Crown Estate Bill [HL]

Earl of Kinnoull Excerpts

Report stage
Tuesday 5th November 2024 Lords Chamber

[Lord Livermore (Lab)]

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

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

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

[The Earl of Kinnoull (CB)]

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

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

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

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

[Earl Russell (LD)]

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

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

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

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

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

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

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

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[Viscount Trenchard (Con)]

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

I remember that the Minister told your Lordships’ Committee:

“The Government wholeheartedly support the objectives”


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

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

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

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

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

[The Earl of Kinnoull (CB)]

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

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

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

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

Crown Estate Bill [HL]

Earl of Kinnoull Excerpts

Committee stage
Tuesday 22nd October 2024 Lords Chamber

[The Earl of Kinnoull (CB)]

My Lords, I declare my interests as set out in the register and in particular as a trustee of the Blair Charitable Trust. I will make two brief points, but generally I feel very supportive of both Amendments 37 and 37G.

The first point begins with the Defra food security statistics, as updated in October 2023, where it is noted that the production-to-supply ratio in the UK is 75%. That is essentially a measure of the number of calories that we produce on these islands that we need to eat. We need to import, therefore, a quarter of all the calories at least that we eat. In fact, it is more, because we export some of what we produce as well. No new land is being produced and we are chipping away at the existing farmland with forestry, development and a certain amount of rewilding, and the population is growing, so the number of calories is going up. Aquaculture is therefore a very obvious way of improving the situation and, while I fully accept all of the many problems that we heard about so powerfully from the noble Lord, Lord Forsyth of Drumlean, earlier on, we are going to have to face up to the fact that aquaculture is something that we will need if we are going to try to narrow the gap of the production-to-supply ratio.

As the Minister said in his Second Reading speech— I am sorry that I was not there—the Crown Estate is very rarely here in this Chamber; it last came in 1961. So it is important to prep the Crown Estate and do some future-proofing of it, and much of the Bill is about getting on top of energy and prepping it for energy as well. Again, we are going to need to grapple with the issues that the noble Lord, Lord Forsyth, raised, but on this visit to the House I think we must prep it for aquaculture as well. That means that we are going to have to have some amendments that are along the lines of Amendments 37 and 37G. I slightly prefer the width of Amendment 37G, but there are good things in both of them.

I move to my second point. There is a lot to learn from the experiences of Scotland in aquaculture, and English commissioners will certainly and inevitably face the problem faced by the trustees of the Blair Charitable Trust that a high financial offer for the use of something may come from a riskier and lower-quality bidder. The effect of Amendments 37 and 37G would be to give those commissioners an easier ability to turn down somebody who has offered a larger amount of money but has lower environmental standards and to say clearly, “No, your bid is not there, it is not in the overall interests of managing the land”—on behalf of all of us, I may say. That is a very important point.

A few years ago, I went to stay with some friends near Oban and they took us down to visit a bankrupt fish farm. I do not know whether anyone else has visited a bankrupt fish farm recently, and I know that “desert” is the wrong word when one is talking about a sea loch, but “desert” is quite a good word for describing what we saw. It was awful, and of course it goes a long way beyond all of the netting arrangements. It was dead and horrible and it smelled and there was waste everywhere and our friends told us of the great difficulty in working out who was going to clear it all up and who was going to pay for the clear-up, because Crown Estate Scotland had not put in place bonding arrangements —something those in construction would do because, if the construction company goes wrong, you can finish off the problem. It usually happens with shipbuilding, although not with Scottish ferries, but bonding arrangements are extremely important and they had not been put in place. I am glad to say that I went back a couple of years later and the area has improved, but it is not perfect. I therefore have direct experience of the horrors of things if you do not get it right, and I suspect there are many war stories—so if aquaculture comes, as I know it will, to England and Wales and Northern Ireland, people can learn from their Scottish cousins.

On my experience of charitable trustees worrying about potential land users, I went back and looked at some trustee board papers, and the process we actually follow in real life when we are considering letting land users on to the Blair Charitable Trust, which is quite big, is very similar to the two processes set out in Amendments 37 and 37G. That process has been going on for a long time on what is a very old-established plot of land. I therefore feel that these are tried and tested routes to something as well, and that they are very good. They have a long-term view built into them, as well as the fact that you must look to the whole environment, as we do at the Blair Charitable Trust. These amendments are therefore vital, and they will make the job of the Crown Estate commissioners much easier.

[The Earl of Caithness (Con)]

My Lords, this has been a fascinating debate to listen to. I had not intended to partake in it, but I was prompted to do so by the last two speeches, by my noble kinsman Lord Thurso and by the noble Earl, Lord Kinnoull. This is clearly a much bigger problem than just salmon. From listening to the debate, it seems that we all want the offshore energy—we need it—and, undoubtedly, as the noble Earl, Lord Kinnoull, said, we will need aquaculture in the future in a much more abundant way than we have it at the moment.

It strikes me that it is very odd that those who operate our farms and our energy on land face very different hurdles to those who operate at sea. Can the Minister, who has quite a lot to take away and think about from this well-informed debate, look at this whole question? This is a rare opportunity for us to try to get this right for future generations. We do not want to solve a problem now by creating a further problem for the future. Let us get this right so that we take a holistic view of development at sea, whether it be fish farming, agriculture or energy, so that the right environmental standards and precautions are put into place before and after an event. As the noble Earl, Lord Kinnoull, said, at the moment it is all too easy for fish farmers to put themselves into liquidation and leave a mess for others to clear up. That cannot be allowed to happen in the future.

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Moved by

[The Earl of Kinnoull]

37D: After Clause 2, insert the following new Clause—
“Report on differences between provisions of this Act about the Crown Estate in England and equivalent provisions in ScotlandThe Secretary of State must, within 12 months of the day on which this Act is passed, lay before Parliament a report assessing any differences between the provisions made by this Act for the management of the Crown Estate in England and equivalent provisions for the management of the Crown Estate in Scotland.”

[The Earl of Kinnoull (CB)]

Amendment 37D is a simple amendment that allows us the opportunity to discuss the lack of symmetry after the passing of this Bill. I should just say that, following the last grouping, I think I have the answer to the Minister’s question about why things are inadequate at the moment.

I discussed in the previous group how I view this Bill as being an opportunity to prep the Crown Estate for energy and agriculture. Clearly, it will improve things here, but not in my native land at the same time. I have had the benefit, in preparing this amendment, of quite a few discussions with the chair of Crown Estate Scotland and had help from his team, and I thank them for that.

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[Baroness Kramer (LD)]

I will not try the patience of the Committee for very long on this issue. It is fairly rare that I do not support amendments that are moved by that powerful combination of the noble Earl, Lord Kinnoull, and the noble Lord, Lord Vaux; but, on this occasion, I am rather troubled by this amendment. I believe that we have to defend the principle of devolution. There are many who want the devolution in name but not in actual fact. I am afraid that when I heard the noble Earl, Lord Kinnoull, use the word “symmetry”, every antenna was raised. I have already argued in earlier phases of this Bill that we should have devolution of the Crown Estate to Wales—that is fundamentally important—and it is important that we reinforce and understand the importance of a genuine devolution of the Crown Estate to Scotland as established in current law. That is in our collaboration, partnership, sharing practice—

[The Earl of Kinnoull]

I am so sorry. I probably did not make it clear that the reason that I was talking to the Crown Estate Scotland was because it contacted me. It is very keen to have the symmetry, and I understand through the Crown Estate Scotland that the Scottish Government is also pretty keen to have it. I am not proposing anything that is not consented to by all parties. I am just worried that the parties will get busy doing other things and will not get on with it. The idea of the pencil in the back is to get consenting adults to get on with it.

[Baroness Kramer (LD)]

I appreciate that intervention from the noble Earl because I now understand his position better, but I do not think that is how this clause would be used. It would create a level of dissent, with each side saying, “We do it better than you do”, and “You need to copy us”. We can see the kind of constant pressures that come to—I am losing language; it is just so late—dilute the power of devolution.

On that basis, I do not support this language. Co-operation, partnership, looking at best practice—all those things are extremely positive, but let us be absolutely clear: the Crown Estate Scotland falls under the Scottish Government. Interestingly, it is often much more regulated than the Crown Estate back in England. I hope we learn from the Scottish experience not that each needs to mirror the other by rote, but that devolution works and should be extended to Wales.

[Lord Livermore (Lab)]

My Lords, Amendment 37D, tabled by the noble Earl, Lord Kinnoull, would require the Secretary of State to lay a report before Parliament within 12 months of the day this Act is passed that assesses any differences between the provisions made by this Act for the management of the Crown Estate in England, Wales and Northern Ireland, and equivalent provisions for the management of the Crown Estate in Scotland.

It is possible now to provide such an assessment, and I am happy to set that out. Section 36 of the Scotland Act 2016 inserted a new Section 90B into the Scotland Act 1998. Subject to certain exceptions, Section 90B provided for the devolution in relation to Scotland of the commissioners’ management functions relating to property, rights or interests in land in Scotland and rights in relation to the Scottish zone.

Devolution occurred on 1 April 2017 under, and in accordance with, the Crown Estate Transfer Scheme 2017. The relevant property, rights and interests are now managed separately by Crown Estate Scotland under the Crown Estate Scotland (Interim Management) Order 2017 and the Scottish Crown Estate Act 2019, as enacted by the Scottish Parliament. They do not form part of the Crown Estate as currently managed by the Crown Estate commissioners.

The relationship between Crown Estate Scotland and the Scottish Government is governed by a public framework document which sets out a broad framework within which Crown Estate Scotland operates, and certain financial aspects. Any changes to that framework document or the wider legislation that underpins it are a matter for the Scottish Government.

I turn to the principal differences and similarities. The Bill grants the commissioners of the Crown Estate a power to borrow with Treasury consent and provides the Treasury with the power to issue loans and financial assistance to the commissioners, including out of the National Loans Fund. The Bill also specifies that the Treasury may determine the rate of interest on any loan and requires the Treasury to pay any sums received in respect of the loan into the National Loans Fund.

In comparison, Part 2, Section 1.1 of the framework document for Crown Estate Scotland explains that

“Scottish Ministers may make grants and loans to Crown Estate Scotland”

and such grants and loans are

“subject to such conditions (including conditions as to repayment) as the Scottish Ministers may determine”.

Part 2, Section 2.1 requires that:

“All borrowing by Crown Estate Scotland … shall be from the Scottish Ministers in accordance with guidance in the Borrowing, Lending & Investment section of the”


Scottish Public Finance Manual.

On investment, this Bill clarifies the commissioners’ existing ability to invest by inserting into the 1961 Act that:

“The powers exercisable by the Commissioners in the discharge of their functions under this Act include powers to do anything which is calculated to facilitate, or is conducive or incidental to, the discharge of those functions”.

It also omits subsection (4) from Section 3 of the 1961 Act, which will broaden the commissioner’s investment powers.

In comparison, Part 1, Section 3.2 of the framework document for Crown Estate Scotland explains that Scottish Ministers are responsible for

“approving Crown Estate Scotland’s Corporate Plan”,

which includes their investment strategy. Part 2, Section 7.3 requires Crown Estate Scotland to

“undertake investment in line with its legislative duties”,

which are set out in the Scottish Crown Estate Act 2019, principally in Part 3, across Sections 7 to 21.

On the constitution of the commissioners, the Bill increases the maximum number of commissioners from eight to 12 and omits the requirement that the second Crown Estate commissioner, if any, be deputy chairman. It also simplifies the legislative process by which commissioners are paid, such that the commissioners’ salaries and expenses are paid directly out of the income of the Crown Estate, rather than out of money provided by Parliament, which comes from the return made by the commissioners to the Government each year.

In comparison, under Part 1, Section 3.5 of the frame- work document for Crown Estate Scotland, the board membership is limited to nine members, including the chair. On remuneration, Section 7 of the Crown Estate Scotland (Interim Management) Order 2017 makes it clear that

“Crown Estate Scotland … must pay each member such remuneration and allowances (including expenses) as the Scottish Ministers may determine”.


The differences between these two organisations reflect the fact that the organisations have formed in different ways. The 1961 Act, which, as I have set out, is the legislative basis of the Crown Estate in its current form, was fulfilling a recommendation of the government Committee on Crown Lands—as set out in its report presented to Parliament in June 1955—to appoint an independent board of commissioners to manage the Crown Estate, with provisions designed to enable Parliament and the Treasury to know how it is discharging its responsibilities. To briefly quote from the 1955 report:

“The board should be a public authority, but not a government department in the sense of an organ of executive government. … We do however respectfully advise that the board should be more, not less, independent than the present Commissioners and that they should be given defined powers and duties as trustees and allowed to work them out with the minimum of direction and control.”


In comparison, Crown Estate Scotland was created by the Scottish Crown Estate Act 2019, which makes specific provisions about the management of the Scottish Crown Estate and followed on from a process of devolution established by the Scotland Act 2016. Crown Estate Scotland is specifically required to align its aims and objectives with the Scottish Government’s published programme for government, and Scotland’s economic strategy and national performance framework.

I hope this assessment was helpful and that I have provided some clarity on the points raised.

[The Earl of Kinnoull (CB)]

It is very interesting that the Minister has not mentioned—unusually, because he is always incredibly well briefed—the Crown Estate Transfer Scheme 2017, which was the scheme under Section 90B of the Scotland Act, under which this was transferred. Schedule 4 of that is headed, “Protection of UK-wide interests”, which is quite a thing, and the subject we have been talking about this afternoon. I wonder whether he would comment on that and how it affects the assessment that he has just made.

[Lord Livermore (Lab)]

I am happy to write to the noble Earl on that point. In the meantime, I hope he will feel able to withdraw his amendment.

[Lord Livermore (Lab)]

What I read out was a response to the amendment tabled, which asked for exactly that; that is why I read it out. The noble Lord raises profound constitutional questions which I may not be the right person to address them to.

[The Earl of Kinnoull (CB)]

I asked a question as well: is the Minister going to afford every assistance to what is going on? This is something worth discussing. There is a danger here, and it is in the interests of all of us, as sub-owners of the Crown Estate, that the position is regularised. I am sorry if symmetry is too strong a word because they are differently enacted, but it is important to be in a position where they have very similar powers. It is in the interests of everyone in these islands that the two things can work together when required and that they have similar powers, so they can engage in the same energy deals and the same things in aquaculture.

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[The Earl of Kinnoull (CB)]

That will be a matter for the noble Lord. On that basis—and I very much appreciate the spirit and the smile on the Minister’s face as he said that—I beg leave to withdraw the amendment.

Amendment 37D withdrawn.