international passenger rail service in the UK, linking Belfast with Dublin, which offers very fine views of the Irish sea coast in the Irish Republic and the Mourne mountains in Northern Ireland. I strongly recommend it for those who have not yet indulged.
The arrangements that the Minister proposes will help to continue and enhance the strong partnership working between Irish Rail and Northern Ireland Railways, which is necessary for the current cross-border line and proposals for further cross-border infrastructure in the future. As the shadow Minister said, of course, in relation to Northern Ireland and its status under the Brexit agreement, the Windsor framework, there will always be some complexities and sensitivities. I hope that the Minister will address the concerns that have been raised in his comments later.
Jim Allister (North Antrim) (TUV)
Thank you, Sir Desmond, for the opportunity to contribute to the Committee. Here we are today with a 40-page document of 54 regulations, and these 30 minutes, if even that, will be the only scrutiny to which they will be subjected in this Parliament of the United Kingdom. Yet, these regulations will introduce a divergence in law and authority in respect of a part of this United Kingdom at the behest of laws not made in this Parliament. They will introduce and give effect to a law made in a foreign Parliament that will be imposed on my constituents and every other constituent in Northern Ireland. The lack of opportunity to even debate them—never mind change them—makes this absurd, and it is also constitutionally absurd that a part of this country should be ruled by laws we do not make and we cannot change. Yet, that is the import and effect of these regulations.
It is because we are impotent to change one word of the foreign Parliament’s legislation that there has been no consultation. Nowhere else do we legislate without at least the façade of consultation, but when it comes to the colonial rule of the EU in Northern Ireland, we do not even consult, as the Minister effectively said, because there is no point. He is obligated under the folly of the protocol to implement these regulations. Whether he, I, or any elected Member of this House thinks it is a good idea, we are effectively told we have no choice. What sort of a way is that to rule any part of this United Kingdom? Is it something that other Members would accept for their constituents that they cannot change the laws that are imposed and handed down from colonial masters and they simply have the obligation, upon criminal sanction, to implement them?
We are creating in these regulations a scenario where railways will be governed in a part of this United Kingdom not by an agency of this United Kingdom but by the EU’s railway agency. When we look at regulations 28 to 30, we discover that, for a supplier in GB to supply any railway equipment to Northern Ireland, they must have an EU declaration of conformity. They must apply and obtain a declaration of conformity that they are complying with the handed-down laws of a foreign Parliament for the item that they wish to supply. That is why I say to this Committee, as I have said on multiple occasions, that unless and until this United Kingdom takes back control over all the laws of the United Kingdom, we will be put in the pitiful, absurd situation of coming to a Committee Room such as the one we sit in to discuss something that we cannot change, in blind obedience to a foreign legislator. That should offend us all, and it certainly offends me and my constituents.
Carla Lockhart (Upper Bann) (DUP)
Yet again, Northern Ireland is being told to accept different rules from the rest of our country. We have had no formal public consultation and no elected voice in making EU laws—just another instruction to put up with the consequences of the protocol. That is the reality of where we find ourselves today. Ministers will tell us that the regulations are technical, but the reason we are here is political. The protocol, now dressed up as the Windsor framework, requires Northern Ireland to implement EU rules while Great Britain continues under its existing framework. The name of the protocol changed, but the problems continue to grow.
I want safe railways, and trains and equipment that work properly together, but my constituents should not have to surrender their democratic voice to achieve that. The regulations create a separate railway regime for Northern Ireland, and businesses supplying equipment to Northern Ireland will have to meet the requirements that apply under them. The Minister needs to explain clearly what that actually means for suppliers trading within their own country. In reality, we all know that it means additional paperwork, additional assessments and additional cost.
Once again, there has been no acknowledgment of the impact the measures have on the ground for businesses in Northern Ireland, nor an explanation for why there was no formal public consultation. Speaking to the Department for Infrastructure and Translink does not give everyone who is affected, including suppliers and businesses, the chance to have their say that they deserve. The Government’s answer is that their obligations under the Windsor framework leave them no alternative. That says everything about this arrangement. Ministers came before Parliament and told us that their hands are tied by an agreement that they continue to defend, but my hands are not, and I, along with the hon. and learned Member for North Antrim, who sits beside me, and others will continue to challenge it.
I find it incredible that after all the promises that we have heard, we are here again to debate another separate rule for Northern Ireland. People are sick and tired of being told that each new measure is small, technical or unavoidable. People in Northern Ireland are not wearing that, because every small, technical or unavoidable measure creates a further barrier between Great Britain and Northern Ireland. The Minister should explain the consequences for businesses, justify the absence of public consultation and recognise, at the very least, the impact that the Windsor framework and the protocol continue to have on people and businesses in Northern Ireland. Northern Ireland is part of the UK, and our people, just like the constituents of hon. Members in other parts of the UK, deserve to have a say in its laws. “The protocol requires it,” will never be a good enough answer for my constituents.
Keir Mather
I thank all hon. Members who have taken part in the debate. I shall do my level best to address the points that they have raised, although the broader constitutional questions and sentiments that were espoused in some of the speeches might not pertain directly to my responsibilities or be for the Department for Transport to address. From a personal perspective, I am incredibly proud to be British and a citizen of the United Kingdom of Great Britain and Northern Ireland, and part of that is about meeting the obligations to which we as a UK Parliament assent. This Committee is a part of that process, and that is why I am glad that we have had such a robust debate on the regulations. Let me respond to a few of the issues raised by hon. Members.
As I outlined in my opening remarks, substantial technical and legal work has been undertaken to ensure that the framework can operate effectively alongside existing domestic rail legislation, and provide a workable, durable and legally robust regime for industry and regulators. That is what will ultimately provide the certainty that rail infrastructure investors need to be able to invest in the UK-wide market—in Northern Ireland, and in Great Britain.
On the concerns that the shadow Minister raised on supply chain coherence—a very fair point—I bring to his attention that we have of course already been working under interim arrangements, which closely mirror the system that we presently have. In that regard, businesses have been working to the tune of what this framework institutes. I wonder whether there is a challenge for the viability of projects in the longer term if the arrangements that we have are discordant with our obligations under the Windsor framework.
De minimis assessment was provided in relation to this legislation, as it is for all legislation, and it concluded that the impact on business was not sufficiently great to raise the merits of the shadow Minister’s concern, but it is of course something that we keep a very close watch on within the Department for Transport, given our obligations to look out for the entirety of the UK rail industry, as well as to ensure growth in rail freight and the maintenance of our railway network.
I turn to the questions on the consultation. As I already mentioned, the Department worked with those organisations that are most directly affected by what is an incredibly technical piece of legislation. That engagement informed the practical approach to implementation that was adopted in these regulations.
I fully take on board the view of the hon. and learned Member for North Antrim on the constitutional question, which underlies why this decision has been taken, but the purpose of these regulations is not to reopen the overall question of the Windsor framework. The arrangements under the Windsor framework represent the international obligations that exist on the United Kingdom. These regulations do not create those obligations; they implement them. They are legally binding, are already entered into in good faith and provide legal certainty regarding how those obligations operate in practice for the railway sector in Northern Ireland.
On the broader question of divergence, the Government recognise the importance of protecting the integrity of the UK’s internal markets. These regulations do not introduce a new policy of divergence. Rather, they establish a clear statutory framework to implement obligations that already apply under the framework.
The Department continues to work closely with the Department for Infrastructure to understand and manage any future impacts arising from regulatory divergence and to ensure that businesses and regulators have clarity regarding the applicable framework. If Members have concerns, particularly as pertains to industries that exist in their constituencies, I encourage them to raise those matters with either me or the Rail Minister.
These regulations provide the legislative framework necessary to implement the UK’s obligations relating to rail interoperability in Northern Ireland and to update domestic legislation implementing the convention concerning international carriage by rail. They provide clarity and certainty to regulators, infrastructure managers, operators and manufacturers; support the continued operation of cross-border rail services on the island of Ireland; and ensure that domestic legislation accurately reflects the United Kingdom’s already existing international obligations.
These are technical regulations, but they perform an important function in providing a clear, stable and legally operable framework for the rail industry in Northern Ireland. I commend the draft regulations to the Committee.
Question put.
Draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026
Draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026
Draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026
(1 day, 21 hours ago)
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The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move,
That the Committee has considered the draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026 and the draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026.
I will now call the Minister to move the first motion and speak to all three instruments. At the end of the debate, I will put the question on the first motion and then ask the Minister to move the remaining motions formally.
Lucy Rigby
Although the three instruments before us concern distinct parts of the financial services regulatory system, they share a common purpose, which is to ensure that the UK regulatory framework remains clear, proportionate and able to support growth, while maintaining appropriate safeguards and financial stability. I will address each instrument in turn, beginning with the overseas prudential requirements regime regulations.
Following EU exit, the UK retained a body of EU-derived financial services legislation, including the UK capital requirements regulation, which sets prudential requirements for banks, building societies and larger investment firms. The first instrument supports the Government’s programme of replacing that assimilated law with a framework tailored to the UK. It brings the existing UK capital requirements regulation equivalence regimes together in a single overseas prudential requirements regime. It also makes targeted changes so that the treatment of exposures to overseas exchanges better reflects the underlying risk; updates the definition of overseas investment firms without changing the overall scope of existing treatment; and enables eligible overseas covered bonds to be recognised in future, subject to a further statutory instrument.
The second SI makes a targeted and important reform to the UK’s framework for regulating over-the-counter derivatives—those traded directly between buyer and seller—by addressing intragroup transactions. It replaces the temporary intragroup exemption regime, which everyone present will know as TIGER, with a permanent framework. In doing so, it provides firms with long-term certainty while preserving appropriate safeguards and regulatory oversight. The benefits of oversight of intragroup transactions are well recognised, so exemptions from certain clearing and margin requirements for certain transactions are a feature of regulatory regimes in the UK and other jurisdictions.
TIGER was introduced following EU exit to provide a temporary regime for exempting certain transactions, but it was only ever intended to be temporary. Having been extended once already, it is due to expire at the end of this year, and the Government consider that a further time-limited extension would not provide the long-term framework and stability that firms need. The instrument therefore establishes a permanent framework for qualifying intragroup transactions.
The third SI concerns the legislation governing building societies—specifically the Building Societies Act 1986. The order makes two specific changes. First, it removes the requirement placed on building societies to execute legal documents such as mortgage deeds using a common seal, enabling them to use authorised signatures instead. That is a practical and proportionate modernisation, reducing unnecessary administrative burdens. Secondly, the order makes specific and limited exemptions from the wholesale funding calculation that building societies are required to make, to ensure that they continue to be majority owned by their members.
Taken together, these instruments modernise our financial services framework. They replace or update inherited arrangements, provide greater clarity and certainty, and support the effective functioning and competitiveness of the UK financial sector, while maintaining appropriate safeguards. I commend them to the Committee.
Mark Garnier (Wyre Forest) (Con)
Dr Murrison, you will be delighted to hear that this is a highly uncontentious set of proposals, which the Opposition are fully behind. There is an opportunity, potentially, to talk about the merits of the Building Societies Act 1986 and how it could be updated, but now is probably not the time. You will therefore be delighted to hear that I will bring my words to a close right now.
Lucy Rigby
I welcome those comments, and I suspect that this is a preview of the Budget debate.
The Chair
You might think that. I could not possibly comment.
Question put and agreed to.
DRAFT OVER THE COUNTER DERIVATIVES (INTRAGROUP TRANSACTIONS) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026.—(Lucy Rigby.)
DRAFT BUILDING SOCIETIES ACT 1986 (ASSIMILATION TO COMPANY LAW AND CHANGES TO FUNDING LIMIT) ORDER 2026
Resolved,
That the Committee has considered the draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026—(Lucy Rigby.)