Crown Estate Bill [HL]

Baroness Humphreys Excerpts

Committee stage
Monday 14th October 2024 Lords Chamber

[Lord Macpherson of Earl’s Court (CB)]

My Lords, unusually, as a former Treasury official, I am generally in favour of greater devolution—the more so when the likes of the noble Lords, Lord Hain and Lord Wigley, and my noble and learned friend Lord Thomas support a proposal. But on this occasion I fear I should advocate a degree of caution.

I speak having been in the Treasury when the Crown Estate in Scotland was devolved. With hindsight, I think that was a mistake, particularly because there is considerable benefit in looking at offshore wind policy at a UK level. Indeed, the then Government missed a trick. They should have followed the example of I think the Wilson Government in the 1960s, who hived off oil sea exploration from the Crown Estate. The then coalition Government should have hived off offshore wind from the Crown Estate, not least because it gives the Royal Family, who no doubt are a deserving cause, a massive windfall, as my noble friend Lord Turnbull pointed out at Second Reading.

Although I very much understand the case that noble Lords have made on both sides of the House, I think this is something that should not be rushed. There may be a case for devolving further powers to Wales, not least because there is a case for giving Wales similar treatment to Scotland. But if the Government are sympathetic to this amendment, I encourage them to spend a bit more time working through whether there are unintended consequences and, in particular, looking through the financial implications. One thing I would not want to see happen is Wales being disadvantaged financially by devolution. This might be the right thing to do for the longer term, but I encourage the Minister to think twice before agreeing to it today.

[Baroness Humphreys (LD)]

My Lords, I apologise to your Lordships for not having taken part in the Second Reading debate. I also draw your Lordships’ attention to my registered interests and my membership of the board of Community and Voluntary Support Conwy, CVSC.

I rise to speak to Amendment 26 in my name and Amendments 1, 21 and 23 in the names of the noble Lord, Lord Wigley, and the noble Baroness, Lady Smith of Llanfaes. My Amendment 26 calls for the devolution of the Crown Estate’s powers to Wales and would require the Treasury to devolve Welsh functions of the Crown Estate commissioners to Welsh Ministers or a person nominated by Welsh Ministers.

There are increasing calls within Wales for the devolution of these powers. It is a policy of my party, the Welsh Liberal Democrats, having been debated and agreed in our Welsh conference in 2023. It would ensure that the profit from offshore energy lease agreements stays in Wales.

In July 2023, Senedd Members voted by a majority of 35 to 13 in favour of a Plaid Cymru debate calling for the devolution of the Crown Estate to the Welsh Government. As we have heard, there are similar calls at local government level. Last week, as the noble Lord, Lord Wigley, detailed, councillors in Gwynedd Council debated a motion asking their chief executive to open negotiations with the Crown Estate over “access fees”. The council paid its annual fee of £161,000 to the Crown Estate in 2023 to allow public access to beaches in Gwynedd, of which £144,000 was paid to allow access to Hafan Pwllheli marina. Councillors also believed that responsibility for the Crown Estate should be devolved to the Welsh Government, with their motion stating:

“Any profits generated by the Crown Estate, here on Welsh lands and waters, should remain in Wales, for the benefit of our residents and communities”.


In addition to all this, social media videos provide information about the Crown Estate and explain why the promoters want change, leading to greater awareness of the issue among the public.

The Crown Estate owns land estimated to be worth more than £600 million in Wales. This includes 65% of the coast of Wales and 300,000 acres of land, including any gold and silver on it. Profits on these numbers are unclear, however.

Let me be clear: there is no criticism of the Crown Estate commissioners implicit in this amendment. The commissioners operate within a system that was established 63 years ago but with a history going back to 1760, and they cannot diverge from the status quo without an Act of Parliament similar to that which devolved similar powers to Scotland in 2017. So, while the commissioners operate the system from the 1960s, history for us in Wales has moved on. Devolution has opened the eyes of the people in Wales to the opportunities and responsibilities that the new order has brought.

--- Later in debate ---

[Lord Wigley (PC)]

Before I pursue the subject of the amendment, I am glad to follow the noble Lord, Lord Lansley, on that subject. I suggest that, if the Crown Estate has the powers, it also has the responsibilities that go with it. The noble Lord, Lord Young of Cookham, has highlighted some important responsibilities, and I suspect that it will need a lot more attention in coming months and years.

I shall speak primarily once again on issues relating to the devolved dimension. It is to better understand the financial dealings of the Crown Estate in Wales that Amendment 24 in my name and that of the noble Baronesses, Lady Smith and Lady Humphreys, is on the Marshalled List. It asks for the disaggregation of the annual reporting of capital and revenue items to provide transparency in regard to the Crown Estate finances relating to Wales, England and Northern Ireland respectively. We have gone through some of the general arguments in this sphere, so I am not going to repeat them, but I stress that this is a modest proposal that surely cannot be rejected by any Government who have some sympathy with the position of the devolved Government.

[Baroness Humphreys (LD)]

I shall make a short contribution in agreement with Amendment 22 in the name of the noble Baroness, Lady Smith of Llanfaes, and Amendment 24 in the name of the noble Lord, Lord Wigley.

When I was preparing for this debate, I looked at some figures, but they are very difficult to find. On the first group in Committee, I referred to the fact that we know that the Crown Estate has land worth more than £600 million in Wales, that it owns 65% of the coast and that it has 300,000 acres of land in Wales, but we do not know exactly how much money that raises in Wales. We know that, across England, Wales and Northern Ireland, profits have more than doubled in the past year, growing from £443 million in 2022-23 to £1.1 billion in 2023-24, but there is very little clarity about the contribution of each individual nation to the total. In the interests of transparency, I certainly support Amendment 24. On Amendment 22, I cannot understand why none of the Parliaments of the UK sends a representative to sit on the board of the commission. I support those two amendments.

[Baroness Kramer (LD)]

My Lords, I very much endorse the comments of my noble friend Lady Humphreys. I too believe that this is another opportunity to make sure that there is a far stronger voice for Wales, so let us seize it and use that as a template for how the Crown Estate goes forward.

I wanted to focus more on a couple of other issues. In a sense, I see a linkage between the comments made by my noble friend Lord Russell suggesting that, by forgoing receiving lease income and instead taking an ownership tranche in a whole series of new energy projects, the long-term income to the Crown Estate and to England and Wales would be significantly larger than the much shallower and shorter-term benefit of charging lease rent. That relates to the same kind of issue raised by the noble Lord, Lord Young of Cookham. Please could the Minister sort that problem out? This really is an unfair situation, and it will just take a Minister to absolutely slap his hand on the table and get it done.

In both cases there is a tendency, which I noticed at Second Reading, for Members of this House to think of the Crown Estate as some sort of cuddly organisation. It may be very generous, and if you read its annual report you can see that it does wonderful things for local communities and talks incredibly sympathetically about disadvantaged people, but when it operates as a commercial entity, my goodness, it is one of the most aggressive commercial entities that anyone could run into—and when you say that within the property sector, you are really saying something. It is infected by the same position adopted by many other property companies, which is to go for very short-term profit and to forget about the long term.

Everything that we hear from the Government is about patient capital—and, if you are going to look for the long term, surely you follow the pattern proposed by my noble friend Lord Russell, which says that, over the long term, you will do much better if you take some serious equity positions and perhaps make an in-kind contribution to a project, rather than charging rent over a relatively short-term period. If it acts in the same way as a commercial entity, surely in its commercial activities the Crown Estate should be treated as a commercial entity and therefore have to live up to the law that applies to other commercial entities operating in that same sector, and not to have an out because of its peculiar status, sitting somewhere between public and private. If that were done, the noble Lord, Lord Young, would not be asking why on earth it was not living up to the terms of the law for other commercial entities in dealing with leaseholders and freehold. It has to be recognised for what it is, and there are changes, consequently, that the Government may wish to make—first to create long-term thinking but also to make sure that, when it operates on a commercial basis, it is subject to the same regulations and requirements as other similar commercial properties.

I want to address very briefly the issues raised by the noble Baroness, Lady Vere. It is wonderful the change that comes when a body moves into opposition —the road to Damascus. The number of times I have asked a Conservative Government: when we have appointments, could we please have pre-appointment scrutiny by a committee of this House? In fact, I may even have requested them of the noble Baroness, Lady Vere, concerning various appointments at the Treasury—I cannot quite remember, there have been so many over the years. I am so glad of this Damascene conversion. We now have a Conservative party that is also supporting pre-appointment scrutiny. I do believe that pre-appointment scrutiny was often the Labour Party position. The noble Lord, Lord Livermore, is shaking his head but I think I may have a longer memory. I have certainly heard it from other Members, both on the Treasury Select Committee when I was in the other House, and on the Economic Affairs Committee. Pre-appointment scrutiny does make sense as a general underlying principle, and it would seem to make sense for the four new commissioners that are to be added to the existing eight.

Like others, I am really curious to know: going from eight to 12, they say, is good practice, but why? What will they do? Where will they come from? I can perfectly well see that this is a great opportunity for regional representation, and the noble Lord, Lord Holmes, touched on a very important point: we now look at most boards and want to see clearly that they understand that the ethics and attitudes of today require inclusivity; that it is not just some token item somewhere in an ethics statement by the company, but that someone is actually taking responsibility, based on knowledge, at a very senior level within the decision-making structure, and implementing that role. Here is an opportunity to seize that, and I hope very much that the Government will do so.