Crown Estate (Wales) Bill [HL]
Tuesday 10th September 2024
(10 months ago)
Lords ChamberCrown Estate (Wales) Bill [HL] 2024-26 Read Hansard Text
Crown Estate (Wales) Bill [HL]
Friday 7th February 2025
(5 months, 1 week ago)
Lords ChamberCrown Estate (Wales) Bill [HL] 2024-26 Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Lord Wigley (PC)
My Lords, I was first drawn into politics in Wales by the action of Liverpool Corporation in the late 1950s, when it purloined the Tryweryn valley in Meirionnydd, turfed out the farmers and villagers and, despite huge local and national opposition, built a reservoir, selling water at a profit to Merseyside industrial customers. That event triggered Plaid Cymru’s parliamentary breakthrough in 1966, which itself led to the SNP’s breakthrough in 1967. Britain’s 50 years of devolutionary politics grew out of the drowning of Tryweryn.
Wales has a history of exploitation of our natural resources, whether it is coal or other minerals, or our water resources, on which Birmingham and London now increasingly depend, as we heard even this morning. We likewise see the exploitation of our energy potential—wave, sea currents, estuarial waters and wind on shore and in the seas around our coast. My Plaid Cymru colleagues and I want to see the maximum possible benefit from such projects coming into the Welsh economy; we want to see that happen in a planned manner that recognises the financial benefit that should rightly come to those who invest in such projects, but also to the communities in which they are based. We want to see such potential developed in co-operation with the Welsh Government, local authorities and industrial development agencies. That means working in partnership and avoiding the totally unacceptable and unnecessary tensions and bitterness generated by the Tryweryn issue.
The Bill for which I request a Second Reading today deals with the democratic control of Wales’s natural resources. The Crown Estate assets in Wales include two-thirds of the Welsh foreshore and tidal river beds. It has control over certain ports, including the strategically important Milford Haven; it has rights over tidal streams, such as Ramsey Sound and Swnt Enlli; and it has control of over 50,000 acres of land in Wales. It is a major operator within the Welsh economy and will get even larger with the exploitation of clean energy potential off our coast.
The Bill enables the Treasury to make a scheme transferring all the existing Welsh functions of the Crown Estate commissioners to Welsh Ministers in Senedd Cymru. The Bill is an enabling one, giving the Treasury a mechanism for such a transfer. It gives it an agenda on which to work, and it is our hope that it will pursue it.
The Bill draws on the steps taken by the Conservative Government in transferring to the Scottish Parliament control over the Crown Estate in Scotland via the Scotland Act 2016 and the 2017 Crown Estate statutory transfer scheme. The powers so transferred were over property, rights and interests in land in Scotland and rights relating to the Scottish renewable energy zone. The devolved Crown Estate benefited the Scottish Government by £113 million in 2023-24. The Crown Estate is not devolved to Wales, and Senedd Cymru gets no such benefit.
The Crown Estate Bill is now progressing through the Commons. I remind the House of the words of the noble Lord, Lord Hain, during the passage of that Bill:
“Welsh Labour’s programme for government in the Senedd includes a commitment to pursue the devolution of powers needed to help reach net zero, including management of the Crown Estate in Wales”.—[Official Report, 14/10/24; col. 16.]
The noble Lord subsequently tabled an amendment providing for the appointment of a commissioner responsible for giving the Crown Commissioners advice about Wales. Supporting that move, the noble Lord, Lord Murphy, who I am glad to see in his place today, said that he had a “great deal of sympathy” with the points made in relation to devolving the Crown Estate to Wales.
There have been voices from all four mainstream political parties in Senedd Cymru and the county councils, expressing anger at the way in which the Crown Estate is treating Wales. Gwynedd Council is asked to pay the Crown Estate £160,000 annually, merely to secure access to our own shoreline. Senedd Members voted by 35 votes to 13 in support of a motion to devolve Crown Estate responsibility to Senedd Cymru. Just two weeks ago, Finance Minister Mark Drakeford stated, on the record:
“I think that the Crown Estate should be devolved to Wales, as it is to Scotland, and that would give us a better opportunity in Wales to take advantage of our natural resources”.
The advice that the proposed commissioner will give the Crown Estate will no doubt reflect the opinion of Welsh Government Ministers on the way in which Crown Estate profits arising from its activities in Wales should be used. Profits of the Crown Estate have grown substantially over recent years. Its revenue profit obtained from Wales is estimated to have increased from £9 million per annum in 2021 to £35 million per annum in 2024.
We have to estimate those figures, because the Crown Estate, incredibly, stopped publishing profit figures for Wales in 2021. Plaid MPs have been given the lame excuse that
“it is not possible to disaggregate net revenue profit attributable to Wales”.
If it was possible to disaggregate the figures up to 2021, why not now? So we are left in the position where the proposed commissioner will not be told about the profits made by the Crown Estate in Wales—or will he? Or she, indeed?
It is little wonder that Wales’s Finance Minister, Mark Drakeford, reiterated last week his call for control of the Crown Estate to be devolved to Wales. Mr Drakeford and the First Minister, the noble Baroness, Lady Morgan of Ely, have long called for the Crown Estate to be devolved to Wales, but UK Ministers apparently will not listen.
In an Answer to a Question by Llinos Medi, MP for Ynys Môn, the Treasury Minister, Darren Jones MP, stated:
“The UK Government has had no discussions with the Welsh Government on devolving the Crown Estate”.
It is unacceptable that policy decisions impacting on Wales are made by UK Labour Ministers without discussing them with Welsh Government colleagues.
On Report of the Crown Estate Bill, an amendment proposed by the noble Baroness, Lady Humphreys, would have required the Treasury to transfer responsibility for the management of the Crown Estate in Wales to the Welsh Government. That amendment was supported by Labour, Conservative and Cross-Bench colleagues from Wales as well as Liberal Democrat and Plaid Cymru Peers. It was defeated by 147 votes to 74.
I will briefly outline the content of this Bill, which is a straightforward two-clause, four-page document. Clause 1 provides that there be inserted into the Wales Act 2017, after Section 52, new Section 52A authorising the Treasury to make a scheme transferring all the existing Welsh functions of the Crown Estate to Welsh Ministers or a person nominated by Welsh Ministers. The scheme must provide for the transfer of designated rights and liabilities of the commissioners in connection with the functions transferred. The scheme must include provision to include that any person in Crown employment is not adversely affected by the transfer. The scheme must also safeguard the interests of defence and security and matters relating to telecommunications. It must not conflict with the interest of reserved matters or with the transmission or distribution of electricity. Such a scheme may be made only with the agreement of Welsh Ministers and no statutory instrument can be made unless a draft instrument is approved by Senedd Cymru. Clause 2 deals only with the extent, commencement and Short Title.
I thank the Public Bill Office for its help in drawing up this Bill, but emphasise that any shortcomings in the Bill are mine and mine alone. Such weaknesses can be addressed in Committee if colleagues are so minded. The Bill may then perhaps progress to give Welsh MPs a chance to stand up for their colleagues in Cardiff and enable the Bill to reach the statute book. I beg to move that this Bill be read a second time.
Lord Murphy of Torfaen (Lab)
My Lords, it is a great pleasure, as always, to follow the noble Lord, Lord Wigley. I was trying to work out how long we have been in Parliament together—it is 38 years since we first spoke on Welsh matters in the House of Commons. On and off, we have agreed probably more times than we have disagreed. It is, as I say, a great pleasure to follow him.
We have of course dealt with this issue some months ago, when the Crown Estate Bill came through this House; it is now in the other place. I think, however, that the argument and discussion are still live. There is some dispute as to the amount of money—or disagreement: perhaps “dispute” is wrong. Is it £8 million, as the Library tells us, or is it much more, £30-odd million, as the noble Lord said? Whatever it is, it is significant in terms of the Welsh budget. One question that I would grateful if my noble friend the Minister could answer in his wind-up is whether the equivalent money in Scotland is regarded as properly additional to the block grant and whether it would be in Wales, if this were devolved to Wales. That is a hugely important issue. I remember spending a year back in 1999, with regard to the European Union Objective 1 money, arguing, discussing and eventually agreeing with Gordon Brown about the way in which European money should be genuinely additional. Quite possibly, he did not agree with his officials at the Treasury—not a bad precedent, from time to time, if I might say so.
Another issue that I want to touch on is that this is of some constitutional importance. My own position with regard to devolution has changed dramatically since 1978 when I was treasurer of the Labour No Assembly campaign. When eventually, many years later, I became Welsh Secretary, my views on devolution gradually changed, so that I ended up supporting the referendum on extra powers for the Welsh Assembly some years ago. That is because the nature of devolution, and the institutions of devolution, are now firmly embodied in the Welsh psyche. There is no question that it is very much part of our political landscape. People understand what it does. If this issue is devolved to Scotland, I still cannot understand why it cannot be devolved to Wales. That is the big question in front of us. I know that the Minister will say that it is settled now and that we have to live with what we have to live with, but I think the constitutional precedent that was set with Scotland getting it causes difficulty.
The compromise that we reached in having a Welsh commissioner for the Crown Estate was a good one. Welsh interests will be partly safeguarded by that, and I hope that we will soon have some progress on who will occupy that position. It was nevertheless a compromise. My fear on this and other issues is that we are not really talking enough to the Welsh Government. Again, I will ask my noble friend the Minister to comment on the view that there have been no discussions with my colleagues in the Welsh Government and Senedd on this matter; I think that is highly unlikely, and I hope that they have indeed been talking on this issue. There is a wider view on this. it was argued at the general election that, if we have a Labour Government in Westminster and a Labour Government in Cardiff, it would—as it did many years ago—make relations much easier. That might not always be the case, which is why the previous Government, rightly in my view, set up the machinery for consultation, discussion and dispute resolution between the devolved Administrations and the United Kingdom Government.
The Minister will, I hope, confirm one way or the other whether there have been discussions, but this issue has not gone away. It will be there for some time to come in relation to the way in which the Government in Westminster deal with the Government in Cardiff. I support the noble Lord, Lord Wigley, in the sense that this is an issue that needs eventually to be discussed and resolved, although perhaps not in the way it is at the moment. We are where we are, though. I very much look forward to the response by my noble friend the Minister, for whom I have the highest regard.
Lord Moynihan (Con)
My Lords, I too congratulate the noble Lord, Lord Wigley, on introducing this Bill and for the many decades that he has eloquently, and with no less a degree of commitment, sought to represent the people of Wales and serve their best interests. It is also a great pleasure to follow the noble Lord, Lord Murphy. I know this as someone who was educated in Wales and was, for the past three years, chair of Haberdashers’ Monmouth School and a long-standing president of Welsh Rowing.
I should also declare my interest in Wales as set out in the register. I chair Amey, which has worked hard to ensure the successful electrification of the Core Valley Lines radiating out of Cardiff. I also chair Acteon, which is a subsea service company that has an active global interest in offshore wind, providing seabed-to-surface sustainable energy solutions for offshore wind.
My view is that, to maximise economic growth in Wales and generate employment in sustainable energy technologies, now would not be the best time to pursue this Bill. I emphasise “at this time”, because I would favour the Government entering into discussions with Wales in due course. I hope they will make it clear that any discussions on devolving the Crown Estate to Wales must not conflict with their priority in the five-year plan to increase the proportion of the UK’s energy generated from renewables to decarbonise the UK’s electricity system by 2030.
Investors look for stability. Growth is generated and new jobs are created only if there are two foundations in place: a stable policy framework and strong financial support with backing from government. The establishment of Great British Energy is under way and understood by investors. The publicly owned clean power company will work with the private sector to encourage greater investment in renewable energy, including offshore wind, which is so important to Wales. Similarly, the Crown Estate Bill underlines the Government’s commitment to support the development of offshore wind projects in seabed areas held by the Crown Estate. Time is of the essence to meet these targets and we need to increase grid capacity now to achieve the rapid expansion of offshore wind energy.
One major hurdle to these ambitious goals would be a minimum of three years of uncertainty; this would happen if we passed the Bill in this Session, for that is how long it took in Scotland. As we know, the process for Scotland was very complex and destabilising for investors. There were significant hurdles to overcome and they all took time: the legal and constitutional challenges; clarifying which functions could be devolved; and ensuring compliance with existing laws, which proved intricate. Assessing how revenues from Crown Estate assets would be managed and distributed in Scotland took a long time. Determining the value of Crown Estate assets and how they would be managed after the transfer was a significant challenge. Engaging with all the stakeholders, including local communities, businesses and environmental groups, was crucial and challenging, as differing interests had to be balanced in the management of assets. The Scottish Government then had to build the capacity to manage the new functions effectively, which involved training new staff and developing new management frameworks. Finally, but self-evident from the debate, the transfer was politically sensitive, with differing views among the political parties on how Crown Estate functions should be managed and by whom. All of that added to the time involved and the complexity of the process.
Further, there is a significant difference in this Bill. It is the wish of the noble Lord, Lord Wigley, that the legislation be subject to scrutiny by both Houses of Parliament and the Senedd. This additional level of approval will take yet more time, and the Delegated Powers Committee brought to our attention in its report that it did not consider scrutiny of the power by the Senedd appropriate.
It is not that I do not favour entering into discussions in due course, but it should not be at a time when it is so important to encourage investors to come into Wales. All this means that there would be less clarity for those investors today. More troublingly, even if the noble Lord, Lord Wigley, put into the Act that it would come into effect three years after it passed, there would be investor uncertainty, which would be damaging. These years of uncertainty would be an inevitable consequence of a move to devolve the Welsh Crown Estate and would need to be factored into investors’ assessments. I fear that they would steer investors away from Welsh waters to other parts of the UK, to the detriment of research and development jobs in Wales, employment opportunities in Wales, which I passionately believe in, and the Welsh ecosystem of business associated with developing wind farms offshore, particularly now when there is so much attention on offshore floating wind opportunities, on which decisions are to be made over the next three years.
I am not arguing that the policy, long advocated by the noble Lord, Lord Wigley, and echoed today by the noble Lord, Lord Murphy, should not be considered in future. It should be, but not at this critical time for the net-zero policy of this Government. I fully understand the political will to devolve the Crown Estate to Wales, but the arguments are currently outweighed by the potential risks to the UK energy market and investor confidence in Wales. Let us grasp the very real opportunities together and work for the success of Wales in the offshore wind energy market. I have never been more optimistic about the potential for Wales. Sadly, if it is introduced now, I see this Bill only damaging that prospect. Its time will come, but not now.
Lord Anderson of Swansea (Lab)
My Lords, there must be some book which gives 1,001 reasons for disagreeing with a particular proposal. The noble Lord, Lord Moynihan, must have read it and reproduced much of its powerful message: “Yes, it is important, but now is not the time”. No doubt, there are many other reasons and excuses as well.
I believe that now is the time. I follow my noble friend Lord Murphy and, dare I say it, my noble friend Lord Wigley, whom I have always considered a friend and a major contributor to debates in this House on a range of issues, not just devolution. I have long been an admirer of his. It is possible that this may be one of his valedictory speeches and I commend him for all he has done in his time here. He and I go back a long way. I think it was about 1966 or 1967 when he first came with a group of colleagues from Plaid Cymru to talk to me about Europe. We have been in touch ever since and I have long admired his contribution.
I will be very brief, because I adopt wholeheartedly what my noble friend Lord Murphy has said. Like him, I have made a progression. In the late 1970s, I was one of the so-called gang of six Labour MPs who opposed devolution. I thought that it had not been thought through adequately and used arguments such as “slippery slope” and so on. Some of them may still be partially true, but it was mainly the policies of Mrs Thatcher, ignoring Welsh interests in the 1980s, that largely convinced me. She was a recruiting sergeant for many of those who changed their views over the 1980s. In 1997, I went around Wales giving a different message from that which I had given in the 1970s. As my noble friend Lord Murphy said, the Senedd is now firmly established in Wales. There will be debates about powers and so on but there is no going back. Although there have been teething problems, it is now accepted and there is much power behind it.
I see no reason in principle why we should not follow the precedent of Scotland, though the problems around timing and adjustment were put forward powerfully by the noble Lord, Lord Moynihan. I commend my noble friend Lord Wigley for his initiative on this and wholeheartedly support him.
Lord Thomas of Cwmgiedd (CB)
My Lords, I too support the noble Lord, Lord Wigley, in his introduction to this Bill and warmly thank him for bringing it again before the House.
As the noble Lord, Lord Murphy, said, the real place to start is the constitutional issue. As forcefully pointed out in our last debate on this, this does not, as it presently stands, deal with a union matter. We are dealing with a matter capable of devolution because power over the estate has been devolved to Scotland. One can see immediately from the Scottish Crown Estate’s report one of the benefits of that: it shows the revenue, as the noble Lord, Lord Wigley, referred to, with a breakdown showing how each community benefits. I will ask the Treasury to think about this hearts and minds issue in a moment.
The real issue is trying to marry what the Minister and the noble Lord, Lord Moynihan, said about the short term and the long term. What is lacking, in my view, is transparency, accountability and a long-term strategy, and distinguishing all that from the technical business of managing the offshore wind industry. They are separate problems; if we disentangled them, we might be able to make some progress.
That progress can be made only by recalling the history of Wales, however the Crown Estate came to the Crown: partly by conquest—it is important to emphasise that word in the history of the United Kingdom—partly by inheritance or partly by an Act of Parliament. Maybe that does not matter, but what does matter from the history of Wales is the perception of the Welsh people. Their natural resources have been exploited, first in coal and the heritage with which we live, and then with water. The Welsh people are not prepared to allow this to happen again. How do we solve this problem?
I am delighted that, as the Minister told us on the last occasion during the passage of the Bill on the Crown Estate proper, the Government are going to discuss issues with the Welsh Government. I very much hope that the Minister can help us with those discussions.
Secondly, I hope that, as soon as the Bill is passed, there will be Welsh commissioner. One must remember, however, that his function is limited to giving advice on the functions in relation to land. What is wrong is that, first, there is no transparency of the position; secondly, there is no showing how the assets are used to the benefit of Wales; and, thirdly, there is no long-term strategy.
The Minister told us two things of great importance on 14 October. He said:
“As the Crown Estate’s operations are not divided into business units for each nation, agreeing the exact net profit figure attributable to Wales is not straightforward, because most of the associated costs cannot easily be disentangled from the Crown Estate’s overall costs and would, in places, require subjective judgment”.
Secondly, he said that,
“if Wales were to benefit only from the income generated in Wales, then it would likely be zero or negligible for several decades to come. Welsh assets are relatively new and will take time to mature, likely in the order of 10 to 15 years”.—[Official Report, 14/10/24; cols. 29-30.]
Both of those things are used as a justification for making no progress.
One looks to the Crown Estate’s annual report. Although these reports are not a joyous read, there is an awful lot of information contained in them. Unlike the position in relation to Scotland, a document called Wales Highlights contains absolutely no financial information of what income is generated. There is nothing of the kind. If one goes back to Wales Highlights for the year ending 31 March 2020, it showed a gross surplus income of £8.4 million on property valued at £96.8 million. I think that most businessmen would not think that this was a bad return for whatever came. Whether that falls into the category of a negligible income, I do not know, but no doubt it would help stop the leaks in the museums of Wales.
The following year shows a similar income, but it also shows the revaluation of the Crown Estate in Wales from £96.8 million to £603 million. Importantly, this appears to result from the offshore wind leasing round four. At the time of the full report for the whole Crown Estate, the revenue—it is broken down in some senses, most importantly for marine—was only £120.8 million. The highlighting stopped, and I simply do not understand why, after that review in Wales, there is no breakdown. I very much hope that the Minister will explain why what was practical in 2021, when round four had taken place and we were able to value the leases in Wales, has stopped. There should be full transparency and accountability.
What is important is to look at how the profits of the Crown Commissioner rose. By the year ending March 2022, the operating profit from marine had risen modestly to £127.5 million. However, by the year ending 2024, it had risen to £1.19 billion. If one looks at the notes to the account, the part of it attributed to the consolidated fund is a huge amount of money, but where did the increase come from? It is clear from page 50 of the annual report that it is attributable to option fees on round four, which produced £1 billion. What I do not understand is why we cannot know what is attributable to Wales. It is critical that there be proper accountability.
I come to my point, which is this: we need to work together to allow what the Minister and the noble Lord, Lord Moynihan—and, I am sure, the people of Wales—rightly want, which is good management of the assets, but we need accountability and transparency. As the Crown Estate Commissioner will not tell the people of Wales what the benefits are, they must be compelled to do so by an Act of Parliament.
I very much hope that this Bill will move to Committee, as time does not permit me to develop these details of accounting any further. I should not have to do this, but what is absolutely clear is that the current step forward is not enough. This Government, in particular HM Treasury, must bear in mind that, in about 15 months’ time, the people of Wales will be able to make a judgment. I hope that, by that stage, the historic legacy of the way in which Wales has been deprived of the benefits from its natural resources will be shown. At the moment, there is money coming to Wales from its resources, and there is a good prospect for the future.
Lord Anderson of Swansea (Lab)
I apologise to the House for speaking prematurely; I should have spoken in the gap. I apologise for that. My only mitigation is that, as a good Welshman, I was led by the spirit.
Baroness Smith of Llanfaes (PC)
My Lords, I rise to speak in unequivocal support of this Private Member’s Bill, introduced by my noble friend Lord Wigley. It is a pleasure to follow the contribution from the noble and learned Lord, Lord Thomas of Cwmgiedd.
The case for devolving powers over the Crown Estate to Wales is not only strong but timely and just. This is not just a question of where decisions should be made; it is about fairness and ending the continued wealth extraction from Wales. The value of Crown Estate assets in Wales has soared in recent years. A financial report for the year 2006-07 indicated that the Crown Estate’s assets in Wales were valued at £21.1 million, generating net revenue of £2.5 million. In the financial year 2023-24, the Crown Estate announced a profit of £1.1 billion—an increase of £658 million on the previous year. As can be seen, and as a number of noble Lords have discussed, there are gaps in these figures. Why?
Given these figures and the number of projects both currently in development and projected to be operational in the years to come, it is entirely conceivable that the asset value of the Crown Estate’s holdings in Wales will exceed several billion pounds, reflecting hundreds of millions in annual revenue. At present, the revenue derived from the Crown Estate’s activities in Wales is paid directly to His Majesty’s Government, with
“no guarantee that Wales receives an equivalent amount back”.
The National Infrastructure Commission for Wales asserts that the
“current system sees a transfer of wealth from fees arising from the Crown Estate’s commercial activity in Wales, to England, an illogical and bizarre outcome”.
Plaid Cymru believes that arrangements should be made to devolve the functions of the Crown Estate to a new body accountable to the Welsh Government and with the sole duty of improving the well-being of the people of Wales. All commercial activity arising from the Crown Estate in Wales would be invested for the benefit of the people of Wales.
There is popular support for this move. The last major poll on devolution of the Crown Estate to Wales showed that 58% of people supported it. Half of all councils in Wales have passed motions calling for this devolution—including Conwy, Gwynedd, Denbighshire, Flintshire, Powys, Monmouthshire, Ceredigion, Carmarthenshire, Swansea, Neath Port Talbot and Caerphilly—with others with motions ready to be debated in the coming weeks. These councils represent a broad political spectrum, too, including Labour in Swansea Council, the Liberal Democrats, the Greens in Powys, and Plaid Cymru.
Through a number of responses to FOIs, we now know that councils in Wales paid over £345,000 in 2023 in lease fees to the Crown Estate. This is simply to lease the land which is in their area, often public footpaths. A devolved Welsh Crown Estate is an opportunity to address this unfairness, so that councils’ public money is not handed over to the Treasury and on to the sovereign grant but directed back into communities for their benefit.
In light of this, I suggest that the Crown Estate urgently reviews these lease fees and either reduces them or abolishes them entirely. Over £300,000 may seem trivial when profits are at £1.1 billion, but for our councils it is a significant amount, particularly as they face making tough decisions to cut local services.
Looking ahead to a new entity post devolution, Plaid Cymru has proposed targeting money generated from a devolved Crown Estate at deprived communities in rural Wales and our deindustrialised valleys. I look forward to visiting the Crown Estate Scotland soon through the Industry and Parliament Trust, to learn from its similar model that targets communities in the Highlands. On a national level, there is an opportunity to use the money to develop a Wales sovereign wealth fund, modelling those of other countries, such as Norway.
I commend my noble friend for crafting a proposal in the Bill that offers flexibility. While I strongly believe that future frameworks for the devolved Crown Estate could include targeted initiatives such as those that I have outlined, the Bill wisely leaves room for adjustment and negotiation between the Welsh and UK Governments. As the Bill’s broad framework acknowledges, this process cannot happen overnight, but it sets a clear path forward. It allows both the Treasury and the Welsh Government to engage in meaningful dialogue and progress the transition in a structured manner.
If, as Ron Davies said:
“Devolution is a process … not an event and neither is it a journey with a fixed end-point”,
then we must remain true to this principle both in word and in deed. Wales must not be relegated to a subordinate position to Westminster; both Governments should be equal partners in that relationship.
I ask noble Lords to consider whether they believe that Wales should be treated fairly and whether Wales should be granted the same powers enjoyed by other nations—in this case, Scotland. The Bill before us is about delivering that fairness and equality. Surely it is not radical to say that every nation deserves the right to benefit from the wealth generated by its own natural resources.
I hope that His Majesty’s Government carefully consider this opportunity before them and support the safe passage of the Bill.
Baroness Bennett of Manor Castle (GP)
My Lords, I am delighted to follow the noble Baroness, Lady Smith of Llanfaes, and congratulate the noble Lord, Lord Wigley, on bringing before us this important and timely Bill. We have a sense of unfinished business here. It is not too late, as we have heard, for the Government to pick this up with their own Crown Estate Bill, and we saw the possibility of that happening demonstrated earlier today in your Lordships’ House.
It is worth noting the point made by the noble and learned Lord, Lord Thomas of Cwmgiedd, that we are talking here about land resources that are the result of conquest. It is interesting that in the current global position, it is a Green principle to believe in self-determination and democracy. I know that the Wales Green Party has been campaigning very strongly in favour of the step that the Bill delivers, and I am sure I will be talking about it with its members when I visit Cardiff next weekend.
I hope that everyone will agree that if we want to discuss British values, self-determination and the right for people to democratically decide their own governance and to have control over their own resources are indeed British values. The Bill is timely because currently these are issues of great concern to the people of Greenland and Panama, as they are to the people of Wales. If we believe in the increasingly battered principle of an international rules-based order and if we are to stand up against powerful forces opposed to that, working at speed to smash them both in their home countries and abroad, this Bill takes us in the right direction.
It is also worth looking at the context of much that is discussed in your Lordships’ House, such as the recent Channel 4 report on Generation Z, identified as those aged 13 to 27. The headline said that a majority of young people want the country to be a dictatorship. When you actually look into the detail of the questions that were asked, it is a little more complex than that. They were asked whether they favoured a strong leader
“who does not have to bother with Parliament and elections”.
I note that these young people are perhaps reflecting what we are hearing from the Government and the governing classes, given that we have just seen the abolition of a large number of elections being delivered by the Government and a great deal of talk about elected mayors being strong leaders. So we might want to look at where these ideas are coming from.
Before we give up on democracy, we should think about trying it. This Bill delivers democracy for the people of Wales. Democracy is not just about voting; it is about deliberating, being in control, being able to collectively make decisions and the people most affected being able to make them, and benefiting from their own resources. As has been commented on by multiple noble Lords, I believe it is the policy of the Labour Party in Wales to support the Bill.
It is worth noting the very relevant context. Report stage of the Great British Energy Bill will be with your Lordships’ House next week and I understand that the Government have finally made a concession on supporting community energy, something that your Lordships’ House has fought for and backed again and again. I reserve the right for final judgment until I have seen the detail; none the less, this is a positive sign. The Bill of the noble Lord, Lord Wigley, would enable much more community control and community energy to be delivered in Wales rather than by giant multinational companies operating with far distant commissioners.
Finally, if this Bill was delivered, it would really highlight the remaining lack of democracy around the whole Crown Estate structure for England.
The noble Lord, Lord Moynihan, said that the Bill might delay. I suggest that it would greatly enhance and speed up the possibility of delivering that community and democratic energy. There is the strongest possible Green support for this and I very much hope that the noble Lord, Lord Wigley, is able to hear from the Minister that this is all going to power ahead.
Baroness Humphreys (LD)
My Lords, I thank the noble Lord, Lord Wigley, for securing this Private Member’s Bill, and also for the vast amount of work which has gone into its production and the clarity with which he has explained the intent of the Bill.
The Bill comprehensively covers all the steps necessary to transfer responsibility for the Crown Estate to the Welsh Government. It gives details of a transfer scheme, together with details of post-transfer management, the transfer of rights and liabilities, and the safeguards and conditions the Treasury considers “necessary or expedient”. Crucially, the Bill would amend the Civil List Act 1952 to ensure that all revenue generated from the Welsh Crown Estate assets would be paid into the Welsh Consolidated Fund.
I make no apology for speaking in favour of the Bill, despite a disappointing response to amendments during the progress of the Crown Estate Bill through this House. When I spoke to my Amendment 26, calling for the devolution of the Crown Estate’s powers to Wales, in Committee on the Crown Estate Bill, I explained that I deliberately did not include a timeframe for the transfer of powers to the Welsh Government. I felt then that this will be potentially a long battle—but it is one we are happy to engage with and to continue.
I quoted from the report of the National Infrastructure Commission for Wales, which asserts:
“By 2030, The Crown Estate’s functions in Wales should be completely devolved to a new body that has as its principal aim the reinvestment of all funds in Wales for the long-term benefits of the people of Wales”.
I said that “by 2030” is a timeframe I am more comfortable with. However, the danger is that, by then, most of the wealth might have been extracted from the Welsh Crown Estate.
Why are some of us so keen on the devolution of these powers? In Wales, the Crown Estate is expected to generate at least £1 billion from offshore wind energy leases in our waters in the coming years. Keeping this money in Wales could add an estimated £50 million per year to the Welsh Government’s budget—money that could directly benefit our public services and communities. Devolving the powers of the Crown Estate to the Welsh Government and the Welsh Parliament would bring us into line with Scotland, recognising Wales’s place as an equal nation, and would bring substantial benefits to Wales. The current system sees profits flow to the UK Government, with Wales missing out on vital funds, especially given successive UK Governments’ historic underfunding of Wales, particularly in infrastructure.
I was pleased to see that, yesterday, in the other place, my party announced during the Commons debate on the Crown Estate Bill that it would work with Plaid Cymru to push for the devolution of the Crown Estate. The Lib Dems submitted their own amendment but committed to supporting Plaid’s amendment if it were selected to proceed to the next parliamentary stage.
As the noble Lord, Lord Wigley, referred to, the devolution of the Crown Estate has widespread support in Wales from the Liberal Democrats and Plaid Cymru and a majority of local authorities. As the noble Baroness, Lady Smith of Llanfaes, said, my own council in Conwy County recently voted in favour of a Plaid Cymru motion, and in November Carmarthenshire councillors voted unanimously in favour of the devolution of these powers. I suspect that even the Welsh Labour Government have been a supporter—but we do not know; there has been very little consultation with them, so their voice is very rarely heard. Opinion polling in Wales continues to show that a clear majority of Welsh people want to see the estate devolved.
Noble Lords across the House have made strong cases for the objects of this Bill. I will now turn my attention to the Government’s position and to one of the reasons the Minister gave in dismissing our amendments during the debates on the Crown Estate Bill in this House last year—perhaps he will give it again today. His main reason was that it would
“delay UK-wide grid connectivity reform”.—[Official Report, 5/11/24; col. 1442.]
We can safely say that we know all about delays to grid connectivity in Wales; it has been the focus of the attention of the Welsh Affairs Committee in the other place for a number of years. Its 2021-22 report concluded that
“developers of renewable energy were encountering problems with grid capacity and connecting to the electricity grid in Wales”.
The committee also said:
“We recognise the strengths of an electricity grid that serves the whole of Great Britain but consider that there are distinct challenges and opportunities relating to grid infrastructure in Wales that require specific focus from the UK Government”.
The report contains many references to the UK Government’s responsibility in this area. The then Conservative Government, in their 2023 response to the report, admitted that a “step change” was needed to boost capacity in Wales. Can the Minister say what assessment he has made of the steps, if any, taken by the previous Government to initiate this step change? What further steps have his Government taken since taking office?
I am sure that your Lordships understand that the reference to delaying UK-wide grid connectivity reform as a reason for not devolving the Crown Estate to Wales is rather ironic and particularly galling for those who have been calling for UK investment in this area of infrastructure in Wales for many years. We on these Benches are in full support of the Bill of the noble Lord, Lord Wigley, and we wish it every success.
Baroness Bloomfield of Hinton Waldrist (Con)
Hoffwn ddiolch i Arglwydd Wigley am ddod a’r Bil Aelod Preifat hwn i’r Tŷ ar gyfer y ddadl heddiw. I congratulate the noble Lord, Lord Wigley, on his Crown Estate (Wales) Bill and thank him for bringing it to the House for debate.
We on these Benches have thought long and hard about the Bill, and my noble friend Lady Vere of Norbiton debated these issues with the noble Lord in Committee on the Crown Estate Bill, which is making its way through the other place presently. I understand the arguments made by several noble Lords and I appreciate the strength of feeling, as well as the clear differences between Scotland and Wales when it comes to the Crown Estate. We support devolution and agree that local people make better decisions for their area. However, I am afraid that we have some important concerns about the Bill, given the current context of policy-making for the Crown Estate.
The Crown Estate in Wales is extensive, covering significant areas of foreshore, seabed and land, and its value has grown considerably, particularly with the rise of offshore renewable energy projects. I agree that, in time, we need to create a climate of co-operation to maximise the benefit that we can all gain from developing our national resources. The legacy of Tryweryn, which was mentioned by the noble Lord, Lord Wigley, still looms large; no one wishes to create another source of resentment.
While the present level of resources that could accrue to the Welsh Government is relatively small, it may well, and probably will, grow in time, particularly as the offshore floating wind industry takes off in south-west Wales. The noble Lord, Lord Wigley, was right to call for greater transparency in the Crown Estate accounts; a point further underlined by the noble and learned Lord, Lord Thomas of Cwmgiedd, who gamely tried to navigate through the fog of those accounts.
When this was discussed last year, the House was considering a sea-change in the Crown Estate’s future. When that Bill passes, Parliament will have set the Crown Estate on a new path, playing an important role in the development of offshore wind. Given that context, we do not feel that devolving the Crown Estate in Wales is the right step at this time. Instituting a whole new system of governance for this part of the Crown Estate would open questions about the future of the Crown Estate, and we feel that that reassessment of the future of the estate could be a setback in the ambitions we are setting for it with the Government’s Bill. For that reason, I am afraid that we cannot support this Bill today.
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
My Lords, is a pleasure to speak in this debate today. I congratulate the noble Lord, Lord Wigley, on this Bill and on his opening speech. While we may disagree on the substance of this issue, I enjoyed our debates on this topic during the passage of the Crown Estate Bill, and it was a pleasure to hear him put the case so powerfully again today.
I will begin by setting out how the Crown Estate currently operates and the case for retaining the current model, which the Government believe provides the best deal for Wales and for the wider United Kingdom. As noble Lords will be aware, the Crown Estate was established with the aim of creating lasting and shared prosperity for the whole of the United Kingdom. Governed by the Crown Estate Act 1961, it holds a diverse portfolio of buildings, shoreline, seabed, forestry, agriculture and common land. It has shown itself to be a trusted and successful independent commercial business, with a proven track record of effective manage-ment. Each year, the Crown Estate is required to pay its profits into the UK Consolidated Fund, which has totalled more than £4 billion over the past decade. This money is used to fund vital public services across the UK, including in Wales in reserved areas. When the UK Consolidated Fund is spent in England—in areas which are devolved to Wales—the Welsh Government also receive funding through the operation of the Barnett formula.
The proposed powers in the Crown Estate Bill, which is currently progressing through the other place, combined with the Crown Estate’s existing scale, expertise and track record, mean that it is uniquely placed to drive forward important growth-generating projects in Wales. This is particularly true in relation to offshore renewable energy and other emerging offshore technologies.
Over the last 20 years, the Crown Estate has helped to deliver a number of important renewable energy projects and to position Wales at the vanguard of clean energy technology and growth. The benefits of these projects are being felt in communities and supply chains right across Wales. For example, the Crown Estate has invested £1.2 million in Welsh tidal stream energy through the Morlais demonstration zone in Anglesey. Last year, the Crown Estate launched offshore wind leasing round 5 for floating offshore wind in the Celtic Sea, which is expected to deliver significant jobs and supply chain benefits locally. The Crown Estate works closely with the Welsh Government and Natural Resources Wales to develop these projects and ensure that resources are sustainably managed for the long term.
As noble Lords will remember, the Government were pleased to support the successful amendment of the noble Lord, Lord Hain, moved by my noble friend Lord Murphy, to the Crown Estate Bill, which will see the appointment of two Crown Estate board commissioners for Wales and Northern Ireland respectively. This is a positive step that will ensure the Crown Estate’s board continues to work in the best interests of the whole of the UK. Importantly, the devolved Governments will reserve the right to be consulted over these appointments. I am grateful to all noble Lords across the House, including some who have spoken in today’s debate, for their work to make this change possible.
Let me turn to the concerns the Government have with the Bill we are discussing today. Devolving the Crown Estate to Wales at this time risks significant fragmentation of the energy market and jeopardising the existing pipeline of offshore wind development in the Celtic Sea planned into the 2030s. This in turn would undermine international investor confidence and significantly delay progress towards net zero, to the detriment of the whole of the UK.
Devolution would likely require the creation of a new entity to take on the management of the Crown Estate in Wales. This entity would not benefit from the Crown Estate’s substantial capability and capital and systems abilities, nor from the fact that the Crown Estate’s marine investments are currently made on a portfolio-wide basis across England and Wales. Devolving the Crown Estate to Wales at this time would disrupt these existing investments, as they would need to be restructured to accommodate a Welsh-specific entity.
As the noble Baroness, Lady Humphreys, quoted from our debates on the Crown Estate Bill, devolution would likely delay UK-wide grid connectivity reform, which is crucial for meeting our growth targets, because it would make it harder to co-ordinate energy generation and infrastructure across England and Wales. The Government are driving forward grid connectivity reform. Introducing a new entity, which would have control of assets only within Wales, into this complex operating environment, where partnerships have already been formed, would not make commercial sense. A devolved entity would be starting from scratch, midway through a multimillion-pound commercial tendering process for a pipeline of Welsh projects, at a time when the Crown Estate is undertaking critical investment in the UK’s path towards net zero.
Some noble Lords have argued today that Wales would benefit financially from devolution of the Crown Estate. Let me set out why the Government believe this not to be the case. As I have already noted, Wales benefits from the UK Government’s spending derived from the Crown Estate. It receives Barnett funding when Crown Estate funding is spent in England in areas which are devolved in Wales. As the noble and learned Lord, Lord Thomas, quoted from our debates on the recent Crown Estate Bill, if Wales were to benefit only from the income from the Crown Estate generated in Wales, it would likely be zero or negligible for several decades to come. This is because Welsh assets are relatively new and will take time to mature, likely to be in the order of 10 to 15 years. Previous reports did not include costs and, as I understand it, many of the figures quoted today are reports of profits from activities without taking into account costs. As I have said before during debates on the Crown Estate Bill, disaggregating activities requires a high degree of subjective judgment.
My noble friend Lord Murphy asked about funding for the Wales Government in the event of devolution of the Crown Estate. Even if devolution could be achieved without risking the revenues for Wales that the Crown Estate generates, this would not automatically lead to an increase in the funding available to the Wales Government. As agreed in the Scottish Government’s fiscal framework review, which concluded in August 2023, the Scottish Government receive a block grant reduction to reflect the profits they retain from Crown Estate Scotland following its devolution.
The noble Lord, Lord Wigley, and my noble friend Lord Murphy raised the Treasury Ministers’ discussions with the Welsh Government about the Crown Estate. In November, I met the Welsh Government’s Cabinet Secretary for Finance and Welsh Language. Our discussion covered a range of issues, including the Crown Estate. I reiterated the UK Government’s position that we do not believe devolution of the Crown Estate is in the best interests of Wales or the wider UK. More widely, the UK Government maintain regular ministerial and official-level engagement with the Welsh Government across a range of different policy areas.
The Crown Estate’s existing scale, expertise and track record mean it is uniquely placed to drive forward growth and investment in Wales. Wales continues to benefit from the funding generated by the Crown Estate, both through the UK Government’s spending in reserved areas in Wales and through funding for the Welsh Government via the Barnett formula. Devolving the Crown Estate at this time would significantly fragment the UK’s energy market, jeopardise the existing pipeline of offshore wind development in the Celtic Sea, undermine international investor confidence in the UK and significantly delay our progress towards net zero. It is for these reasons that the Government cannot support the Bill before your Lordships’ House. The Government will of course continue to discuss these issues—
Lord Thomas of Cwmgiedd (CB)
Before the Minister sits down, I want to press him on one point: the proportion of income classified in the accounts as derived in the marine sector from option fee and other income, some of which is straight-lined into the Consolidated Fund. Can he give the figure for Wales? As we have discussed, he was able to give it at an earlier point; it must be possible, and I would be grateful if he would write to the House and give us that figure. It is of huge symbolic importance to the people of Wales, and I do not want this Government to suffer 15 months hence.
Lord Livermore (Lab)
I am very grateful to the noble and learned Lord for his concern for the Government. I am told it is impossible to disaggregate the figures in the way that he has asked. I will double check that and write to him if I can, but I am told it is not possible to do that disaggregation.
Lord Thomas of Cwmgiedd (CB)
Forgive me for a moment, but I am quite used to arguing with accountants and I would be delighted to meet the Crown Estate to try to understand what the problem is. I believe it is accountancy gobbledygook that we cannot do it. Of course there will be an element of subjective judgment, but it can be done. If it cannot be done, please can I meet the accountants at the Crown Estate?
Lord Livermore (Lab)
I will happily suggest that to the accountants at the Crown Estate.
The Government will continue to discuss these issues with the First Minister and the Welsh Government, to ensure that Wales sees the full benefits of the Crown Estate.
Lord Wigley (PC)
My Lords, I am grateful to the Minister for his response and even more grateful to colleagues from all parties who have spoken in this debate. I am grateful for the support that has come from the noble Lords, Lord Murphy and Lord Anderson—albeit that he spoke earlier than he had intended, it was very welcome—the noble and learned Lord, Lord Thomas of Cwmgiedd, my colleague and noble friend Lady Smith, the noble Baronesses, Lady Bennett and Lady Humphreys, who has done so much work on this matter. I regret very much that my friend from Monmouth was unable to support the Bill, but he left a glimmer of hope that, if not now, there might be a time. Perhaps we can come back to that. With regard to the response of the noble Baroness, Lady Bloomfield, from the Front Bench, she recognised the case but said that the Government cannot at this stage move forward with it.
With regard to getting the maximum possible benefit from the elements that Wales has—wind, water and all the rest—around its coast, there needs to be cross-government co-operation between the Government of Wales in Cardiff and the UK Government. In order to facilitate that, the Crown Estate must surely see the benefit of the positive energy that comes from maximising the output from our own resources and arrange things in a way that encourages that to happen.
I hope we will get a Second Reading today and that we can go into a meaningful Committee stage. I noted the points the noble and learned Lord, Lord Thomas, made about that and look forward to it. These arguments will not go away. The Minister had discussions with his colleagues in Cardiff in November, I think, and I hope that he will keep in touch with them. I had a meeting a fortnight ago with our erstwhile colleague here, the First Minister of Wales. These are matters that are of concern to them, and they will arise in the election, on a new format, to the Senedd in Cardiff in less than 18 months’ time.
There is a need to get some co-ordination on this. Even if this Bill is not the vehicle, there must be some way of maximising the co-ordination and benefit that comes to Wales from the resources around our coasts. If it can be done for Scotland, surely it can be done for Wales too.
Crown Estate (Wales) Bill [HL]
Friday 6th June 2025
(1 month, 1 week ago)
Lords ChamberCrown Estate (Wales) Bill [HL] 2024-26 Read Hansard Text Amendment Paper: HL Bill 29-I(a) Amendment for Committee (Supplementary to the Marshalled List) - (5 Jun 2025)
Lord Harlech
Member’s explanatory statement
This amendment would ensure that any revenues from the Welsh Crown Estate would still be paid into the Exchequer.
Lord Harlech (Con)
My Lords, in opening this group of amendments in my name, I declare my farming and land management interests in Wales.
I pay tribute to the noble Lord, Lord Wigley, for his long-standing service to Wales and his clear and consistent advocacy for greater Welsh autonomy. There is much that we agree on, and I like to think we work together in raising Welsh interests in your Lordships’ House, not least in hoping to see the Welsh rugby team resurgent in the not too distant future. The noble Lord’s passion is beyond question and his commitment to Welsh interests is evident in this Bill. However, while I respect its intent, I regret to say that it is the wrong Bill introduced at the wrong time with the wrong outcomes for the people of Wales.
Amendments 1 and 6 stand in my name and seek a straightforward but essential safeguard: that revenues from the Welsh Crown Estate should continue to be paid to the Exchequer. At a time when public finances are under enormous strain, diverting these vital funds away from the UK Exchequer is neither prudent nor responsible. These revenues are used not just in Wales but across the United Kingdom, for the benefit of all our citizens.
Let us ask plainly: will these funds be better managed by the Labour-run Welsh Government, whose track record is one of failure and misplaced priorities? Just look at the 20 mile per hour speed limit debacle, a policy that has stifled economic activity, hit small businesses and left the public exasperated—as I can see the noble Baroness, Lady Bennett of Manor Castle, is at the moment. What confidence can we possibly have that the same Ministers will not use Crown Estate revenues to fund yet more policies that the Welsh people do not support?
Without stealing his sandwiches, I note that Amendments 2 and 8, proposed by my noble friend Lord Moynihan, seek to retain the Crown Estate’s borrowing cap at 25% of its net asset value. This is not ideology but basic financial stewardship. The Crown Estate is not a plaything; it manages critical assets such as our seabeds and land. A financially secure estate is vital to its long-term success, and excessive borrowing puts that future at risk. Whether devolved or not, that principle must hold.
Amendment 3 introduces a necessary backstop: the power for HM Treasury to impose conditions if the devolved Crown Estate in Wales fails in its functions. Again, this is an act not of hostility but of responsibility. Sadly, we have seen time and again that, when left unchecked, the current Welsh Government do not always act in the public interest. This safeguard would ensure that the Crown Estate’s essential duties—environmental, economic and fiduciary—were upheld to the standards the public expect.
The Clause 1 stand part notice exists because the Bill, at its core, is premature. We have only just passed the new Crown Estate Act, and it is simply not wise to begin carving out individual devolved frameworks before we have seen how the new national reforms bed in. This is a constitutional experiment based more on politics than on policy.
Although I defer to my noble friend Lord Moynihan on the reporting amendment, I will say this: any serious consideration of devolving the Crown Estate must be preceded by rigorous evidence and not ideological aspiration. A report on the impact on finances, land management and environmental standards should be the starting point, not an afterthought.
To conclude, although I respect the ambition of the noble Lord, Lord Wigley, I must urge caution. The people of Wales deserve better than what the Bill contains. They deserve good governance, sound management and real accountability. Sadly, the Bill does not offer that. I beg to move.
The Deputy Chairman of Committees (Baroness Garden of Frognal) (LD)
My Lords, the noble Baroness, Lady Harris of Richmond, is taking part remotely, and I invite her to speak.
Baroness Harris of Richmond (LD) [V]
My Lords, I am speaking to the amendments in this group on behalf of these Benches and, in doing so, I confirm the strong support we expressed at Second Reading for the Bill. There was a sense of outrage when President Trump attempted to squeeze an agreement for the extraction of rare minerals out of Ukraine without payment. His argument was that capital and equipment sent to Ukraine by Congress under the leadership of President Biden was not a grant, as had previously been thought, but a loan. That is the outrage felt in Wales when its natural assets are exploited without any benefit to the people of Wales.
At Second Reading, the noble Lord, Lord Wigley, referred to the flooding of Tryweryn and the political consequences that followed, including, very probably, his presence in this House. The purpose of the Conservative amendments is to ensure that none of the assets or income of the Crown Estate in Wales, whether property rights in land or the highly valuable rights in relation to the Welsh zone, should fall under the control of the Senedd or its Ministers. Rents and profits should whizz up the motorway to lodge in the Treasury as they always have, even when it was called Watling Street. Perish the thought that some Welshman, in the tradition of Owain Glyndŵr, would get his hands on the loot. You might call that the Conservative principle.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise briefly to speak on behalf of the Wales Green Party against all the amendments in this group. The noble Lord, Lord Harlech, perhaps misinterpreted my reaction: I was astonished that he is not taking seriously the statistics showing that 20 mile per hour speed limits stopped about 100 deaths and serious injuries on Welsh roads when they were in force. Those saved lives and people’s lives being transformed for the worse by serious injury should not be taken in any way lightly, and it is a great pity it is not continuing. Similar figures from TfL show a 34% decrease in serious deaths and injuries in London. A range of measures affect that —around 15% perhaps from other measures—but 20 miles per hour is a significant factor in reducing deaths and injuries on roads. Surely everyone wants that to happen.
It is a great pleasure to follow the noble Baroness, Lady Harris of Richmond. She has far more personal connection with this than me, and the passion in her speech leaves me with little to add, except to say that the Crown Estate in Wales is drawing on Welsh resources. The resources surely should stay in Wales. This is a basic democratic principle. The concentration of power and resources here in Westminster is a problem all around the country, but particularly for the nation of Wales. There is a fast-growing interest in independence for Wales. Those who wish to maintain the union might like to think about what position they are taking on this Bill, because not being able to have the returns from their own resources is something about which there is increasing anger in Wales.
I spoke at Second Reading in favour of—
Lord Harlech (Con)
My Lords, what guarantee can the noble Baroness give that, were this Bill to pass, the revenue from it would be distributed equally throughout Wales and not just be concentrated in Cardiff and the surrounding area, as revenues currently are?
Baroness Bennett of Manor Castle (GP)
In response to the noble Lord, Lord Harlech, I note that Wales has a democratic electoral and political system, unlike Westminster, where we have a Government who won the support of 34% of voters and are now in control. If he is looking for a democratic distribution of resources, he is a lot better off in the Senedd than in Westminster.
I was about to finish, so I repeat that the Wales Green Party strongly backs this Bill and opposes the amendments. More power to Lord Wigley’s elbow.
Lord Moynihan (Con)
My Lords, I will speak to Amendments 2, 3, 8 and 9, which are in my name, and explain why I oppose Clause 1 standing part of the Bill. I declare my interests as set out in the register, particularly my chairmanship of Amey and Acteon; although they are not contracted in offshore wind projects in Wales, they work in this space worldwide.
Before I concentrate on my amendments, I place on record the considerable sadness I have in finding myself in opposition to the noble Lord, Lord Wigley, who saw me through my Back-Bench and ministerial career in another place. I have always viewed him as a trusted friend and outstanding politician, and he is recognised as such across both sides of both Houses. I put that down to the English influence on him, which, if I am not mistaken, came from his birth in Derby and education in Manchester.
Amendments 2 and 8 seek to ensure that the Bill is in line with the same borrowing limits as the Crown Estate. Ostensibly, it is reasonable to ask why such borrowing limits are prudent. The answer is that there is considerable political, strategic and commercial risk associated with devolving and transferring the functions of the Crown Estate in Wales to Welsh Ministers.
The most recent publicly available figures for asset values in Wales are from the August 2023 freedom of information request, which stated—in property values in sterling—that offshore wind and marine accounted for some £793 million out of a total of £853 million of assets. Our focus is therefore on those offshore opportunities—particularly but not exclusively wind—with marine energy being some 93% of those assets. That is what we need to focus on when considering this Bill. Taking a 25% debt-to-asset value would mean borrowing up to £213 million, which would need to be against Welsh assets to that value. Currently, as I understand it, Crown Estate Scotland does not have access to borrowing powers, so even if my amendment were accepted, this would create further asymmetry of opportunity.
The difficulty of making sense of these figures, and therefore the security required for borrowing, is further compounded by a number of economic factors. The first is the creation of global instability in the sector. The international renewable energy market is experiencing that instability, no small part due to the changes of US tariff and green subsidy policies. In challenging global conditions, it is crucial that the UK market can present a united and stable environment to give confidence to investors in the sector and developers to commit their capital and their projects in the UK.
However, there is already difficulty in doing so. For noble Lords following this area of net zero, the Ørsted cancellation of Hornsea 4 only last month because of the economics of the project proves just how volatile and uncertain the sector is at present. The benefit of the current structure of the Crown Estate is an ability to balance investments and reduce risk exposure across England and Wales, ensuring more robust and sustainable growth in a way that a devolved Welsh entity would struggle to replicate at the pace necessary to capitalise on the immediate opportunity that exists. Neither balance sheet strength nor economics of scale would exist if this Bill went through. Any further fragmentation could signal political and regulatory uncertainty, reducing the UK’s attractiveness as a destination for clean energy investment and harming both the Welsh and the broader UK economies.
My second point, and the second reason behind the amendments, is that the UK systems-wide approach to tackling energy security and the net-zero ambition of the Government gives a basis to the fact that the Crown Estate is, first and foremost, involved with the energy transition across the UK and in Wales, and with the development of offshore wind in particular and ground-breaking new technologies, which are even more risky, particularly the ones that are considered for floating offshore wind generation in the Celtic Sea. In this context, the UK’s transition to renewable energy, particularly offshore wind, requires a highly co-ordinated approach. Fragmenting seabed management through devolution would disrupt the collaboration currently in place between the Crown Estate, the National Energy System Operator and the UK Government. This could delay grid connection decisions and undermine the strategic coherence of the contracts for difference auctions. My genuine belief is that a transfer to Welsh Ministers would be counterproductive to the Welsh economy—which is what we should be thinking about in the context of this Bill—Welsh jobs and growth in the sector.
I would like briefly to address the comments of the noble Baroness, Lady Bennett. The Celtic Sea—what we are talking about at the present time—and the role that the Crown Estate can play in de-risking and stimulating the supply chain in those projects is critical. I am afraid that those who believe in transferring the Crown Estate assets from the UK back to Wales may find themselves misguided if they feel that the Welsh acreage of the Celtic Sea represents some sort of 530 carat Cullinan diamond—the great star of Wales.
The reality, as I found to the cost of many months, if not years, of negotiation as Minister for Energy in another place on the Frigg treaty—which went across the median line of Norway and the UK—is that the proposed Celtic Sea developments create a similar issue, with a pretty even split between English and Welsh waters. The delineation is highly complex; it is not a straightforward North Sea divide. If you look at a map, you see that there is a kaleidoscope of different ownership interests, and fragmentation of the control of the project would be counterproductive, in my view. It would take more time, it would be economically inefficient, and it would be politically sensitive if two different organisations were trying to make sure that that economic opportunity—which would benefit the people of Wales, as well as the people of the United Kingdom—was curtailed or sent into a political quagmire of negotiations and differences.
The round 5 project development areas in the Celtic Sea are equally important to both the south-west of England and to Wales. That is a critical factor when you consider the scale of this project in the totality of the Crown Estate assets. With this scale in mind, it is important to reflect on the integrated and complex nature of the supply chain which would back up that project. It is unrealistic to expect that every component of the supply chain would be available in Wales.
That is the reason I tabled these amendments. It is not just the major port of Port Talbot which is critical to the Celtic Sea leasing round; Bristol is equally important. Transfer operations in Wales could create jurisdictional and logistical bottlenecks, impeding the rollout of offshore wind infrastructure. My concern, and my reason for tabling these amendments, is not principally political; it is to make sure that there is no inhibition to the development of these interesting opportunities, particularly the offshore opportunities that exist, which will benefit the people of Wales and the people of the south-west.
The evidence presented in the Future of Offshore Wind illustrates that the majority of future opportunity in the Celtic Sea is further away from the Welsh coast and not in Welsh water. I add that an aspect of this is covered by Northern Ireland as well, so there is a triple lock on this project which would need to be looked at. That is the reason I tabled my amendments. The Welsh coastline presents a significant opportunity, regardless of the position of projects in the seabed. It is in the best interests of both Wales and the Crown Estate to ensure this potential is fully realised, so that coastal communities can benefit from the offshore resources. It is important to contrast this, for example, with the Scottish seabed and Scottish waters, which are materially distinct, creating no operational overlaps nor conflicting regulation and contrasting financial systems.
Finally, I emphasise my beliefs not only that this is important, as was heard during the passage of the then Crown Estate Bill, but that the operational independence of the Crown Estate is critical in enabling it both to maximise the economic opportunities and to take an apolitical, long-term decision in line with its statutory purpose. Imposing oversight from Wales through either Welsh Ministers or the Treasury would have a significant impact on the abilities of the commissioners to carry out their functions and to create both lasting, shared prosperity for the nation and jobs in Wales. Although this Bill is ostensibly attractive, without any amendments it would be economically disadvantageous to Wales; that is my main driver.
For those reasons, I speak to the amendments in my name. I do not have time to cover the last one; suffice it to say that I think that, if we pass this Bill, there would be real benefit in having after one year a review not just of what has happened in Wales but, potentially, of what has happened in Scotland as well.
Lord Harper (Con)
My Lords, I will speak briefly. I strongly support what my noble friend Lord Moynihan said about the complexity of the economic opportunities here. I was involved in some of those negotiations when I was the Secretary of State for Transport. They are complex and overlap on both English and Welsh interests. If you were to split them, that would make it harder to land those economic opportunities.
I want to touch briefly on what the noble Baroness, Lady Bennett of Manor Castle, said about the 20 mph speed limits in Wales, in order to present a balanced picture. I will not dwell on them, because they are not the subject of this Bill, but I think that she should also have mentioned that the original proposals by the Welsh Government carried a cost to the Welsh economy of £4.5 billion; that is in the Welsh Government’s own impact assessment. You have to balance that against the lives saved and decide whether that balance is correct and whether that cost of £4.5 billion, if used in a different way, would achieve a better outcome. I just want to put that on the record to balance out the argument. The noble Baroness is pulling a face at me, but the impact assessment of the Welsh Government costed that policy at £4.5 billion; that is their figure, if she wants to take it up with them.
The final point I want to make picks up the point made by the noble Baroness, Lady Harris of Richmond, about where the revenues go. It is worth pointing out, I think, that, through the Barnett formula, the Welsh people are net beneficiaries of the UK Exchequer. It is not clear from the Bill, as proposed by the noble Lord, Lord Wigley, what impact transferring revenues of the Crown Estate has on the Barnett formula—that is, whether it will be netted off and leave the same amount of money going to the Welsh Government, or whether it will be an increase—but the point is that more than all of the revenue that flows from the Welsh public into the Exchequer goes back because they are net beneficiaries. So there is no unfairness here to the people of Wales. I think that taxpayers in the rest of the United Kingdom would look unfavourably on more revenues being transferred to the Welsh Government and increasing that net benefit at a time when the public finances are, as my noble friend Lord Harlech said, so stretched. The picture is a little more complex than some noble Lords have said. For those reasons, I strongly support—
Baroness Bennett of Manor Castle (GP)
For clarification, would the noble Lord like to make it clear that the figure of £4 billion he gave was over three decades?
Lord Harper (Con)
Yes, I am very happy to make that point, but it is still a significant sum of money. If you do what is normally done in these circumstances, which is to look at the cost versus the benefit, I would argue that that is not a good return. Of course, that is one reason—alongside the enormous unpopularity of that policy—why the Welsh Government responded to the political pressure from both my party and the public by changing the policy significantly. They themselves are not, I think, persuaded by those arguments.
I was going to finish by saying that, for the reasons I set out, I strongly support the amendments tabled by my noble friends Lord Harlech and Lord Moynihan. I very much hope that, in due course, the House will get a chance to support them.
Lord Thomas of Cwmgiedd (CB)
I shall speak to the amendments in my name. By way of background, we have had the benefit of the noble Baroness, Lady Harris of Richmond, speaking about what makes this issue what I would describe ultimately as a hearts-and-minds issue. The acquisition of the Crown Estate in Wales by conquest and inheritance, the imposition of English laws, the exploitation, as it is perceived in Wales, of Wales’s resources of coal and water and the fact that Scotland has been allowed to control its own estate turn this into an important political and hearts-and-minds issue. I have tried, through the amendments I have put forward, to recognise that. In saying that it is an important hearts-and-minds issue, we must bear in mind the view of the Welsh Government, of the same complexion as the Government here in London, that they want devolution. The overwhelming majority of Welsh authorities want devolution. The very strong feeling is, for the reasons that I have tried briefly to summarise, that there ought to be devolution of the Crown Estate to Wales.
What has bedevilled this problem is a failure to understand and give effect to the difference between ownership and benefit from an asset and management of an asset. Those of us who may be fortunate to have the odd spare penny or two know the difference. Allowing someone else who is better qualified to manage assets while ensuring that the policy towards those assets and the ultimate benefit appertain to the owner is an important distinction that I have sought to make.
The first step is to try to identify what is the Crown Estate in Wales. Is it valuable? Does it have any assets? Does it have any revenue? Noble Lords may recall that in the Second Reading debate I spent a little time—I am not going to do that today because it is unnecessary—going through the accounts of the Crown Estate Commissioners in respect of Wales. The revenue and asset values for the year ending March 2021 were clear, but there was nothing in the accounts thereafter.
I challenged the Minister, the noble Lord, Lord Livermore, the Financial Secretary to the Treasury, about how an accountant could possibly not be able to identify the assets and income. I am immensely grateful to him and the chief executive of the Crown Estate Commissioners and to one of the commissioners for a meeting I had with him. Having checked with him, and I am happy to say he agrees that I can say this, I was told by him that in the financial statements for next year—that is, for the year ending March 2026—it is the commissioners’ intention to provide a separate breakdown for Wales of the assets and revenue. That shows that you can identify what is Welsh and what is English, and you can show the resultant revenue streams and capital expenditure, so an awful lot of the obfuscation that has occurred can be got rid of. I do not want to comment any further. Let us wait for those accounts to be produced. It brings to an end the argument that you cannot really say what is Welsh and what is English and what is the benefit from it. We will know. It is a great pity that this was not done before.
Therefore, I think that what is before us now is, if this hearts-and-minds issue is to be addressed and dealt with, how do we take this forward? It would be very helpful for us to hear from the Minister about the discussions that have been taking place between his colleagues—I assume that they are his colleagues—in Cardiff and his colleagues here in London about dealing with this hearts-and-minds issue and, as the noble Lord, Lord Moynihan, has been very careful to stress, obtaining economic benefits for Wales. The distinction that I try to draw is between ownership of and benefit from the assets and the management of the assets, and that is why I put forward Amendments 4 and 7.
First, Amendment 4 is primarily to set a timetable. It is no use having a Bill, it seems to me, that transfers the assets on its passing without some clear preparatory work and a timetable to reassure investors and others that the transfer is orderly. Therefore, Amendments 4 and 7 put forward a timetable. I have put dates forward as indicative only: obviously, the timetable is a matter for detailed discussion between the Governments in London and Cardiff, providing that, during that period, the Crown Estate commissioners remain completely in control—they ought to take account of the views of Welsh Ministers but not be bound by them—and that the income thereof in the meantime is properly identified. This really provides a bridging period, dealing with the issue of the transfer of the assets but allowing their management to continue, and therefore really tries to address the problem that, as I understand it, some Government Ministers have put forward, that all this would wreak havoc with investment and jobs in Wales. I regard that as a fallacy. When one really looks at what we are talking about, it is accepting that the Crown Estate in Wales is a national asset of the Welsh people, but accepting that there needs to be an orderly transfer.
As to the future, I have put down a separate amendment, Amendment 5, which I will address in due course, in the second group of amendments, because it addresses this fundamental misunderstanding that is used to try to justify the preparation of an injustice which does such damage to the union.
Lord Sandhurst (Con)
My Lords, the amendments in this group relate to the operation of the Crown Estate in Wales under the newly devolved approach. I should say at the outset that on this side of the House, we are opposed to the Bill in principle. I know that the noble Lord, Lord Wigley, tabled amendments to the Crown Estate Act during its passage through your Lordships’ House. The Official Opposition were clear at that point that the Government should resist those amendments. As my noble friend Lady Vere of Norbiton said then, we have set the Crown Estate on a very different path as a result of that legislation, and now is not the time to frustrate that process with a very different proposal on the direction of the Welsh part of the Crown Estate. That argument was right then; it is right now.
Amendments 1 and 6 in the name of my noble friend Lord Harlech would require the revenues of the Welsh part of the Crown Estate to be paid to the Exchequer after the devolution and transfer of functions to a new body. This would ensure that the existing revenues go to the Exchequer, which, as we all know from the rumours about the spending review next week, is already in great need of income. If control of the functions of the Welsh Crown Estate were to be devolved but the revenues continued to be paid to the Exchequer, that would at least achieve part of the aim of the noble Lord, Lord Wigley, without depriving the Exchequer of much-needed revenue. Perhaps the noble Lord is open to that.
My noble friend Lord Harper raised interesting and cautionary points about the Barnett formula more generally. Amendments 2 and 8 in the name of my noble friend Lord Moynihan seek to ensure that the Welsh Crown Estate is bound by the same borrowing limits as the Crown Estate itself. As noble Lords will recall from the passage of the previous Bill, my noble friends Lady Vere of Norbiton and Lord Howard of Rising spoke at length and pressed Ministers to secure that borrowing limit. We were pleased that Ministers accepted those calls and implemented a borrowing limit, even though this was placed on a statutory footing. The amendment which my noble friend Lord Moynihan has sensibly tabled seeks to ensure that the Welsh Crown Estate is similarly bound by an appropriate limit on its borrowing. Here I should mention, of course, the important points that he made about the impact that this transfer would have on the future of energy, in this country as a whole and in Wales in particular, and the difficulties in apportioning that.
Amendment 3, in the name of my noble friend Lord Moynihan, seeks to establish a backstop to prevent mismanagement of the Welsh Crown Estate. We know how poorly Wales is served by her current devolved Government. Whether it is education, healthcare or economic outcomes, Wales consistently underperforms, so much of this is the responsibility of the Welsh Government. Given that backdrop, it is understandable that noble Lords are a little more than reticent about proposals to take another step down that road, with a body as important as the Crown Estate and with such big assets. We on these Benches share the concern that motivates my noble friend in his amendment, and we would be interested to hear from the Minister whether the Government might consider some form of backstop such as that proposed by this amendment.
Amendments 4 and 7, in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd, reflect legitimate concerns about the untimely transfer of these powers in the event that the Bill is passed. Clearly, a sudden change so soon after we passed the Crown Estate Act, which sets a very different direction of travel for the Crown Estate, would be very disruptive to that new direction. Perhaps the noble Lord, Lord Wigley, would respond to that point in his remarks at the conclusion of this group.
In summary, we have serious concerns about the transfer of the Welsh parts of the Crown Estate to a devolved framework. There are many important issues that must be addressed before this proposal could go forward. We look forward to hearing from the noble Lord, Lord Wigley.
Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)
My Lords, before I start my speech, I pay tribute to our Armed Forces who participated in D-Day 81 years ago today. I will mention the 2nd Battalion of the South Wales Borderers and the Durham Light Infantry, who fought side by side on the beaches that day. We will never forget their sacrifices.
While the Government’s position was made clear on debates on this topic during the passage of the recent Crown Estate Bill, it continues to be a pleasure to speak in Committee on this Bill. We should all recognise the passion that the noble Lord, Lord Wigley, has shown on this issue. I prewarn noble Lords that there will be a time during my speech when the Durham accent comes into contact with the Welsh language—so just beware of that.
I thank the noble and learned Lord, Lord Thomas, and the noble Lords, Lord Harlech and Lord Moynihan, for their thoughtful contributions and accompanying amendments relating to the operational framework of any devolved Welsh Crown Estate entity. I also welcome the contributions from the noble Baronesses, Lady Harris and Lady Bennett, and the noble Lord, Lord Harper.
Amendments 1 and 6 would ensure that the revenues from the Welsh Crown Estate would still be paid into the Exchequer. Amendments 2 and 8 would place parameters on borrowing. Amendment 3 would allow the Treasury to impose whatever conditions it sees fit under the scheme for ensuring the expeditious exercise of the functions of the Crown Estate in Wales. Amendment 9 would require the Secretary of State to produce a report on the effectiveness of devolving the management of the Crown Estate.
Amendments 4 and 7 would delay the transfer of the functions in respect of the Crown Estate in Wales for a period of three to seven years after the passing of this Bill, while establishing interim arrangements including requiring the Crown Estate commissioners to engage with Welsh Ministers when exercising their powers in relation to property, rights or interests in land in Wales, and rights in relation to the Welsh zone, in order to enable an orderly and planned transfer, to publish financial information about the Crown Estate in Wales and to pay the proportion of the consolidated revenue account distributable to the Consolidated Fund, which is attributable to the Welsh Crown Estate and to the Welsh Consolidated Fund.
As the House has heard previously, the Government believe that the Crown Estate as it currently operates across England, Wales and Northern Ireland provides the best outcome for Wales and the wider United Kingdom. Devolution of the Crown Estate would risk fragmenting the energy market and delay our progress towards net zero. The Crown Estate has played a critical role in positioning the United Kingdom as one of the most significant global markets for offshore wind over the past 20 years. It has also helped to position Wales at the forefront of clean energy technology and growth, with North Hoyle offshore wind farm becoming Wales’s and the United Kingdom’s first major offshore renewable energy project in 2003 during leasing round 1. Subsequent leasing rounds, including round 4, are delivering offshore wind benefits to Wales.
More recently—in fact, last month—in a boost to the United Kingdom’s clean energy transition, the Crown Estate announced that through its capacity increase programme, seven fixed-bottom offshore wind farms will increase the amount of power produced by offshore wind by adding turbines to projects already at sea. This includes Awel y Mor in north Wales. In addition, the ongoing offshore wind leasing round 5 for floating offshore wind in the Celtic Sea is expected to deliver significant jobs and supply chain benefits to local communities in Wales and the south-west.
The benefits of these projects are felt in the local communities and supply chains across Wales. For instance, the Crown Estate recently invested £1.2 million in Welsh tidal stream energy through the Morlais demonstration zone. Owned and managed by Ynys Môn social enterprise Menter Môn, the Morlais tidal scheme is set to become the largest consented tidal energy project in Europe.
The recently passed Crown Estate Act, which has broadened the scope of the Crown Estate’s investment and borrowing powers, means that it is uniquely placed to drive forward growth-generating projects in Wales. But this is not all that the new Act achieves. As noble Lords will remember, the Government were pleased to support the amendment of the noble Lord, Lord Hain. This was a thoughtful and positive step that will see the appointment of two additional Crown Estate commissioners, each with an additional responsibility to advise on conditions in Wales and Northern Ireland respectively. This will ensure that the board continues to work in the best interests of Wales while delivering its statutory duties as set out in legislation.
It takes time to set up new processes for such appointments. However, I would like to reassure noble Lords that the Treasury is working on plans for these appointments to ensure that they fit the public appointments recruitment process and comply with the governance code. An important feature of those appointments is that the devolved Governments reserve the right to be consulted on them.
Some noble Lords have argued that Wales would benefit financially from devolution of the Crown Estate. Let me set out why the Government do not believe this to be the case. The funds generated by the Crown Estate’s activities across the UK—more than £4 billion over the last decade—already benefit Wales in two ways. First, those Crown Estate revenues support UK Government spending on vital public services in Wales in reserved areas. Secondly, in areas which are devolved to Wales, when the UK Government fund spending in England, the Welsh Government receive funding through the Barnett formula.
Even if devolution could be achieved without risking the revenues generated in Wales, this would not automatically lead to an increase in available funding to the Wales Government. For example, in the case of Scotland, where the Crown Estate is devolved, the Scottish Government receive a block grant reduction to reflect the profits they retain from Crown Estate Scotland following its devolution.
To answer the point made by the noble Baroness, Lady Harris, in previous debates noble Lords questioned why the Crown Estate does not report on income generated in Wales. The noble and learned Lord, Lord Thomas, spoke particularly passionately—I thank him for his contributions—including today on the third amendment. Following the case put forward at Second Reading, the Crown Estate met with the noble and learned Lord to explain in more detail the challenges involved in reporting separate capital and revenue accounts according to administrative and geographical boundaries. However, the Crown Estate recognises the desire for greater understanding through a Wales lens and has committed to review reporting for Wales in its 2025-26 annual report and accounts. I thank the noble Lords from across the House for their engagement on this matter.
Finally, in response to the noble and learned Lord, Lord Thomas, and just to make the position clear, the Government will continue to discuss these issues with the First Minister and the Welsh Government to ensure that Wales sees the full benefits of the Crown Estate.
Lord Wigley (PC)
My Lords, I am very grateful to all colleagues who have participated in this debate. We are in Committee and therefore I am not going to be tempted towards the general arguments that have arisen from several directions over the past hour or so. I thank the noble Baroness, Lady Harris, for coming in from a distance, the noble Baroness, Lady Bennett, for her contribution, the noble Lord, Lord Harlech, for moving the amendment, and the noble Lords, Lord Moynihan, Lord Harper, Lord Sandhurst and Lord Wilson. and the noble and learned Lord, Lord Thomas, for speaking to his amendment, and from whom we may hear more in a moment. Have I covered everybody? I hope so. I am very grateful to everyone who has participated.
It might assist colleagues, particularly those who do not live in Wales and may not keep up with every twist and turn in Welsh politics, to know that, by now, of the 22 Welsh local authorities, of a whole range of political allegiance—and some have no overall political control—21, all but one, have passed resolutions calling for the devolution of the Crown Estate to Wales. This has been supported by Plaid Cymru, Labour and the Liberal Democrats, and I believe even accepted by some Conservative members and Reform UK councillors, who are only too aware of the current feeling of injustice in Wales in this regard.
Mention has been made of the windmills in the sea to the north of north Wales. Noble Lords who watched “Question Time” last night will have noted that the largest round of applause in the programme came when the suggestion was made that Wales should benefit from all those windmills that take up the horizon to the north of Llandudno, along the coast by Colwyn Bay, Prestatyn and Rhyl. There is very strong feeling about them, and that is why 21 out of 22 councils have passed resolutions in support—and I have little doubt that there is sympathy also in the 22nd, which has not.
In considering the amendments before us today, I hope we will bear these background points in mind. By all means, let us improve the Bill by debating amendments and, if appropriate, passing them on Report. But I urge that the Bill be approved by this Chamber and it would then be a matter for those in the other place to come to a resolution on it in due course, if they are prepared to make the time available, so that they can at least address the strong feelings of an overwhelming majority of Welsh councils.
I have noted the comments made by the Delegated Powers and Regulatory Reform Committee in its report last January, that the powers conferred by new Section 52A of the Wales Act 2017 should be subject to scrutiny solely by both Houses of Parliament. While I understand the logic of that viewpoint, I personally would have preferred to have an even-handed approach that enabled the Senedd to voice an opinion. However, I note that the Scottish Parliament were not afforded such an opportunity, and if that were the only issue at stake, I would of course accept an amendment to that end, to facilitate the progress of the Bill.
I will now address the first group of amendments, starting with Amendment 1, which was moved by the noble Lord, Lord Harlech. Amendment 1 seeks, in the words of the presenters of this amendment, to direct the moneys raised by the Crown Estate in Wales to the coffers of the Treasury, and not to the Government of Wales. This is nothing less than undermining the fundamental objective of the Bill, of course, and as such does not improve the Bill, but in effect works out as if the Bill had been refused a Second Reading.
This seems to me to be a back-door way of blocking the Bill and I would be grateful to know whether those who tabled this amendment have secured the agreement of the leader of the Welsh Conservative Party on this matter. If indeed Darren Millar MS has agreed to such a ploy, it is an issue about which the voters in Wales in various Senedd elections will certainly be aware. Let every voter be aware that the Tory party wants the resources of Wales to be put into the control of faceless Treasury mandarins rather than the elected representatives of Wales. My political friends in Wales have experienced this in both the Senedd and the National Assembly, to the dismay of elected Members of all parties.
I will give a specific example of that experience, which Wales suffered at the sticky hands of the Treasury in Whitehall. Between 2007 and 2011, the Labour-led Welsh Government, to their huge credit, attempted to avoid the fiasco of a year-end stampede to spend revenue moneys before the end of the financial year on any scheme that may be at hand, irrespective of whether such expenditure represented the best value for money. Everyone knows that this still happens the length and breadth of these islands. Despite a tightening of the rules, the Treasury has not sorted that out. So, 20 years ago, the Welsh Government devised a scheme whereby they accumulated all the year-end revenue underspends into a capital fund, which was allocated to worthwhile projects such as building schools and hospitals. Between 2007 and 2011, they accumulated some £400 million—a process that the then Labour Government at Westminster accepted.
Lord Thomas of Cwmgiedd
“(c) confer on the Welsh Ministers or the body that may be nominated as the transferee power to enter into an agreement with the Crown Estate Commissioners for the performance of specified matters in relation to management or investments of the Welsh Crown Estate on behalf of Welsh Ministers or the body nominated as the transferee.”Member’s explanatory statement
This amendment permits agreements to be entered into for the Crown Estates Commissioners to exercise specified management and investment functions on behalf of Welsh Ministers.
Lord Thomas of Cwmgiedd (CB)
My Lords, I will be brief. I separated out this amendment because it deals with an issue we too often neglect when we speak about devolution: the working of the union. It seems to me that the debate on the previous amendments brought into clear focus a failure to distinguish the positives of devolution—that is, giving to nations what they aspire to and what they feel they ought to have, as a matter of hearts and minds. As the noble Lord, Lord Wigley, has said, there is enormous support for the devolution of these powers. But it is also important to remember that we are part of a union, and the Crown Estate shows and exemplifies that you can give powers to be devolved in certain areas, but then you should work together.
I suggested in the amendment that the Crown Estate commissioners should have this power to take the management of the Crown Estate in Wales from the Welsh Government—in accordance with the investment policy of the Welsh Government, and being consulted about it—so that it could be a model of the way in which the union operates to benefit economically.
Spending a great deal of my time in Wales, I hope that the Government understand that there is an enormous feeling of hostility to the way in which the Government have run the Welsh economy—a feeling that they have not sufficiently acceded to what happens in Wales. I have no views on whether that is right or wrong—I express none—but it seems to me important that we do two things: that we recognise national aspirations and accept, as the noble Lord, Lord Wigley, said, that what you give to Scotland you ought to give to Wales, because you recognise it as having the same national aspirations. However, we also need openly and transparently to work together where it is in the common interest. As the remarks of the noble Lord, Lord Moynihan, showed, working together in the energy sector is essential.
I therefore wished this particular point to be debated separately to bring home, I hope, to His Majesty’s loyal Opposition—who were not very good at this when they were in government—and to this Government, before it is too late, the absolute essentials of making it clear that you respect nationhood and what has been done by way of devolution but also that you will work together to benefit each of the nations, by co-operation and joint policies, where it is in the overwhelming national interest.
The Crown Estate epitomises the recognition of national aspirations—but where it compels working together. That is a lesson much broader than this particular Bill, but, as a strong believer in the union, I think we in London too often forget it. We do not recognise the pluses that devolution has brought, the fact that we cannot row back on it and how much more effort needs to be put into working together. This provides the perfect model. I beg to move.
Lord Sandhurst (Con)
My Lords, I will speak briefly to Amendment 5 in the name of the noble and learned Lord, Lord Thomas of Cwmgiedd. He has made thoughtful and powerful contributions to our debate today, not least—as he has said—as a strong supporter of the union.
Amendment 5 would create a framework for powers to be granted to enter into agreement with the Crown Estate commissioners for the performance of specified matters in relation to the management or investments of the Welsh Crown Estate by Order in Council. I have listened carefully to the noble Lord’s arguments, and he has made a powerful case for his amendment. However, as I said in my more general remarks to the previous group, we have serious concerns about the direction set by this Bill. Now is not the time to take forward proposals for devolution of the Welsh Crown Estate.
That said, if this Bill is to go forward, we hope the noble Lord, Lord Wigley, will listen carefully to constructive remarks made by the noble and learned Lord, Lord Thomas of Cwmgiedd, and my noble friends Lord Harlech, Lord Moynihan and Lord Harper.
Lord Wigley (PC)
My Lords, as I indicated when I spoke previously, I would be minded to accept this amendment if it was moved on Report.
Lord Wilson of Sedgefield (Lab)
My Lords, as I have already set out, the Government believe that the Crown Estate, as it currently operates across England, Wales and Northern Ireland, provides the best outcomes for Wales and the wider United Kingdom. I will not repeat the arguments I set out earlier in this debate.
I thank the noble and learned Lord, Lord Thomas, again for his considered contributions to this debate. The amendment we are debating now—Amendment 5 —would permit the Crown Estate commissioners to exercise specified management and investment functions on behalf of Welsh Ministers.
I remind the House that existing statute provides the Crown Estate with independence and autonomy to set and achieve its goals. The Government believe that the Crown Estate should continue to operate in this way—as a commercial business independent from government—because it has shown itself to be a trusted and successful organisation with a proven track record in effective management. Even if the proposal in this amendment was being suggested for the Crown Estate in its current form, it would be important to ensure that independence was preserved in respect of any functions it took on behalf of Ministers.
More broadly, as I previously set out, the Government will continue to discuss these issues with the First Minister and the Welsh Government to ensure that Wales sees the full benefits of the Crown Estate.
Lord Moynihan (Con)
Before the noble and learned Lord, Lord Thomas, winds up, I completely endorse and agree with his views about co-operation. There is no doubt whatever that it is vital in the relationship between Wales and the United Kingdom in this context.
My arguments have not been principally political at any stage during Committee. My argument is that the lion’s share of the Crown Estate’s assets in Wales requires to be maximised in terms of economic value to Wales, and that there should be the overarching control and involvement of the Crown Estate as is currently set up. I believe that would be the most efficient and efficacious way of maximising the value of those assets in the Celtic Sea, and that was the reason that I pushed this argument so strongly, and not because of future political arrangements. After that project comes to fruition and benefits all concerned, there may well be an opportunity to look at the political realities that have been put forward by the noble Lord, Lord Wigley, and the noble and learned Lord, Lord Thomas.
I think that is the reason that the Government have taken the position they have, and I endorse it strongly: it is a cross-party view, but it is one that is driven—from my perspective—on the economic realities of those assets in Wales at this time. We should still make sure there is maximum co-operation between all interested parties, the Crown Estate and the locally interested parties in Wales, so that the projects we have been discussing in the context of this Bill are brought to fruition to the maximum economic benefit of both the United Kingdom as a whole and indeed Wales.
Lord Thomas of Cwmgiedd (CB)
I will briefly reply. There is a difference between what I have put forward and what the noble Lord, Lord Moynihan, suggests.
I thank everyone for listening patiently to what I had to say. I believe that, at the end of the day, as one sees across the world, we must recognise the importance of what is stirred up by nationhood. It is important to try to analyse the way in which economic benefits can be conferred. I have listened to all the arguments, and it still seems to me that the compromise which I put forward—namely, to recognise nationhood and national aspiration but to co-operate to provide economic benefit—is something for now and not for some distant time in the future. Having listened to all the arguments and hearing the views of the Committee, I beg leave to withdraw my amendment.