Crown Estate Bill [HL]

Baroness Humphreys Excerpts

Report stage
Tuesday 5th November 2024 Lords Chamber

Moved by

[Baroness Humphreys]

6: After Clause 2, insert the following new Clause—
“Devolution of Crown Estate management to WalesAfter section 1 of the Crown Estate Act 1961, insert—“1A Devolution of Crown Estate management to WalesThe Treasury must complete a transfer of the responsibility of the management of the Crown Estate in Wales to the Welsh Government.””Member's explanatory statement
This amendment would require the Government to devolve Welsh Crown Estate responsibility to Wales.

[Baroness Humphreys (LD)]

My Lords, I will speak to Amendment 6 in my name and Amendment 11 in the name of the noble Lord, Lord Hain. I thank the noble Baroness, Lady Smith of Llanfaes, for signing my amendment. We debated a similar amendment in Committee, where those of us who argued for the devolution of the Crown Estate to Wales made strong arguments in favour of it. Other noble Lords, including the noble Lord, Lord Wigley, and the noble Baroness, also presented strong cases for their amendments on the transference of the management of the Crown Estate in Wales to the Welsh Government, on separate reporting within the annual accounts of the activities of the Crown Estate in England, Wales and Northern Ireland, and on other issues. I thank both noble Lords for their commitment to this issue.

Public opinion in Wales is behind the devolution of the Crown Estate, with a YouGov poll last year showing that 58% of the people of Wales support such a move. Senedd Cymru has supported its devolution, as have the majority of political parties in Wales, including my party—the Welsh Liberal Democrats and our federal party. I was encouraged this week to find that, in their response to the final report of the Independent Commission on the Constitutional Future of Wales, the Welsh Labour Government said:

“Our longstanding position is that the Crown Estate should be devolved to Wales in line with the position in Scotland”.


That being so, I am disappointed that the Welsh Government were not consulted when this Bill was being prepared.

There are frustrations in Wales, as Scotland is seen to be benefiting from the devolution of Crown Estate powers to the Scottish Parliament, not only through the receipts paid to it but in the control, power and influence that Scotland has over the use of its resources. Scotland appears to move on while Wales lags behind. For us, the process of devolution appears to have come to a stop. There are real concerns that, by the time Wales has control over the Crown Estate, much of the wealth will already have been extracted.

As we appear to have reached something of an impasse, the way forward might be to follow the process followed by the Scottish Affairs Committee in the other place in the lead-up to the devolution of the Crown Estate there. It published a number of reports, one of which in 2014 identified issues in the management of the Crown Estate’s responsibility, particularly in relation to the seabed and foreshore. It looked at issues including

“accountability and transparency … communication and consultation with local communities … cash leakage from local economies … arising from the way the CEC operates … The evidence did not identify such problems with the CEC’s management of its urban and rural estate”,

only those relating to the seabed and foreshore.

We would therefore welcome any decision of the Welsh Affairs Committee to initiate an inquiry to determine if similar problems apply to Wales. It is not of course our place in this Chamber to call for that, but an evidence-taking committee of inquiry would provide the evidence to move this issue forward and address any lessons learned since the devolution of the Crown Estate to Scotland.

As I said in Committee, my amendment does not call for a timescale for the devolution of the Crown Estate to the Welsh Government, because I accept that this will not be completed overnight. However, I am also disappointed that the amendment of the noble Lord, Lord Hain, which the Minister has signed, does not lay any foundation or route map for the transference of powers to Wales. Because of this, I am minded to seek the opinion of the House on my Amendment 6.

I want to make a couple of comments on Amendment 11, but as the noble Lord has not had the opportunity to speak to his amendment yet, my comments will be brief. I am grateful to the noble Lord for tabling his amendment and recognise the time and the cross-party work he put into its preparation—I know it was no easy feat. I am also grateful to the Minister, who has signed Amendment 11. This represents a major change in his stance since Second Reading and Committee of the Bill, and I also acknowledge how difficult this process must have been for him as Treasury Minister.

However, this major change in the Minister’s stance will be seen as the smallest, most insignificant step for those advocating the devolution of the Crown Estate to Wales. Amendment 11 calls for three commissioners to be appointed, one each to represent England, Wales and Northern Ireland and to be

“responsible for giving advice about”

their respective nations.

I have two questions, which I hope the noble Lord or the Minister will be able to address. First, proposed sub-paragraph (3C) refers to

“the giving of advice to the Commissioners about conditions in that part so far as relating to their functions in relation to land there”.

I assume that the use of the word “land” excludes the giving of advice about the more lucrative foreshore and seabed. If it does exclude the foreshore and the seabed, why are they not included?

Secondly, in a nod to devolution, in sub-paragraph (4B) Welsh Ministers are to be “consulted” about the commissioner for Wales before the recommendation is made to His Majesty. Can the Minister confirm that “consulted” means that Welsh Ministers are to take no part in the actual appointment of the commissioner for Wales?

I am seeking more for Wales than Amendment 11 provides. With the devolution of the Crown Estate, we could see an economic boost built on the success of renewable projects around our coastline, reviving coastal communities and ensuring the benefits from these projects are actually felt by those living near them in Wales. I beg to move.

[Lord Murphy of Torfaen (Lab)]

My Lords, I will speak to move Amendment 11 on behalf of my noble friend Lord Hain, who cannot be with us this afternoon. I was present in Committee on the Bill and listened with great interest to noble Lords discussing the issue of devolving the Crown Estate to Wales. I had a great deal of sympathy with the points that were made. I believe it is incongruous that it has already been devolved to Scotland but is not devolved to Wales or Northern Ireland. I speak as someone who was Secretary of State for both Wales and Northern Ireland. Therefore, I welcome the amendment tabled by my noble friend, in so far that it means that there will be commissioners specifically responsible for giving advice to the Crown Estate itself on behalf of Wales and Northern Ireland—which is very good.

I take the point made by the noble Baroness, Lady Humphreys, about consultation, but it is pretty clear to me that it would be a very foolish Government to appoint commissioners who were not approved by the First Minister in Cardiff and the First and Deputy First Ministers in Belfast. It is a start, though it is not exactly everything that was wanted. I agree with the noble Baroness, Lady Humphreys, that my noble friend the Financial Secretary has indeed moved his stance to one which would be agreed to by lots of people in Wales, and I guess in Northern Ireland.

We are living in different times; we now have a Labour Government in Cardiff and in Whitehall. I believe it is important that Governments can get together and talk about these issues in a very special way. That is why this amendment is before us this afternoon: exactly because there have been proper discussions, which I guess the Secretary of State for Wales has also been involved in. Personally, I do not think it goes far enough, but as I said, it is a start.

In the new regime—in this new Britain since the general election—there is a very serious case to be made for a much better relationship between the devolved Administrations and the United Kingdom Government. We have a new Council of the Nations and Regions, which will do a great deal of good for that relationship. We have a situation in Northern Ireland where we now have the Executive up and running, at last, and I congratulate the previous Government on the work they did on that. In this new era, where devolution means something very different from what it has meant over the last number of years, we have to believe that this new relationship will result in decisions such as this one.

I hope that this is not the end of the discussions between the Treasury, the Government, the Welsh Government and the Northern Ireland Executive; I hope it is the beginning of discussions on these issues, not just on this one, but on other ones as well. In my personal view, I hope that, ultimately, the Crown Estate should be devolved. However, we are where we are: the Government have made a concession, the Financial Secretary has very kindly signed my noble friend’s amendment, and I very much look forward to what he has to say in the course of this important debate.

--- Later in debate ---

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have spoken in this debate in response to the amendments from my noble friend Lord Hain and the noble Baroness, Lady Humphreys.

Turning first to Amendment 11, tabled by my noble friend Lord Hain with my noble friend Lord Murphy speaking on his behalf, I thank my noble friend Lord Hain for his constructive engagement on this topic and thank other noble Lords across the House who have spoken in favour of this amendment, which the Government support. The amendment requires that the board of Crown Estate commissioners must include a commissioner who is knowledgeable about Wales and that such a commissioner, alongside their existing responsibilities, must be responsible for giving advice about Wales to the board. It also requires equivalent positions for Northern Ireland and England and grants Welsh Ministers and the Executive Office in Northern Ireland the right to be consulted about the Welsh and Northern Irish appointments. These legislative requirements will ensure that the board of commissioners continue working in the best interests of Wales and Northern Ireland alongside their existing duties as commissioners. To answer the noble Baroness, Lady Humphreys, I say that I do not believe that the amendment in any way deliberately excludes the seabed.

I reassure the noble Lord, Lord Wigley, that the Crown Estate absolutely welcomes the opportunity presented by the increase in the number of commissioners from eight to 12, to bring knowledge of the devolved nations even more directly to the board table. It is an enthusiastic supporter of this amendment. This will supplement the expertise of its director for the devolved nations, who is based in the Crown Estate’s recently opened Cardiff office and whose knowledge and extensive local engagement over the last two years is evidence of the importance to which it attaches understanding local conditions in Wales.

The commissioner responsible for giving advice to the board on Northern Ireland will provide valuable insight as the Crown Estate’s engagement and activities in Northern Ireland continue to evolve. For example, the Crown Estate’s chief executive was in Belfast last month meeting officials and Ministers from the Department of Agriculture, Environment and Rural Affairs and the Department for the Economy. That form of engagement will move from strength to strength with the knowledge that such commissioners will offer to the board. These commissioners will certainly strengthen the Crown Estate’s ability and mission to deliver benefit for the whole UK at a time when devolution of the estate would significantly risk fragmenting the energy market, which would undermine international investor confidence and delay the progress towards net zero by an estimated 10 to 20 years, to the detriment of the whole UK.

Amendment 6, tabled by the noble Baroness, Lady Humphreys, would require the Treasury to complete a transfer of the responsibility for the management of the Crown Estate in Wales to the Welsh Government. As I have set out previously, the Government’s position is that there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form. As I set out in detail in Committee, the Crown Estate Act 1961 requires the Crown Estate commissioners to manage the Crown Estate as a commercial enterprise and with due regard to the requirements of good management. While the Crown Estate has goals which, under its own strategy, align with wider national policy objectives, the 1961 Act provides the Crown Estate with independence and autonomy to set and achieve its goals. It has shown itself over the last 60 years to be a trusted and successful organisation with a proven track record in effective management.

The Crown Estate is required to place profits into the UK Consolidated Fund each year, worth more than £4 billion over the past decade. This enables those revenues to fund UK government spending in reserved areas in Wales and Northern Ireland and supports the funding provided through the block grant. Those revenues are then allocated to public service priorities by the Government, subject to the usual parliamentary controls. As I have noted previously, that is a valuable outcome which we must be careful not to undermine. Devolving the Crown Estate to Wales would, as I have explained, most likely require the creation of a new entity to take on the role of the Crown Estate in Wales. As I have previously set out, this entity would not benefit from the Crown Estate’s current substantial capability or capital and system abilities, nor benefit from the Crown Estate’s marine investments currently being made on a portfolio-wide basis across England and Wales. To devolve to Wales would disrupt these existing investments, since they would need to be restructured to accommodate a Welsh- specific entity.

I will not repeat the examples that I gave in Committee, but it remains the point that to devolve at this time would risk jeopardising the existing pipeline of offshore wind development in the Celtic Sea, planned into the 2030s, and the vital investment and jobs that this would bring across south Wales. As I noted in Committee, in addition to energy, the extensive jobs and supply chain requirements of the round 5 offshore wind opportunity in the Celtic Sea would also likely deliver significant benefits for Wales and the wider UK. As I mentioned in Committee, an advisory firm to the Crown Estate estimated that manufacturing, transporting and assembling the wind farms could create around 5,300 jobs and a £1.4 billion boost for the UK economy.

Devolution would also delay UK-wide grid connectivity reform. For Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its current pipeline of Welsh projects, the biggest of which is round 5—which is expected to contribute enough energy capacity to power 4 million homes across the United Kingdom—can benefit from this co-ordinated approach to grid connectivity up front. Introducing a new entity, which would have control of assets only within Wales, into this complex operating environment where partnerships have already been formed, would not make commercial sense. A devolved entity would be starting from scratch midway through a multi-million-pound commercial tendering process when the Crown Estate is undertaking critical investment in the UK’s path towards net zero. I therefore respectfully ask the noble Baroness, Lady Humphreys, to withdraw her amendment.

[Baroness Humphreys (LD)]

I thank the Minister for those comments and everyone who has spoken in this debate, especially those who have supported the devolution of the Crown Estate to Wales. I was looking for a little more from the Minister about the responsibility of the commissioners. It seems that they are there to give advice, but there is no responsibility to report to Welsh Ministers or to discuss with them, which I hope that they will do in any case.