Crown Estate Bill [HL]

Report stage
Tuesday 5th November 2024 Lords Chamber

Report

15:33

Clause 1: Power of Crown Estate Commissioners to borrow etc

Amendment 1

Moved by

[Baroness Vere of Norbiton]

1: Clause 1, page 1, line 26, at end insert—
“(3) The Secretary of State must limit any borrowing by the Crown Estate under this Section by regulations made by statutory instrument, and these regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(4) The first set of regulations made under subsection (3) must limit borrowing to a net debt to asset value ratio of no more than 25 per cent.”Member's explanatory statement
This amendment would limit the amount the Commissioners may borrow by regulations subject to the affirmative procedure for statutory instruments.

[Baroness Vere of Norbiton (Con)]

My Lords, I thank my noble friend Lord Howard of Rising for his support on the amendment and for his very wise counsel in our discussions to ensure that the change that is proposed is both reasonable and rational. The Official Opposition have made a clear and consistent argument for the insertion of essentially two things: parliamentary approval to borrow up to 25% of net debt to asset value, and a second and simple check from the Government of the day when the borrowing is forecast to increase over that higher ratio.

This two-step process is quite important. The initial use of the power would ensure that Parliament and your Lordships’ House can take into account a revised business case. I am incredibly grateful to the Minister for publishing a business case that sets out the rationale as to why the Crown Estate needs this borrowing. Unfortunately, it does not include the partnership with GB Energy. Noble Lords will know that this partnership was announced with great fanfare, and one must assume that it is significant. Therefore, I believe it would be appropriate for the business case to be revised in due course and that that would be expected. I am sure that the Minister will agree that that will happen. However, on the basis of that business case, I think it is important that Parliament and your Lordships’ House can then say that it is wise for the Crown Estate to seek the borrowing required.

The second use of the power—which according to current forecasts, which I am sure the Minister would probably agree with, will not be needed for many years—to go beyond 25% of net debt to asset value based on the current total assets of the Crown Estate would mean going above a borrowing requirement of about £3 billion. That is a significant amount of money, and the Crown Estate is not forecasting that it will need that amount of borrowing, so the further use is for much further down the road. In terms of the initial use, our view is that it is appropriate to put that check in place now to ensure that all information is considered as the Crown Estate is given this new power to take on borrowing.

I am grateful to the Minister for his engagement to date on this important matter. I know he has had some useful conversations with myself and my noble friend Lord Howard of Rising. Underpinning all of this and many of the amendments before your Lordships’ House today is that the assets held by the Crown Estate are absolutely critical to the national, cultural and environmental importance of our nation. Not only are the assets incredibly important, but the Exchequer receives a very handy income from the Crown Estate, which then supports the nation’s public services. We must not put either of those things at risk unduly.

I believe that some form of parliamentary oversight is critical here. It is right that, under this Bill, there is a lessening of that oversight, as Parliament, particularly the House of Commons, will no longer need to approve the salaries and expenses of the commissioners of the Crown Estate. Given that reduction in parliamentary oversight, ensuring the correct financial structure of the Crown Estate is, to my mind, critical. Doing that on the basis of the new business case is also incredibly important.

This is a simple amendment. It is in two stages: one would have to happen quite soon, and one would happen many years hence, but I think it is right that we not only address the financial situation of the Crown Estate as it is now, following the partnership with GB Energy, but ensure that the Crown Estate does not risk the temptations of excessive borrowing in the future, which would therefore put our nation’s assets at risk. I hope noble Lords will be able to support the amendment.

[Lord Howard of Rising (Con)]

My Lords, I support my noble friend. In Committee, the Minister was good enough to agree that controls on borrowing by the Crown Estate must be in place and that they would be set out in a memorandum of understanding between the Crown Estate and the Treasury at a loan-to-value ratio not to exceed 25%. This figure is more than I would have wished for, and using asset value rather than capital reserves in the definition allows a still greater level of borrowing. Nevertheless, I am grateful that the Minister acknowledges that there should be a limit on borrowing. However, there must be a tighter control than a memorandum of understanding. Amendment 1 proposes an affirmative statutory instrument to achieve this. It requires the Government to limit borrowing to net debt-to-asset value of no more than 25%, purposely copying the wording of the Minister’s comment in Committee.

Should His Majesty’s Government need more flexibility in the future, this statutory instrument would provide for that. It would be better if the limit on borrowing were in primary legislation, but in seeking a solution which His Majesty’s Government might find acceptable, the amendment would be a fair compromise, retaining any flexibility that the Government might need while providing a stronger safeguard than a memorandum of understanding. As the Minister said, this limit is unlikely to be of concern to the present Government. Therefore, I hope he will accept this very modest suggestion to safeguard the Crown Estate for the future.

[Baroness Kramer (LD)]

My Lords, I think I started this hare running at Second Reading, when I basically said to the Minister that the Government were asking us to give borrowing power to the Crown Estate but we did not have the business case that argued why it needs a borrowing power—it is not evident from the annual report. Also, the framework agreement, which at that time governed the relationship between the Treasury and the Crown Estate, was silent on the issue of borrowing, other than to say it was not allowed, so clearly we needed changes to the framework report and we did not have them at Second Reading.

I am so impressed by the Minister’s response—and appreciative, because I have sat on these Benches looking at a Conservative Government for quite a number of years when every attempt to get transparency was rejected, I was handed documents based on Henry VIII powers and there was complete resistance to oversight by Parliament. Instead, the Minister has provided us with the business case—which is, frankly, virtually unheard of. It is an excellent document that completely clarifies why the change that this legislation contains has come to us. We can now understand that. It provides the draft changes to the framework document that we expect to see fully negotiated and enacted by the end of the year, we hope, but well ahead of any borrowing. Even more importantly, it provides a document that we usually cannot extract from the Treasury’s fingers, which is the memorandum of understanding that takes us into the much greater detail behind the whole rationale and sets out the rules in a very open and public manner.

This is the way that Governments should handle situations such as this. I want to respond from these Benches to those actions by the Government in a completely positive way. I understand that the Conservative Benches feel that opposition is a very different role from government and therefore they behave completely differently in opposition from the way that they would choose to do in government—that is their choice—but I am very content with the information that has been offered to us. As it has been given to us by the Government, it will last and will survive passage through this House and the other place. I think we can say with confidence that borrowing and financial liability in the Crown Estate are within a sensible and appropriate framework. Therefore, I ask that these Benches do not support the amendment proposed by the Conservative Benches and instead grasp the opportunity of a very responsible and appropriate offer from the Government.

15:45

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, I am grateful for the contributions from all noble Lords on this group of amendments. As I set out in Committee, the Government recognise that the matter of controls on borrowing is an important consideration for noble Lords.

I listened carefully to the concerns raised at previous stages of the Bill. I found the arguments put forward by the noble Baroness, Lady Kramer, to be particularly compelling. As such, I committed to sharing the underpinning memorandum of understanding, which sets out the parameters and controls relating to the power to borrow, as well as the original business case and the framework document. Following on from my commitment, these documents were shared with noble Lords and have been deposited in the Library. I am grateful to the noble Baroness for her words just now.

The memorandum of understanding set out that borrowing by the Crown Estate will be limited to a maximum of 25% loan to value, defined as net debt-to-asset value, and that any borrowing within that limit can be undertaken only with the consent of the Treasury.

The framework document will be amended, as I have shared, to include references to borrowing powers, and the original business case produced by the Crown Estate makes the argument for the Crown Estate being able to borrow with the consent of the Treasury, in line with its peers, to ensure that it can continue to operate sustainably and drive maximum returns to the Exchequer.

I trust that having sight of these documents has been useful for noble Lords and has provided an additional opportunity for scrutiny of the proposed borrowing. Let me be clear that the Government agree that controls on borrowing must be in place. As I have set out previously, borrowing can be undertaken only with the consent of the Treasury and, as outlined in the memorandum of understanding, borrowing is not to exceed 25% of loan to value, defined as net debt-to-asset value. This is a clear and carefully chosen guard rail to ensure that sufficient limits are in place. The proposed powers will enable the Crown Estate to draw on its cash holdings first and, as such, it is not envisaged that these borrowing powers will be used in the short term.

Amendment 1, tabled by the noble Baroness, Lady Vere, and supported by the noble Lord, Lord Howard, would require the Secretary of State to limit borrowing by the Crown Estate by affirmative regulations, and for the first set of regulations to set the limit at 25% net debt-to-asset value.

As debated in Committee, the principle here is whether a specific cap should be in statute. The Government’s view remains that the limit is better placed outside of legislation. The primary control, set out in the Bill, is the requirement for Treasury consent to be obtained prior to undertaking any borrowing. In addition to this important safeguard, we are retaining the requirement for the Crown Estate commissioners to maintain and enhance the value of the estate, while having due regard to the requirements of good management as set out in the 1961 Act.

Taken together, these two elements maintain and strengthen the existing and important fiduciary duty of the commissioners not to take decisions that could endanger the estate. The Government believe that these safeguards and the limits set out in the memorandum of understanding provide clear guard rails to the powers set out in the Bill.

The 1961 Act also contains a power of direction. This power is not altered by the Bill. It remains open to the Government to use in extremis; if, for example, there were concerns that the commissioners were endangering the core statutory purpose of the Crown Estate.

As I have set out previously, the Crown Estate is a commercial business, independent from government. It operates for profit and competes in the commercial markets for investment opportunities. To ensure that it can compete effectively, it needs the ability to borrow as its competitors can. Imposing a legislative cap on borrowing would likely place additional restrictions on the Crown Estate that its competitors in the private sector do not face. This would not be consistent with the Government’s vision for the Crown Estate: to ensure that it has flexibility to invest in activities that will drive increases in its revenues and, consequently, its returns to the public purse.

As set out in the Crown Estate’s original business case, which I have shared with noble Lords, the limit of 25% loan to value is consistent with its peers. I hope this demonstrates to noble Lords that these plans have been considered carefully.

Let me also be clear that any request by the Crown Estate to draw down on debt will be carefully considered by the Treasury in the context of the fiscal position and in line with our fiscal rules. As the Chancellor set out in the Budget, the Government have set out our robust fiscal rules alongside a set of responsible reforms to the fiscal framework to improve certainty, transparency and accountability. The stability and investment rules will put the public finances on a sustainable path while allowing the step change needed in investment to drive long-term growth.

I hope that these explanations are useful and reassure the House that the Crown Estate’s power to borrow will be carefully monitored and controlled within these parameters. I hope I have provided some clarity on the Government’s position and that as a result the noble Baroness, Lady Vere, feels able to withdraw her amendment.

[Baroness Vere of Norbiton (Con)]

My Lords, I am grateful to the Minister for his response and to the noble Baroness, Lady Kramer, although I am sorry to hear that she will not be able to support the amendment. Noble Lords will not be surprised to hear that I do not agree with her.

While I agree with the noble Baroness’s assessment of the documents that were published by the Minister—it was helpful to see the memorandum of understanding, the draft framework and the business case—that is not really the point, because they do not go far enough. Those documents can be amended by this or any future Government. As the Minister referred to, and as I tried to explain in my opening remarks, this is the original business case, but there is no business case that currently sets out what the relationship with GB Energy looks like and what it will do to borrowing.

GB Energy is going to invest billions of pounds. How much of that is going to come from GB Energy and how much from the Crown Estate? No one knows. It is important that we make sure that it is impossible for the Crown Estate to ramp up borrowing without at least some oversight from Parliament. The Minister said, “It’s okay—the maximum is 25%”, but of course this Government or any future Government can change that unilaterally.

The Minister mentioned that competitors somehow do not have any caps on borrowing. Of course they do; they are commercial businesses, so the caps on their borrowing will be set by their banks. If the Minister looks at the original business case that he shared with us, he will see that all the competitors sit around the same sort of level of loan to value.

To go back to the original point, this is a sensible, simple and reasonable amendment. It would put in place just two checks: first, whether the Crown Estate should be borrowing now, and up to 25%, with the assessment done on a new business case, including GB Energy; and, secondly, another check, at some point long in the future, if ever, should the Crown Estate ever want to go above 25%. I think our nation’s assets need that sort of protection, and I therefore wish to test the opinion of the House.

15:52

Division 1

Ayes: 193

Noes: 226

16:04

Clause 2: Number of Crown Estate Commissioners and their salaries and expenses

Amendment 2

Moved by

[Baroness Vere of Norbiton]

2: Clause 2, page 2, line 11, at end insert—
“5A The Chair of Commissioners may not be appointed until the appointment has been scrutinised by the Treasury Committee of the House of Commons, or any successor committee.”Member's explanatory statement
This amendment would require the appointment of the Chair of Commissioners of The Crown Estate to be subject to scrutiny by the Treasury Select Committee.

[Baroness Vere of Norbiton (Con)]

My Lords, I will speak to Amendments 2 and 14 in my name.

On Amendment 2, I am incredibly grateful to the Government for their engagement on the importance of pre-appointment scrutiny for the Crown Estate commissioners. However, I recognise that my initial amendment in Committee was a bit ambitious and have restricted the amendment before your Lordships’ House today on Report to the chair of the Crown Estate commissioners. It is important, as I mentioned in the first group, as there is a decrease in parliamentary oversight. It is not uncommon for the chairs of the boards, or equivalent, of such significant public sector bodies to at least have some form of questioning prior to taking up their role.

I note that, in his letter yesterday, the Minister said:

“The Government has not tabled an amendment on this matter because there is already an established process by which roles such as this are added to the Cabinet Office’s pre-appointment scrutiny list. The Treasury will work with the Cabinet Office to progress this matter”.


I am grateful to the Government for their assurance that the chair of the Crown Estate commissioners could be added to the Cabinet Office’s pre-appointment scrutiny list; we will be holding the Government to account as this is progressed.

Amendment 14 is, again, related to the importance of the assets for which the Crown Estate is responsible. It has the stewardship of billions of pounds-worth of very important assets for the benefit of the nation. Some of these assets are on land, some make up the seabed, some are incredibly important thoroughfares in our main urban centres, and others might be important agricultural land across the nation. I can see very few guardrails to prevent the Crown Estate commissioners deciding to sell those assets. Indeed, there have been quite significant asset sales over recent years, and I was not really able to find any information as to what has been sold.

We made this argument in Committee, and I am grateful to the Government for their assurance that they will bring forward an amendment or some sort of process by which the seabed might be protected. However, my understanding is that the law in this area is very complicated, so I am somewhat concerned that a process could not be found that is seabed-specific. Nevertheless, I welcome the Government’s engagement and their recognition that selling off elements of our seabed in perpetuity would not be wise and should not be done without some form of transparency.

However, as I said previously, it is not just about the seabed; I also remain concerned about other important assets owned by the Crown Estate. My Amendment 14 simply proposes that, should the Crown Estate sell more than £10 million-worth of assets—I am happy to look at a different figure—there would be some form of transparency to Parliament, such that noble Lords and colleagues in the other place could see the assets being disposed of and make at least some assessment of whether that is the right course of action for the Crown Estate.

[Lord Berkeley (Lab)]

My Lords, I wish to speak to Amendment 15 in my name, which is in this group. I tabled the same amendment that we debated in Committee because my noble friend had not yet been able to respond in his promised letter; but, of course, he has now responded, and I presume all noble Lords have seen the letter. I found it very helpful, and I thank him for it. However, my amendment provides an opportunity to debate what is in that letter and issues that affect quite a lot of people—not only in the Isles of Scilly but in some of the other places related to the ownership of the Duchies or the Crown Estate. There are a few principles I would like to discuss and see where we get to.

What I found most interesting was that my noble friend’s letter was quite clear that both Duchies are private estates—I do not think there is any debate about that now. The Duchy has been saying this for a long time, and it is in his letter from the Treasury. I am also grateful for the explanations about the finance and the involvement, or not, of the Public Accounts Committee in the other place, the National Audit Office, et cetera. But then we get into rather more interesting and difficult territory. In his letter, my noble friend says:

“Crown bodies … are not bound by the enfranchisement legislation”


that your Lordships’ House debated over many months earlier this year. I question how a private estate cannot be bound by legislation such as that—why should the Duchy be exempt?

We then get into an even deeper mystery about what are called “excepted” areas. There is a distinct lack of transparency here. I will not go into great detail about the problems faced by the tenants on the Isles of Scilly because noble Lords can read material from the previous year or two. During the legislation at the end of the last Parliament, the then Chief Whip, the noble Baroness, Lady Williams, read out a parliamentary undertaking that attempted to differentiate between what they call “non-excepted” and “excepted” areas. So my first question to my noble friend the Minister is: what is an excepted area, and who decides? Is it Parliament, the Government or the landowner—in this case the Duke of Cornwall—who decides what should or should not be included in legislation? That is interesting for a private sector company, and it needs debating.

Given that, last weekend, there was a lot of publicity in the media, including the Sunday Times, you start wondering what “private” means in this context. Presumably, all private bodies should pay tax—that is pretty fundamental to our life here—including income tax. The Duchy and His Majesty say that they pay tax, but it is voluntary. I would love to pay voluntary tax and to decide how much it was, as I am sure many other noble Lords would, but that is not what it is all about. They do not pay corporation tax, capital gains tax or inheritance tax. They get all that rental income, which noble Lords may have read about in the Sunday Times, from ambulances parking on their land, with the National Health Service being charged and paying the Duchy of Cornwall, I think it was. This seems to be a bit of a recycling of the cash that the Duchy claims it needs to charge people. This comes back to the Duchy claiming credit—I see this on the Isles of Scilly—for allowing bodies to use its land and charging them for it.

One example is that the farmers on the Isles of Scilly want an abattoir built so that they do not have to transport animals to the mainland, which I think is a good idea. The Duchy said, “You can have the land”. Many of us think that it does not own the land anyway, but, leaving that to one side, if it allocates land to an abattoir, it will then charge the farmers for using it. Is that right, when the land does not really belong to it and it is not contributing to the cost? That is another debate that we need to have on this.

Perhaps what is wrong is that the Duchy needs the money, but given what is in the rest of the Bill, it will result in His Majesty and other members of the family getting quite a lot more. One could surmise that they do not need the money and that it might be better if they paid their taxes and invested properly in an estate, like many large estate owners in this country already do. Noble Lords will have heard me speak about the appalling transport services between the Isles of Scilly and the mainland, where a single fare by ship or plane usually costs the best part of £100. The Duchy could contribute to that—it would just be small change.

16:15

Investing for the benefit of society is quite a good idea for the Duchy. At the moment, the leasehold properties that it owns have very high fees and very short- term leases, sometimes no more than 20 or 30 years. At the same time, the properties that it rents are showing bad signs of poor management. The roads in the borough where I live are diabolical—you need to carry Wellingtons all the time because it has forgotten that the contractor who was appointed did not really want to do the work.

It would be a good idea if the Government could look at getting the finances of the Duchy of Cornwall merged into the Crown Estate, and letting the King, with his quite big income, give money to Prince William for what he needs to do as heir to the Throne. He does that for Princess Anne, who I think we would all agree does a really good job for the Royal Family. So does William—they all do, but I do not think they need the money. We are talking about £23.6 million to the Duchy.

We need transparency and consistency, and a proper definition. If the Duchy is in the private sector, let us have evidence showing that it pays tax like a normal private sector organisation. Alternatively, as I have said, the business could be removed from the Duchy and Prince William could carry on doing good works, without having to bother about the money. That would modernise the Duchy of Cornwall and would, I hope, avoid many of the issues set out in the Sunday Times, which must have been hurtful for them and for many people. We could do without seeing that, but we need to bring about change.

[Lord Young of Cookham (Con)]

My Lords, I shall speak briefly to Amendment 15 in the name of the noble Lord, Lord Berkeley, which deals with lease extensions from the Crown Estate. I may do so with less republican overtones than we have just heard.

Those who have been following the proceedings of the Bill will know that I have raised the question of what happens to freeholds when they end up in the hands of the Crown Estate under an obscure process known as escheat. When a freeholder of a block of flats disappears or goes bankrupt, by default the freehold goes to the Crown Estate, whose policy is then to dispose of it, getting the best value, as is required by the 1963 Act. I raised the issue as to whether that obligation was trumped by a subsequent undertaking given by the Crown Estate to dispose of freeholds or extend leases in accordance with Acts relating to leasehold reform, when they would get less than market value.

In September I got a letter from the Minister saying that, against this backdrop, the Crown Estate

“does not believe the 1992 parliamentary undertaking applies to escheat”.

That crystallised the problem. On the one hand, clear undertakings had been given to Parliament by the Crown Estate that it would respect the Leasehold Reform, Housing and Urban Development Act 1993, which I happened to put on the statute book, but on the other hand, it would not respect it when disposing of freeholds back to leaseholders.

We then had a meeting with the Minister and the Crown Estate. I am most grateful to the Minister for his role in initiating it. At that meeting it became clear that, contrary to what the letter said, the Crown Estate would abide by the leasehold reform Act. This undertaking is now reproduced in the draft framework agreement, which says that the Crown Estate should comply with

“all public undertakings given on its behalf by ministers in Parliament to follow the law ‘by analogy’ where Crown bodies are not bound by the specific legislation in question”.

While issues remain in the specific case that I raised with the Minister, which I will pursue with him offline, I regard the principle as satisfactorily resolved and am grateful to him for the role he played in securing that agreement.

I end with one final suggestion. The process of escheat brings windfall gains to the Crown Estate. When a freeholder disappears or goes bankrupt, the Crown Estate acquires the freehold but, crucially, under the process of escheat, it does so free of any obligations that may have accrued to the previous freeholder. It then disposes of it, with a fee paid by the purchaser. This income is different from the rest of the income of the Crown Estate and should be shown separately in its accounts. I had a look to see whether this was the case, but could not find it. One could argue that these windfall proceeds are rather like unclaimed bank accounts and should go to charity via the Reclaim Fund, but that is a matter for another day. Does the Minister agree with the accounting change I have proposed?

[Lord Lansley (Con)]

My Lords, I agree with my noble friend on the Front Bench about the desirability of there being some form of prior parliamentary scrutiny over the appointment of a chair of the Crown Estate. My entry in the register of interests shows that I am chair of the Cambridgeshire Development Forum, of which the Crown Estate is a member. Sir Robin Budenberg has done a very good job but is retiring, so a question will rapidly arise. As we consider the Bill and think that it has been 63 years since the Crown Estate Act 1961, there is a good case for the public interest to be examined through that scrutiny when somebody is appointed whose principal purpose will probably be to represent the public interest in relation to the continuing functions of the Crown Estate.

However, I do not agree with my noble friend about Amendment 14. It probes the question—I hope the Minister will see it in that light—of how the disposal of assets by the Crown Estate is properly scrutinised. Noble Lords will recall that in Committee I referred to the duties of the Crown Estate commissioners under the 1961 Act, which the Minister just referred to. I also referred to their duty under Section 3 of that Act not to dispose of assets other than on

“best consideration in money or money’s worth”.

Given that we are trying to maintain the Crown Estate’s commercial operations, with prudential limits in relation to those assets, the duties in the 1961 Act should suffice.

I hope my noble friend will not press Amendment 14. Given the role of the Crown Estate as a major developer of potentially significant interest in the science parks to the north of Cambridge, for example, its disposals as a major developer may easily and rapidly reach £10 million in the course of a year. The bureaucracy and intervention that would be required thereafter by this amendment would be unreasonable, and I do not want us to impose those kinds of onerous obligations on the Crown Estate commissioners. If they fail to meet their duties, we can see that there are means by which the Treasury can intervene in order to establish that those duties are being met.

[Earl Russell (LD)]

My Lords, I rise briefly to speak to Amendment 2 in the name of the noble Baroness, Lady Vere of Norbiton. This simple amendment seeks that the chair of the Crown Estate commissioners be appointed by the Treasury Select Committee. On these Benches, this seems like a reasonably sensible idea. This is an important appointment and should have an adequate level of pre-appointment scrutiny.

I welcome the letter from the noble Lord, Lord Livermore, sent yesterday, pointing out the established process for the Cabinet Office and that this could be added to the pre-appointment scrutiny list. To our minds, that is a very sensible answer and a way forward. It is a way of resolving this issue. My only real question in relation to this is that the Minister says this will be done in “due course”. Can he give us a clearer idea of what he means by that? What is the timeframe?

Further to that, in relation to the amendment from the noble Lord, Lord Hain, calling for commissioners from individual countries to be appointed to the Crown Estate, I ask the Minister: will those appointments also be subject to this type of pre-appointment scrutiny?

I turn now to Amendment 14, also in the name of the noble Baroness, Lady Vere. It seeks to require the approval of His Majesty’s Treasury for the disposal of assets over £10 million, and the commissioners to inform the Treasury if assets over a value of £10 million are disposed of in a single year, then requiring the Treasury to approve of the disposal of those assets and to report that to Parliament within 28 days.

Again, the noble Lord, Lord Livermore, responded to this in his letter to all Peers yesterday, and we welcome that response. The Minister pointed out that this was a complicated matter, and that he would bring forward an amendment to address this concern. His engagement with that is welcome. This is an important issue—assets should not be disposed of by the Crown Estate without ministerial approval—but I seek further clarification from the Minister. When he says that this will be brought forward, will it be before Third Reading in this House? If it is not possible to bring that clarification forward before Third Reading, can the Minister give an undertaking that it will happen before Report in the other place?

On this amendment, our preference is that a compromise way forward is agreed. In fact, both amendments are matters that should be resolved without resorting to testing the opinion of the House.

[Lord Livermore (Lab)]

My Lords, I thank all noble Lords for their contributions to this debate. First, I would like to address the points raised by the noble Lord, Lord Young of Cookham. I thank him very much for his engagement on this issue since Committee. I am also extremely grateful to him for raising the issues around the law relating to ownerless land and the process of escheat. It is a legally complex area and long overdue for reform. As a result of his intervention, Treasury officials are now engaging with the Law Commission on options for longer-term reform.

On the specific issues raised by the noble Lord, I am grateful to him for meeting with me, Treasury officials and the Crown Estate after Committee to discuss his specific concerns in detail. At the meeting we gained useful clarity that in cases of escheat the Crown Estate follows the valuation formula set out in the Leasehold Reform, Housing and Urban Development Act 1993, as he said.

As the noble Lord requested in Committee, I have agreed to update the framework document that governs the relationship between the Treasury and the Crown Estate to make this clear. The addition in paragraph 7.2 will set out that the commissioners have a responsibility to ensure that all public undertakings given on the Crown Estate’s behalf by Ministers in Parliament are met. I have raised the noble Lord’s suggestion about the specific accounting change with the Crown Estate and will follow up in due course.

Amendment 2, tabled by the noble Baroness, Lady Vere, would require scrutiny by the Treasury Select Committee, or any successor committee, of future chair appointments before the appointment can be made. She spoke persuasively on this in Committee, and I agree with many of the points she raised. For this reason, I am happy to confirm that the Treasury will work with the Cabinet Office to add the role of chair to the official pre-appointment scrutiny list. This will be in accordance with the already-established process by which significant roles, such as this, are added to the Cabinet Office’s pre-appointment scrutiny list. As I have set out, I will be very happy to update noble Lords in due course. The noble Earl, Lord Russell, asked when that will be. I will come back as soon as I have relevant information. We are already working with the Cabinet Office, and I do not envisage there being a significant delay.

16:30

Amendment 14, also tabled by the noble Baroness, Lady Vere, would prevent the Crown Estate from selling assets of a value totalling £10 million or more in a single year. It would also require the Treasury to approve of the disposal of any assets above the threshold, and for the Secretary of State to lay a report before Parliament within 28 days of being notified of such disposals by the commissioners. The provisions in this Bill are not intended to change fundamentally the nature of the Crown Estate’s business, and it will continue to maintain an estate in land and enhance the returns obtained from it. It is the Government’s view that imposing a statutory limit on disposals in this way would undermine the flexibility required by the Crown Estate to ensure that it can operate commercially and fulfil its core duties under the future Act. As sometimes it may make commercial sense to dispose of a high-value asset for the benefit of the wider estate, putting such a limit in statute is likely to constrain the Crown Estate’s ability to take a long-term view of its strategy and the overall business. I am very grateful to the noble Lord, Lord Lansley, for his support on this point.

Furthermore, there are existing safeguards to ensure that the commissioners maintain and enhance the value of the estate, while having regard to the requirements of good management. These safeguards have worked effectively over the past 60 years and will continue to do so for decades to come. I thank the noble Baroness, Lady Vere, for her engagement on this issue ahead of Report.

I know that the noble Baroness also has some specific concerns about the seabed. I agree with her that the seabed is a unique asset and, therefore, special protections may be warranted. However, the law on the ownership of the seabed is unfortunately incredibly complex. My officials are working at pace with legal experts and the Crown Estate to establish the extent to which the Crown Estate can currently sell the seabed. I reassure noble Lords that my officials will continue this work at pace to ascertain the current position, and I am happy to commit that, if we establish that further legislation is required to restrict the ability of the Crown Estate to sell the seabed, we will bring forward an amendment in due course. The noble Earl, Lord Russell, again asked about the timescale. If it is possible before Third Reading, it will be brought forward then; otherwise, we will do so in the other place.

Amendment 1, tabled by my noble friend Lord Berkeley, would alter the commencement of the Bill so that it comes into force two months after it is passed, or after the Crown Estate publishes its lease extension policy and a Minister of the Crown has tabled a Motion in both Houses of Parliament to debate that policy—whichever is later. As I previously set out in Committee, the Crown Estate has committed to publish its revised lease extension policy. That commitment was read out on the Crown Estate’s behalf in this House on 24 May 2024 during Report on the now Leasehold and Freehold Reform Act 2024. The implementation of the Act requires a programme of secondary legislation, the timing of which is not in the Crown Estate’s control. Requiring the Crown Estate to publish its policy before the Act is implemented would not be practical, as it would require some broad assumptions to be made and would likely require change once the legislation is fully implemented. Therefore, it would be inappropriate to delay the commencement of the Bill on that basis. However, I hope that the proposed changes to the framework document, which include clarifying that the commissioners have a responsibility to meet their public undertakings, provide my noble friend with some reassurance that the policy will be published when appropriate.

My noble friend also raised some specific points with me on the Duchy of Cornwall and the Duchy of Lancaster, which I am happy to answer now. He asked who decides which properties are exempted from the Crown’s undertaking to apply leaseholder law by analogy. Crown bodies, which includes the Crown Estate and the two duchies, are not bound by the enfranchisement legislation. However, during the passage of each iteration of enfranchisement legislation through Parliament, an undertaking has been given to Parliament that Crown bodies would comply “by analogy” with the legislation. The parliamentary undertaking distinguishes between properties in areas known as “non-excepted areas” and “excepted areas”.

The descriptions of properties that are within the excepted area designation were updated in the last undertaking, reducing the total number of properties within those areas. In determining whether a property is in an excepted area, the bodies base their decision purely on whether the property comes within the scope of the stated description, supported by evidence where necessary. The excepted areas do not exist for commercial reasons, so the relevant bodies do not take account of commercial considerations.

The Crown Estate and the duchies commit in the undertaking to the publication of their lease extension policies in the excepted areas, which will be possible once the relevant supplementary regulations for the legislation have been made.

I hope that these explanations have been helpful and that I have provided some clarity on the Government’s position in relation to these matters. I hope that as a result, the noble Baroness, Lady Vere, feels able to withdraw her amendment and that the noble Lord, Lord Berkeley, will not press his.

[Baroness Vere of Norbiton (Con)]

My Lords, very briefly on Amendment 2, I am grateful to the Minister for his words and his engagement on that, and I am content on it.

On Amendment 14, obviously, should I decide to test the opinion of the House, it will come slightly later in proceedings. However, I want to respond briefly to my noble friend Lord Lansley. I do not propose at all that the Crown Estate would not get best consideration; this is merely an obligation to report to Parliament and to get the consent of the Treasury. On the original business case—I do not know about the new business case because we have not seen it—the Crown Estate is planning £1.4 billion-worth of disposals of assets. That is quite a lot; I would be interested to know whether that is very important heritage assets or seabed, and at the moment I have no way to find out. That is an important element for noble Lords to be aware of. Therefore, I will take this away and consider my position on Amendment 14 in due course. However, I beg leave to withdraw Amendment 2.

Amendment 2 withdrawn.

Amendment 3

Moved by

[Lord Livermore]

3: After Clause 2, insert the following new Clause—
“Annual reportsIn section 2 of the Crown Estate Act 1961 (reports and accounts), after subsection (1) insert—“(1A) The annual report for a year in which a partnership between the Commissioners and Great British Energy is in operation must include a report on—(a) the activities of the Commissioners during the year under that partnership, and(b) any effects or benefits experienced during the year which were the result of activities of the Commissioners under that partnership.”” Member’s explanatory statement
This amendment would require the Commissioners to include in their annual reports a summary of the things done, and of any effects or benefits or effects resulting from things done, under any partnership between themselves and Great British Energy. The duty will only apply in relation to a year in which such a partnership was in operation.

[Lord Livermore (Lab)]

My Lords, I will address other noble Lords’ amendments in this group during my closing speech, after listening to the debate.

I have listened to the arguments and concerns put forward at Second Reading and in Committee by the noble Baroness, Lady Vere, on how the new partnership between the Crown Estate and Great British Energy will work and the difference it will make. The Crown Estate is of course keen to ensure that details of this partnership are publicly available on an ongoing basis, and the Government therefore propose an amendment to require the Crown Estate to include, in its existing annual report, a report on the activities of the commissioners during that year under the partnership with Great British Energy, and any effects or benefits during that year resulting from activities of the commissioners under the partnership.

I am grateful to the noble Baroness, Lady Vere, for her engagement on this matter, and to other noble Lords who have raised similar concerns, and I trust that this amendment meets those concerns. I hope that noble Lords feel able to support this amendment as a result. I beg to move.

[The Earl of Kinnoull (CB)]

My Lords, I will speak to Amendment 5, which stands in my name. I thank the Minister and his Bill team for their time in what is always the busiest period of the Treasury’s life. He was happy to give time, and I am very grateful for that and for the sensible discussion that we had.

The amendment is designed to be the gentle pencil in the back, as I put it in Committee, in order that the Crown Estate Scotland be afforded the same freedoms and flexibilities that the Crown Estate will have following the passage of the Bill. I described in Committee how the Crown Estate Scotland had advised me that the Scottish Government were keen that it has those. I know that the UK Government are keen that it does so, as is the Crown Estate itself.

There are many opportunities for collaboration, particularly for energy projects in the North Sea at the moment, but there will be other opportunities as well for aquaculture. There is the ability to copy the good and avoid the bad, given that a number of copycat transactions might be done using Crown Estate property going forward. This is of course in all our interests, because ultimately this is very much part of the net-zero agenda, and the more the two Crown Estates can be aligned the better it will be for everybody in the long term.

The amendment is, as I said, a gentle pencil, designed to ensure that the UK entities do not down tools following the passage of this Act but carry on enthusiastically to ensure that Crown Estate Scotland benefits from the same freedoms and flexibilities. I therefore ask my only question of the Minister: does he share this aim of ensuring that those freedoms and flexibilities are afforded, and does he feel that this amendment is a proportionate way of going about it?

[Earl Russell (LD)]

My Lords, I rise to speak briefly to all the amendments in this group, all of which relate to reporting.

Beginning with government Amendment 3, I am grateful to the Minister for this important concession and welcome his listening to the concerns expressed across the House and his open engagement and willingness to look again at this issue. If he will forgive my saying so, we have come quite a long way since Second Reading, when the Government’s response was that the partnership with Great British Energy was not really a key part of the Crown Estate Bill. We support the clean energy mission—this is so important not only for our net-zero goals but in providing for our own energy security. Great British Energy promises to unlock £60 billion of private investment, and the Government themselves have committed £8.3 billion over the course of this Parliament. We have the third-best wind resources in the world, and we should be making best use of them to bring down the cost to bill payers and ensure that we have security of our own supply.

By 2030 this will, I hope, have led to the generation of enough electricity for the equivalent of 20 million homes. Everyone across the House has broadly welcomed this, but collectively we have wanted broader and greater scrutiny of the Crown Estate and the work it does. It is a long time since the 1961 Act came in, and simply updating the borrowing powers without updating any other measurements did not feel like the complete picture for providing that security going forward. We have campaigned for greater transparency and the Government have listened. I am grateful to them and welcome this.

We are happy to support Amendment 5, tabled by the noble Earl, Lord Kinnoull, but with one small caveat. It is very important that Crown Estate Scotland goes along with the energy transition and is fully invested. The noble Earl’s amendment is carefully worded, simply calling for a report to be laid before Parliament. Devolution is an important issue for us on these Benches: it is not for this Parliament to be telling devolved Parliaments what they should do or how they should act, although we recognise that the noble Earl’s amendment does not do that.

Equally, as I said, we support the amendment and would like to see progress made on this issue, just as we would like to see Scotland fully engaged with the Great British Energy partnership and contributing to our green energy. As the noble Earl said, the amendment is a pencil in the back. I have written down “a gentle nudge”, and they are probably similar things. We welcome the amendment, which puts down a marker to the Minister and the Government to continue their negotiations and conversations with their equivalents in the Scottish Assembly, the Scottish Government and Crown Estate Scotland so that progress can be made.

Finally, my Amendment 8 was tabled as a compromise, from my point of view. There has been a feeling around the House that we need greater scrutiny, and noble Lords have raised numerous issues that they feel should be subject to such scrutiny. The Minister responded by saying that under the original 1961 Act, too many legal powers were constraining the Crown Estate’s ability to act freely in the interests of the state. He consistently argued throughout the various stages of this Bill that he did not want to reimpose those conditions on the Crown Estate’s ability to operate. The idea behind my amendment is that, simply by putting chapter headings in the Crown Estate’s annual report, which goes before Parliament, there would be greater opportunity for the issues that have been raised collectively in this House to be scrutinised in Parliament, so that, in exchange for giving the Crown Estate greater borrowing powers and a greater role, there would also be greater scrutiny.

I have aimed to cover a lot of the issues that have been raised across your Lordships’ House. It is quite a simple amendment that simply asks for these topics to be covered. However, I doubt whether the Minister will respond positively to it.

16:45

[Lord Vaux of Harrowden (CB)]

My Lords, I rise briefly to support Amendment 5 in the name of the noble Earl, Lord Kinnoull. In passing, I still am rather confused by this Bill, which covers Scotland but not Crown Estate Scotland. That seems a bit of a contradiction, but it is clear there is a degree of overlap between the two. There certainly is an overlap of opportunity—we have heard about Great British Energy et cetera.

It is also clear that, while devolution must be respected and that is extremely important, Crown Estate Scotland and the Scottish Government want to have the same levels of flexibility. This simple amendment keeps the matter on the table and that is the key here, so I hope the Minister will be able to accept it.

[Lord Forsyth of Drumlean (Con)]

My Lords, I rise very briefly to speak to Amendment 5 in the name of the noble Earl, Lord Kinnoull. This is an entirely sensible proposal that I cannot imagine for a moment the Government would wish to resist, and which respects the autonomy of the devolution settlement. If I were a commissioner on the Crown Estate in England or the Crown Estate in Scotland, I would very much welcome this provision, and I congratulate the noble Earl on his ingenuity in tabling an amendment that would enable us to deal with this lacuna. I entirely understand why the Liberal Benches would not want to be accused of doing anything that undermined devolution. The noble Earl has found an elegant way of dealing with this, and I very much hope that the Government will support it.

[Baroness Vere of Norbiton (Con)]

My Lords, I entirely agree with my noble friend Lord Forsyth. In tabling Amendment 5, the noble Earl, Lord Kinnoull, has hit upon something here; it is a report that would be worth doing. When I was having discussions about the Bill between Second Reading and Committee, I spoke to people in the port sector and they were very concerned that, if there is to be investment in ports in one part of the country, that investment should be equally likely to happen in another part of the country—namely, Scotland. It is an important opportunity, and I am sure that the Minister will respond in a positive fashion, as far as he can.

Turning to government Amendment 3, I am grateful to the Minister, who listened to concerns from all sides of the House about ensuring that sufficient information is forthcoming about the relationship between Crown Estate and Great British Energy. I am somewhat disappointed that we never saw the partnership document. I still suspect that that is because it does not exist, so I am not entirely sure what the partnership is; but let us put that to one side. I am looking forward to seeing information come through on the results of this partnership as we go forward.

I note what the noble Earl, Lord Russell, said about the intention behind his Amendment 8. Any noble Lord who has looked at the Crown Estate annual report will know that it is already quite detailed, and I appreciate that a lot of work has been put into sharing information about the organisation with stakeholders. I suspect that his amendment is too detailed to be wholly useful, but I am sure that he has picked out various elements that the Crown Estate will no doubt take note of and include in future reporting.

[Lord Livermore (Lab)]

My Lords, I thank all noble Lords for their contributions to this debate. Let me once again say that I am particularly grateful to the noble Baroness, Lady Vere, for her constructive engagement prior to today in relation to Amendment 3, tabled by the Government. It is important that certain details on the partnership between the Crown Estate and Great British Energy are publicly available on an ongoing basis, and I trust that this amendment meets the concerns raised on this matter by the noble Baroness and others across this House.

Amendment 8, tabled by the noble Earl, Lord Russell, would create a new reporting requirement on the Crown Estate commissioners, requiring them to publish an annual report, to be sent to the Environmental Audit Committee of the House of Commons, which must consider the commissioners’ activity in the contribution to supporting local communities and economies, the achievement of the United Kingdom’s climate and environmental targets, the relationship with Great British Energy, a just transition to green energy, a jobs and skills transition into the green economy, the promotion of animal welfare in aquaculture on the Crown Estate, the protection of the foreshore on the Crown Estate and the protection of the seabed in the Crown Estate. It would also require the commissioners to appear before the Environmental Audit Committee if requested.

I thank the noble Earl for his constructive engagement on this matter prior to today. I agree with him that these are important areas and, as a result, we have agreed with the Crown Estate that we will make a further update to its public framework document to clarify that its annual report must continue to include a report on the Crown Estate’s activities in terms of sustainable development, covering the impact of its activities on the environment, society and the economy.

It is important that this Bill stands the test of time and that, as new, relevant areas of concern on the environment, society and the economy emerge over the coming decades, these are covered in the Crown Estate’s annual report too. The proposed changes to the framework document, which also directly address other concerns, have been made deliberately broad in an attempt to cover the wide range of specific concerns the House has raised, including those raised by the noble Earl. On Great British Energy specifically, as I have set out, the Government have also now tabled an amendment that creates a reporting requirement for the Crown Estate to cover in their existing annual report a summary of its activities in relation to Great British Energy.

I turn next to Amendment 5, tabled by the noble Earl, Lord Kinnoull. This amendment would require a report to be laid before Parliament within 12 months of the day on which this Act is passed, assessing any differences between the provisions made by this Act for the management of the Crown Estate in England and equivalent provisions for the management of the Crown Estate in Scotland. I am grateful to the noble Earl for his engagement on this matter. He has also raised specific concerns about ensuring that the Crown Estate and Crown Estate Scotland are in analogous positions should this Bill pass.

As I set out in Committee, Section 36 of the Scotland Act 2016 inserted a new Section 90B into the Scotland Act 1998. Subject to certain exceptions, Section 90B provided for the devolution in relation to Scotland of the commissioners’ management functions relating to property, rights or interests in land in Scotland, and rights in relation to the Scottish zone. Devolution occurred on 1 April 2017 under, and in accordance with, the Crown Estate Transfer Scheme 2017. The relevant property, rights and interests are now managed separately by Crown Estate Scotland under the Crown Estate Scotland (Interim Management) Order 2017 and the Scottish Crown Estate Act 2019, as enacted by the Scottish Parliament. They do not form part of the Crown Estate as currently managed by the Crown Estate commissioners.

I share the noble Earl’s commitment in this area, and I would like to make that clear. The Crown Estate and Crown Estate Scotland hold similar operational priorities, and, naturally, the chief executives of both organisations must be, and are, in regular contact. There is also significant collaboration between the two organisations, for example on the offshore wind evidence and change programme, which is an initiative led and funded by the Crown Estate and in which Crown Estate Scotland is a key partner. The programme aims to de-risk and accelerate the delivery of offshore wind projects by funding research and data collection. Both organisations contribute to and benefit from research projects that address knowledge gaps and support the offshore wind consenting process. At a project level, Crown Estate Scotland was a partner in the predators and prey around renewable energy developments project. That focused on Scotland, particularly the Moray Firth and the Firth of Forth and Firth of Tay regions, but the project had broad relevance for the whole of the UK. The improved understanding gained from the project informs marine spatial planning and guides future offshore wind development.

The two organisations also share data on offshore activities through their partnership with the Marine Data Exchange, a digital platform established by the Crown Estate to provide a more comprehensive and integrated understanding of the UK’s seabed. Founded by the Crown Estate in 2013 as the first resource of its type, the Marine Data Exchange provides a world-leading digital platform for gathering and disseminating vital information on a wide range of offshore activities. It currently holds one of the world’s largest collections of freely available data relating to the seas around England, Wales and Northern Ireland and, thanks to the partnership with Crown Estate Scotland, is now extended to cover Scottish waters.

The two organisations also hold frequent discussions through the carbon capture utilisation and storage collocation forum, which is a collaborative effort run by the Crown Estate with input from Crown Estate Scotland and other stakeholders to explore the potential for collocating carbon capture and storage with offshore wind projects. If there are further areas of potential co-operation, I know that the Crown Estate will be more than willing to discuss them with its counterparts in Crown Estate Scotland. The Treasury is, of course, open to any request for a meeting from the Scottish Government and Crown Estate Scotland to discuss this Bill, and we are more than happy to share any policy thinking to help inform any changes they may wish to propose in the Scottish Parliament. I hope these explanations have been helpful and have provided some clarity on these points. I hope that the noble Earls, Lord Russell and Lord Kinnoull, will not press their amendments as a result.

Amendment 3 agreed.

Amendment 4

Moved by

[Lord Forsyth of Drumlean]

4: After Clause 2, insert the following new Clause—
“Salmon farms on the Crown EstateAfter section 3 of the Crown Estate Act 1961, insert—“3A Salmon farms on the Crown Estate(1) In carrying out their functions under this Act, the Commissioners must assess the—(a) environmental impact, and(b) animal welfare standardsof salmon farms on the Crown Estate.(2) If the assessment under subsection (1) determines that a salmon farm—(a) is causing environmental damage, or(b) has significant animal welfare issues,then they must revoke the licence for the farm in question.(3) The Commissioners must assess the potential—(a) environmental impact, and(b) animal welfare standardsof applications for licences for salmon farms on the Crown Estate.(4) If the assessment under subsection (3) determines that an application for a licence for a salmon farm—(a) may cause environmental damage, or(b) raises significant animal welfare concerns,then they must refuse the application.””

[Lord Forsyth of Drumlean (Con)]

My Lords, I am tempted to take this amendment, frame it and put it in my downstairs loo, given that it is supported not just by the noble Baroness, Lady Jones of Moulsecoomb, but by the noble Lord, Lord Sikka, and my noble friend Lord Strathclyde. This is a new experience for me and shows the extent to which this amendment makes sense. It is, of course, the same amendment as I tabled in Committee. I should perhaps re-declare my interest as a salmon fisherman; I never kill a salmon, but I fish for them and my family has a timeshare week on the River Tay.

I am sure the House will be relieved that I do not plan to repeat everything I said in Committee about the extensive damage that salmon farming can cause if not properly regulated. I gave a number of examples, and examples of countries that are going so far as to ban salmon farming altogether. That is not my purpose, but I made a reasonably robust speech about the dangers of salmon farming, and I am surprised that I have heard not a cheep from the industry or, indeed, from the Crown agents to push back on anything I said, so I assume that this perfectly sensible amendment causes no concern. Nor should it, because all it does is provide that the Crown Estate commissioners in carrying out their functions under the Act must assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. If the assessment determines that a salmon farm is causing environmental damage or has significant animal welfare issues, they must revoke the licence for the farm in question. Who could possibly be against that? Also, the commissioners must assess the potential environmental impact and animal welfare standards of applications for licences for salmon farms on the Crown Estate, and if the assessment determines that an application for a licence for a salmon farm may cause environmental damage or raise significant animal welfare concerns, they must refuse the application. This is a perfectly sensible provision, which places a clear duty on the commissioners.

The Minister was kind enough to arrange a very short meeting with me at which he indicated that he might not be able to support the amendment. I am really looking forward to hearing why, because he was unable to tell me at that time what his reasoning might be. I was struck in the proceedings earlier today by the emphasis that he put on the essential duty for the protection of the seabed and, of course, protection of the seabed is central to some of the issues, apart from the protection of salmon and everything else.

17:00

I was also grateful to the Minister when, in his response to the noble Earl, Lord Kinnoull, he emphasised how important it was that the Crown Estate commissioners on both sides of the border took account of each other’s actions and learned from each other. Only a few minutes ago, he gave the House substantial assurances that that would happen. Therefore, those who are arguing that there are not many salmon farms covered by the Crown Estate commissioners in England have had their argument trounced. By passing this amendment, it will be possible for both sets of Crown agents, on both sides of the border, to consider these important issues.

I believe this will be helpful to the commissioners. I can imagine being a commissioner on either side of the border faced with the prospect of a—perhaps new—salmon farm, knowing that I will get a percentage of the revenue from that salmon farm, which will in turn mean having more fish in cages and more potential environmental damage, and perhaps being less concerned about escapes. In the case of one salmon farm that I know about, which is covered by this Bill, some 5,000 fish escaped. That is probably as many as the wild population in the area concerned; I do not know the figures, but that is a substantial escape. It seems to me that, if I am a commissioner, I do not want to be in a position where I simply have to think about the revenue; in other words, where my duty is just to maximise the revenue. I would want to have a balancing duty that also looks at the environmental impact. At the moment, no such duty exists; my amendment would provide for that.

I am grateful to the Minister for the opportunity that I had to discuss this with him. I imagine he will say that there are already other quangos and bodies that will tell the commissioners what to think about these issues. That is a very odd concept. The commissioners have a duty; they are in charge of preserving this national resource. They have had that duty for centuries. The idea that they should rely on some quango or some response by a Select Committee to an annual report—and that the principle that they preserve for future generations what they have been entrusted to save and protect should not be absolutely central to everything that they do—just does not cut it for me.

On the issue of relying on the existing controls and regulations, I may be wrong but I have not been able to find a single example of fines being imposed on a salmon farm where a large escape of fish has occurred, which of course does huge damage to the indigenous Atlantic salmon population. I remind the House that that population is now regarded by the UN as an endangered species; such is its fragility. I have not found a single example of fines being imposed. They have perhaps been told, “Please try and strengthen your nets” or “Don’t do it again”. It seems to me that there should be a duty on the part of the landlord—the Crown Estate commissioners—to make sure that there is a sanction, that people can lose their business, or not get a licence, unless they can show that they are taking this seriously.

I say to the Minister: please think again; please accept this tiny amendment, which could make a huge difference to the wild population and to the conduct of the salmon farms. We should remember that those farms are producing food that is eaten on a substantial scale now. Therefore, the way in which those salmon farms are managed, the chemicals that are used on them and the consequences of overstocking for the fish are important. I shall give a recent example. I am not repeating myself; I did not give this example earlier. A select committee from the Scottish Parliament was due to visit a farm in Scotland but, unfortunately for them, activists filmed thousands of dead fish being dumped prior to the visit by those important parliamentarians. No doubt that was entirely coincidental, but we are dealing here with an industry where the death rate among the fish can be anything from 25% to 40%. So this is about not just environmental issues but animal welfare issues. I beg to move.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, on this day, 11 years, 2 hours and 20 minutes ago, I was introduced to your Lordships’ House, and I think that having signed this amazing amendment is a good way to celebrate those 11 years, 2 hours and 20 minutes.

I have spoken many times in your Lordships’ House about food and animal welfare and other connected issues, but I did not imagine that all this time later we would be talking about such a truly disgusting issue. I admit that I did not know all that much about it, but I know more now. I have seen the photographs of fish that have been eaten through by lice and the amount of debris that ends up on our seabed. It is unbelievable that we are allowing this.

Probably most of us eat salmon. I can only say to noble Lords: do not eat salmon unless it comes from Iceland or Canada. One noble Lord told me earlier that listening to the noble Lord, Lord Forsyth, made him feel sick—and I am sure that was for the right reasons.

I spoke at a PETA meeting just before this—that is, People for the Ethical Treatment of Animals—and used salmon farming as an example of how far we still have to go to live up to our reputation as a country that cares for animals. I argue that this is a very damaging situation. I hope that the debates on the amendment, today and in Committee, are read, understood and acted upon by the Crown Estate commissioners and the salmon farming industry.

It is clear that the current rules for the Crown Estate are not good; they are not good enough for the environment or for animal welfare. Although I imagine that the leases are quite profitable for the Crown Estate, they are shameful. A spotlight has been shone on these harmful factory farms, where fish are riddled with sea lice, pumped full of antibiotics and fed with pellets crammed with other, smaller fish, causing damage to their populations. The salmon can have double-digit mortality rates. Plus, these fish farms are detrimental to our native salmon populations, which are already at risk of collapse.

There is also damage to the seabed around these farms and damage to the ocean’s ecosystems. We still know very little about the ocean—it is apocryphal that we know more about the surface of Mars than we do about the ocean—so we really should not be doing this to our seabed; we can imagine the amount of damage that tonnes of faeces, drugs, antibiotics and corpses can do to it. That is horrific.

It is unconscionable that the Crown Estate should be profiting from such a harmful industry. As the Minister accepted in response to this amendment in Committee, the existing laws and regulations clearly are not working to protect to salmon populations from this toxic industry. I hope he has thought more about that and can give an update today.

In his opening remarks on day 2 in Committee, the noble Lord, Lord Forsyth, called this a modest and uncontroversial amendment. Having looked more closely into this issue, I say that the amendment is absolutely necessary, and it would be unforgivable of the Government not to accept it.

[Lord Strathclyde (Con)]

My Lords, I support the noble Baroness, Lady Jones, who has just spoken. She said that this was a very important amendment. I also support my noble friend Lord Forsyth, who spoke with great logic about the amendment he has proposed today and, indeed, the one he proposed in Committee, which had the benefit of being exactly the same.

When I listened to the Minister wind up the debate in Committee, he said:

“The Government wholeheartedly support the objectives behind these amendments.”—[Official Report, 22/10/24; col. 565.]


He did not say that he supported the amendments, but he did say that he supported the objectives. I was immensely encouraged to hear from my noble friend Lord Forsyth that a meeting had taken place. At that meeting, the Minister could say why he was not accepting them or indicate to my noble friend the kinds of tweaks and changes he could make that would make them more acceptable. But what has not changed in logic is that this is a very controversial issue and damage is taking place around the shores of this country.

I too should have declared an interest as being a salmon fisherman, although not a very good one.

I hope that the Minister, when he winds up, can be even more encouraging to my noble friend. The Government have had plenty of time to reflect and reconsider. My noble friend Lord Forsyth talked about a balancing duty. Surely that is an immensely important factor that we ought to take into consideration. My noble friend has laid out what that duty should be. In itself, it will enhance the reputation of the Crown Estate and I very much hope that the Minister will take all this into account when he winds up and, I hope, accepts the amendment.

[The Earl of Devon (CB)]

My Lords, briefly—I did speak at Second Reading but failed to be here for Committee—I thank the noble Lord, Lord Forsyth, for his excellent introduction. The challenge I give to those proposing this amendment—particularly the noble Baroness, Lady Jones—is: why is it so narrow? Why are we focused solely on salmon farms and salmon fishing?

The reason I rise—and I note my interest—is that the foreshore of the River Exe estuary is absolutely inundated with non-native Pacific oysters, which are carpeting the foreshore and depleting the stocks of crabs, and bait digging is now impossible across this foreshore. This pest was introduced by the Crown Estate’s junior cousin, the Duchy of Cornwall, which introduced Pacific oysters into the Helford down in Cornwall and this pest has now spread across all the estuaries of the south-west peninsula. If the Crown Estate had been responsible and had known what it was doing in granting leases to Pacific oyster farmers, this would not have happened and we would have proper, sustainable mussel farming and crab tiling, as we have had for centuries on the Exe estuary.

While salmon farming is obviously important and is a pest, this should expand to all sorts—

[Lord Forsyth of Drumlean (Con)]

If the noble Earl is concerned about the wider thing, he will find that two later amendments in my name cover the point he is making.

[The Earl of Devon (CB)]

I appreciate that from the noble Lord, Lord Forsyth. Perhaps he could cover that in his winding up.

I think it is important. The focus on salmon farming is perhaps too focused and this should be much broader.

[The Lord Bishop of Manchester]

My Lords, just briefly, I add to the wide range of support that the noble Lord, Lord Forsyth, has had on this amendment some from our Benches here.

I think it is incumbent on the Crown Estate to be an exemplar, and the salmon farming scandal around lice has been going on for so long and is so horrendous. As the noble Baroness, Lady Jones, has very clearly said, we need to take this amendment as a chance to do something about it.

I think it was the late Queen Mother, who, having been rushed into hospital with a fishbone in her throat, said that the salmon had begun their revenge. Please let us not give the salmon any more grounds to seek revenge against the Crown in any of its guises.

[Lord Douglas-Miller (Con)]

My Lords, briefly, I support my noble friend Lord Forsyth’s amendment, which I fully concur with—although I did feel rather left out not to be included in his elite triumvirate of supporters.

At previous stages of the Bill, we have heard many noble Lords express considerable disquiet about the state of aquaculture on Crown Estate land and the lack of proper governance by the Crown Estate commissioners. In Committee, the Minister seemed moved to look at this area and address some of the failings clearly apparent in the current framework. I sense today that the Minister seems reluctant to address these issues, which makes me wonder whether he has had any discussions with the fish farming industry. When responding to my noble friend Lord Forsyth, can the Minister confirm whether he has had any contact from the fish farming industry? If so, can he tell us the nature of these discussions?

17:15

[Viscount Trenchard (Con)]

My Lords, I support my noble friend Lord Forsyth of Drumlean in bringing back his excellent and very necessary amendment. I supported his identical amendment in Committee and had intended to add my name to this one too, but I was beaten to it by the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Sikka, who is not in his place. Nevertheless, I entirely and whole- heartedly support this amendment.

I remember that the Minister told your Lordships’ Committee:

“The Government wholeheartedly support the objectives”


behind my noble friend’s amendment. But he clearly did not think it is necessary and has not tabled his own amendment. However, he did acknowledge that the intent of the existing regulations

“is not currently being achieved”.—[Official Report, 22/10/24; col. 565.]

My noble friend Lord Forsyth has rightly tabled this amendment again and has so well explained the serious damage caused to the Atlantic salmon population by open-net salmon farms in Scotland, many of which are not adequately regulated. In particular, my noble friend has drawn your Lordships’ attention to the harm cased by the toxic chemicals used to treat the infestations of sea lice and the damage caused to the wild salmon’s DNA, which is specific to each river system, by interbreeding with escaped salmon from the open-net farms.

It is true that apart from one salmon farm in Northern Ireland, open-net salmon farms are at present confined to Scottish waters. However, we absolutely do not want them in England. I strongly support my noble friend in bringing back this amendment. I should also declare an interest as a salmon fisherman on the River Tamar in Devon. I strongly support the noble Earl, Lord Devon, in bringing up the problem of the oyster farming in the south-west river estuary systems.

Before I finish, I will ask the Minister again the question I asked in Committee concerning the unnecessarily restrictive licences issued for the shooting of cormorants which prey on wild salmon. Does he know how many gamekeepers are employed by the Crown Estate and how many cormorants they are licensed to shoot each year? I look forward to other noble Lords’ interventions and the Minister’s reply.

[The Earl of Kinnoull (CB)]

My Lords, I want to make two very short points relating to the reasoning the Minister gave in response to these amendments earlier. I should also say that my sympathies lie with my noble friend Lord Devon, in that I wish this were a wider aquaculture thing, and that the commissioners were able to consider the environment for all of aquaculture, for the reasons I gave in Committee; I will not repeat them.

The first logical problem I had with the Minister’s response was in relation to how many salmon farms there are and the intention of the current commissioners of the Crown Estate not to do any salmon farming. The difficulty I have is that salmon was an incredibly common thing to be fed to people in Victorian times. We are able to legislate on the Crown Estate for only the first time in 63 years, so if we are legislating for 63 years’ time, I feel that logically we need to think a bit more about protection further than however far out the current commissioners look, which, I imagine, is something like five years.

I feel that we are going to have to improve aquaculture around our waters because of the lack of calories that we are producing for our population. Therefore, it is poor logic to say that we do not need to legislate for salmon because we are not interested in salmon farming at the moment. I hope the Minister might address that in his remarks.

My second logical problem is that the Minister was able helpfully to list a number of statutory instruments in Scotland setting out the rules for salmon farms, but those all apply to salmon farms that have already been established. The problem I was told about by Crown Estate Scotland is that, because it is not really able to look at economic benefit, sometimes it might let through licence holders of lower quality that then create the problems. Then, as the noble Lord, Lord Forsyth, said so eloquently, they are not being held to account by these complicated rules because there is not really a police force. In any event, there is no one to fine, because often the reason that things have gone wrong is that the small entity that owned the farm has gone bust, even though it was, in fact, a subsidiary of a very big entity. That entire list is irrelevant. What matters is not what happens after you have established a salmon farm but the decision to establish it in the first place. I would be very interested in any help the Minister can give on those two logical issues.

[Earl Peel (CB)]

My Lords, I welcome the amendment from the noble Lord, Lord Forsyth. For those of us who have followed these issues over the years, there is no doubt that the impact of no environmental assessments being undertaken on these salmon farms has been a devastating effect on wild salmon stocks. It is about time that we had a system in place where proper assessments were undertaken, so I thoroughly welcome this amendment.

I have a question for the noble Lord, Lord Forsyth. How does he think the assessment would be undertaken? Would it be done by the Crown Estate itself or undertaken by an independent assessor? I would be much happier if it was independent rather than being done in-house, but perhaps the noble Lord can enlighten us on how he feels that might develop.

[Earl Russell (LD)]

My Lords, I rise to speak briefly to this amendment, and I might have a slightly different take on it. To start with, the amendment requires the Crown Estate to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. I thank the noble Lord, Lord Forsyth, for raising this issue and for the interest he has sparked in it across the House. His partnership with the noble Baroness, Lady Jones, is an unexpected one.

The noble Lord, in his personal conversations with me, as he has had with others, has spoken about his personal journey on these issues. He has gone from a time when he was in government and supported these farms to a time now when he recognises the damage that they do. I do not disagree with him at all on that. There is a real need to protect animals; there is a real need for animal welfare; there is a real need to look at the associated pollution and at the escape of farmed salmon and the impact on natural salmon that happens as a result of these farms. As far as all that goes, I have no problem with this amendment.

However, the issue here is that the Crown Estate is devolved in Scotland, so I have had to turn to the philosopher George Berkeley to try to analyse this amendment. He came up with the question: if a tree falls in the forest but nobody hears it, does it make a sound? My response to the noble Lord, Lord Forsyth, is: if his amendment protects no salmon, is it helping the salmon? There are literally no salmon farms in England. I have an assurance from the Minister personally that there is no intention from the Crown Estate to start producing salmon farms in English waters. In fact, I do not think those waters are able to support salmon. I do not think that is happening. I listened to the point made by the noble Earl, Lord Kinnoull, that we are legislating for the longer term—that is an issue —but, again, I see absolutely no plans for this to happen.

This matter is devolved. My strong suggestion to everybody in favour of stronger protection for salmon and the environment is to raise these matters with the Scottish Parliament, which is responsible for these matters. Noble Lords can put this in the Bill, but it will be overturned in the Commons. If not, it will have no impact on any salmon. I fail to see the point of this amendment.

On these Benches we are not able to support this amendment, not because we do not support animal welfare but because this simply does not impact any fish. There is no point in making bad, pointless legislation; that just makes us all look foolish. It does not do anything to increase animal welfare standards if the standards do not apply to any animals. It is pointless.

[Lord Roborough (Con)]

My Lords, I declare my interests in the register as an owner of fishing rights and president of South West Rivers Association. I will also speak briefly, as the arguments have been well made by many noble Lords.

We have heard from noble Lords around the House that this is an important amendment that strikes at the heart of our care for the environment and animal welfare. It imposes reasonable obligations on the Crown Estate to take responsibility for environmental damage caused by salmon farming on its property, and for the welfare of the fish being farmed. As I understand it, there is only one salmon farm in our waters, off the coast of Northern Ireland, although there are 210 in Scottish waters. But this amendment will ensure that any future salmon farms are developed with those obligations in place.

In Committee, the Minister highlighted existing legislation and regulations that cover the salmon farming industry. However, given that the wild Atlantic salmon in our country is now on the IUCN red list, and given the sometimes dire conditions that farmed salmon are kept in, it is hardly surprising that my noble friend Lord Forsyth of Drumlean continues to press this amendment. We are disappointed that the Government have so far failed to see its merits, and we hope for a more constructive reaction from the Minister today. We on these Benches will support my noble friend if he decides to test the opinion of the House.

[Lord Livermore (Lab)]

My Lords, I am grateful to all noble Lords for their points. The amendment tabled by the noble Lord, Lord Forsyth of Drumlean, would require the Crown Estate commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate on an ongoing basis. Where that assessment determines that a salmon farm is causing environmental damage or has significant animal welfare issues, the Crown Estate would be required to revoke the relevant licence. The commissioners would also be required to make the same assessment of any applications for new licences for salmon farms and, where the commissioners determine that an application may cause environmental damage or raises significant animal welfare concerns, the Crown Estate must refuse the application.

The noble Lord, Lord Forsyth, again made a powerful speech on his amendment. As I noted in Committee and can repeat today, I wholeheartedly support the objectives behind it but I regret that the Government are unable to support it. I recognise that this is not what the House wants to hear, but it remains the Government’s position that this amendment would duplicate protections that already exist in legislation or that are required by regulators as part of the licensing process for aquaculture. I say to the noble Lord, Lord Douglas-Miller, that, like the noble Lord, Lord Forsyth, I have had no contact with the industry. I may have written to the noble Viscount, Lord Trenchard, following Committee, but, if not, I will absolutely ensure that I do.

All salmon farming in England is regulated with the intention to ensure that it is carried out in a responsible manner that respects the environment and protects consumer health and animal welfare. As noble Lords know and some have observed, the management of the Crown Estate in Scotland is a devolved matter. My officials have been in contact on this matter with the Scottish Government, who have said that it is their view that salmon farming is strictly regulated to ensure that the environment on which the aquaculture sector and others rely is protected for future generations. They have also stated that Crown Estate Scotland works to ensure responsible use of Scotland’s seas through leasing the seabed. However, as is proper, it is the role of local authorities and the Scottish Environment Protection Agency to conduct a thorough assessment of development proposals, including environmental impact assessments and habitats regulations appraisals, with advice from statutory and other consultees.

I am aware of the strength of feeling on this matter, and I recognise that many noble Lords will not agree with the case I have set out. However, I respectfully ask the noble Lord, Lord Forsyth, to withdraw his amendment.

17:30

[Lord Forsyth of Drumlean (Con)]

My Lords, it is not much fun being a Minister when you have to read out a speech like that. I suspect that, like all of us in the Chamber, the Minister is concerned about the animal welfare and environmental issues. What he had to say about the Scottish Government, as opposed to the Scottish Crown Commissioners, was rather revealing, but I shall not go there. However, I thank everyone who has spoken in this debate, particularly my noble friends Lord Strathclyde and Lord Trenchard, and the noble Baroness, Lady Jones—our being so aligned must be a first. I am also grateful to the noble Earl, Lord Kinnoull. The noble Earl, Lord Peel, asked who would do the assessment. The Minister said that, in Scotland, SEPA and other agencies are charged with looking at the damage caused.

I gently point out to the Scottish Government, in their complacency, the number of fish that have escaped from farms, doing real damage and destroying the wild population. As far as I am aware, no sanctions have been imposed against a billion-pound industry operating around the world where Governments have been forced to intervene and close them down in some circumstances. We are well aware of the danger.

I am very disappointed by the Liberal Democrats; this is almost a permanent condition for me, but on this occasion I really am very disappointed. I think it was Amendment 8, which we discussed earlier, on which the noble Earl, Lord Russell, argued that there should be a report which could then be considered by the environment committee and others. He was actually arguing for a method allowing some parliamentary scrutiny. I have always thought of the Liberal Democrats as very determined to put a duty on, for example, landlords and others, as property owners, to behave responsibly, and that is what this amendment would do. I find this new alliance, whereby the Liberal Democrats do all kinds of somersaults in order to support the Government, very intriguing, and wonder what can possibly be behind it.

[Earl Russell (LD)]

There are no somersaults here. My previous amendment did not relate to devolution. I return the question: does the noble Lord admit that his amendment applies only to one salmon farm? Does he recognise that that is not a good way to make legislation? I fully support what he is trying to do, and am not doing somersaults to protect the Government, but the issue needs to be resolved with Scotland. This is not an English issue but a Scottish one. On these Benches, we believe strongly in devolution. The amendment sounds good but it does little, and that does damage to us as lawmakers, to the standing of this House and to devolution. It does nothing to protect any fish.

[Lord Forsyth of Drumlean (Con)]

I am grateful to the noble Earl. He may be disadvantaged, compared with others in this debate, because he is not—I do not think—a salmon fisherman. If he were, he would know that English salmon go through the Crown Estate waters up into Scottish waters, where there are salmon farms. Therefore, this amendment does impact on English salmon. There may be only one salmon farm, but if he was concerned about preserving salmon which occupy the rivers in England, he would be much more enthusiastic about this amendment than he appears to be. My noble friend Lord Douglas-Miller, who was chairman of the Atlantic Salmon Trust, has done wonderful work on this, so I am afraid that the noble Earl will not get away with the idea that, because there is only one salmon farm in English waters, a duty on the Crown Estate commissioners to consider the environmental impact has no impact on salmon south of the border.

I will repeat a point made earlier in the debate. In response to the amendment of the noble Earl, Lord Kinnoull, with enthusiastic support from the Front Bench, we agreed that there should be an exchange of views between the commissioners and that they should learn from each other. We have also heard from the Minister how the Scottish Government are utterly complacent about this. We have seen the results of that and the near extinction of this noble fish, the salmon.

[Baroness Jones of Moulsecoomb (GP)]

Pollution of the seabed does not exist only in Scotland, obviously. It will move around.

[Lord Forsyth of Drumlean (Con)]

I am very grateful to the noble Baroness—I feel I should call her my noble friend. I find I am being asked to have meetings with the activists who film the salmon farms illicitly. I will have to go on a protest march if the Government do not accept this amendment. I know that the Minister has done everything he can on this, but I do not think the response is satisfactory. I beg to test the opinion of the House.

17:36

Division 2

Ayes: 220

Noes: 139

17:47

Amendment 5 not moved.

Amendment 6

Moved by

[Baroness Humphreys]

6: After Clause 2, insert the following new Clause—
“Devolution of Crown Estate management to WalesAfter section 1 of the Crown Estate Act 1961, insert—“1A Devolution of Crown Estate management to WalesThe Treasury must complete a transfer of the responsibility of the management of the Crown Estate in Wales to the Welsh Government.””Member's explanatory statement
This amendment would require the Government to devolve Welsh Crown Estate responsibility to Wales.

[Baroness Humphreys (LD)]

My Lords, I will speak to Amendment 6 in my name and Amendment 11 in the name of the noble Lord, Lord Hain. I thank the noble Baroness, Lady Smith of Llanfaes, for signing my amendment. We debated a similar amendment in Committee, where those of us who argued for the devolution of the Crown Estate to Wales made strong arguments in favour of it. Other noble Lords, including the noble Lord, Lord Wigley, and the noble Baroness, also presented strong cases for their amendments on the transference of the management of the Crown Estate in Wales to the Welsh Government, on separate reporting within the annual accounts of the activities of the Crown Estate in England, Wales and Northern Ireland, and on other issues. I thank both noble Lords for their commitment to this issue.

Public opinion in Wales is behind the devolution of the Crown Estate, with a YouGov poll last year showing that 58% of the people of Wales support such a move. Senedd Cymru has supported its devolution, as have the majority of political parties in Wales, including my party—the Welsh Liberal Democrats and our federal party. I was encouraged this week to find that, in their response to the final report of the Independent Commission on the Constitutional Future of Wales, the Welsh Labour Government said:

“Our longstanding position is that the Crown Estate should be devolved to Wales in line with the position in Scotland”.


That being so, I am disappointed that the Welsh Government were not consulted when this Bill was being prepared.

There are frustrations in Wales, as Scotland is seen to be benefiting from the devolution of Crown Estate powers to the Scottish Parliament, not only through the receipts paid to it but in the control, power and influence that Scotland has over the use of its resources. Scotland appears to move on while Wales lags behind. For us, the process of devolution appears to have come to a stop. There are real concerns that, by the time Wales has control over the Crown Estate, much of the wealth will already have been extracted.

As we appear to have reached something of an impasse, the way forward might be to follow the process followed by the Scottish Affairs Committee in the other place in the lead-up to the devolution of the Crown Estate there. It published a number of reports, one of which in 2014 identified issues in the management of the Crown Estate’s responsibility, particularly in relation to the seabed and foreshore. It looked at issues including

“accountability and transparency … communication and consultation with local communities … cash leakage from local economies … arising from the way the CEC operates … The evidence did not identify such problems with the CEC’s management of its urban and rural estate”,

only those relating to the seabed and foreshore.

We would therefore welcome any decision of the Welsh Affairs Committee to initiate an inquiry to determine if similar problems apply to Wales. It is not of course our place in this Chamber to call for that, but an evidence-taking committee of inquiry would provide the evidence to move this issue forward and address any lessons learned since the devolution of the Crown Estate to Scotland.

As I said in Committee, my amendment does not call for a timescale for the devolution of the Crown Estate to the Welsh Government, because I accept that this will not be completed overnight. However, I am also disappointed that the amendment of the noble Lord, Lord Hain, which the Minister has signed, does not lay any foundation or route map for the transference of powers to Wales. Because of this, I am minded to seek the opinion of the House on my Amendment 6.

I want to make a couple of comments on Amendment 11, but as the noble Lord has not had the opportunity to speak to his amendment yet, my comments will be brief. I am grateful to the noble Lord for tabling his amendment and recognise the time and the cross-party work he put into its preparation—I know it was no easy feat. I am also grateful to the Minister, who has signed Amendment 11. This represents a major change in his stance since Second Reading and Committee of the Bill, and I also acknowledge how difficult this process must have been for him as Treasury Minister.

However, this major change in the Minister’s stance will be seen as the smallest, most insignificant step for those advocating the devolution of the Crown Estate to Wales. Amendment 11 calls for three commissioners to be appointed, one each to represent England, Wales and Northern Ireland and to be

“responsible for giving advice about”

their respective nations.

I have two questions, which I hope the noble Lord or the Minister will be able to address. First, proposed sub-paragraph (3C) refers to

“the giving of advice to the Commissioners about conditions in that part so far as relating to their functions in relation to land there”.

I assume that the use of the word “land” excludes the giving of advice about the more lucrative foreshore and seabed. If it does exclude the foreshore and the seabed, why are they not included?

Secondly, in a nod to devolution, in sub-paragraph (4B) Welsh Ministers are to be “consulted” about the commissioner for Wales before the recommendation is made to His Majesty. Can the Minister confirm that “consulted” means that Welsh Ministers are to take no part in the actual appointment of the commissioner for Wales?

I am seeking more for Wales than Amendment 11 provides. With the devolution of the Crown Estate, we could see an economic boost built on the success of renewable projects around our coastline, reviving coastal communities and ensuring the benefits from these projects are actually felt by those living near them in Wales. I beg to move.

[Lord Murphy of Torfaen (Lab)]

My Lords, I will speak to move Amendment 11 on behalf of my noble friend Lord Hain, who cannot be with us this afternoon. I was present in Committee on the Bill and listened with great interest to noble Lords discussing the issue of devolving the Crown Estate to Wales. I had a great deal of sympathy with the points that were made. I believe it is incongruous that it has already been devolved to Scotland but is not devolved to Wales or Northern Ireland. I speak as someone who was Secretary of State for both Wales and Northern Ireland. Therefore, I welcome the amendment tabled by my noble friend, in so far that it means that there will be commissioners specifically responsible for giving advice to the Crown Estate itself on behalf of Wales and Northern Ireland—which is very good.

I take the point made by the noble Baroness, Lady Humphreys, about consultation, but it is pretty clear to me that it would be a very foolish Government to appoint commissioners who were not approved by the First Minister in Cardiff and the First and Deputy First Ministers in Belfast. It is a start, though it is not exactly everything that was wanted. I agree with the noble Baroness, Lady Humphreys, that my noble friend the Financial Secretary has indeed moved his stance to one which would be agreed to by lots of people in Wales, and I guess in Northern Ireland.

We are living in different times; we now have a Labour Government in Cardiff and in Whitehall. I believe it is important that Governments can get together and talk about these issues in a very special way. That is why this amendment is before us this afternoon: exactly because there have been proper discussions, which I guess the Secretary of State for Wales has also been involved in. Personally, I do not think it goes far enough, but as I said, it is a start.

In the new regime—in this new Britain since the general election—there is a very serious case to be made for a much better relationship between the devolved Administrations and the United Kingdom Government. We have a new Council of the Nations and Regions, which will do a great deal of good for that relationship. We have a situation in Northern Ireland where we now have the Executive up and running, at last, and I congratulate the previous Government on the work they did on that. In this new era, where devolution means something very different from what it has meant over the last number of years, we have to believe that this new relationship will result in decisions such as this one.

I hope that this is not the end of the discussions between the Treasury, the Government, the Welsh Government and the Northern Ireland Executive; I hope it is the beginning of discussions on these issues, not just on this one, but on other ones as well. In my personal view, I hope that, ultimately, the Crown Estate should be devolved. However, we are where we are: the Government have made a concession, the Financial Secretary has very kindly signed my noble friend’s amendment, and I very much look forward to what he has to say in the course of this important debate.

[Baroness Smith of Llanfaes (PC)]

My Lords, I will speak to both amendments in this group. I thank the Minister for the comprehensive letters he wrote to Members who took part in Committee, addressing some of our unanswered questions.

I will set out the context of how I am approaching this group. At Second Reading, I outlined clearly how the draft legislation did not deliver fairness for Wales for four key reasons: first, the Crown Estate profits will not be retained in Wales; secondly, the proposed changes to the Crown Estate board do not include Welsh representation; thirdly, expanding investment and borrowing powers for the Crown Estate may undermine the Welsh Government; and, finally, the Bill does not make provisions to promote the economic or social well-being of Wales. In Committee, I tabled three amendments, and my noble friend Lord Wigley tabled an additional three, which sought to remedy these four key issues from a Welsh perspective—issues on which Plaid Cymru has long campaigned.

18:00

I am thankful that, in Committee, there was a clear cross-party consensus that Wales was not being treated fairly in relation to the Crown Estate powers. I am particularly grateful to the contributions made by the noble Lord, Lord Hain, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Humphreys, in which they added their support to these calls. Of the four issues I raised, I am pleased to see one concession from the UK Government for Welsh representation on the Crown Estate board.

Amendment 11 in the name of the noble Lord, Lord Hain, was led today by the noble Lord, Lord Murphy of Torfaen, and was supported by the Minister, the noble and learned Lord, Lord Thomas, and the noble Baroness, Lady Humphreys. It requires that one commissioner is to have a legal responsibility to give advice about Crown Estate activities and the use of resources in Wales. Welsh Ministers will be part of the decision-making process for who that individual will be. The UK Government making this concession, although a small first step, is a clear recognition of the feeling that Wales is not getting a fair deal from the Crown Estate as it stands. I support this step as an intermediate measure rather than as an end point. I hope that the Welsh Government will utilise this new position in the best interests of Wales by making sure that the people of Wales benefit directly from the use of their natural resources and have a say in their management. However, having a say is no replacement for full control, which is what Wales needs.

I turn to Amendment 6 in the name of the noble Lady, Baroness Humphreys, which I have signed in support. The amendment would devolve management of the Crown Estate to Wales. As your Lordships’ House will know, the devolution settlements in Wales and Scotland differ greatly on the Crown Estate. In Scotland, the Crown Estate assets were valued at over £650 million, and the profits go to the Scottish Government. Last year, the Scottish Crown Estate generated £103 million for the Scottish Government’s purse. Pots of this money were given to rural and relatively deprived areas in Scotland. To put this into perspective, that is four times the amount that the UK Government committed to coal tip safety in last week’s Budget. Constitutionally, we should support Wales being on an equal footing with Scotland, as currently there is an asymmetry of power between the two nations to manage their own natural resources.

I remind the House of the Welsh Government’s position on devolving the Crown Estate to Wales:

“Our longstanding position is that the Crown Estate should be devolved to Wales in line with the position in Scotland. We have been clear that the current devolution settlement for energy limits our ability to deliver policy in Wales in a way that reflects our policy priorities and the needs of future generations”.

This position is included in the Welsh Government’s current programme for government for 2021-26. Yesterday, all Members of the House were sent a letter from the Minister that noted the UK Government’s position:

“The Government remains of the view that there is a significant benefit for Wales and the rest of the UK in retaining The Crown Estate in its current form”.

In Question Time yesterday, the Leader of the House stated, in response to a question on Scotland:

“The important thing for young people and older people across the UK is to know that they have a Government who work with the devolved Governments in their best interests”.—[Official Report, 4/11/24; col. 1311.]

Today I ask the Minister a question of principle. Now that we have two Labour Governments—one in Cardiff and one in London—which one is responsible for making decisions about the use of Wales’s natural resources, especially with such a strong statement having been made in the Welsh Government’s programme for government? Does he believe that it should be the UK Government or the Welsh Government who make the decisions about Wales’s natural resources? Does he believe that it is fair that Scotland has vastly greater powers than Wales in this area? I ask the House to show support for Wales today and support the devolution of the Crown Estate to Wales by backing this amendment.

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I will speak briefly because so much has been said already, particularly by the noble Lord, Lord Murphy of Torfaen, about the structure of the two amendments before us.

I thank the noble Lord, Lord Hain, in his absence, and the Minister for making a step forward; it may be small, but it is a step. It is an important recognition for the people of Wales that Wales is different. It is interesting that, in the last debate, we talked almost exclusively about English salmon and its difference from salmon in Scotland—no one seemed to mention Wales at all. It reminded me of the Encyclopaedia Britannica entry for “Wales”: “See England”. Part of the debate we had earlier exemplified that. Wales needs to be recognised as being different; it is a proud and long-established nation with its own resources, people and interests. I welcome what the Minister has done, along with the noble Lord, Lord Hain, and I am grateful to him.

I will make two further comments before turning to Amendment 6. It is very important that the commissioner is not seen to be a patsy. He or she must be able to stand up for Wales. My experience has been that, when people have been appointed to represent and give advice about Wales, they can make a very powerful difference—we see this in many committees and bodies across the UK—but they have to be visible. The people of Wales will expect two things. First, the advice must be transparent: what are they saying about the advice they are giving about Welsh resources? Secondly, when looking retrospectively at the advice given, they must say what the benefit to Wales has been. I do not see how you can give advice without explaining the benefit. Therefore, I hope that there will be full transparency in the Crown Estate commissioner’s report.

That is why this amendment may be much more important than is appreciated. It inserts the opener into the can by beginning to explain how Wales will be treated in the new way in which the Crown Estate commissioners will work, recognising Wales and Northern Ireland as having different and separate interests. I am deeply grateful to the Minister. He told us last week that Wales will look forward to benefits from the Budget, but I did not expect this benefit.

I support Amendment 6, because that is where we are going. As the noble Lord, Lord Murphy, said, it is what the people of Wales want. I can see the possible argument that maybe now is not the right time—but when is ever the right time?

Wales is a poor country, much poorer than England; you only have to spend time in Wales and in London to appreciate the huge disparity of wealth. In the 19th century, Wales had a natural resource that never benefited it properly by long-term investment. The same must not happen again. So I support Amendment 6 but I am extremely grateful to the Minister for Amendment 11.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, I am delighted to follow the noble and learned Lord, Lord Thomas of Cwmgiedd. I support the amendment in the name of my noble friend Lord Hain, which was ably promoted by my noble friend Lord Murphy of Torfaen. This amendment was also signed by the noble Baronesses, Lady Smith and Lady Humphreys, the noble and learned Lord, Lord Thomas, and the Minister.

I view this amendment from my noble friend Lord Hain as a step in the right direction because it enables Wales and Northern Ireland to be represented by commissioners. I said in the debate on the devolution amendments in Committee that devolution is particularly important. In the words of the noble and learned Lord, Lord Thomas, it should not become a patsy; it has to have something of meaning. To have a commissioner from the devolved regions means that you should have somebody there who understands the issues of the Crown Estate in those areas. In Northern Ireland there is the issue of escheat, where in some instances freehold land can become ownerless. On those occasions it is the local commissioner who will have that understanding of where those areas of land are, their impact and the need for their development for the benefit of the whole community.

I raised other issues in Committee, such as Great British Energy and the fact that in Northern Ireland there is an all-island electricity market. Can the Minister consider how that issue will be dealt with? There are also issues to do with fishing rights in the Irish Sea. Those issues all need to be investigated and supported by the commissioner who will represent Northern Ireland, as well as the renewable technologies, so that they are all in the right space in the seabed and do not interfere with fishing effort. The local person is best placed to do that.

I am very pleased that my noble friend the Minister has signed Amendment 11. Like my noble friend Lord Murphy, I think it shows that there is a determination and a willingness on the part of the Government to recognise the principle of devolution. I hope that in the fullness of time, the Government will move that little stage further and see the validity of devolution in all its holistic aspects. In the meantime, I am very happy to support Amendment 11.

[Lord Wigley (PC)]

My Lords, I am delighted to follow the noble Baroness, Lady Ritchie, and I am so glad she had the opportunity to bring in the Northern Ireland dimension, building on the comments that the noble Lord, Lord Murphy, made in introducing this debate. There is a synergy of interest in getting a balanced pattern to develop.

I will speak briefly in support of Amendment 6 in the name of the noble Baroness, Lady Humphreys, and my noble friend Lady Smith of Llanfaes. I would have added my own name to this amendment had I not been away on family duty last week, for which I apologise. Of course, I have awaiting Second Reading a Private Member’s Bill with a similar objective to Amendment 6.

I will not detain the House by repeating the case I made at Second Reading and in Committee for the Crown Estate to be fully devolved to Wales as it is to Scotland. Let us remember that it was a Conservative Government who delivered the Act to devolve the Crown Estate to Scotland, and there is cross-party consensus among Senedd Members in Cardiff Bay, who ask, “If this is acceptable for Scotland, why on earth is it not acceptable for Wales?”.

In practical terms, the activities of the Crown Estate in Wales have mushroomed over recent years. Its financial take from Wales has grown from about £400 million a year two or three years ago to now approaching £1 billion a year. There is growing resentment that such money should flow to a body that contributes little to the Welsh public purse, and this at a time of chronic underfunding of Welsh public services.

18:15

We read in this week’s Sunday Times of growing resentment in Cornwall and elsewhere at the way in which the royal coffers benefit from similar activity. The way to avoid such bitterness being directed at the Royal Family is to ensure that those territories from where financial gain is extracted by the Crown Estate, be they Wales, Northern Ireland or indeed Cornwall, get a fair proportion of the takings.

I turn to Amendment 11 in the names of the noble Lord, Lord Hain, my noble friend Lady Smith, the noble and learned Lord, Lord Thomas, the noble Baroness, Lady Humphreys, and, I am glad to see, the Minister himself, the noble Lord, Lord Livermore. I thank the noble Lord, Lord Murphy, for presenting it and for the way in which he spoke. I welcome the amendment as a small step, as mentioned by several colleagues, in recognising the strong feelings in Wales regarding the exploitation of Welsh resources by the Crown Estate, with very little coming back to Wales. Noble Lords may recall that in Committee I had an amendment which was supported across the House and on which the noble Lord, Lord Hain, spoke very persuasively indeed. In his absence, I am grateful to the noble Lord, Lord Murphy, for proposing Amendment 11, which is a step in the direction of the amendment that we had in Committee.

I am also very grateful to my noble friend Lady Smith of Llanfaes for supporting it so eloquently today, and to the noble and learned Lord, Lord Thomas of Cwmgiedd, and the noble Baroness, Lady Humphreys, for their support. In particular, I welcome the fact that the noble Lord, Lord Livermore, has indicated the Government’s support for this amendment, which is indeed a step in the right direction. I thank him for having noted the feeling across the House in taking this on board and building on it.

The appointment—in consultation, I hope, with the Welsh Government—of a commissioner with special responsibility for Wales is a statutory recognition that the Welsh Government have a valid case and a valid role to be involved with the Crown Estate’s activities in Wales. It goes further than just appointing one person. It is a signal of the direction in which I believe this House wants to see things move. If the Government want to see it move in that direction as well, all credit to them for that. I hope we can build on it.

The Crown Estate must therefore have regard to the way in which it goes about its business in Wales. It must have regard to the charges it imposes, for example, on Welsh local authorities for accessing the coastline adjacent to those authorities’ own territory. It must surely be expected to make its case to the Welsh Government as to how its activities bring benefit to Wales, and it should work on that agenda to ensure that transpires. The appointment of such a commissioner either has such implications or does not. If it does not, it will be seen as an empty gesture, a sop to sentiment in Wales with no meaningful value. But if it is indeed a step in the right direction on which we can build, as I believe it is, it can be of real benefit to Wales.

I hope that the Minister, in responding to this brief debate, can give an assurance that the commissioner for Wales has a meaningful role, that the Crown Estate has been consulted about such a provision and that it is fully signed up with the Welsh Government in seeing such an appointment as an essential step in creating a new partnership between the Crown Estate and the public sector in Wales.

[Lord Morgan (Lab)]

My Lords, I will not take up much time, but very much agree, in general and in detail, with the remarks of the noble Lord, Lord Wigley, and many other noble Lords who have spoken. There is a detailed matter and a more general principle which justifies this form of devolution to Wales. The environment in Wales is exceptionally important and the estates referred to are central to the economic and social life of Wales. More generally—I echo what we have just heard—the whole history of devolution in Wales has been a very slow process and the battle goes on. In the mid-19th century, it took the form of political demands from the Liberal Party in Wales. The Labour Party provided devolution and other parties have taken up the baton in that way.

The history of devolution in Wales has for a long time been a sluggish process. It has not arisen with the buoyancy that we have had, perhaps not always happily so, in Scotland and Ireland. The Barnett formula indicates how Wales has been treated—in an indirect and offhand way—and this is a valuable addition to it. Given the happy congruence of government in Wales, the United Kingdom and Northern Ireland, we would like a full embrace of this, bracketing the Welsh Government and the devolutionary process emerging from Westminster. Wales has suffered for a long period from a kind of half-colonial attitude towards the nation. This is an excellent example of a way in which that could be reversed.

[Lord Berkeley of Knighton (CB)]

My Lords, as someone who lives and farms in mid-Wales as well as writing music, I support this amendment. Living among people there, to me it seems that the comments we have just heard are very apposite. There is a feeling that we are slightly out on a limb and that, if devolution is to mean anything, this is a perfect example of where some empowerment could take place and, as the noble Lord, Lord Wigley, said, we could see a certain amount of money returned to Wales to help with the preservation of all those things that people value there, not least the coast and countryside. We are threatened with all kinds of things—possible massive pylon building and massive problems with the Wye, which has been coming up today in various amendments. To be able to decide for ourselves, or for the Welsh Government to be able to decide on our behalf, seems an extremely important point in this debate. Therefore, I very much support the amendment.

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments from my noble friend Lord Hain and the noble Baroness, Lady Humphreys.

Turning first to Amendment 11, tabled by my noble friend Lord Hain with my noble friend Lord Murphy speaking on his behalf, I thank my noble friend Lord Hain for his constructive engagement on this topic and thank other noble Lords across the House who have spoken in favour of this amendment, which the Government support. The amendment requires that the board of Crown Estate commissioners must include a commissioner who is knowledgeable about Wales and that such a commissioner, alongside their existing responsibilities, must be responsible for giving advice about Wales to the board. It also requires equivalent positions for Northern Ireland and England and grants Welsh Ministers and the Executive Office in Northern Ireland the right to be consulted about the Welsh and Northern Irish appointments. These legislative requirements will ensure that the board of commissioners continue working in the best interests of Wales and Northern Ireland alongside their existing duties as commissioners. To answer the noble Baroness, Lady Humphreys, I say that I do not believe that the amendment in any way deliberately excludes the seabed.

I reassure the noble Lord, Lord Wigley, that the Crown Estate absolutely welcomes the opportunity presented by the increase in the number of commissioners from eight to 12, to bring knowledge of the devolved nations even more directly to the board table. It is an enthusiastic supporter of this amendment. This will supplement the expertise of its director for the devolved nations, who is based in the Crown Estate’s recently opened Cardiff office and whose knowledge and extensive local engagement over the last two years is evidence of the importance to which it attaches understanding local conditions in Wales.

The commissioner responsible for giving advice to the board on Northern Ireland will provide valuable insight as the Crown Estate’s engagement and activities in Northern Ireland continue to evolve. For example, the Crown Estate’s chief executive was in Belfast last month meeting officials and Ministers from the Department of Agriculture, Environment and Rural Affairs and the Department for the Economy. That form of engagement will move from strength to strength with the knowledge that such commissioners will offer to the board. These commissioners will certainly strengthen the Crown Estate’s ability and mission to deliver benefit for the whole UK at a time when devolution of the estate would significantly risk fragmenting the energy market, which would undermine international investor confidence and delay the progress towards net zero by an estimated 10 to 20 years, to the detriment of the whole UK.

Amendment 6, tabled by the noble Baroness, Lady Humphreys, would require the Treasury to complete a transfer of the responsibility for the management of the Crown Estate in Wales to the Welsh Government. As I have set out previously, the Government’s position is that there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form. As I set out in detail in Committee, the Crown Estate Act 1961 requires the Crown Estate commissioners to manage the Crown Estate as a commercial enterprise and with due regard to the requirements of good management. While the Crown Estate has goals which, under its own strategy, align with wider national policy objectives, the 1961 Act provides the Crown Estate with independence and autonomy to set and achieve its goals. It has shown itself over the last 60 years to be a trusted and successful organisation with a proven track record in effective management.

The Crown Estate is required to place profits into the UK Consolidated Fund each year, worth more than £4 billion over the past decade. This enables those revenues to fund UK government spending in reserved areas in Wales and Northern Ireland and supports the funding provided through the block grant. Those revenues are then allocated to public service priorities by the Government, subject to the usual parliamentary controls. As I have noted previously, that is a valuable outcome which we must be careful not to undermine. Devolving the Crown Estate to Wales would, as I have explained, most likely require the creation of a new entity to take on the role of the Crown Estate in Wales. As I have previously set out, this entity would not benefit from the Crown Estate’s current substantial capability or capital and system abilities, nor benefit from the Crown Estate’s marine investments currently being made on a portfolio-wide basis across England and Wales. To devolve to Wales would disrupt these existing investments, since they would need to be restructured to accommodate a Welsh- specific entity.

I will not repeat the examples that I gave in Committee, but it remains the point that to devolve at this time would risk jeopardising the existing pipeline of offshore wind development in the Celtic Sea, planned into the 2030s, and the vital investment and jobs that this would bring across south Wales. As I noted in Committee, in addition to energy, the extensive jobs and supply chain requirements of the round 5 offshore wind opportunity in the Celtic Sea would also likely deliver significant benefits for Wales and the wider UK. As I mentioned in Committee, an advisory firm to the Crown Estate estimated that manufacturing, transporting and assembling the wind farms could create around 5,300 jobs and a £1.4 billion boost for the UK economy.

Devolution would also delay UK-wide grid connectivity reform. For Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its current pipeline of Welsh projects, the biggest of which is round 5—which is expected to contribute enough energy capacity to power 4 million homes across the United Kingdom—can benefit from this co-ordinated approach to grid connectivity up front. 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 multi-million-pound commercial tendering process when the Crown Estate is undertaking critical investment in the UK’s path towards net zero. I therefore respectfully ask the noble Baroness, Lady Humphreys, to withdraw her amendment.

[Baroness Humphreys (LD)]

I thank the Minister for those comments and everyone who has spoken in this debate, especially those who have supported the devolution of the Crown Estate to Wales. I was looking for a little more from the Minister about the responsibility of the commissioners. It seems that they are there to give advice, but there is no responsibility to report to Welsh Ministers or to discuss with them, which I hope that they will do in any case.

18:30

One of the biggest drawbacks for me is that the amendment would allow Welsh Ministers to be consulted. That is passive: they are being consulted but are not actually part of the process. The amendment very carefully avoids any commitment to a devolution process. I know we all feel that this is a small step, but I do not know where that small step is leading us. I feel as though that small step could go nowhere and that would be the end of the devolution of the Crown Estate to Wales. There is nothing in the amendment or in the Minister’s statement here that allows us to move forward or think that we will. Is it an empty gesture, as the noble Lord, Lord Wigley, said, or is it something that we can build on? I am not too sure. I have not heard anything from any Member that shows that this will be built on and that this is the first step in the process of that devolution of the Crown Estate to Wales.

Because I am not really convinced that this will move us on or put us on a route towards devolution, I wish to test the opinion of the House.

18:32

Division 3

Ayes: 74

Noes: 147

18:42

Amendment 7

Moved by

[Earl Russell]

7: After Clause 2, insert the following new Clause—
“Climate change and nature duty of Crown Estate CommissionersIn the Crown Estate Act 1961, after section 1 insert—“1A Duty of the Commissioners to contribute to climate change and nature targets(1) In complying with the general duty under section 1(3) and in exercising their functions the Commissioners must take all reasonable steps to contribute to—(a) the achievement of targets set under Part 1 of the Climate Change Act 2008,(b) the achievement of biodiversity targets set under sections 1 to 3 of the Environment Act 2021, and(c) adapting to any current or predicted impacts of climate change identified in the most recent report under section 56 of the Climate Change Act 2008.(2) In carrying out the duty set under subsection (1), the Crown Estate Commissioners must include conditions in all seabed leases that require the leaseholder to contribute to the conservation and overall enhancement of the natural environment.””Member’s explanatory statement
This amendment would give the Crown Estate a new climate change and nature duty requiring it to take all reasonable steps to contribute to the achievement of the Climate Change Act 2008 and Environment Act 2021 targets in exercising its functions. The duty requires the inclusion of nature conservation measures in all seabed licences granted by the Crown Estate.

[Earl Russell (LD)]

My Lords, I rise to move Amendment 7 on behalf of the noble Baroness, Lady Young of Old Scone, who is not able to attend the House today. This amendment mirrors that laid in Committee by the noble Baroness, Lady Hayman, and supported by the noble Baroness, Lady Young, my noble friend Lord Teverson and the noble Lord, Lord Young of Cookham. It would lay a duty on the Crown Estate to contribute to the Government’s climate change and nature targets as laid out in the Climate Change Act and the Environment Act.

The Crown Estate’s role in enabling these targets to be met is significant. The Crown Estate is the third-largest landowner in the United Kingdom; in particular, it owns significant land in coastal areas and on the seabed, which is important for the big growth in renewable energy that is required and for the recovery of our biodiversity. The deal with Great British Energy means a major uplift in the Crown Estate’s contribution to net zero. The Crown Estate is also a major developer and can contribute to zero-carbon homes and construction, sustainable procurement, and the circular economy.

Since Committee, the noble Baroness, Lady Hayman, has been involved in discussions with the Minister and the Treasury, and Amendment 10 in her name and that of the noble Lord, Lord Livermore, is the result. This requires commissioners to keep under review the impact of their activities on the achievement of sustainable development in the UK. I understand that the Minister will also commit to an addition to the framework agreement between the Treasury and the Crown Estate which would mean that the Crown Estate would have to have regard for the impact of its activities on the environment, society and economy and will include them in considering relevant legislation in the Climate Change Act and the Environment Act. I thank the noble Baroness, Lady Hayman, and the Minister for their negotiations on this occasion.

However, I am concerned that it does not go far enough. While I recognise that the primary purpose of the Crown Estate is to maximise financial contributions to the Treasury from the estate and to do this in a socially and environmentally responsible way, I am concerned on two accounts.

First, as the Crown Estate ramps up its development activities in renewable energy and a range of other activities, the possibility of conflicts between its economic objectives and its environmental responsibilities will become more acute, and the risk is that the primary economic objective will take priority. That might be good for renewable energy, but it could be a very bad for biodiversity. To “have regard” is a particularly weak requirement. Putting in the Bill a clear objective to help meet the legally binding climate change and biodiversity targets alongside the Crown Estate’s economic objective would mean that solutions would be brought that combine the benefits on all these objectives.

Secondly, the status of the framework agreement is not wholly clear. It is negotiated periodically between the Crown Estate and the Treasury. Revisions to it could be subject to negotiation without Parliament being any the wiser. What if the Crown Estate decided that it was going to downplay the guidance on the legally binding targets? Over the 60 years since the power of direction over the Crown Estate was brought into existence in 1961, the Treasury has yet to insist on any provisions of the framework agreement. As a last resort, Ministers have the power of direction over the Crown Estate, but the legal advice is that it can be exercised only in a way that is consistent with the statutory duty under the Act, hence the need for the objectives on targets to be on the face of the Bill. Can the Minister tell the House how much welly the framework agreement has in law and what action the Treasury could take if the Crown Estate did not come up to the mark on the climate and environment targets?

I do not want to repeat the arguments made by noble Lords, including the noble Baronesses, Lady Young of Old Scone and Lady Hayman, in Committee. I will, however, remind the House that the Minister laid considerable stress throughout Committee, in his response to several amendments, on the need for the primary purpose of the Crown Estate to be the effective economic management of the estate. I point out to the House that a nearly identical duty to the one proposed in this amendment, requiring contributions to the legally binding biodiversity targets, was applied to NHS trusts throughout the Health and Care Act 2022 by the previous Administration, with the support of the Labour Party. It is questionable why the environmental considerations in the Bill, which were previously supported for the NHS, are not now considered appropriate for a public body with probably more natural habitats under its control, and more potential for reducing carbon, than any other.

In conclusion, I ask the Minister to reassure the House that the environmental objectives will not end up being second fiddle when the pressure is on; how the framework agreement renegotiations, in future, will be transparent and safeguarded from sliding back on environmental requirements; how the Treasury will measure and hold the Crown Estate accountable for the contribution to the climate change and biodiversity targets; and, finally, what sanctions the Treasury has on the Crown Estate if it does not deliver the framework agreement.

In a personal capacity, I thank the noble Baroness, Lady Hayman, and the noble Lord, Lord Livermore, for Amendment 10. Speaking now as me, I think that it is extremely important that the commissioners

“must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom”.

This is a welcome development, and I welcome the compromise. I think this helps to strengthen the Bill, and it is great to have it in the Bill. I am very pleased that this has taken place. I beg to move Amendment 7.

[Baroness Hayman (CB)]

My Lords, it is a pleasure to follow the noble Earl, Lord Russell. He clearly set out the reasons why in Committee, we, along with the noble Baroness, Lady Young of Old Scone, who I am sure we all wish a quick recovery, were very concerned to ensure that the Crown Estate, given its potential influence in these areas, plays its part in achieving the Government’s statutory commitments under the Climate Change Act and the Environment Act. Across the Committee, there were contributions that supported that view.

Of course, in some ways I would like the amendment that has just been moved to be put in the Bill. Here, I should declare my interest as chair of Peers for the Planet. Like others, I thank the Minister and his officials for the time, care and effort they have put into trying to resolve the issues that would arise if the full amendment were included in the Bill. From my point of view, it has been an exemplary process. The noble Baroness, Lady Kramer, made this point as well, as have many other noble Lords. The care and transparency that the Minister and his officials have provided throughout the passage of this Bill have been extremely welcome.

In Committee, when we were debating the amendment then in my name, the Minister made two things absolutely clear. One was the Government’s commitment to achieving the same ends by ensuring that the Crown Estate is a good citizen in respect of these events, and that is also manifested in what the Crown Estate is doing and the way it is reporting on its activities. So I think there is a shared objective between the amendment proposed by the noble Baroness, Lady Young of Old Scone, which we just heard spoken to, and the Minister and the Crown Estate. It is certainly shared by me.

Concerns have been articulated about the importance of safeguarding the prime objectives of the Crown Estate and not putting the detail into the Bill. I think we have come up with a solution that will achieve, certainly from my point of view, the vast majority of what I was looking to achieve in my original amendment. Amendment 10 would implement the climate and nature objectives by inserting in the Bill an obligation on the Crown Estate to conduct its affairs in a way that ensures sustainable development. That, of course, is a much wider and not very precise term that covers economic, environmental and social issues. Mind you, there has been a lot of debate this afternoon about the importance of the Crown Estate covering exactly those issues and taking them into account.

In a sense, having placed that in the Bill, we then have a paving amendment on to the framework agreement. I was very reassured by the letter we all received on 4 November, stating that the specific concerns about two aspects of the Climate Change Act—mitigation and our net-zero obligations, and the importance of adaptation to existing climate change and the nature protection objectives under the Environment Act—would be spelled out in the framework agreement and reported on publicly in the annual report, so that we can judge the contribution made to achieving those objectives through the publication of the framework agreement. Such reporting is another theme that has run through today’s debate.

In my view, it is better to achieve 80% of what we achieve in legislative terms than to have 100% judged by this House, which I am not at all sure we would win on. What matters is the endgame and the results, not whether my phraseology or the noble Earl’s goes in the Bill. What matters is the impact we have and how much we have shifted the dial in terms of what the Crown Estate achieves in support of the Government's climate and nature objectives. So, I am very pleased to be able to propose Amendment 10 and I am grateful to the Minister for adding his name to it.

I will say only one other thing, which is that I have spent the last four and a half years putting provisions like this into individual Bills as they go through this House. I hope the Government will recognise that, when they say that climate and environment issues are for everybody and that all departments, private industries and public bodies are affected and ought to be looking at the implications, they act on that realisation and do not rely on Back Benchers making Ministers’ lives miserable because they have been missed out. The Government should cut out all that argument and do it for themselves by including those issues in Bills. They were not included in the first place in this Bill, which was silent on the climate and nature. Now they are included, albeit in slightly convoluted but, I hope, effective way.

I end by saying once again how grateful I am to the Minister and his team for the constructive way in which they have handled this issue.

[Baroness Vere of Norbiton (Con)]

I rise only briefly to say that we on these Benches want to see the Crown Estate taking action to improve our environment, and we share the concerns of other noble Lords in this area. We note that the Government have expressed their support for the amendment in the name of the noble Baroness, Lady Hayman. I agree with her that it is all about outcomes in these circumstances. We agree that this is a sensible amendment and that it deserves the Government’s support.

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments tabled by my noble friend Lady Young of Old Scone and the noble Baroness, Lady Hayman. Before I respond to the amendments relating to the environment, I reaffirm my strong support for the intention behind them. As I set out in Committee, it is right that the public and private sectors make every contribution they can to achieving our climate change targets. The Crown Estate should continue to be a national trailblazer in this regard.

The Crown Estate’s commitment to becoming a net zero carbon business by 2030, aligning with a 1.5 degree trajectory, and its commitment to prioritising activities that help enable a reduction in a national carbon emissions, such as building net-zero homes, transitioning its holdings to sustainable agricultural practices, and working in partnership with government to meet the national renewable energy targets, speaks to how seriously it is already committed to these goals.

19:00

As I also set out in Committee, the commissioners operate under a clear commercial objective, as set out in the 1961 Act: to maintain and enhance the value of the estate. While the Crown Estate has goals which, under its own strategy, align with wider national policy objectives, the 1961 Act 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.

As I have also noted previously, the Crown Estate returns its profits to the Exchequer each year, and it has returned a combined total of more than £4 billion in the last decade. This is used to fund the priorities of the Government of the day, which currently include spending on policies that help us to meet our climate change targets.

I sincerely thank the noble Baroness, Lady Hayman, for her constructive engagement ahead of Report. I am very pleased that the Government have been able to support the noble Baroness’s amendment, which will require the commissioners to

“keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom”.

The public framework document will also be updated in light of this amendment to clarify that “sustainable development” means regard for the impact of the Crown Estate’s activities on the environment, society and the economy.

The public framework document will also make it clear that this regard includes, where relevant, consideration of relevant legislation, such as Part 1 of the Climate Change Act 2008, which deals with the targets for 2050, Section 56 of the Climate Change Act 2008, and Sections 1 to 3 of the Environment Act 2021, which deal with specific environmental targets. The framework document will also explicitly make it clear that the Crown Estate will include in its annual report a report of its activities in relation to sustainable development.

The amendment tabled by the noble Baroness, Lady Young, and moved by the noble Earl, Lord Russell, would create a new duty for the commissioners to contribute to the climate change and nature targets, requiring them to take all reasonable steps to contribute to the achievement of targets set under Part 1 of the Climate Change Act 2008 and the achievement of biodiversity targets under Sections 1 to 3 of the Environment Act 2021, and to adapt to any current or predicted impacts of climate change identified in the most recent report under Section 56 of the Climate Change Act 2008. It would also require the commissioners to include conditions in all seabed leases to require the leaseholder to contribute to the conservation and overall enhancement of the natural environment.

Although the Government strongly support the intention behind this amendment for the reasons that I have already set out, it is important to reiterate that a key purpose of the 1961 Act was to repeal various detailed statutory provisions that had built up over 150 years previously, which were hampering the effective management of the estate.

I am aware that some noble Lords may take a different view as to how the Crown Estate should operate, but it remains the Government’s view that the existing statutory commercial focus—coupled with adherence to environmental and other nature requirements as set out in other legislation, as well as the need in the 1961 Act for the commissioners to have due regard to the requirements of good management—remains the best approach. Under the terms of the amendment from the noble Baroness, Lady Hayman, the Crown Estate will also now be required in legislation to keep under review the impact of its activities on the achievement of sustainable development. Supplemented by the intended amendments to the framework document, this makes it clear that the Crown Estate must consider, where relevant, the statutory targets that the noble Baroness, Lady Young, seeks to place in the Bill.

The amendment also seeks to require the commissioners to include specific conditions in all seabed leases, which would require leaseholders to contribute to the conservation and overall enhancement of the natural environment. As I set out in Committee, all leases granted by the Crown Estate for development that affects the seabed already require the leaseholder to have the necessary statutory consents before development can begin. I will not repeat in detail what I have already set out, but the Government are of the view that the existing protections in place are already sufficient.

The decision to grant leases, as set out in Committee, is informed by advice from the relevant statutory nature conservation body, either via the statutory consent process or, where appropriate, direct engagement. It can include enhancement requirements. For those activities that are deemed exempt from statutory consents, the Crown Estate requires applicants to demonstrate that advice has been sought from relevant environmental bodies to inform their decision on leasing.

I hope noble Lords can see that the Government have made efforts to alleviate the concerns raised on this topic. I hope that the noble Earl, Lord Russell, on behalf of the noble Baroness, Lady Young, feels able to withdraw Amendment 7 as a result.

[Earl Russell (LD)]

My Lords, speaking on behalf of the noble Baroness, Lady Young: yes, she is prepared to withdraw her amendment. I welcome the Government’s response to her amendment; I think even she realises that it was perhaps the gold-plated version. As the old saying goes, a bird in the hand is worth much more than a bird in the bush.

I return to my own persona to close this group of amendments. I congratulate the noble Baroness, Lady Hayman. It is extremely important that these duties are there, that they are written in the Bill and included in the framework agreement, and that the Crown Estate needs to report on them. These, taken together, are not constraints but real responsibilities that the Crown Estate will need to meet. They are safeguards that exist for evermore; that is a powerful thing in protecting the environment. I congratulate the noble Baroness, Lady Hayman, on all the work that she does; here we have another Bill, with another of her amendments being accepted.

Before I sit down—I know the hour is late—the noble Lord, Lord Krebs, has a Bill before this place to do some of this stuff for evermore, so that we can free up parliamentary time to discuss other things. As a final word, I encourage the Government to consider lending support to his Private Member’s Bill so that we can free up parliamentary time, put this in all the places where it needs to be, make sure that these protections are in place, and use our parliamentary time for other matters. But I am delighted that this has happened in this case. I thank the Minister, and I beg leave to withdraw Amendment 7.

Amendment 7 withdrawn.

Amendment 8 not moved.

Amendment 9

Moved by

[Earl Russell]

9: After Clause 2, insert the following new Clause—
“Regional Wealth Fund and Skills Training FundAfter section 4 of the Crown Estate Act 1961, insert—“Regional Wealth Fund and Skills Training Fund (1) The Commissioners must use the funds from the Crown Estate to establish a Regional Wealth Fund and a Skills Training Fund, as set out in subsections (2) to (9).(2) The Commissioners must ensure that a percentage of the Crown Estate’s license fee for leases of Crown Estate land for offshore wind power development is given to a regional wealth fund.(3) The Commissioners must agree regional boundaries of the regional wealth fund in consultation with local government.(4) Funds from the Crown Estate’s license fee for such leases must be distributed to the nearest regional wealth fund to the offshore wind power development.(5) The Commissioners must ensure that a percentage of the Crown Estate’s profit is given to a skills training fund (“the fund”).(6) The Commissioners must ensure that the fund works to provide persons residing or employed on the boundaries of or on the land of the Crown Estate with skills training to equip them to perform jobs in the green economy.(7) The Commissioners must ensure that those administering the fund consult with appropriate national and regional organisations and industry to agree the type of training that the fund will provide to meet the requirement under subsection (6).(8) The Secretary of State must by regulations set the percentages under subsections (2) and (5).(9) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””Member’s explanatory statement
This amendment would require the Commissioners to establish a Regional Wealth Fund and a Skills Training Fund.

[Earl Russell (LD)]

My Lords, it is quite late and we have run over our time, so I will be brief with this amendment. To be honest, my plan was never to call it to a vote. This is an amendment that I tabled at previous stages of the Bill. It calls on the commissioners to do two things: to establish a regional wealth fund and a skills training fund. I believe that both are important. That is why I have brought this amendment back today. As I said, I will speak to it very briefly.

On the regional wealth fund, we are going through one of the biggest energy transitions that this country has experienced since the dawn of the Industrial Revolution. A lot of stuff needs to be built; a lot of change is coming. The Government need to take people with them on that journey. It is not for Whitehall and central government to do this to people. It is for this Government to do things with people, for people, and to take people with them on that journey. I say these things because they are important. We on these Benches want to see Labour succeed in these missions. If public support wanes, that will not happen.

I believe also in devolution; we believe in devolution on these Benches. We believe that local communities should benefit from the energy that they host, and from the infrastructure that sits in their communities. We believe very much in community energy as well. In legislation to come, we will have GB Energy. From these Benches, we will be pushing the Government strongly to go further on community energy. We think it is an important part of the puzzle that can be achieved within the GB Energy Bill.

I move on finally to skills and training. The green revolution is a revolution; it will change all our lives. It offers real opportunities, not just to decarbonise and meet our climate commitments but for Britain to grow new industries to be new world leaders and to train people to take on new jobs, the jobs of the future, which we need to grow our economy.

The Budget this week, for all the investment, had very little growth coming out of it. I personally worry that there was very little money in the Budget for skills and training. The year 2030 will be here in a blink of an eye. To meet our targets, we need people to be able to build all this stuff, to make this thing happen; otherwise, our targets will not happen and will not be met.

The Crown Estate sits at an important juncture between the big industries and the local communities. It is already doing a very good and imaginative job in this area. I simply call on the Government to do more: to work with the Crown Estate to help create these skills; to help support our local communities; and to help bring people with them and alongside them on this journey, so that we can all transition together. I beg to move.

[Lord Livermore (Lab)]

My Lords, I will respond to Amendment 9 tabled by the noble Earl, Lord Russell, on the topic of local and community benefits. As I set out in Committee, the Government are committed to working closely with the Crown Estate to support our target of clean power by 2030 by collaborating to accelerate and derisk the sustainable delivery of technology such as offshore wind. As I noted in Committee, local communities already benefit from onshore and offshore developments in the form of the economic benefits that such developments bring, including job creation and increased business for local suppliers. Individual developers also contribute to local initiatives.

Over the longer term, local communities will also benefit as we accelerate our transition away from volatile fossil fuel markets to clean, homegrown power to boost Britain’s energy independence and security. The Crown Estate has also specifically designed the leasing process for the offshore wind leasing round 5 opportunity in the Celtic Sea in such a way that developers have to make commitments to deliver social and environmental value as part of the development of their new windfarms.

I turn to the second part of the amendment, on a skills training fund. As I have previously made clear, the Government of course support the spirit behind the amendment. We are committed to clean energy by 2030, accelerating to net zero and promoting biodiversity. To meet those ambitions, we need to make sure that our workforce has the knowledge and skills to succeed in the green economy, both now and in future.

As part of that effort, the Department for Education has set up Skills England, a new body that will tackle skills shortages and support sustained economic growth. The Government also introduced the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill in this House last week, which among other things will help to support the establishment of Skills England. As I highlighted in Committee, the Crown Estate is dedicated to supporting skills and training.

As I have said previously, the Crown Estate consults extensively with communities, charities, businesses and the Government to ensure that its skills initiatives are sensitive to market demands and emerging technologies to keep them relevant and effective. The Government consider it important that the Crown Estate retains that flexibility in how its skills initiatives are funded and delivered to ensure that it can contribute to skills training in the best possible way.

I hope these explanations have been helpful and I have provided some clarity on the points raised. I hope the noble Earl, Lord Russell, feels able to withdraw his amendment as a result.

[Earl Russell (LD)]

My Lords, I thank the Minister for his response. I am of course able to withdraw my amendment. I recognise the work that the Government are doing in these areas, but there is a need for more to be done. I do not think that working with the Crown Estate would impact other work; it would actually strengthen it. As I said, it sits in a unique juncture that would be particularly helpful in bringing industry together with communities to create local jobs and provide training. However, I note the work that the Government are doing and I thank the Minister for his response. I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

Amendment 10

Moved by

[Baroness Hayman]

10: After Clause 2, insert the following new Clause—
“Sustainable developmentIn section 1 of the Crown Estate Act 1961 (general provision about the Crown Estate Commissioners), after subsection (3) insert—“(3A) The Commissioners must keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom.””Member's explanatory statement
The amendment would require the Commissioners to keep the impact of their activities on the achievement of sustainable development under review. Sustainable development goals as recognised by the United Nations, the Commonwealth and other bodies refer to human development that aims to meet the economic, environmental and social needs of the present while also ensuring the ability of future generations to meet their own needs.

Amendment 10 agreed.

Amendment 11

Moved by

[Lord Murphy of Torfaen]

11: After Clause 2, insert the following new Clause—
“Commissioners with special responsibility(1) Paragraph 1 of Schedule 1 to the Crown Estate Act 1961 (constitution etc), is amended as follows.(2) Before sub-paragraph (4) insert—“(3B) The commissioners appointed under this paragraph must include—(a) a commissioner responsible for giving advice about England,(b) a commissioner responsible for giving advice about Wales, and (c) a commissioner responsible for giving advice about Northern Ireland.(3C) References in sub-paragraph (3B) to “giving advice about” a part of the United Kingdom are to the giving of advice to the Commissioners about conditions in that part so far as relating to their functions in relation to land there.(3D) A commissioner’s responsibility for giving advice under sub-paragraph (3B) is additional to the other responsibilities of a commissioner.”(3) Before sub-paragraph (5) insert—“(4B) No recommendation may be made to His Majesty for the appointment of a person as a commissioner under sub-paragraph (3B)(b) or (c) unless—(a) the Welsh Ministers have been consulted about the appointment, in the case of an appointment under sub-paragraph (3B)(b), or(b) the Executive Office in Northern Ireland has been consulted about the appointment, in the case of an appointment under sub-paragraph (3B)(c).””Member's explanatory statement
This new Clause would require the persons appointed to be Crown Estate Commissioners to include three commissioners who are able to provide the Commissioners with advice about conditions in England, Wales and Northern Ireland respectively, so far as they relate to the functions of the Commissioners.

Amendment 11 agreed.

Amendments 12 to 14 not moved.

Clause 3: Extent, commencement and short title

Amendment 15 not moved.