Crown Estate (Wales) Bill [HL]

Debate between Lord Anderson of Swansea and Lord Thomas of Cwmgiedd

2nd reading
Friday 7th February 2025 Lords Chamber

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I too support the noble Lord, Lord Wigley, in his introduction to this Bill and warmly thank him for bringing it again before the House.

As the noble Lord, Lord Murphy, said, the real place to start is the constitutional issue. As forcefully pointed out in our last debate on this, this does not, as it presently stands, deal with a union matter. We are dealing with a matter capable of devolution because power over the estate has been devolved to Scotland. One can see immediately from the Scottish Crown Estate’s report one of the benefits of that: it shows the revenue, as the noble Lord, Lord Wigley, referred to, with a breakdown showing how each community benefits. I will ask the Treasury to think about this hearts and minds issue in a moment.

The real issue is trying to marry what the Minister and the noble Lord, Lord Moynihan, said about the short term and the long term. What is lacking, in my view, is transparency, accountability and a long-term strategy, and distinguishing all that from the technical business of managing the offshore wind industry. They are separate problems; if we disentangled them, we might be able to make some progress.

That progress can be made only by recalling the history of Wales, however the Crown Estate came to the Crown: partly by conquest—it is important to emphasise that word in the history of the United Kingdom—partly by inheritance or partly by an Act of Parliament. Maybe that does not matter, but what does matter from the history of Wales is the perception of the Welsh people. Their natural resources have been exploited, first in coal and the heritage with which we live, and then with water. The Welsh people are not prepared to allow this to happen again. How do we solve this problem?

I am delighted that, as the Minister told us on the last occasion during the passage of the Bill on the Crown Estate proper, the Government are going to discuss issues with the Welsh Government. I very much hope that the Minister can help us with those discussions.

Secondly, I hope that, as soon as the Bill is passed, there will be Welsh commissioner. One must remember, however, that his function is limited to giving advice on the functions in relation to land. What is wrong is that, first, there is no transparency of the position; secondly, there is no showing how the assets are used to the benefit of Wales; and, thirdly, there is no long-term strategy.

The Minister told us two things of great importance on 14 October. He said:

“As the Crown Estate’s operations are not divided into business units for each nation, agreeing the exact net profit figure attributable to Wales is not straightforward, because most of the associated costs cannot easily be disentangled from the Crown Estate’s overall costs and would, in places, require subjective judgment”.


Secondly, he said that,

“if Wales were to benefit only from the income generated in Wales, then it would likely be zero or negligible for several decades to come. Welsh assets are relatively new and will take time to mature, likely in the order of 10 to 15 years”.—[Official Report, 14/10/24; cols. 29-30.]

Both of those things are used as a justification for making no progress.

One looks to the Crown Estate’s annual report. Although these reports are not a joyous read, there is an awful lot of information contained in them. Unlike the position in relation to Scotland, a document called Wales Highlights contains absolutely no financial information of what income is generated. There is nothing of the kind. If one goes back to Wales Highlights for the year ending 31 March 2020, it showed a gross surplus income of £8.4 million on property valued at £96.8 million. I think that most businessmen would not think that this was a bad return for whatever came. Whether that falls into the category of a negligible income, I do not know, but no doubt it would help stop the leaks in the museums of Wales.

The following year shows a similar income, but it also shows the revaluation of the Crown Estate in Wales from £96.8 million to £603 million. Importantly, this appears to result from the offshore wind leasing round four. At the time of the full report for the whole Crown Estate, the revenue—it is broken down in some senses, most importantly for marine—was only £120.8 million. The highlighting stopped, and I simply do not understand why, after that review in Wales, there is no breakdown. I very much hope that the Minister will explain why what was practical in 2021, when round four had taken place and we were able to value the leases in Wales, has stopped. There should be full transparency and accountability.

What is important is to look at how the profits of the Crown Commissioner rose. By the year ending March 2022, the operating profit from marine had risen modestly to £127.5 million. However, by the year ending 2024, it had risen to £1.19 billion. If one looks at the notes to the account, the part of it attributed to the consolidated fund is a huge amount of money, but where did the increase come from? It is clear from page 50 of the annual report that it is attributable to option fees on round four, which produced £1 billion. What I do not understand is why we cannot know what is attributable to Wales. It is critical that there be proper accountability.

I come to my point, which is this: we need to work together to allow what the Minister and the noble Lord, Lord Moynihan—and, I am sure, the people of Wales—rightly want, which is good management of the assets, but we need accountability and transparency. As the Crown Estate Commissioner will not tell the people of Wales what the benefits are, they must be compelled to do so by an Act of Parliament.

I very much hope that this Bill will move to Committee, as time does not permit me to develop these details of accounting any further. I should not have to do this, but what is absolutely clear is that the current step forward is not enough. This Government, in particular HM Treasury, must bear in mind that, in about 15 months’ time, the people of Wales will be able to make a judgment. I hope that, by that stage, the historic legacy of the way in which Wales has been deprived of the benefits from its natural resources will be shown. At the moment, there is money coming to Wales from its resources, and there is a good prospect for the future.

[Lord Anderson of Swansea (Lab)]

I apologise to the House for speaking prematurely; I should have spoken in the gap. I apologise for that. My only mitigation is that, as a good Welshman, I was led by the spirit.