Crown Estate Bill [HL]

Debate between Lord Teverson and Lord Livermore

Committee stage
Monday 14th October 2024 Lords Chamber

[Lord Teverson (LD)]

I make this comment as a former board member of the Marine Management Organisation. The 2010 regulations, in particular, which have come through Europe, have been very ineffective, as has much on the Minister’s list. Hence, I believe it important that we put the responsibility down to the owner, rather than to some high-level legislation and regulations that departments have not paid a lot of attention to in the past.

[Lord Livermore (Lab)]

I am sure the noble Lord is much more expert in those things than I am. I take what he says seriously.

The decision to grant leases is informed by advice from the relevant statutory nature conservation body, either via the statutory consent process or, where appropriate, direct engagement. It can include enhancement requirements. Statutory nature conservation bodies are responsible for providing advice to government and regulators on the management, monitoring and assessment of marine protected areas. For those activities that are deemed exempt from statutory consents, the Crown Estate requires applicants to demonstrate that advice has been sought from relevant environmental bodies to inform their decision on leasing.

More broad protections, which would prohibit even temporary damage anywhere on the UK territorial seabed owned by the Crown Estate, would also cause major disruption to many critical marine sectors. These include, for example, offshore renewable energy, which requires the burial of power cables in the seabed to transport energy to shore; the laying of subsea and telecom cables, which carry 99% of all intercontinental data traffic for the UK; the UK’s ports, harbours, marinas and shipping channels within UK waters that require dredging for the creation and maintenance of navigable depths; and the manufacturing industry, which relies on marine aggregates, which are used, for instance, on major construction projects, beach replenishment and coastal protection schemes across the UK. The Government therefore consider these amendments to be unnecessary given the existing statutory protections and the Crown Estate’s existing practices.

I turn next to Amendments 37A, 37B and 37C, tabled by the noble Baroness, Lady Vere, which would all place new duties in respect of granting licences to access the seabed. Amendments 37A and 37B would prohibit the Crown Estate from granting new licences to access the seabed unless it has considered the impact of those licences on commercial fishing and commercial shipping. While the Government support the spirit behind these amendments, the Bill will not directly impact how much commercial fishing or shipping takes place in areas managed by the Crown Estate, nor is the Crown Estate responsible for the regulation of these sectors.

The Crown Estate collaborates extensively with industry stakeholders, statutory nature conservation bodies, environmental non-governmental organisations and marine licensing bodies to ensure activities on the seabed are conducted responsibly and enable a restored and thriving marine environment. A recent blog post from the National Federation of Fishermen’s Organisations, for example, noted on engagement with the Crown Estate ahead of the offshore wind leasing round 5 in the Celtic Sea that the

“process succeeded in identifying and avoiding the places where it would be most harmful to the fishing industry to see turbines installed. The cooperation between the Crown Estate and fishermen was unprecedented and the outcome was a positive one”.

The Crown Estate has also invested £50 million in the offshore wind evidence and change programme, which includes several initiatives to consider and support the fishing industry. I will give two examples. The first is the fisheries sensitivity mapping and displacement modelling project, which identifies areas of offshore wind development that present risks to the fishing industry to try to reduce the likelihood of conflicts between the two sectors. The second example is the ecological effects of floating offshore wind research programme, which focuses on understanding how marine ecosystems will react to the planned large-scale expansion of floating offshore wind in UK waters over the next decade. The goal of this programme is to change the way the Crown Estate deploys floating offshore wind on a large scale, ensuring nature recovery and enabling co-existence with other sea users, including fisheries.

Amendment 37C would prohibit the Crown Estate from granting new licences to access the seabed unless it has considered the impact of those licences on coastal communities. Coastal communities are already a primary consideration of any investment decision by the Crown Estate. For example, it has specifically designed the leasing process for its offshore wind leasing round 5 opportunity in the Celtic Sea in such a way that developers have to make commitments to deliver social and environmental value as part of the development of their new wind farms. Tender bidders are required to think innovatively and constructively about how their developments can create a legacy of healthier, more resilient, fairer, more vibrant and more prosperous communities which stretch beyond the lifetime of the wind farm leases for the benefit of generations to come. Commitments made during the tender process will be monitored, reported on and enforced throughout the lifetime of the relevant round 5 developments.

We could of course make this an explicit duty for the Crown Estate in legislation, but if we did that then there are many other points we have debated today that could also be added as statutory duties. As I said earlier, a key purpose of the 1961 Act was to repeal various detailed statutory provisions that had built up over 150 years previously, to avoid the Crown Estate having to work through a maze of requirements for each investment decision.

I turn next to Amendments 15, 17 and 29, tabled by the noble Lord, Lord Holmes, and the noble Earl, Lord Russell. These amendments seek to create new objectives for, or impose new duties on, the Crown Estate. Specifically, Amendment 15 would require the Crown Estate to seek to prioritise the objectives of UK food security and to support the development and promotion of new technologies, including artificial intelligence, in the managing and turning to account of Crown Estate land.

Amendment 17 would require the commissioners to publish a review assessing how Crown Estate assets can be deployed to support nature prescribing. The amendment would also require the commissioners to work with NHS England and devolved counterparts to enable the Crown Estate’s nature assets to form part of a major UK-wide nature prescribing scheme.

Amendment 29 would require the commissioners, when exercising their duty in Section 1(3) of the 1961 Act, to act in a way best calculated to further the achievement of sustainable development and to seek to manage assets in a way likely to contribute to the promotion or improvement of economic development, regeneration, and social and environmental well-being.

Before I speak to these amendments it is worth reiterating that the Crown Estate is a commercial business, independent from government, that operates for profit and competes in the marketplace for investment opportunities, yet it is currently restricted in its ability to do so. As I have already set out, the Government believe that it is right that the Crown Estate continues to operate as a commercial enterprise. A key purpose of the 1961 Act, as I have noted, was to repeal various detailed statutory provisions that had built up over 150 years previously, which were hampering the effective management of the estate. Since then, the Crown Estate has shown itself to be a trusted and successful organisation with a proven track record in effective management. That is a valuable outcome, which I stress we need to be careful not to undermine.

This track record includes its commitment to enable the development of new net-zero technologies and to invest in artificial intelligence to enhance its habitat and environmental monitoring system. The Crown Estate has also made it clear that it is prioritising food security alongside nature recovery and enabling the diversification of income for its tenant farmers. The investment and borrowing powers proposed in this Bill will allow for even greater investment in these areas by the Crown Estate.

The Government believe that the Crown Estate’s existing duties give it a clear focus, leading to a consistently significant return to the Exchequer to support the funding of public services. At the same time, the Crown Estate is already able to, and does, focus on activities which also closely align with wider national needs, including energy security and sustainable economic growth. As a public body, the Crown Estate seeks to work with the grain of prevailing government policy.

I turn next to Amendments 25 and 30, tabled by the noble Earl, Lord Russell, and the noble Baroness, Lady Hayman. Amendment 25 would create a new duty for the Crown Estate commissioners in the exercise of their functions to take all reasonable steps to contribute to the achievement of targets under Part 1 of the Climate Change Act 2008; the achievement of biodiversity targets under Sections 1 to 3 of the Environment Act 2021; and to adapt to any current or predicted impacts of climate change as identified in the most recent report under Section 56 of the Climate Change Act 2008. This amendment would also require the Crown Estate to include conditions in all seabed leases for the leaseholder to contribute to the conservation and enhancement of the natural environment.

Amendment 30 would create a new nature recovery duty. This would require the Crown Estate to take steps to embed nature into spatial planning and seabed leasing, allocate space for nature recovery in all projects and invest in clean energy projects.

Before I explain the Government’s position, let me express strong support for the intention behind these amendments. It is right that the public and private sectors make every contribution they can to help achieve our climate change targets, and the Crown Estate should continue to be a national trailblazer in this regard. The Crown Estate has committed to becoming a net-zero carbon business by 2030, aligning with the 1.5 degrees trajectory, and will prioritise activities which help enable a reduction in national carbon emissions, such as building net-zero homes, transitioning its holdings to sustainable agricultural practices and working in partnership with government to meet the national renewable energy targets.

On the biodiversity targets in the Environment Act, the Crown Estate is committed to delivering a measurable increase in biodiversity by 2030. It will publish its delivery plan to meet this goal next year, which will include commitments to restore habitats in line with targets in the Environment Act. As I have already noted, all leases granted by the Crown Estate for development that affects the seabed already require the leaseholder to have the necessary statutory consents in place before development can begin.

The Crown Estate also published its approach on nature recovery last week, where it has committed to delivering increased biodiversity, to protect and restore freshwater, marine and coastal systems, and to increase social well-being benefits from nature. However, as I have already set out, the reforms being introduced in this Bill are not intended to alter the fundamental statutory basis of the Crown Estate as a commercial business independent from government.

The commissioners operate under a clear commercial objective, as set out in the 1961 Act, to maintain and enhance the value of the estate. I know that some noble Lords take a different view as to how the Crown Estate should operate, but it is the Government’s view that the existing statutory commercial focus, coupled with adherence to environmental and other nature requirements as set out in other legislation, as well as the need in the 1961 Act for the commissioners to have due regard to the requirements of good management, remains the best approach. One of the functions of the Crown Estate is to return its profits to the Exchequer each year, and it has returned a combined total of more than £4 billion in the last decade. This is used to fund the priorities of the Government of the day, which currently include spending on policy that helps achieve our climate change goals.

The more the Crown Estate’s core purpose in legislation is expanded, particularly with additional duties or objectives that may unnecessarily complicate, conflict with or risk compromising the achievement of that core commercial objective, the harder—

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[Lord Livermore (Lab)]

I thank my noble friend for that intervention. With the greatest respect, it is not a lack of understanding; it is just a slight difference of opinion. As I said, I have great sympathy with the motives underlying this amendment, but the Government would seek to achieve them in a slightly different way from my noble friend.

[Lord Teverson (LD)]

I am very grateful to the noble Lord for giving way; I will make one final intervention. I welcome very much what he said about biodiversity and the wish to do that, but he has not mentioned biodiversity net gain. It is a government policy to introduce marine biodiversity net gain. Will that apply? As one of the co-developers to the Crown Estate, will they be responsible for that when they implement that policy?

[Lord Livermore (Lab)]

I will be completely honest and say I do not know the answer to that question. I will find out and let the noble Lord know.

I hope these explanations have been helpful and that the noble Lords, Lord Holmes, Lord Teverson and Lord Young, the noble Earl, Lord Russell, and the noble Baronesses, Lady Hayman and Lady Young, will feel able not to press their amendments as a result.

Crown Estate Bill [HL]

Debate between Lord Teverson and Lord Livermore

Committee stage
Monday 14th October 2024 Lords Chamber

[Lord Livermore (Lab)]

My Lords, I will respond to the amendments tabled by the noble Lord, Lord Teverson, and the noble Earl, Lord Russell, both of which touch on the topic of local and community benefits.

Amendment 27, moved by the noble Lord, Lord Teverson, would require that a percentage of the Crown Estate’s licence fee for leases for offshore wind developments is distributed to a regional wealth fund. The Government are committed to working closely with the Crown Estate to support our target of clean power by 2030, by working collaboratively to accelerate and derisk the sustainable delivery of technologies such as offshore wind.

Local communities already benefit from onshore and offshore developments in the form of the economic benefits that such developments bring, including job creation and increased business for local suppliers. Individual developers also contribute to local initiatives. Over the longer term, local communities will also benefit as we accelerate our transition away from volatile fossil fuel markets to clean, home-grown power to boost Britain’s energy independence and security.

The Crown Estate has also specifically designed the leasing process for its offshore wind leasing round 5 opportunity in the Celtic Sea in such a way that developers have to make commitments to deliver social and environmental value as part of the development of their new wind farms. Tender bidders are required to think innovatively and constructively about how their developments can create a legacy of healthier, more resilient, fairer, vibrant and more prosperous communities, which stretch beyond the lifetime of the wind-farm leases for the benefit of generations to come. Commitments made during the tender process will be monitored, reported on and enforced throughout the lifetime of the relevant round 5 developments.

I recognise that this amendment would go even further, requiring a direct financial contribution from the Crown Estate to local communities. In essence, this is a very similar proposal to that put forward in Amendment 23, requiring a transfer of profits to the Welsh Government, as debated earlier. The concerns I set out there also apply here. Again, agreeing an appropriate level of payment would not be straightforward, because the relevant revenues and costs cannot be easily disentangled from the Crown Estate’s overall financial flows. Any arrangement of this nature would reduce the profits that the Crown Estate pays into the UK Consolidated Fund, reducing the revenues that can be allocated by the Government to the needs and priorities of the day, across all the UK.

Amendment 33, tabled by the noble Earl, Lord Russell, would require the Crown Estate to pay a percentage of its profits into a skills training fund. It would also require that this fund works to provide skills training to persons residing on or employed by the Crown Estate to equip them to perform jobs in the green economy and that the training is agreed with industry in advance.

The Government are, of course, very supportive of the spirit behind this amendment, and I agree with much of what the noble Earl said about skills. We are committed to clean energy by 2030, accelerating to net zero and promoting biodiversity. To meet these ambitions, we need to make sure our workforce has the knowledge and skills to succeed in the green economy, both now and in the future. As part of this effort the Department for Education has set up Skills England, a new body that will tackle skills shortages and support sustained economic growth. The Government also introduced the Institute for Apprenticeships and Technical Education (Transfer of Functions etc) Bill in this House last week, which will, among other things, help support the establishment of Skills England.

The Crown Estate is dedicated to supporting skills and training. As a UK company with a payroll of over £3 million, the Crown Estate pays the apprenticeship levy—0.5% of its payroll over £3 million—and hires apprentices into its business. It also runs various targeted initiatives. For example, it has an existing partnership with the Department for Work and Pensions to address recruitment barriers and is training a pool of 60 job coaches in the east of England, with plans to expand. It is also developing a skills pipeline among the 14 to 16 age group, and has already seed-funded a pilot GCSE qualification in engineering skills for offshore wind, developed by Cornwall College. The Crown Estate also works closely with Pembrokeshire College on the Destination Renewables pilot course, which equips students with skills for careers in renewable energy. In Grimsby, the Crown Estate partners with Projekt Renewable, which aims to spark local community interest in offshore wind activities and encourage careers in that sector.

The Crown Estate consults extensively with communities, charities, businesses and the Government to ensure that its skills initiatives are sensitive to market demands and emerging technologies, to keep them relevant and effective. The Government consider it important that the Crown Estate retains this flexibility in how its skills initiatives are funded and delivered, to ensure it can contribute to skills training in the best possible way.

I hope that these explanations have been helpful and that I have provided some clarity on the points raised. I hope that the noble Lord, Lord Teverson, and the noble Earl, Lord Russell, feel able to withdraw and not press their amendments as a result.

[Lord Teverson (LD)]

My Lords, strangely enough, I am going to withdraw my amendment, to the shock of the Minister. However, I am seriously disappointed with the response.

I get absolutely all the supply chain arguments about development and maintaining offshore windfarms after the event, once they are operating. However, as the Minister knows himself, although some of the beneficiaries of those supply chains are local, some of them are international and are certainly not anchored to the region and those communities. The great thing about the Shetland example was that while the oil industry did very well—suppliers and lots of people came in—there were whole areas of the population of the Shetland Islands that did not benefit directly from those developments. Yet they did in the end, because of community wealth schemes—two of them, I think—that happened in Shetland. The same is true regionally.

When it comes to the argument that the Crown Estate would lose out on money or whatever from this, I would put the opposite view. A community or regional wealth fund would actually accelerate the ability to deliver these projects, because there would not be the opposition that there might be otherwise. I absolutely agree with the noble Lord, Lord Bellingham, and thank him for his contribution. It was good, as always, and emphasised the effect of coming onshore and all the facilities that are required, such as pylons and all the rest of it.

What it comes down to is a matter that I think everybody normally agrees with: a just transition. A regional wealth fund allows a just transition. I was going to quote back the Labour Party manifesto on just transitions, but strangely enough it does not mention that the transition should be just. That is a shame, but I genuinely believe that this will allow this important programme, which the Government are rightly pushing forward, to accelerate, be successful and have local and regional acceptance. At this point, I beg leave to withdraw my amendment.