Crown Estate Bill [HL]

Baroness Young of Old Scone Excerpts

Committee stage
Monday 14th October 2024 Lords Chamber

[Baroness Hayman (CB)]

My Lords, I declare my interest as co-chair of Peers for the Planet—oh, I am not co-chair, I am chair now! I am sorry, I must have an old version of my speech.

I will speak to Amendment 25 in my name in this group. I am grateful for the support of the noble Baroness, Lady Young of Old Scone, and the noble Lords, Lord Teverson and Lord Young of Cookham. I am very glad to follow the noble Lord, Lord Holmes of Richmond, in his widening of the debate about the role of the Crown Estate into some of the huge challenges that we face as a nation and as a society.

This group of amendments takes up the themes suggested by the noble Lord, Lord Lansley, and the questions raised by the noble Lord, Lord Young of Cookham, which challenge us to answer the question of how the core responsibilities of the Crown Estate —the financial responsibilities and the objectives of creating an income stream for the Treasury—fit in and interact with other major responsibilities and other pieces of legislation. The noble Lord, Lord Young, was talking about this in relation to tenancy questions, while the noble Lord, Lord Lansley, was asking whether the Crown Estate is constrained in some of the things it wants to do—the environmental and climate change issues that I am interested in, for example—by the 1961 Act, and whether it is unable to recognise other responsibilities and objectives that the Government have put into legislation since that Act.

My amendment tries to ensure that the Crown Estate does what it can as an important part of our national wealth to contribute to combating the nature and climate crises. It would equip the Crown Estate to play its role and future-proof that commitment against a future change of government. It does so by ensuring the Crown Estate has a statutory duty to contribute to national efforts to meet our climate and nature targets, as set out in the Climate Change Act and the Environment Act. In relation to the seabed, about which the noble Lord, Lord Holmes, spoke so eloquently, the amendment would also safeguard the Crown Estate’s ability to fulfil its stated mission to,

“take a leading role in stewarding the UK’s natural environment”,

by requiring seabed leaseholders to meet a new conservation condition.

The amendment would enable the Crown Estate to continue to fulfil its role of creating wealth for His Majesty’s Treasury while recognising that, as it moves away from being solely an asset owner and takes on new borrowing and investment powers, it should also be accompanied by obligations to deliver for nature and the climate. The last significant modernisation of the Crown Estate was over 60 years ago, when the issues relating to climate change and the threats to the natural environment were far less understood and far lower down the national and global agenda. Today, however, the impacts of climate change are undeniable. Only last week, a new report on the state of the world’s climate led by international scientists concluded that:

“Much of the very fabric of life on Earth is imperilled. We are stepping into a critical and unpredictable new phase of the climate crisis”.


The report highlights that we are still moving in the wrong direction, with emissions and their often catastrophic effects, which we have seen so recently, still rising.

At Second Reading, the Government did not seek to deny the threat or the urgency of the climate and nature crises, nor the need for the Crown Estate to play its part in combatting them. Rather, they suggested that a statutory duty was not necessary because:

“the Crown Estate has existing governance structures in place to ensure that environmental impacts are a central consideration of its investment decisions”.—[Official Report, 2/9/24; col. 1021.]

But there is an important difference between considering environmental impacts in investment decisions and making sure that those decisions actually contribute to our nature and climate targets.

My amendment supports the Crown Estate not just to think about minimising the impacts on the environment but to look at the contribution it can make that will bring us closer to our climate and nature goals. I welcome the important progress that the Crown Estate is making through its new nature goals and the initiatives it has taken, including the Marine Delivery Routemap, but our amendment seeks to embed such initiatives in legislative form. It is constructive work that is already being done, but—I go back to it not being a cuddly organisation—we need to embed it and to future-proof it, and we can do that only by changing the Bill.

The need for a legislative base to underpin environmental responsibilities was, in fact, recognised in the Scottish Crown Estate Act. I believe that my amendment reflects a similar, and indeed even stronger, objective by linking the contribution to our legally binding targets. I know that there is concern about the possibility of these provisions in some way encroaching on the commercial independence of the Crown Estate, but my amendment does not seek to constrain that commercial independence. It simply commits the organisation only to

“take all reasonable steps to contribute to … the achievement of”

our nature and climate targets, in line with the legally binding targets the Government have already committed to.

There is a growing recognition that we have to integrate nature and climate responsibilities across our national and local bodies and across all organisations that discharge public duties. As the Minister will recall, there have been a number of Bills affecting regulators and public bodies on which we have brought forward amendments similar to this and often succeeded in integrating nature and climate responsibilities into legislation—but we are doing it piecemeal at the moment. The noble Lord, Lord Krebs, has a Private Member’s Bill before the House this week that gives us the opportunity to take a more coherent and comprehensive approach. I support that—I hope we will have coherent and comprehensive support—but today, and as we go through this Bill, we have the opportunity to make a very specific contribution through the work of the Crown Estate. I hope that the Minister will be sympathetic to amending the Bill in the ways that I suggest.

[Baroness Young of Old Scone (Lab)]

My Lords, I add my support to Amendment 25, to which I have put my name, alongside the noble Baroness, Lady Hayman, and the noble Lords, Lord Teverson and Lord Young of Cookham.

I think that we have all agreed that the Crown Estate is not cuddly, but it is also big and hugely important. It is the third-biggest landowner in this country and it is a major owner of the seabed, covering an area twice the landmass of England, Wales and Northern Ireland, so it is absolutely crucial that it does the right thing. The decisions it makes about land and sea are important not just for energy and climate change but for biodiversity, food resilience, flood risk, water management, and the quality and quantity of water—a whole plethora of things. That is why I bang on about the need for a land use framework, but you could almost say that the Crown Estate could have a mini land use framework and a mini sea use framework all of its own, because it is sufficiently large a player.

As the noble Baroness, Lady Hayman, said, we have national targets set in statute for net zero and biodiversity recovery. It is absolutely clear that the Government will simply not be able to make these targets without the Crown Estate playing a full role, as it is one of the big boys on the block. For example, the offshore wind partnerships that we have heard about in collaboration with Great British Energy will leverage £60 billion of private investment and provide energy to nearly 2 million homes.

The Crown Estate is also fundamental to economic and environmental issues, including flood risks, owning as it does great tracts of the coast. Carbon capture, use and storage, if you believe in it, is a big part of the net zero strategy—I have my doubts that it will actually play that role—but it depends hugely on the Crown Estate playing its role, otherwise it simply will not be able to happen. We have to recognise that the Crown Estate is a massive player, including in coastal habitats which are uniquely important in UK terms. We are a major staging post for marine and bird migration as a result of our globally important coastal habitats. The Crown Estate is big in all of those things.

--- Later in debate ---

[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—

[Baroness Young of Old Scone (Lab)]

I know the Minister is anxious to get on to the dinner break business, but I think he misunderstands exactly what we are saying by asking for biodiversity and climate change target achievement to be included. The reality is that we want the Crown Estate commissioners to be able to walk, talk and chew gum. They have to be able to be smart enough to deliver on the commercial and economic imperatives that the Minister has been absolutely clear about—he has repeated them several times—and do the biodiversity and net zero delivery at the same time. That is doable but not if, as the Minister has just done, he continues to say and reinforce for the Crown Estate commissioners that their primary purpose is a commercial one, because that will always take precedence.