Crown Estate Bill [HL]

Debate between Baroness Smith of Llanfaes and Lord Berkeley

Committee stage
Tuesday 22nd October 2024 Lords Chamber

[Baroness Smith of Llanfaes (PC)]

My Lords, Amendment 41 in my name is included in this group of amendments and is supported by my noble friend Lord Wigley. This amendment would require the publication of an agreed fiscal framework between the Treasury and the Crown Estate before commencement of the Act.

During day one of Committee there were strong arguments made in support of the second group of amendments—a number of them seeking to write a fiscal framework. I believe that there is a shared view from around the Chamber that such a framework should have been drafted and published before Second Reading of this Bill. I am therefore grateful that the Minister, in his response to the second group of amendments, committed to publishing the framework before Report. If that is the case, I will not need to push for an amendment of this kind on Report.

However, I will take this opportunity to highlight some concerns regarding the possible content of the fiscal framework. I am concerned by the possibility of no hard cap on borrowing. I am led to believe that the framework will instead impose a loan-to-value ratio of 25%, which, as the Minister has already noted, would currently be around £3 billion and could go beyond that. To put this into perspective, the Welsh Government fiscal framework has a cap of £l billion on capital expenditure, with an annual borrowing limit of £150 million, which it can borrow from the National Loans Fund or a commercial bank. I ask the Minister: would the passing of this Bill as it stands, alongside a fiscal framework of a loan-to-value ratio of 25%, give the Crown Estate more or less borrowing power than the devolved Government of Wales?

I share the view expressed by the noble baroness, Lady Kramer, that the Crown Estate is no “cuddly” organisation. I look forward to hearing the Minister’s response to my question on how the proposed borrowing powers will compare to the current fiscal powers of the devolved Governments, particularly the Welsh Government.

[Lord Berkeley (Lab)]

My Lords, I will speak to Amendment 42 in this group. It is another attempt at putting a condition on the Government in bringing this Bill into effect, until the Crown Estate in my case has fulfilled the undertakings given on Report of the Leasehold and Freehold Reform Act: specifically, the commitment that it would publish its lease extension policy. I got an answer from the Minister’s colleague in July when I asked when this was going to happen. The answer was very interesting. It was that the Crown would act in accordance with the Leasehold and Freehold Reform Act 2024 and the statutes it amended, subject to specific specified conditions—I do not know what specific unspecified conditions are, but we will leave that out—set out in the undertaking, and the expectation was that the Crown bodies would work with the tenants as they developed these policies.

The problem is of course that the specific specifying conditions referred to refer to the Isles of Scilly and the tenants there—about whom I have spoken to your Lordships many times—are suffering significantly due to their inability to negotiate leases of a reasonable length of time which would be allowed under the new Act.

I was told subsequently that this Crown statement cannot be made in advance of the relevant regulations under the Leasehold and Freehold Reform Act being tabled, because that is the way it always is. But the worry I have is also that the Duchy of Cornwall and Crown Estate may publish them and there will be no opportunity for debating them and offering and suggesting changes to them. This gets back to my question last time we raised this: who is in charge? I was very pleased to get a response from Dr John Kirkhope, an expert on Duchy things, explaining that this is all because of the Duchies of Lancaster and Cornwall (Accounts) Act 1838. It is because the two Duchies got their revenue from George I and George IV and, before that, from being Electors of Hanover rather than Kings or Queens of England

I am told that, under Salic law, a female could not be elector of Hanover, so Queen Victoria suddenly thought that she was going to lose all this money. She persuaded the Parliament of the time to bring in this Bill, which became the Duchies of Lancaster and Cornwall (Accounts) Act 1838. I can read out the whole Act—it is not that long—but I think noble Lords would probably prefer that I did not. It required the two duchies to submit accounts to the Government every year for Parliament to approve.

When I tried to put down a Question to ask for how many years this had taken place, who could tell me which years those were and where the accounts were, I was told by the clerks that it was a bit unclear who was in charge. Was it Parliament, the Government or the Crown? I do not think it would be the Crown, because that would mean the Crown being in charge of itself, which is probably not very desirable and probably not true. I would be grateful if my noble friend the Minister could tell me over how many years these two duchies have submitted accounts and over how many years, if any, they have been debated in either House of Parliament.

My question to my noble friend is: when will the Government publish these Crown Estate policies? Do they have to wait until they have published secondary legislation on leasehold reform? When these special conditions are published, will the Government provide an opportunity for debate? I can see the Crown saying that it is in charge and that nobody can tell it what to do, and so we cannot debate them. The conditions applicable to the Leasehold and Freehold Reform Act will be modified to the extent that the people of the Isles of Scilly, who suffer quite a lot, not just from rents but from transport and a few other things, will not have an opportunity to debate this and see whether the duchies are playing fair. I look forward to my noble friend’s response.