Crown Estate Bill [Lords]

Report stage
Monday 24th February 2025 Commons Chamber

Consideration of Bill, as amended in the Public Bill Committee

New Clause 1

Management of the Crown Estate in Wales

“(1) Within two years of the day on which this Act is commenced, the Treasury must have completed a transfer of the responsibility of the management of the Crown Estate in Wales to the Welsh Government.

(2) The Treasury may by regulations make provision about the transfer of the responsibility of the management of the Crown Estate in Wales relating to reserved measures as it considers necessary or expedient, including—

(a) in the interests of defence or national security,

(b) in connection with maintaining and developing telecommunications and wireless telegraphy, and

(c) in connection with maintaining and developing the transmission or distribution of electricity or the provision or use of electricity interconnectors.

(3) The Treasury must by regulations make provision to ensure that the employment of any person in Crown employment is not adversely affected by the transfer of responsibility under this section.

(4) A statutory instrument containing regulations under subsections (2) and (3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”—(Llinos Medi.)

This new clause places a duty on the Treasury to transfer management of the Crown Estate in Wales to the Welsh Government within two years of the commencement of the Act and take measures by resolution to secure arrangements for reserved matters such as defence and national security, telecommunications, and the national grid, and to ensure that employees of the Crown Estate are not adversely affected by the transfer.

Brought up, and read the First time.

18:31

[Llinos Medi (Ynys Môn) (PC)]

I beg to move, That the clause be read a Second time.

[Madam Deputy Speaker (Caroline Nokes)]

With this it will be convenient to discuss the following:

New clause 2—Marine Spatial Planning: coordination—

“In relation to any decisions made about marine spatial priorities, the Crown Estate must—

(a) ensure that the decisions are coordinated with the priorities of the Marine Maritime Organisation, and

(b) consult any communities or industries impacted by the plans, including fishing communities.”

Marine plans guide marine use and regulation for sustainable development, balancing the environment, economy, and society. This new clause ensures the Crown Estate collaborates with DEFRA's Marine Spatial Prioritisation through the MMO, using its expertise to inform decisions, preventing conflicts of interest from its new borrowing and investment powers.

New clause 3—Sustainable development: community benefits—

“(1) Before making any investment decision, the Commissioners must assess—

(a) plans for community benefits for local communities, and

(b) plans for community benefits for coastal communities of offshore activities.

(2) In section 3(1) of the Crown Estate Act 1961, at end insert—

‘(1A) The Commissioners must transfer at least 5 per cent of all net profit generated from the Crown Estate’s activities to local communities impacted by those activities.’”

This new clause would require the Commissioners to ensure their activities benefit local communities, including coastal communities, and that 5% of any profits would be transferred to local communities.

New clause 4—Devolution of Crown Estate powers to Wales—

“(1) The Crown Estate Act 1961 is amended as follows.

(2) After section 7 (powers of Minister of Works in Regent’s Park) insert—

‘7A Commissioners’ functions in Wales

(1) The Treasury must set out a scheme to transfer all the existing Welsh functions of the Crown Estate Commissioners (“the Commissioners”) to the Welsh Ministers or a person nominated by Welsh Ministers.

(2) The existing Welsh functions under subsection (1) are the Commissioners’ functions relating to the part of the Crown Estate that, immediately before the transfer date, consists of—

(a) property, rights or interests in land in Wales, and

(b) rights in relation to the Welsh zone.

(3) The Secretary of State must by regulations set a date to implement the scheme under subsection (1) to the transfer of functions to the Welsh Ministers or a person nominated by Welsh Ministers.

(4) A statutory instrument containing regulations under subsection (3) is subject to annulment in pursuance of a resolution of either House of Parliament.’”

This new clause would require the Treasury to devolve Welsh functions of the Crown Estate Commissioners to Welsh Ministers or a person nominated by Welsh Ministers.

New clause 5—Limit on the disposal of assets—

“After section 3 of the Crown Estate Act 1961, insert—

‘3A Limit on the disposal of assets

(1) The Commissioners must inform the Treasury if the disposal of assets of the Crown Estate will be of a value totalling 10% or more of the Crown Estate’s total assets in a single year.

(2) The Treasury must approve of any disposal of assets above the threshold in subsection (1) and the Chancellor of the Exchequer must lay a report before Parliament within 28 days of being notified by the Commissioners.’”

This new clause requires the Crown Estate Commissioners to notify and seek HM Treasury approval for the disposal of assets totalling 10% or more of the Crown Estate’s total assets.

New clause 6—Partnership agreement: the Crown Estate and Great British Energy—

“The Chancellor of the Exchequer must lay before Parliament any partnership agreement between the Crown Estate and Great British Energy.”

This new clause requires the Chancellor of the Exchequer to lay before Parliament any partnership agreement between the Crown Estate and Great British Energy.

Amendment 1, clause 1, page 1, line 26, at end insert—

“(3) The Treasury must by regulations limit borrowing to a net debt to asset value ratio of no more than 25 per cent.

(4) A statutory instrument containing regulations under subsection (3) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This amendment would limit the amount the Commissioners may borrow by regulations.

Amendment 4, page 1, line 26, at end insert—

“(3) The Chancellor of the Exchequer must limit 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.”

This amendment would limit the amount the Commissioners may borrow by regulations subject to the affirmative procedure for statutory instruments.

Amendment 2, clause 3, page 2, line 17, at end insert—

“(3B) Any framework document published by the Chancellor of the Exchequer, the Crown Estate and the Commissioners must define ‘sustainable development’ for the purposes of this Act.

(3C) The definition under subsection (3B) must include reference to a climate and nature duty.

(3D) A ‘climate and nature duty’ means a duty to achieve any targets set out under Part 1 of the Climate Change Act 2008 or under sections 1 to 3 of the Environment Act 2021.”

This amendment would ensure that this act’s Framework Agreement must define “sustainable development”, and that the definition must include reference to a climate and nature duty.

Amendment 3, page 2, line 17, at end insert—

“(3B) In pursuit of the objective under subsection 3A, the Commissioners must assess the adequacy of protections against coastal erosion in areas affected by their offshore activities.”

This amendment would require the Commissioners to assess the protections against coastal erosion in areas where landfall is made for offshore projects.

Amendment 5, page 2, line 17, at end insert—

“(3B) In keeping the impact of their activities under review, the Commissioners must have regard to―

(a) the United Kingdom’s Net Zero targets;

(b) regional economic growth; and

(c) ensuring resilience in respect of energy security.”

This new sub-section would require the Crown Estate Commissioners, in reviewing the impact of their activities on the achievement of sustainable development, to have specific regard to the United Kingdom’s Net Zero targets, regional economic growth, and resilience in respect of energy security.

[Llinos Medi]

New clause 1 transfers the management of the Crown Estate in Wales to the Welsh Government within two years of the commencement of the Act. The principle behind it is simple: the people of Wales should control and benefit from their own natural resources. For much of Welsh history, that has not been the case, with resources often exploited for the benefit of others. From copper in Amlwch in Ynys Môn, slate in Gwynedd, steel in Port Talbot and Newport, to the coal across the south-east valleys, the rivers of wealth that flowed from those industries were sucked out of our communities—and those communities have since been ravaged by poverty.

Wales is blessed with natural wealth and brilliant people, yet we are also a nation afflicted with deprivation, following years of extraction. Shocking new figures show that child poverty in Wales is set to reach 34.4% by the end of the decade. That is the legacy of our past, in which wealth generated was not used to benefit the Welsh economy or communities. Today, in 2025, that extractive pattern is being repeated with Wales’s green wealth.

Wales has immense renewable energy potential in our windy seas and long coastlines—we can see that demonstrated in the Morlais project on Ynys Môn—but the seabed, along with thousands of acres of land, is controlled by the Crown Estate. Renewable energy projects using these resources are expanding rapidly and delivering profits. We see that in the value of the Crown Estate, which sky-rocketed from £96 million five years ago to £853 million in 2023. However, all profits generated by the Crown Estate in Wales are transferred to the Treasury. This green wealth, just like the wealth from coal and other minerals in the past, is being sucked out of our nation. Millions of pounds generated on the Welsh Crown Estate is taken out of Wales each year, away from our communities who have borne the brunt of decades of economic decline.

In 2017, Scotland gained control over the Scottish Crown Estate and ensured that all profit was kept in Scotland. Devolution has generated millions for the Scottish public purse, with funds going directly to deprived communities such as those in the highlands. Why do the Scottish people get the benefit from their own water, wind and sea resources, but the people of Wales cannot? It is simply not credible for the Government to continue to say that devolution is too complicated, too costly and too time-consuming. These are all issues that can be addressed with proper planning and resourcing. Scotland’s Crown Estate was devolved in 2017. It is ludicrous to say that the Welsh Crown Estate cannot be devolved in a similar way. In Scotland, interim measures were put in place to ensure a smooth transition from the point of devolution until the implementation of a long-term framework for managing assets. New clause 1 takes a similar pragmatic approach by introducing a transition period. It worked in Scotland; it can work for Wales, too.

Throughout this whole debate, the Government have still not addressed the principle of control, so I would like the Minister to answer directly: do his Government believe that the people of Wales should have democratic control over their own natural resources? The people of Wales certainly believe so. Polling shows that majority support among the Welsh public for the devolution of the Crown Estate is higher than ever. It is also supported by the Welsh Labour Government. A majority of councils in Wales have passed motions in support of devolution; Wrexham council did so just last week, with the support of its Labour group. More councils will follow suit, and we may very likely have all councils in Wales declaring support for devolution in the near future. There is a mandate from right across Welsh society for devolution. Members of Parliament would do well to remember that they are here to serve and represent the people, and that the people of Wales have clearly made their views known on this matter.

In closing, I return to the principle that I outlined at the beginning of my speech. Do Members of this House believe that the people of Wales should, after centuries of exploitation, finally be given the right to control and benefit from their own natural resources? If they believe in that principle, I urge them to join me in the voting Lobby.

[Henry Tufnell (Mid and South Pembrokeshire) (Lab)]

We live in uncertain times, and as a nation we face many challenges ahead. For one, there is Russia’s invasion of Ukraine. The impact on our domestic energy prices has shown the extent of our reliance on the international oil and gas markets. Since 2022, gas prices for households across the country have spiked, and the cost of living continues to bite. Putin’s boot is on our throat.

Another challenge is the result of rapid deindustrialisation across the UK since the 1980s, and too much economic focus on London and south-east England. We have seen massive job losses at Port Talbot; we face an uncertain future at Grangemouth; and we still bear the scars of the loss of the mining industry. Regional inequality is stark, and in my constituency of Mid and South Pembrokeshire, the rate of child poverty is steadily increasing.

And of course there is our climate crisis: wildfires in California, torrential rain in Spain, and extreme heatwaves and longer droughts. Even walking through the village of Angle in Pembrokeshire with members of the local community council, it is all too easy to see the increase in frequency of flooding, not to mention its damaging impact on residents and local farmers.

Prior to the general election of 4 July, my right hon. Friend the Chancellor set out her economic vision of securonomics: we would make, sell and buy more in Britain, and so deliver energy security and create good, well-paid jobs while tackling the climate crisis. My Labour colleagues and I stood for election on that manifesto, and it is time to deliver. At a time when the challenges are so great and the need for leadership is so acute, it is vital that the Crown Estate has greater scope to rise to those challenges and do its part for the revitalisation of our great nation.

The provision in clause 3 that commissioners at the Crown Estate

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

is therefore to be welcomed. That amendment was hard fought for by the noble Lords in the other place, and I commend them for it. However, it is our duty in this House to provide clarity about the meaning and scope of “sustainable development”, and about the mechanism for enforcing that provision. Maintaining transparency and accountability is critical for an organisation as big and influential as the Crown Estate. Allowing the estate to define “sustainable development” and report annually is a move straight out of the environmental, social and governance playbook. Given the financial firepower that this House is granting the Crown Estate, allowing it to effectively self-regulate on an issue of national importance is a dereliction of our democratic duty.

Under amendment 5, the commissioners must have regard to net zero, regional economic growth and energy security. It would not impede the independence of the Crown Estate, but would provide unambiguous purpose and direction on an otherwise undefined and unexplained term. It should therefore be welcomed.

[Jim Shannon (Strangford) (DUP)]

Of course, a key issue for all of us in the United Kingdom, and certainly for us in Northern Ireland, is the fishing sector. Any net zero development, such as a wind farm—wind farms have been proposed for my constituency in the past—could have a direct impact on the fishing sector there. Does the hon. Gentleman share my concern that the fishing sector could be impacted by measures that take away the opportunity to fish in the seas around this United Kingdom of Great Britain and Northern Ireland, to the detriment of those in the sector, and their families?

[Henry Tufnell]

The fishing industry has a great history in my constituency, and it is vital that the Crown Estate takes on board the issues in the fishing industry when it looks at leasing and consenting. I thank the hon. Gentleman for that intervention.

I am grateful also to the Minister for his assurances in Committee that the public framework document will give context to clause 3, on sustainable development. However, no text has yet been shared with this House, nor will any be shared until after the Bill receives Royal Assent. This reduces scrutiny and will encourage a retrospective review, rather than a proactive approach. Furthermore, relying on a public framework document reduces this House’s ability to ensure that the clause is properly enforced. What is the mechanism for enforcement in the event of non-compliance? What if the Crown Estate failed to report in good faith—what would the penalties be?

Off the back of Labour’s resounding victory last July, we know there is democratic consensus across the nation on our economic vision, which promotes energy security, regional economic growth and net zero, yet the Crown Estate appeared to be relying on the window dressing of ESG standards to obfuscate its desire to maximise its 12% of profits, at the expense of our nation.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The hon. Gentleman is making a powerful argument, and I share his concern for communities such as Milford Haven, in which renewable development will be critical in future. I am sure he will also agree that devolution of the Crown Estate would be a key way to make the best use of supply chains, and to ensure that money stays as local as possible, particularly in Wales.

[Henry Tufnell]

I thank the right hon. Lady for her intervention. I sometimes feel, though, that the ideas of her party are slightly for the birds. The idea of devolution—where is their plan? There is no plan. What are the practicalities?

[Ben Lake (Ceredigion Preseli) (PC)]

I thank my friend and constituency neighbour for giving way. The plan is quite simple: we could look at what is happening at this very moment in Scotland.

[Henry Tufnell]

The issue, though, is the practicalities. Is the hon. Gentleman going to draw an artificial line in the Celtic sea? What about the issue of consenting? What would that do for the leasing rounds, when certainty of investment for the private sector is so critical at this stage?

Furthermore, other Government agencies and Departments have to take account of this economic vision. In its latest contract for difference round, the Department for Energy Security and Net Zero set a criterion of achieving shorter supply chains, in order to ensure that manufacturing facilities, installation firms and ports are located in areas of deprivation. It also adheres to science-based targets, which are goals that businesses set to reduce their greenhouse gas emissions in line with obligations under international treaties, so that we can reach net zero by 2050.

The national wealth fund has an overall goal of increasing investment in resilient and sustainable infrastructure to support the UK’s net zero transition, and to contribute to improved local economic opportunity and productivity. In partnering with the private sector and local government, the national wealth fund has two clear strategic objectives: to tackle climate change and to support regional and local economic growth.

Great British Energy facilitates, encourages and participates in the production, distribution, storage and supply of clean energy, the reduction of greenhouse gas emissions, improvements in energy efficiency and measures for ensuring the security of energy supply.

18:43

In providing clarity of purpose, this House is not overreaching and dictating individual organisational decisions; instead, it is setting out a broader direction of travel, based on the democratic will of the people of this great country. In my constituency, people are desperately in need of that radical intervention to address the high levels of social deprivation and bring back economic prosperity.

To be clear, I support the Bill. However, in order for this Government to deliver on their election manifesto, the Crown Estate must be given clear purpose and direction that are directly aligned with the Prime Minister’s plan for change.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[James Wild (North West Norfolk) (Con)]

It is a pleasure to speak on Report, Madam Deputy Speaker. I will focus on amendment 4 and new clauses 5 and 6, which I tabled.

The Bill was developed under the previous Conservative Government to increase the Crown Estate’s ability to compete by providing a broader power to borrow, in order to maintain and enhance the value of the estate and the income derived from it. The assets managed by the Crown Estate, which total £15.5 billion, are not the property of the Government, nor are they part of the sovereign’s private estate; they are held in right of the Crown. Appropriate scrutiny of the Crown Estate is therefore essential, which is what the amendment and new clauses I have tabled seek to ensure. Over the past decade, the Crown Estate generated £4.1 billion for the nation’s finances, and it believes that the measures in the Bill will enable it to generate an additional £100 million in revenues to the Treasury by 2030, which is a prize worth seeking.

Before speaking to the measures in my name, I turn briefly to new clause 1, which proposes devolution of the Welsh functions of the Crown Estate to the Welsh Government. I wonder whether the hon. Member for Ynys Môn (Llinos Medi) has support from businesses for this change, as splitting the Crown Estate at this time would introduce risk for assets and revenue streams. In Committee, we heard about the potential problems and complexity of licensing of the Celtic sea, to which the hon. Member for Mid and South Pembrokeshire (Henry Tufnell) just referred.

[Ben Lake]

I am very interested to hear the hon. Gentleman’s arguments against devolving the administration of the Crown Estate to Wales. The previous Government— his Government—devolved those same powers to Scotland. Can I ask him, very simply, why it works for Scotland, but is too complicated for Wales?

[James Wild]

We are dealing with the Bill in front of us today. To do so at the moment would be too complex for the licensing reasons and other reasons set out in Committee, which could undermine the returns that would be made for taxpayers, whether in Wales or other parts of the country.

The hon. Member for Mid and South Pembrokeshire spoke to amendment 5, a version of which was moved in Committee on his behalf. We recognise that the amendment has been revised. However, as I said in Committee, we are cautious about putting more obligations on the Crown Estate than clause 3 already does; there is danger of the overreach that he spoke about. I am sure he will be listening to the Minister’s speech with some interest.

The kernel of the Bill is the expansion of the power of the Crown Estate to borrow, but there is a lack of parliamentary oversight on borrowing levels. Amendment 4, which appears in my name, would limit borrowing to a net debt-to-asset value ratio of no more than 25%, which could be amended by affirmative regulations. That would, I believe, be a proportionate check on this new borrowing power. When pushed in Committee, the Government again stated that limits on borrowing are best set outside legislation in a memorandum of understanding, but a memorandum of understanding is all too easily altered at the stroke of a pen—a point the Minister did not address in Committee. Will he give an undertaking, at the very least, that any changes to a memorandum of understanding would be reported to Parliament?

Given that Parliament is being asked to remove the restriction on borrowing and that the Government agree there should be a limit, I struggle to see why the cap should not be set in legislation, with the ability to amend it. Borrowing more than 25% carries risk, which could ultimately affect the sustainability of the estate. That is why the Government themselves have accepted that there should be a limit. As this new power affects assets held on behalf of the nation, it should be subject to control. This would be a perfectly reasonable check, and I hope Members will back it.

New clause 5 would require the Crown Estate to seek Treasury approval for disposals amounting to 10% or more of its total assets, and then to lay a report before Parliament. Disposal of assets has been an important part of the discussions throughout the proceedings on the Bill, both here and in the other place. Indeed, clause 5 was introduced after pressure to require Treasury consent before disposing of any of the Crown Estate’s rights or privileges in relation to the territorial seabed. That is a welcome safeguard, but can the Minister conceive of any circumstances in which the Government would approve of such a sale? Can he give a commitment that national security would be at the fore in any consideration of such a proposal? Would Ministers come to the House before agreeing to any such disposal?

In Committee, the Minister stated that the current process dictates that the Government will be consulted on any potential sale of a nationally significant asset. How does he define nationally significant? He also argued that requiring Treasury consent for large disposals would undermine the flexibility that the Crown Estate needs to operate commercially, but the proposed new clause simply requires Treasury consent to be sought and then reported to Parliament. The Crown Estate will not suddenly decide tomorrow to dispose of an asset; it will go through its internal processes and business cases. A version of those papers could be provided to Ministers and, depending on the Ministers, there could be a very rapid approval process that does not compromise flexibility but ensures accountability. These assets are held for the benefit of the nation, and we should ensure some form of transparency and scrutiny.

New clause 6 would require the Chancellor to lay before Parliament any partnership agreement between the Crown Estate and GB Energy. That is fundamental, as without being able to see details of the agreement, we do not know what has been agreed. There is a lack of clarity over how this new partnership will work. We are still concerned that it has been created for political rather than economic reasons. The Opposition are sceptical about what the Government say about GB Energy, because during the election Labour claimed that GB Energy would cut energy bills by £300, but bills are going up. The chairman of GB Energy has refused to say when people can expect £300 off their energy bills. We know that GB Energy will spend £8.3 billion of taxpayers’ money, but will not generate any energy, be an energy supplier or save families £300.

We are concerned that at all stages the Government have resisted greater transparency. When pushed on Second Reading and in Committee, the Exchequer Secretary said that while the partnership agreement itself will not be published since it will be commercially sensitive, the Crown Estate is committed to publishing information relating to the partnership as part of its existing annual report. However, the provisions to include that in an annual report could result in a considerable lag after such an agreement becomes operational and in only limited detail being published. Frankly, that is not good enough, which is why we have tabled new clause 6.

Transparency is important because we do not know how much the Crown Estate may invest in GB Energy’s projects. We do not know what level of funds from this borrowing power could be used for that purpose. When I asked the Crown Estate how it would decide between projects that GB Energy favours and others that may have a higher rate of return, I was told that there would be a business plan for the partnership. That shows a further lack of transparency, as I assume the Minister will not place that before the House. I also asked about decision making for the partnership, and the response was:

“The intention is that both parties will seek agreement on investment decisions whilst retaining their own independence. The Crown Estate will not be compelled to agree to anything which it does not wish to agree to in fulfilment of its statutory duty.”

I note the use of “intention” and “compelled”.

There is a lingering concern that Ministers may pressure GB Energy and the Crown Estate to invest in the Energy Secretary’s pet projects. Clearly, the chairman of GB Energy is very close to the Labour party, and nominating a Labour party donor as the chairman of the Crown Estate adds to this concern. Publishing the agreement could help allay concerns about the Government’s intentions.

If the Minister contends that the agreement, which does not yet exist, is too commercially sensitive, will he consider making a redacted version available? As I said in Committee, will he consider providing the agreement to the Public Accounts Committee on a confidential basis? As a former member of that Committee, I know of a precedent for that: in January 2018, the Cabinet Office provided a risk register of strategic suppliers to Government—a very sensitive document—to that Committee, which provided assurance on behalf of the House. I remain concerned about political pressure being put on the Crown Estate and urge Members to support our new clause 6, which would simply require the Chancellor to lay the partnership agreement before Parliament.

The Crown Estate Bill will deliver the modernisation of the Crown Estate. Our amendments and new clauses would ensure appropriate oversight and transparency as it delivers on its primary duty to maintain and enhance the value of the assets and the return for taxpayers.

[Matt Rodda (Reading Central) (Lab)]

It is a pleasure to contribute this evening. I will speak in favour of the Bill and address some of the amendments and new clauses, although there probably is not time to address them all. The Bill is an important and necessary step to help the Government take speedy action to tackle the climate emergency, and to help ensure energy security. It modernises the management of the Crown Estate, as we have heard, which potentially is a sleeping giant of green energy provision. The estate is responsible for vast amounts of coastal land and seabed, which have enormous potential to deliver wind power and other renewables.

Tackling the climate emergency is a significant challenge, but it is achievable. However, we need to step up to the challenge, and the Bill is part of a wider transformation of Government policy to do exactly that. As we heard in Committee, the Bill is urgently needed because although the Crown Estate has enormous potential, the rules governing its management are unduly restrictive. For example, the Crown Estate Act 1961, which governs the estate’s management of its resources, sets out rules that would now be deemed inappropriate for holding very large cash balances. That makes it difficult for the Crown Estate to work with private investors to develop new wind energy and to transmit urgently needed new power to the grid. There is a clear need for these measures. I hope that, after sufficient debate, it is time for the Bill to make further progress.

I would like to support the Minister by briefly pointing out the inherent errors of some of the new clauses and amendments. New clause 5 seeks Treasury approval for the disposal of more than 10% of the Crown Estate’s assets. Clearly, that would reduce flexibility for the Crown Estate in managing its estate and business. New clause 6 would require the Chancellor to lay any partnership agreement between the Crown Estate and GB Energy before Parliament. However, as we have heard, partnership agreements are normally commercially sensitive, and there could be a risk to further business if that was carried out.

Let me turn briefly to the amendments. Amendment 3, which in my opinion is misconstrued, would require the commissioners to assess the adequacy of protections against coastal erosion in areas affected by their offshore activities. However, the UK already has a whole series of dedicated statutory bodies in each of the devolved Administrations that are tasked with exactly that activity.

Equally, amendment 5 is unnecessary. It would ask the Crown Estate when reviewing the impact of its work to consider the impact on net zero targets, regional economic development and energy security. However, it is clear that the whole Bill is intended to tackle the challenge of addressing and eventually reaching net zero. Referencing specific targets risks further complicating what is already an important Bill that has had considerable discussion in Committee.

As my right hon. Friend the Chief Secretary said at an earlier stage, this is an important Bill to help the UK achieve our climate targets, and it is a significant step forward in helping us retain energy security. It is time for the whole House to support it.

[Madam Deputy Speaker (Judith Cummins)]

I call the Liberal Democrat spokesperson.

19:00

[Pippa Heylings (South Cambridgeshire) (LD)]

I extend my thanks to colleagues in the other place, the Public Bill Office staff and those in this House who served on the Bill Committee. Their efforts have been invaluable in scrutinising and refining the Bill. I support the Bill. However, the Liberal Democrat amendments seek to ensure that it delivers for both people and the planet. While the Bill presents opportunities—it aims to enhance energy security, create new jobs and bring us closer to achieving our climate targets—we must not lose sight of the need for financial accountability, proportionate borrowing caps, the duty to protect nature in the marine environment and the necessity of taking communities with us and providing them with clear, tangible benefits.

It is important to note that our discussion coincides with the third anniversary of Russia’s invasion of Ukraine and its consequences not only for the Ukrainians suffering the war, but for families here in the UK with volatile, skyrocketing energy prices due to our reliance on fossil fuels from authoritarian regimes like Putin’s: a stark reminder of the need to secure the production of our energy here in the UK. The last Conservative Government set the UK back both in meeting our climate targets and in seizing the opportunity to be global leaders in green energy due to indecision and broken pledges. We have the chance to be global leaders in offshore floating wind, which is why the Bill is so important.

I speak to amendment 2 to clause 3, which I hope we will vote on tonight. It would ensure that sustainable development was clearly defined in the Crown Estate’s framework agreement, explicitly including a reference to a climate and nature duty. The Crown Estate plays a crucial role in managing our land, seas and natural resources. It is central to offshore wind expansion, biodiversity conservation and sustainable land use. Given its influence, merely requiring its commissioners to “keep under review” their impact on sustainable development is insufficient without a clear definition and accountability of what that entails, as the hon. Member for Mid and South Pembrokeshire (Henry Tufnell) mentioned. That is key to ensuring that there are social and economic considerations in all investments and that the costs and benefits—in particular to local communities and local economies—are taken into consideration.

The amendment builds on Baroness Hayman’s concession in the other House. She said:

“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.”—[Official Report, House of Lords, 5 November 2024; Vol. 840, c. 1448.]

By clearly defining sustainable development in the Crown Estate’s framework agreement, the amendment would establish a benchmark for accountability in line with existing legislation. In contrast with the amendment tabled by the hon. Member for Mid and South Pembrokeshire, this amendment mentions nature, too, and builds on the agreements in the other House. It seeks to enshrine the assurances given to the Lords, ensuring that the framework agreement would indeed include a climate and nature duty, aligning the Crown Estate’s responsibilities with the UK’s legally binding climate targets under the Climate Change Act 2008 and nature restoration goals under the Environment Act 2021. It is about more than environmental stewardship; it is about future-proofing the Crown Estate’s decisions against the economic risks of climate change and nature loss.

I strongly support new clause 3, which would ensure that the Bill brought local communities along with it. That is essential. We tabled the new clause to guarantee that coastal and rural communities would see real benefits from Crown Estate activities. It would require a proper assessment of community benefits before investment decisions are made, and mandate that at least 5% of net profits be reinvested in affected areas.

Coastal communities need to see both jobs and a fair financial return from large-scale developments around them and off their shores. The Crown Estate generates billions from offshore wind, marine industries and land developments, yet local people often see little direct benefit. The new clause would redress that imbalance, ensuring that such communities impacted by change actively benefit from it. It is about fairness and economic regeneration. If the Government are serious about levelling up, they should back the new clause, which would ensure that the Crown Estate’s success was shared by all, not just a privileged few.

We have other amendments, too—we were busy in Committee. New clause 2 focuses on marine spatial planning co-ordination and would ensure that the Crown Estate duly collaborated with the Marine Management Organisation, which has the mandate to make decisions about marine spatial planning, and that fishing communities were fully consulted. That aligns with work going on for years as Liberal Democrats have called for comprehensive land and sea use frameworks to resolve conflicts, determine priorities and improve co-ordination. With growing pressures from offshore wind, marine conservation, fishing and tourism, decision making must be joined up. Marine plans balance economic, environmental and social interests.

The Crown Estate must work closely with the Department for Environment, Food and Rural Affairs’ marine spatial prioritisation framework and the MMO’s expertise, as well as other relevant consultees such as heritage. The Government amendment requiring ministerial approval for seabed sales is an important and positive step, recognising its national importance. However, that highlights the broader need for transparency and oversight in marine planning. The new clause seeks to avoid potential conflicts of interest in prioritising and decision making arising from the Crown Estate’s new borrowing and investment powers.

Members may have noticed a theme running through the Liberal Democrats’ amendments: that of ensuring that local communities both benefit from and have a real say in decisions that will affect them as a result of the Bill. That is why we have also tabled new clause 4. While the appointment of commissioners for Wales, England and Northern Ireland is a positive step, Wales still lacks the legal and financial control over the Crown Estate that Scotland enjoys. Welsh communities must also stand to benefit from the changes introduced by the Bill.

I hope that the Government and the Opposition will join the Liberal Democrats in supporting amendment 2 to ensure that sustainable development within the Crown Estate’s framework agreement is clearly defined and includes a climate and nature duty. The Bill presents a trident of opportunity—it can enhance energy security, create jobs and bring us closer to achieving our net zero targets—but we cannot afford to lose sight of the need for financial accountability, the duty to protect nature, and the need to ensure that all communities are included in the crucial journey to net zero.

[Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)]

The Bill is not just about numbers on a spreadsheet. Ultimately, for my constituents, it is about jobs, opportunities and a better future for places like Wolverhampton North East. Right now, the Crown Estate is held back by outdated rules that limit its ability to invest. It is forced to sell assets just to raise capital. That is not sustainable, and it is stopping us from reaching our full potential.

The Bill changes the game, giving the Crown Estate the power to borrow, invest and back long-term projects that deliver real benefits for our communities. Wolverhampton North East is ready to seize those opportunities. With our forthcoming green innovation corridor, world-class manufacturing industry and skilled workforce known for its true graft, we are perfectly placed to drive the UK’s green economy.

The Bill means more funding for renewable energy, more investment in advanced manufacturing and more demand for the products we make in Wolverhampton and Willenhall. More investment means more jobs, more apprenticeships and more chances for young people to get the skills they need to build a career in the industries of the future, whether in engineering, fabrication or high-tech manufacturing. The Bill will help us to build more, make more and sell more in Wolverhampton and Willenhall, right in the heart of the Black Country.

The unprecedented £60 billion partnership between Great British Energy and the Crown Estate will supercharge offshore wind development, creating huge opportunities for our local businesses. This is not just about turbines on land or at sea—we know that Wolverhampton and Willenhall are not geographically suitable for offshore wind—but about the supply chains, the manufacturing and the innovation that we can drive in towns and cities like Wolverhampton and Willenhall.

[James Naish (Rushcliffe) (Lab)]

Just this morning, the CBI has said that Britain’s net zero economy is booming. The sector is growing three times faster than the overall UK economy, the average salary in the net zero sector is £5,600 higher than the national average and productivity in the sector is nearly 40% higher than in the wider economy. Does my hon. Friend agree that this is an industrial opportunity for this country that we cannot afford to ignore, and that this Bill will help us to realise this opportunity and make it more achievable?

[Mrs Brackenridge]

I absolutely agree. This is an example of how this Government will respond to the changing world that we live in. This Bill is about backing British industry, investing in local communities and making sure that places such as Wolverhampton North East lead the way in the UK’s future success.

[Chris Vince (Harlow) (Lab/Co-op)]

Does my hon. Friend agree that removing these outdated restrictions on the Crown Estate will allow a greater return for the public purse and benefit all our constituents across the country, including her own in Wolverhampton and mine in Harlow?

[Mrs Brackenridge]

I do agree with my hon. Friend, and based on the make-up of our constituencies, we come from a different angle from other Members who have raised important points in the debate. For us it is about jobs, apprenticeships and our local economy, so I back this Bill and I hope that the House will join me in doing so.

[Steff Aquarone (North Norfolk) (LD)]

I want to speak to amendment 3, tabled by my hon. Friend the Member for South Cambridgeshire (Pippa Heylings), which deals specifically with coastal erosion. My constituency plays host to a whole load of energy infrastructure that is vital to our security and our renewable transition. We have the Bacton energy hub, which is on track to make the exciting transformation from being a key asset in national gas to hydrogen production and carbon capture. It is one of my constituency’s largest employers, but it is also of national significance because of the role it plays in our energy ecosystem. It is therefore understandable that, a few years ago, a £20 million sandscaping scheme was welcomed. It gave protection not only to the energy terminal but to the villages of Bacton and Walcott that surround it. One local business owner spoke of how such a scheme means he no longer feels “trepidation” when he checks the weather forecast.

Just down the coast in the village of Happisburgh, the Norfolk Boreas and the Norfolk Vanguard wind farms make their landfall. Happisburgh has been at the frontline of the coastal erosion suffered in north Norfolk, with 40 homes already lost to the ever-encroaching North sea. This is a village battling the real-world impacts of climate change, and it is doing its bit to fight back by hosting renewable energy infrastructure, but it has had no additional protections. This double standard seems deeply unfair. It is in our interest to protect the renewable energy infrastructure we are building, but it is also in our interest to protect the communities that live alongside it.

People in Happisburgh have lived with the looming threat of coastal erosion and frequently feel left behind or forgotten about, and it seems as though this is just another example of this happening. I am sure that if there were an erosion risk of this scale in central London or the south-east, the Government would move heaven and earth to take action, but in North Norfolk, right at the eastern edge of our island nation, people feel despondent about the situation they are facing. Our amendment seeks to right this wrong. We believe that when these reforms to the Crown Estate allow for new renewable energy products, efforts must be made to secure the coastline where they make landfall. Renewables are our future, and we have to make sure that the communities that host key infrastructure have a future too.

I am aware that the Minister did not support this amendment in Committee. I am not expecting the recess to have led him to a Damascene conversion, but I hope that he can provide some reassurance today on how the Government will look at this double standard for energy products and what steps they will be taking to provide protection to villages such as Happisburgh that are doing all the right things but feel they do not get their fair share back. I would also be happy to welcome him and any of his Government colleagues to Happisburgh to see the situation for themselves. I honestly believe that bearing witness to the way that our coastline is being ravaged by climate change, meeting the people it affects and understanding what we are set to lose will spark anyone into supporting radical action to stop this coming to pass. I would be delighted if the Government could back our amendment today, but if they are unable to do so, I hope that the Minister’s team will be able to provide promises of progress for the residents of Happisburgh and all the other communities who live with the existential threat of coastal erosion.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

I was on the Bill Committee and I have followed the Bill throughout, mainly because I represent Truro and Falmouth, which has huge potential to benefit from floating offshore wind, with Falmouth docks and our position in the Celtic sea. If the build-out in the Celtic sea is done quickly and done well, our young people will benefit from good, well-paid jobs in a strong local supply chain. I also want to mention the CBI report published today, which shows how the green economy has grown three times faster and has higher wages than the national average across the board. We in Falmouth could really do with some of that, so I welcome this Bill.

19:15

The changes to the powers of the Crown Estate will enable it, in partnership with GB Energy, to invest in ports such as Falmouth without selling its assets, as well as mapping the seabed and front-loading the leasing rounds and local supply chains. As I said in an earlier debate, when a college in my constituency was struggling to get funding for a level 2 course on floating offshore wind engineering for local 14 to 16-year-olds, the Crown Estate stepped in with a year’s funding to allow it to go ahead on a pilot scale. Now, with these changes, more positive interventions like this could be made, which would be really welcome in places such as Truro and Falmouth, where further education colleges are struggling to get the go-ahead for these kinds of courses.

New clause 2 deals with marine spatial planning. We need a spatial strategy for the ocean that links energy, fishing and nature restoration, and that has to be done in consultation with all the industries and with environmentalists, but this Bill is not the place to do that. New clause 3 deals with community benefits. Communities will benefit so much from the economic boost that this Bill will enable, with training and education, good jobs, supply chains and investment in our ports.

Amendments 2 and 5 cover issues that we discussed in the Bill Committee. I would simply ask the Minister to give an assurance that the public framework will have regard to environmental, regional and economic growth, and social value benefits, and to confirm that this reform will enable the Crown Estate to invest in a wider range of high-impact projects across the UK, strengthening floating offshore wind, nature recovery and benefits to those regional economies.

The partnership between the Crown Estate and GB Energy has real potential to be a huge force for good—we really feel that down in Cornwall. It will spearhead the development of offshore renewable energy in a speedy but sustainable way, investing in energy production initially and laying the groundwork for our energy security of the future, as well as building our local communities, our infrastructure and our supply chains in some of the most left-behind and deprived parts of the UK.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

I rise to speak in support of new clause 4 and to express my party’s frustration with the Government’s refusal thus far to devolve the Crown Estate to Wales. It is the firm view of the Liberal Democrats, both here in Westminster and in the Senedd, that this decision is wrong for Wales and its economy. Under the current system, the profits generated from Wales’s vast natural resources flow directly to the UK Treasury, offering no benefit to the communities where that wealth is created.

The Crown Estate in Wales is set to generate millions annually from offshore wind energy leases in Welsh waters. If this money were kept within Wales, it could contribute an estimated additional £50 million to the Welsh Government’s budget at a time when public services in Wales are crumbling. It is nothing short of outrageous that the Labour Government in Westminster seek to deny Wales these vital sources of income, which could help to address the crisis in our public services, economy and infrastructure. The Labour Government’s refusal to devolve these powers further entrenches the outrageous notion by Labour and the Conservatives that Wales is a lesser nation than Scotland.

While Scotland has controlled its Crown Estate since 2017, Wales, despite having vast Crown Estate assets within its borders, has been left without those powers. The benefits of devolution for Scotland have been clear, with the Scottish Crown Estate generating over £103 million for the public finances since 2017. The excuses we have heard from the UK Government for failing to put Wales on an equal footing simply do not hold up. Patronising comments from Ministers about how devolving the Crown Estate would not be in Wales’s “best interests” or would be a “waste of time” are frankly an insult to the people of Wales.

This Government claim to support growth, but they seem determined to keep Wales from reaching its full potential. Instead of empowering Welsh communities to harness the benefits of their own resources, profits continue to flow directly to London. That is not the vision of growth to benefit local communities or level up left-behind communities; it is a continuation of the Conservatives’ failed economic model, which prioritises centralisation and investment in the south-east of England over everywhere else. It would be a great mistake if those in power in Westminster were to deny Wales the opportunity to build a better future for our communities. I hope the Government will change their mind.

[Jim Allister (North Antrim) (TUV)]

I wish to primarily address new clause 7, tabled by the hon. Members for Belfast South and Mid Down (Claire Hanna) and for Ynys Môn (Llinos Medi), and to express opposition to it. It very much reflects what is in new clause 1, in terms of seeking devolution of the Crown Estate, but in this case to the Northern Ireland Executive in respect of the assets there. I oppose that for a number of reasons. It presently is a reserved matter, and I strongly believe that is how it should stay. I say that not because that is right ideologically, but because practically it is beyond belief that the current Stormont Executive could ever handle the controversies that come with the Crown Estate.

This is an Executive in Stormont that have been in existence for almost 13 months and still cannot agree a programme for Government. If we were to hand them something as controversial as control of the Crown Estate, we all know what the outcome would be. Why is it controversial? For one specific and historical reason. Lough Foyle is controlled and owned by the Crown Estate. It is a piece of water that separates County Londonderry, which is in Northern Ireland, from County Donegal, which is in the Republic of Ireland, but the entirety of Lough Foyle since last we had a King Charles rests under British control. In 1662, Charles II gifted Lough Foyle, the surrounding waters, the seabed and the waters within it to the Irish Society. The Irish Society was a conglomerate of various companies from the City of London, which did a great deal to develop and build the city of Londonderry; and as part of that, I presume, it was gifted control over Lough Foyle. In 1952, the Irish Society conveyed Lough Foyle to the Crown Estate.

A divided Executive in Northern Ireland would be hopelessly incapable of resolving the issues that flow from the somewhat controversial aspect of the entirety of Lough Foyle, right up to the coastline of County Donegal, being properly, legally and in perpetuity in the control of the Crown Estate. Therefore, devolving the Crown Estate to the Northern Ireland Executive would be disastrous for the good management of the lough and for the uncontroversial continuance of its ability to be developed. That might be a particular situation, but it is in addition to my opposition from an ideological point of view and my belief that the Crown Estate is a national asset that should continue to be of a reserved category. I think the proposition in new clause 7 would be the utmost folly; I trust that the Government will resist it and that the House will reject it.

[Jim Shannon]

It is a pleasure to contribute to the debate; I will follow on from what the hon. and learned Member for North Antrim (Jim Allister) seeks. I want to make a specific request, which I did when I intervened on the hon. Member for Mid and South Pembrokeshire (Henry Tufnell).

My issues with the provisions primarily relate to the fishing sector and the impact on fishing fleets around the whole of the United Kingdom of Great Britain and Northern Ireland, but particularly in Strangford for Portavogie, and Ardglass and Kilkeel in South Down. I appreciate the opportunity to speak on an issue that affects Crown Estates in the entirety of the United Kingdom.

As the Library briefing outlines, the Crown Estate focuses on activities that align with wider national needs, including energy security and sustainable economic growth. It manages the seabed and much of the coastline across England, Wales and Northern Ireland, playing a

“fundamental role in the sustainable development of this national asset, including the UK’s world-leading offshore wind sector.”

I am not against wind turbines and the green energy they produce, but I am concerned about the impact on the fishing sector. I want to state my concerns and express my support for the fishing fleets at Portavogie, Ardglass and Kilkeel, where fishing is an important economic sector, providing jobs and investment. That has been happening for hundreds of years, and I want to see that tradition maintained. I hope that when the Minister sums up, he will reassure fishing communities that any development will not be to the detriment of the fishing sector.

[Jim Allister]

Does the hon. Member agree that one of the problems in this territory is that we do not yet have the definition of what is meant to be sustainable? On reading the Bill, it appears that the whole focus of what sustainable will be is on the green energy side, rather than what will sustain the fishing industry.

[Jim Shannon]

That is the thrust of where I am coming from. I am not against the idea of green energy, but I want to ensure the sustainability of the fishing sector over the years. It has been sustainable and still provides jobs in Kilkeel and Ardglass, and I want it to continue to do so. That would be my concern as well.

The fishermen in my area are well aware of the limitations brought about by Crown holdings on the coastline, and concerns have been expressed to me regarding the partnership announced by the Government for the Crown Estate and Great British Energy—the very issue that the hon. and learned Member for North Antrim refers to—to bring forward new offshore wind developments. I wholeheartedly welcome renewable energy and attempts to harness the reliable energy of our vast seas and loughs, but only inasmuch as they do not stop the fishing sector from operating and being successful. That must always be the key consideration. If we were to lose one of our primary sectors in fishing and to gain wind turbines and green energy, that would be something that the Government would have to consider sensibly.

Similarly, the regeneration and development department in my local Ards and North Down council has highlighted the additional red tape that comes from leasing or altering existing leases to the Crown Estate. That being said, the council is also thankful for the open doors and accessibility when needed. However, it has been seen that there is a willingness to consider the national needs when requests are made for alterations, and that is appreciated. When we look at the national needs, we want to ensure that they do not take away from the local needs of those in Strangford, in Ards and North Down and in the fishing fleets and those who own land and farms around the Irish sea and Strangford lough.

During 2023-24, the Crown Estate generated a net revenue profit of £1.1 billion. Over the past decade, it has returned £4.1 billion of net revenue profit to the Treasury. We must ensure that the Crown Estate is being run at ultimate capacity and is bringing money into our coffers, but also that it has a socially conscious operating model and that it is being used to do good for everyone, including the fishing sector in my constituency.

I was very much inspired, as we probably all were, by the Prince of Wales’s scheme on homelessness, and by the fact that he is using his personal estate, the Duchy of Cornwall, to build 24 homes to help tackle homelessness. The construction of the first homes in Nansledan, Newquay, is due to be complete in autumn 2025. That good work should inspire us all to ensure that a Crown Estate operated by a team appointed by the Prime Minister attempts where it can to make such an impact for the common good.

19:30

My understanding is that the Bill would broaden the scope of activity that the Crown Estate can undertake to support the delivery of its core purpose to include activities across net zero, nature recovery, economic growth—that covers the fishing sector—and more, so that it can generate returns for the public purse. The Bill will also enable the Crown Estate to invest in capital-intensive projects more effectively. If that is the case, I will support the Bill, as long as we remember our obligations to existing businesses and partnerships, including in the fishing and industrial sectors. I welcome the appointment of a commissioner who will have an eye over Northern Ireland. Will the Minister reassure me, the hon. and learned Member for North Antrim and other affected Northern Ireland Members that elected representatives can have direct contact and discussion with the commissioner on any fishing sector issues that come to our attention?

I welcome the progress of the Crown Estate, and recognise the benefit that will come from improvement, but none of that can be done on the back of existing relationships. The Minister is an honourable man—we know that. He has set out to help us and reassure us on many things—although, for the record, there has not been too much reassurance lately. I seek assurances for the fishing sector in Strangford, and in South Down. Given that the Member of Parliament for that constituency does not even attend Parliament, I find myself with the duty to work on behalf of the fishing fleets in Ardglass and Kilclief. The fishing fleets are all in the boat together—to use a pun—and all need help. If the Minister can reassure us, he may go some way towards reassuring the fishing sector, which is not quite sure yet about what is happening.

[Madam Deputy Speaker (Judith Cummins)]

I call the Minister.

[The Exchequer Secretary to the Treasury (James Murray)]

I thank all hon. Members who have contributed to the debate, and provided further detail about their amendments or concerns.

I start by making it clear that the Government have carefully considered all amendments throughout the passage of the Bill. Where we have agreed with the intent behind an amendment, we have worked hard to find an appropriate way forward. That was evidenced in the changes made by this House to ensure appropriate protections for our seabed. As a result of changes made to the Bill, the Crown Estate will now be required to seek the approval of the Treasury for any permanent disposal of the seabed. I thank the Opposition for a constructive debate on that matter. Alongside that, further changes made in the other place have helped to strengthen the Bill, including changes to require the appointment of commissioners with special responsibility for giving advice about England, Wales and Northern Ireland; a reporting requirement in respect of activities with Great British Energy; and a requirement relating to sustainable development. In that spirit, I have considered the amendments that are before us.

I thank the hon. Member for Ynys Môn (Llinos Medi) for tabling new clause 1, under which, within two years of the day on which the Act commences, the Treasury must have completed the transfer of responsibility for management of the Crown Estate in Wales to the Welsh Government. It would allow the Treasury, by regulations, to make provision about the transfer relating to reserved matters as necessary, and would require it to ensure that no person in Crown employment has their employment adversely affected by the transfer of responsibility.

I also thank the hon. Member for South Cambridgeshire (Pippa Heylings) for tabling new clause 4, to which her colleague, the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick), also spoke. It would require the Treasury to set out a scheme for transferring all Welsh functions of the Crown Estate commissioners to Welsh Ministers or a person nominated by Welsh Ministers. The Welsh functions would consist of the property, rights or interests in land in Wales, and rights in relation to the Welsh zone. As I set out in Committee, the Government believe that there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form.

New clause 4 would most likely require the creation of a new entity to take on the management of the Crown Estate in Wales—an entity that, by definition, would not benefit from the Crown Estate’s current substantial capability, capital and systems abilities. It would further fragment the UK energy market by adding an additional entity and, as a consequence, it would risk damaging international investor confidence in UK renewables. It would also risk disrupting the National Energy System Operator’s grid connectivity reform, which is taking a whole-system approach to the planning of generation and network infrastructure. Those reforms aim to create a more efficient system and reduce the time it takes for generation projects to connect to the grid.

[Ben Lake]

I am grateful to the Minister for outlining his concerns about devolving the Crown Estate to the Welsh Government—he listed a number of them. Am I right in saying that he believes that the devolution of powers from the Crown Estate to Scotland has fragmented the market, and is in some way to the disbenefit of people in Scotland?

[James Murray]

The matter that we are considering today, through the two new clauses that I have mentioned, is the proposal by Opposition parties for devolution to Wales. We are not analysing what may have happened in Scotland, historically; we are looking at the proposals put to us in those new clauses, which I am addressing.

To be clear, the cumulative impact of the changes that the hon. Member for Ynys Môn is suggesting in her new clause would likely be to significantly delay the pathway to net zero.

[Liz Saville Roberts]

The Minister said that the Bill would be beneficial to the people of Wales as it stands. Could he quantify that benefit, please?

[James Murray]

If the right hon. Member waits just a moment, I will come to some of the direct benefits for the people of Wales of retaining the Crown Estate in its current form.

It is important to emphasise that the Crown Estate’s marine investments are made on a portfolio-wide basis across England and Wales. Devolving to Wales would disrupt existing investments, as they would need to be restructured to accommodate a Welsh-specific entity. To devolve the Crown Estate at this time would risk jeopardising the pipeline of offshore wind development in the Celtic sea, which is planned for into the 2030s. The Crown Estate’s offshore wind leasing round 5 is spread across the English and Welsh administrative boundaries in the Celtic sea. It was launched in February last year and is expected to contribute 4.5 GW of total energy capacity—enough to power 4 million homes.

In addition to energy, the extensive jobs and supply chain requirements of round 5 will also likely deliver significant benefits for Wales and the wider United Kingdom. Lumen, an advisory firm to the Crown Estate, has estimated that manufacturing, transporting and assembling the wind farms could potentially create around 5,300 jobs and a £1.4 billion boost for the UK economy. Devolution would also delay UK-wide grid connectivity reform. The Crown Estate is using its data and expertise as manager of the seabed to feed into the National Energy System Operator’s new strategic spatial energy plan. On Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its pipeline of Welsh projects—the biggest of which is the round 5 offshore wind opportunity in the Celtic sea—can benefit from this co-ordinated approach to grid connectivity up front.

[David Chadwick]

If devolution presents such enormous barriers, why are the Government choosing to put the headquarters of Great British Energy in Scotland?

[James Murray]

GB Energy is for the benefit of the whole of the UK. It is absolutely right to locate its headquarters in Aberdeen, given the strong connection between Aberdeen and use of the assets of the North sea to generate power for the entire United Kingdom. In fact, the hon. Gentleman’s example underlines my point, which is that when different parts of the United Kingdom work together, we can achieve more than we can separately. I thank him for endorsing my point.

It would not make commercial sense to introduce a new entity, with control of assets only within Wales, into a complex operating environment in which partnerships have already been formed. Furthermore, the Crown Estate’s assets and interests in Wales are fundamentally smaller than its assets in England, and would likely not be commercially viable if their costs were unsupported by the wider Crown Estate portfolio. The Crown Estate can take a longer-term approach to its investments and spread the cost of investments across its entire portfolio. A self-contained, single entity in Wales would not have the same ability; neither would it benefit from the expertise that the Crown Estate has developed over decades of delivering offshore wind at scale. A devolved entity would be starting from scratch.

[Liz Saville Roberts]

The Minister has just told the House that Wales is too small and poor to benefit from the devolution of the Crown Estate. That is an extraordinary argument, and I am sure that the Welsh Government will share my amazement. Has he discussed that with his partners in Welsh Labour?

[James Murray]

I think the right hon. Member has misunderstood the point I was making. If we were to have a devolved entity, it would be starting from scratch midway through a multimillion-pound commercial tendering process, just at a time when the Crown Estate is undertaking critical investment in the UK’s path towards net zero—something I am sure she is keen to support.

The commercial viability of all three 1.5 GW floating offshore wind project development areas in the Celtic sea, which straddle the English and Welsh administrative boundaries, benefited from the Crown Estate’s significant investment of time, expertise and capital, which enabled their entry into the market. UK floating offshore wind, an emerging offshore technology that the Crown Estate is supporting, would be particularly vulnerable to market disruption.

It is important to underline that income generated by the whole Crown Estate benefits the people of Wales. As I have noted, the Crown Estate pays its entire net profits into the UK Consolidated Fund each year. That means that much of the revenue already supports public services in Wales, either by supporting UK Government spending in reserved areas or through the funding provided under the Barnett formula and the Welsh Government’s block grant funding.

[Llinos Medi]

As I mentioned in Committee, the Barnett formula is not a fair formula for Wales. In the Scottish model, £10 million was taken out of the block grant, but those communities received £103 million back. I think that is a fair exchange. Does the Minister not agree?

[James Murray]

The hon. Member has highlighted that the changes made in Scotland led to a reduction in the block grant to Scotland.

The focus of the new clauses is the proposal to devolve Crown Estate capabilities to Wales. As I am setting out, that would not make commercial sense when it comes to advancing greater energy capacity, or when it comes to increasing the Crown Estate’s net profit, which is of course reinvested in public services right across Wales and other parts of the UK.

I draw Members’ attention to the fact that in the other place, the Government supported the inclusion of clause 6, which requires the appointment of commissioners responsible for giving advice about England, Wales and Northern Ireland. That will ensure that the Crown Estate’s board of commissioners continues to work in the best interests of Wales.

[Jim Shannon]

I seek assurance that the ambitious net zero targets will not detrimentally affect the fishing sector. I remember some years ago there was talk of a wind farm just off the coast of Kilkeel, and the fishermen were concerned that it would be in one of their prime fishing sectors, where scallops were plentiful. If that continued, the fishing sector could lose out because the Government decided to push for net zero. I sought reassurance that Northern Ireland MPs would be able to contact the Northern Ireland commissioner directly, but I ask specifically for a wider assurance about the fishing sector in Northern Ireland—for Portavogie, Ardglass and Kilkeel.

[James Murray]

I thank the hon. Gentleman for his intervention about the impact on the fishing sector, and I can reassure him that the Crown Estate is committed to the sustainable management of the seabed. As with any developer, the Crown Estate’s proposals go through the standard planning approval process, which includes the relevant environmental assessments. Under the Crown Estate’s strategy, it has an objective to take a leading role in stewarding the natural environment and biodiversity. Key to delivering on that aim is managing the seabed in a way that reduces pressure on, and accelerates recovery of, our marine environment. Of course, the Bill will not impact directly on how much commercial fishing takes place in areas managed by the Crown Estate.

I pointed out that the inclusion of clause 6 in the Bill in the other place provided for the appointment of commissioners responsible for giving advice about England, Wales and Northern Ireland. The requirement to give advice to the board about Wales will be alongside the commissioners’ existing duties. That change will strengthen the Crown Estate’s ability to deliver benefits for the whole UK.

Hon. Members may not agree with the points I have made, but I hope that I have set out clearly why the Government believe that the existing structure remains the best approach, and I hope that hon. Members will feel that they do not need to press their new clauses to a vote.

New clause 2, which was tabled by the hon. Member for South Cambridgeshire, would require the Crown Estate to ensure that any decisions about marine spatial priorities are co-ordinated with the priorities of the Marine Management Organisation, and to consult any communities or industries impacted by the plans, including fishing communities. I confirm that the Crown Estate and the Marine Management Organisation already have well established ways of working together to ensure effective collaboration for marine spatial planning and prioritisation.

19:45

The Crown Estate’s collaboration with the Marine Management Organisation and other relevant statutory bodies is governed by the Marine and Coastal Access Act 2009. The Act establishes the framework for marine planning and licensing in the UK, and it requires the Crown Estate to have regard to marine policy documents, such as marine plans, in its decision making. The work of the Crown Estate is also governed by the habitat regulations, which require it to conduct plan-level habitat regulation assessments for leasing or licensing activities.

Furthermore, in 2020 the Crown Estate and the Marine Management Organisation jointly agreed a statement of intent, which is reviewed periodically to provide a focus on priorities and opportunities for alignment. That statement of intent complements a memorandum of understanding agreed in February 2011, which sets out a framework to encourage co-operation between parties in relation to the sustainable development of the seabed and rights managed by the Crown Estate.

[Pippa Heylings]

We will not be pressing this new clause to a vote, but the new investment and borrowing powers change the context for the 2020 memorandum of understanding. I ask for reassurance that we might seek a new memorandum of understanding between the Marine Management Organisation and the Crown Estate.

[James Murray]

I thank the hon. Member for her intervention. As I said, the Crown Estate and the Marine Management Organisation agreed the statement of intent in 2020, and it is reviewed periodically to focus on priorities and opportunities for alignment. That may provide an opportunity for review in due course to ensure that it meets current aims.

In addition to the Crown Estate’s relationship with the Marine Management Organisation, there are various regulatory requirements on developers who lease areas of the seabed from the Crown Estate to engage with the Marine Management Organisation themselves. Those include requirements through marine licensing. Developers must obtain marine licences from the Marine Management Organisation for activities that could impact on the marine environment. That process involves consultation with statutory bodies and adherence to marine plan policies.

As part of a marine licence application, developers must conduct environmental impact assessments for projects that could significantly alter the environment. That includes consultation with the Marine Management Organisation and other relevant authorities. Developers are furthermore encouraged to engage with local communities, statutory bodies and other stakeholders throughout the planning and development process to address concerns and ensure compliance with marine plans. I welcome the indication from the hon. Member for South Cambridgeshire that she feels able to withdraw the new clause, and I hope I have gone some way to addressing the points that she made.

New clause 3, which was also tabled by the hon. Member, would require the commissioners to assess plans for benefits to local communities and coastal communities in respect of offshore activities before making any investment decisions. It would also require the commissioners to transfer at least 5% of the Crown Estate’s net profit to local communities impacted by its activities. As I set out in Committee, local communities benefit economically from onshore and offshore developments—for example, through job creation and increased business for local suppliers. Local communities will also benefit in the long term as the country transitions away from volatile fossil fuel markets towards clean, domestically produced power, enhancing Britain’s energy independence and security.

As I highlighted in Committee, the Crown Estate has specifically designed the leasing process for its offshore wind leasing round 5 in the Celtic sea to require developers to make commitments to deliver social and environmental value. Tender bidders must think about how their developments can encourage healthier, more resilient and more prosperous communities, creating lasting benefits that extend beyond the lifetime of wind farm leases. Those commitments will be monitored, reported on and enforced throughout the lifetime of the relevant round 5 developments.

As I have laid out before, the Crown Estate is committed to proactively working with local communities and partners to enable employment and skills opportunities. As I mentioned in Committee, it has invested £50 million through the supply chain accelerator to stimulate green jobs and develop a green skills pipeline. It is supporting development in the skills we need for the future, through measures that range from a GCSE in engineering skills for offshore wind, seed-funded by the Crown Estate and developed with Cornwall college, to a post-16 destination renewables course with Pembrokeshire college. It is also partnering with the employment charity Workwhile to create green construction apprenticeships.

The Crown Estate already works closely with communities, charities, businesses and the Government to ensure that its skills initiatives are sensitive to market demands and emerging technologies. While I respect the concerns reflected in new clause 3, the Government consider it important that the Crown Estate retains flexibility in how its skills initiatives are funded and delivered. That enables it to contribute to skills training in the best possible way, while—importantly—not conflicting with its statutory duty to maintain and enhance the value of the estate. On that basis, I hope that the hon. Member for South Cambridgeshire feels able to withdraw the new clause.

New clause 5 seeks to limit the ability of the Crown Estate to dispose of assets without Treasury approval, by requiring it to seek consent for disposals of assets totalling 10% or more of its total assets in a single year. It would also require the Chancellor to lay a report before Parliament within 28 days of being notified of disposals above that threshold. As the Government have set out both in Committee and in the other place, in our view imposing a limit on disposals would undermine the flexibility needed to enable the Crown Estate to operate commercially and meet its core duties under the Act. It is important to emphasise that the Bill is not intended materially to alter the independence of the Crown Estate. Requiring the Treasury to approve the Crown Estate’s ordinary business transactions, which may well be caught by the new clause, would encroach on the independence of the Crown Estate. That is inconsistent with the Government’s vision for the Crown Estate.

The hon. Member for North West Norfolk (James Wild) has concerns that the Crown Estate could choose to sell off critical or significant assets—indeed, he raised that point in Committee. I reassure the House that strong safeguards are already in place to ensure that the Crown Estate maintains and enhances the estate. The first is a legislative safeguard, namely the statutory duty on the Crown Estate to maintain and enhance the value of the estate, and the returns obtained from it, while having due regard to the requirements of good management. Those are set out in the Crown Estate Act 1961 and will remain unchanged by the Bill. The second is a requirement set out in the framework document that governs the relationship between the Treasury and the Crown Estate. That document is clear that the Crown Estate should inform the Treasury of any matters concerning spending, income or finance that are novel, contentious or repercussive. The Government’s view is that that captures any proposed sales of nationally significant assets—a point the shadow Minister raised. I recognise that he may not agree, but I hope he understands the Government’s position on the matter and, as a result, feels able to withdraw his new clause.

The shadow Minister also tabled new clause 6, which would require the Chancellor to lay before Parliament any partnership agreement between the Crown Estate and Great British Energy. As I made clear in Committee, partnership agreements are highly commercially sensitive. It is therefore right that any agreement is not made public or laid before Parliament, as to do so would likely prejudice the commercial interests of the Crown Estate or Great British Energy. I hope the hon. Member feels that he does not need to push the new clause to a vote.

I will consider amendments 1 and 4 together to try to make progress as speedily as I can, Madam Deputy Speaker. They would impose a legislative limit on the amount of borrowing that could be undertaken by the Crown Estate, and both would require the Government to introduce affirmative regulations, setting out a borrowing limit of no more than a 25% net debt-to-asset value ratio. I thank hon. Members for their contributions on this matter. The Government recognise that borrowing controls are an important consideration for the Bill. As such, the Government made available the Crown Estate’s business case, as well as the underpinning memorandum of understanding, which sets out the guardrails that will protect against uncontrolled or excessive borrowing. The key principle is whether a specific limit should be set in legislation. As I have set out previously, it remains the Government’s view that limits on borrowing are best set outside of legislation in a memorandum of understanding.

I have listened to the point made by the hon. Member for North West Norfolk that a limit outside legislation can be easily changed, but I reassure the House that the Bill has been carefully drafted to include strong controls, specifically the requirement for Treasury consent. Alongside that, the existing requirement for the Crown Estate to maintain and enhance the value of the estate, while having due regard for the requirements of good management, is maintained. Taken together, those elements provide clear guardrails around the ability of the Crown Estate to borrow.

Amendment 2, tabled by the hon. Member for South Cambridgeshire, would require any framework document published by the Chancellor of the Exchequer, the Crown Estate or the commissioners to define “sustainable development”. That definition would be required to include a reference to a “climate and nature duty”, which would mean

“a duty to achieve any targets set out under Part 1 of the Climate Change Act 2008 or under sections 1 to 3 of the Environment Act 2021.”

As I set out in Committee, the Government understand the intention behind amendment 2, but a key purpose of the 1961 Act was to repeal various detailed statutory provisions that had built up over the previous 150 years, which were hampering the effective management of the estate. By focusing the commissioners’ duties on enhancing the estate’s value and the returns generated, the commissioners have a clear objective on which they can be held to account. It is an important principle that giving an organisation too many objectives will make it far less effective than giving it clear and focused priorities, and, as I set out in Committee, the Crown Estate is a commercial business, independent from Government, that operates for profit. That mandate is unchanged by the Bill—[Interruption.]

I am getting vibes from the Whip, Madam Deputy Speaker, so I might not respond as fully as I had hoped to some of the remaining amendments. However, I will address amendment 5, which I know matters to several Labour Members who have spoken to it. Amendment 5, tabled by my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell), would require the commissioners, when keeping the impact of their activities under review with respect to clause 3, to have regard to the UK’s net zero targets, regional economic growth and resilience of energy security. I thank my hon. Friend for the discussions that he and I had on this topic both before Committee and last week. A version of the amendment was debated in Committee. I particularly thank my hon. Friends the Members for Truro and Falmouth (Jayne Kirkham), for St Austell and Newquay (Noah Law) and for Camborne and Redruth (Perran Moon) for engaging with me on this matter, and setting out so clearly what is important to them in the constituencies they represent.

Although I understand the sentiment behind my hon. Friend’s amendment, it is perhaps helpful to set out the context behind clause 3. The clause was supported by the Government in the other place, as it sought to clarify and enhance the accountability of the Crown Estate to deliver on environmental, social and economic outcomes. Clause 3 will require the commissioners to keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom. I emphasise that the public framework document, which governs the relationship between the Crown Estate and the Treasury, will be updated in light of that clause, and will include a definition of “sustainable development”, as I have set out several times. The Crown Estate will continue to include information on its activities in its annual report, which is laid before Parliament. The Government’s intention throughout the passage of the Bill has been to ensure that it can stand the test of time without need for regular updates. That, in part, is why the term “sustainable development” was adopted.

I hope I have addressed some of the concerns raised by hon. Members, although I regret I was not able to address all the amendments with quite the level of detail I had hoped. As I made clear earlier, the Government have carefully considered all amendments throughout the passage of the Bill, and I hope that hon. Members will understand the approach we are taking. I thank my hon. Friends the Members for Reading Central (Matt Rodda), for Wolverhampton North East (Mrs Brackenridge), for Harlow (Chris Vince), and for Rushcliffe (James Naish) for powerfully setting out the benefits that the Crown Estate and measures in the Bill will provide to people in their constituencies and across the country. I hope all hon. Members will understand the approach we are taking, and support our targeted and measured changes to ensure that the Crown Estate is able to operate independently, commercially and in the national interest.

[Llinos Medi]

Diolch, Madam Dirprwy Lefarydd. The Government have tried to explain how devolution and the creation of a Welsh Crown Estate would undermine investor confidence, but that has not been the case for the devolved Scottish Crown Estate, which has raised £700 million from offshore wind investments since 2022. A devolved Crown Estate could lead to greater alignment and integration with the economy in Wales, as has been the case in Scotland. With a well-managed transition, there is no evidence that disruption would occur. Devolution would also offer opportunities to strengthen the role of the local supply chains to be used and to actually see the 5,300 jobs that the Government claim will be created for the people of Wales.

I remind hon. Members that it is projected that child poverty numbers will reach 34.4% in Wales in five years’ time, at the end of this decade, but the Joseph Rowntree Foundation says that the forecast in Scotland is 19.8%. I refer hon. Members to the words of a former Secretary of State for Wales, Lord Peter Hain. He recently said that opposing devolution of the Crown Estate

“reflects old, centralised, conservative, anti-devolution Whitehall thinking.”—[Official Report, House of Lords, 14 October 2024; Vol. 840, c. 18.]

Labour promised us that a Labour Government in Wales and a Labour Government in Westminster would benefit the people of Wales. This Labour Government do not show any ambition for the people of Wales, and I ask every Member who wants to see the best for Wales to join me in the Aye Lobby.

Question put, That the clause be read a Second time.

20:00

Division 101

Ayes: 59

Noes: 316

New Clause 6

Partnership agreement: the Crown Estate and Great British Energy

“The Chancellor of the Exchequer must lay before Parliament any partnership agreement between the Crown Estate and Great British Energy.”—(James Wild.)

This new clause requires the Chancellor of the Exchequer to lay before Parliament any partnership agreement between the Crown Estate and Great British Energy.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

20:13

Division 102

Ayes: 100

Noes: 312

Clause 1

Power of Crown Estate Commissioners to borrow etc

Amendment proposed: 4, page 1, line 26, at end insert—

“(3) The Chancellor of the Exchequer must limit 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.”—(James Wild.)

This amendment would limit the amount the Commissioners may borrow by regulations subject to the affirmative procedure for statutory instruments.

20:26

Division 103

Ayes: 153

Noes: 316

Clause 3

Sustainable development

Amendment proposed: 2, page 2, line 17, at end insert—

“(3B) Any framework document published by the Chancellor of the Exchequer, the Crown Estate and the Commissioners must define ‘sustainable development’ for the purposes of this Act.

(3C) The definition under subsection (3B) must include reference to a climate and nature duty.

(3D) A ‘climate and nature duty’ means a duty to achieve any targets set out under Part 1 of the Climate Change Act 2008 or under sections 1 to 3 of the Environment Act 2021.”—(Pippa Heylings.)

This amendment would ensure that this act’s Framework Agreement must define “sustainable development”, and that the definition must include reference to a climate and nature duty.

Question put, That the amendment be made.

20:59

Division 104

Ayes: 61

Noes: 316

Third Reading

King’s consent signified.

20:56

[James Murray]

I beg to move, That the Bill be now read the Third time.

The Crown Estate is an independent commercial business with a varied portfolio of assets across London, and with marine, rural and urban holdings. It operates for profit and competes in the marketplace for investment opportunities. However, it is governed by legislation that has not changed since 1961. That is why the Bill is focused on modernising the Crown Estate by removing limitations that, if unchanged, would hamper its ability to compete and invest as a commercial business.

The central aim of the Bill has been to ensure that the Crown Estate has a sustainable future for decades to come. Through these targeted and measured changes to its founding legislation, particularly in respect of its investment and borrowing powers, the Government are building on the Crown Estate’s strong track record of success in creating long-term prosperity for the nation. The changes will ensure that the Crown Estate has flexibility to support sustainable projects and preserve our heritage for generations to come. Crucially, the measures will unlock more long-term investment, helping to drive growth across the UK.

The Bill has been strengthened and improved in its passage through both Houses. It has been amended to require the Crown Estate’s board to include commissioners with special responsibility for giving advice about England, Wales and Northern Ireland. That will ensure that the Crown Estate continues to work in the best interests of the UK. There have also been changes to strengthen its transparency and accountability, for example through the requirement for the Crown Estate to report on its activities under the partnership with Great British Energy, and the requirement to keep its activities under review with regards to the achievement of sustainable development.

I thank all hon. Members and all noble Lords in the other place for their thorough consideration and scrutiny of the Bill, and for the many and varied amendments that have been tabled and debated. I also thank everyone who has played a role in getting the Bill to this stage, including my colleagues in the Treasury, Members from across the House who took the time to provide scrutiny, all the parliamentary staff who worked on the Bill, and the officials in my Department who have put in a significant amount of time and effort. I am grateful for the broad support for the Bill from across all Benches. It will ensure that the Crown Estate can operate successfully for many more decades to come. I commend the Bill to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

19:30

[James Wild]

I thank hon. Members from across the House, and my noble Friends, who have worked hard to scrutinise this important legislation. I also thank the Exchequer Secretary for the constructive approach he has taken throughout these proceedings, as did the Financial Secretary, particularly on seabed protections, as well as the Public Bill Office, and everyone who has helped to scrutinise the Bill.

There is support across the House for the aims of the Bill, which will deliver the modernisation that the Crown Estate needs, and should generate greater returns for the Exchequer. We are disappointed, however, that the Government have resisted our proposals for greater transparency and appropriate parliamentary oversight, including on borrowing. Similarly, the Crown Estate is about to embark on a novel partnership with GB Energy, and the lack of clarity around that partnership—notwithstanding the limited transparency through the annual report—is a concern. It raises concerns about the political pressure that may be brought to bear on the partnership to persuade it to fund the Energy Secretary’s costly plans. Notwithstanding those concerns, we support the legislation. However, we will be watching carefully to ensure that the primary purpose of the Crown Estate—to maintain and enhance its assets for the benefit of the nation, as well as the income derived from it—is protected.

Question put and agreed to.

Bill accordingly read the Third time and passed.