Crown Estate Bill [HL]

(Limited Text - Ministerial Extracts only)

Consideration of Commons amendments
Tuesday 4th March 2025 Lords Chamber

Moved by

[Lord Livermore]

That this House do agree with the Commons in their Amendment 1.

1: After Clause 4, insert the following Clause—
“Territorial seabed
After section 3A of the Crown Estate Act 1961 (inserted by section 1 of this Act) insert—
“3AA Restriction on permanently disposing of interest in seabed etc
(1) The Commissioners may not without the consent of the Treasury permanently dispose of—
(a) any part of the territorial seabed, or
(b) any interest, right or privilege over or in relation to the territorial seabed,
which forms part of the Crown Estate.
(2) Accordingly, without that consent, any purported disposal of a kind mentioned in subsection (1) is void.
(3) In subsection (1), “territorial seabed” means the seabed and subsoil within the seaward limits of the United Kingdom territorial waters.””

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

My Lords, with the leave of the House, I will also speak to Amendments 2, 2A and 3. It is a pleasure to present the amended Crown Estate Bill to your Lordships’ House following its passage through the other place. As noble Lords will recall, this Bill focuses on removing existing limitations that hamper the Crown Estate’s ability to compete and invest as a commercial business, ensuring it has a sustainable financial future for years to come. In doing so, the Bill supports the Crown Estate to build on its strong track record of creating long-term shared prosperity for the nation.

Two main changes were made to this Bill in the other place. The first was the addition of a clause on the territorial seabed. I am very grateful to the noble Baroness, Lady Vere, for bringing this important issue to the Government’s attention. As noble Lords may remember, this issue relates to the ability of the Crown Estate to dispose of the seabed, given that it is a unique national asset.

As I noted on Report, the law on the seabed is complex. I committed to explore the matter further and, if required, bring forward a legislative provision to restrict the Crown Estate’s ability to permanently sell the seabed. I am grateful to the noble Baroness, Lady Vere, and the noble Earl, Lord Russell, for their support for proceeding in this way.

Clause 5, as inserted in the other place, delivers on this commitment and seeks to address the legitimate concerns raised by the noble Baroness, Lady Vere. It puts special protections in place for the seabed by requiring the Crown Estate commissioners to obtain consent from the Treasury before they permanently dispose of any part of, or the Crown Estate’s interest in, or rights or privileges in relation to, the territorial seabed.

To be clear, this does not mean that the Crown Estate could never be permitted to dispose of seabed. It may be that national or local interests would be best served by such a sale—including, for example, by the sale to another part of the public sector to enable local infrastructure development—but any such sale could take place only with the agreement of Ministers, and it is right that they are the decision-makers on such sales.

This clause would not fetter the Crown Estate’s existing right to agree licences or leases in relation to the seabed that, by definition, do not represent a permanent disposal of the asset. The ability to agree long-term licences and leases for use of the seabed will continue to be an important feature for the Crown Estate to attract the significant investment needed for offshore clean energy developments. I believe this fulfils my commitments to your Lordships’ House and addresses the important points raised.

The second change made to the Bill in the other place was, I am afraid, the removal of Clause 5, introduced by the noble Lord, Lord Forsyth, on Report, which would require the Crown Estate commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate on an ongoing basis. I thank the noble Lord, Lord Forsyth, for raising this important issue during the passage of the Bill, and for our constructive engagement on the subject since. As I said on Report, I wholeheartedly support the objectives behind his amendment, but I regret that the Government are still unable to support it. It remains the Government’s position that this amendment would duplicate protections that already exist in legislation or that are required by regulators as part of the licensing process for aquaculture.

As I also noted on Report, fisheries policy is the responsibility of the devolved Governments in Scotland, Wales and Northern Ireland. All fish farming in England is regulated to ensure it is carried out in a responsible manner that respects the environment and protects consumer health and animal welfare. At present, virtually all salmon aquaculture in the UK takes place in Scotland, where the management of the Crown Estate in Scotland is a devolved matter.

However, as this House has previously heard from my noble friend Lady Hayman of Ullock on 12 September 2024, according to the International Union for Conservation of Nature’s red-list criteria, Atlantic salmon are now endangered in Great Britain and near threatened globally. To provide further reassurance to noble Lords, I have spoken to the Crown Estate and the Government are now prepared to go further. I can make two commitments to the noble Lord, Lord Forsyth, should he choose not to push his amendment to a vote.

First, on auditing standards, the noble Lord’s amendment on Report provided for Crown Estate commissioners to assess the environmental impact and animal welfare standards of salmon farms on the Crown Estate. Today, I can say to the noble Lord that the Crown Estate will undertake an audit to ensure that all salmon farms leasing land on the Crown Estate in England, Wales and Northern Ireland comply with all relevant regulations on salmon farming in England, Wales and Northern Ireland. The outcome of this audit would be set out in its 2024-25 annual report, which will be published in June. If this audit were to find that salmon farms are not complying with their legal obligations and regulatory requirements, the Crown Estate will ensure these practices are corrected. In extreme cases this may involve exercising forfeiture rights, in the event of non-compliance of covenants.

Secondly, the relationship between the Crown Estate and the Treasury is governed by the framework document. The Government will amend this document to ensure that the environmental impact and animal welfare standards of salmon farms is considered at all times. The updated framework document will be amended to read: “The Crown Estate will continue to keep under review the environmental impact and animal welfare standards of salmon farms on its estate”. This amended framework document will be published on Royal Assent. I trust that these two commitments go some way to resolving the noble Lord’s concerns on this matter, and I hope he feels able not to press his amendment.

In addition to these substantive amendments, a procedural amendment was made in the other place. In line with existing convention, every Bill that begins in your Lordships’ House that requires a money resolution in the other place has an additional clause added to it that indicates that nothing in the Bill shall impose any charge on public funds. Once the Bill has been considered by the other place and authorised by a money resolution, this redundant clause is then removed.

I reassure noble Lords that the removal of the privilege amendment does not alter the position I previously set out on borrowing controls. To be clear, the Crown Estate will be able to borrow only with the consent of the Treasury and in line with the parameters set out in the memorandum of understanding that I have previously made available in draft. This includes that borrowing is not to exceed more than 25% of a net debt to asset value ratio.

Pre-appointment scrutiny was another important issue raised by noble Lords during the passage of the Bill in your Lordships’ House. In Committee, I committed to work with the Cabinet Office to ensure that pre-appointment scrutiny applied to the role of chair of the Crown Estate. I take this opportunity to confirm that the role of chair has now been formally designated as a public appointment for which parliamentary pre-appointment scrutiny now applies. The Government announced on 23 December that their preferred candidate would face pre-appointment scrutiny by the Treasury Committee in the other place. This hearing is set to take place on 19 March, with the committee’s report expected to follow shortly after. I am grateful for the opportunity to update your Lordships’ House on all these issues, and I beg to move.

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, I thank my noble friend Lord Forsyth for his work on salmon, highlighted in Amendments 2 and 2A, and the Minister for the response he set out at the beginning of these proceedings. As we know, genetically modified escapees infect wild migratory fish with sea lice and disease and interbreed with wild populations. Worldwide, salmon farms have led to significant environmental damage and pose a real risk to other species. We increasingly see recognition of this. Various standards for fish farming have been introduced, and countries such as Australia and Denmark have banned the practice.

We support the sustainable farming of wild Atlantic salmon or other fish species. However, that must not come at the expense of wild populations. We acknowledge that the Bill is relevant to only one existing salmon farm, and that the main problem is in Scotland, which is devolved. Given the comments of my noble friend Lord Forsyth and the noble Lord, Lord Wigley, I hope that the Minister will make it clear whether the audit envisaged by the Government will also be relevant to improving things in Scotland, which have been highlighted in our discussions.

[Lord Forsyth of Drumlean (Con)]

Forgive me if this point has already been made, but, on this idea that this is only about Scottish salmon, it is crucial that people understand that all the salmon migrate to the Arctic waters in the far-north North Sea. Therefore, English salmon are having to go past this environmental disaster in Scotland. It is very pertinent to England, and to suggest that there is only one salmon farm in these territorial waters is to miss the point about the most threatened example of the Atlantic salmon, which are those that come from English and Welsh rivers.

[Baroness Neville-Rolfe (Con)]

I very much take my noble friend’s point. I was thinking, in clarification, that problems in Scotland would be addressed by the measure that the Minister has very helpfully brought forward today, so that this is looked at in the round wherever the salmon may be. I think that my noble friend and I are at one about this.

Government Amendment 1 seeks to restrict the permanent disposal of interest in the seabed. It would ensure that the commissioners may not dispose of the seabed without the consent of the Treasury. In Committee and on Report, noble Lords across the House, including, as has been said, my noble friends Lord Holmes of Richmond and Lady Vere of Norbiton, raised concerns about the disposal of the Crown Estate’s assets and emphasised the duty of the commissioners to protect the seabed. As stewards of our seabed, the Crown Estate and its commissioners bear a profound and unique responsibility to ensure its protection. It is not merely an asset; it is actually the foundation of our oceans and a vital natural resource that supports marine life and holds cultural and ecological significance. In a spirit of compromise, we can accept the Government’s amendment and reformulation.

In conclusion, I warmly thank the Minister for his efforts to meet our concerns on the Bill. That includes what he has not mentioned, the important 25% cap on borrowing that will be in the framework document, and it includes the agreement on pre-appointment scrutiny. I thank all noble Lords across the House—it has been a cross-party effort—who have taken part in the scrutiny of the Bill. I particularly thank my noble friend Lord Forsyth of Drumlean again for his persistence in this matter, and success. Above all, I thank my predecessor and noble friend Lady Vere of Norbiton, and my noble friend Lord Roborough, for their work on the Bill.

[Lord Livermore (Lab)]

My Lords, I thank all noble Lords who have spoken today. I am very grateful to the noble Lord, Lord Forsyth, for what he said and his agreement on the way forward. As the noble Baroness, Lady Neville-Rolfe, knows, the Crown Estate is devolved to Scotland, so the measures I have set out will not apply to Scotland and I cannot ensure that they will.

In answer to the noble Lord, Lord Wigley, as the Crown Estate is not devolved to Wales, the audit that the Crown Estate will conduct will apply to England, Wales and Northern Ireland. However, I do not believe that there is a salmon farm in Wales, so I do not know whether the audit will apply, but, clearly, all salmon farms on Crown Estate land in England, Wales and Northern Ireland will be looked at.

In answer to the noble Lord, Lord Bellingham, the outcome of the audit will be set out in the Crown Estate’s annual report, which will be published in June, giving an opportunity for scrutiny. In answer to the noble Earl, Lord Russell, in terms of the seabed, the Crown Estate is limited to 150-year leases.

I am glad that we have been able to agree to the changes made by the other place to this Bill. Once again, I thank all noble Lords for their efforts on the Bill since last July.

Motion on Amendment 1 agreed.

Motion on Amendment 2

[Lord Livermore]

Moved by

That this House do agree with the Commons in their Amendment 2.

2: Clause 5, page 2, line 29, leave out Clause 5

--- Later in debate ---

Motion on Amendment 3

[Lord Livermore]

Moved by

That this House do agree with the Commons in their Amendment 3.

3: Clause 7, page 4, line 4, leave out subsection (4)