Crown Estate Bill [Lords]

David Chadwick Excerpts

2nd reading
Tuesday 7th January 2025 Commons Chamber

[Pippa Heylings (South Cambridgeshire) (LD)]

I begin by extending my gratitude to all those who have worked tirelessly in the Lords on the Bill over the past seven months. I note in particular the way in which full transparency was offered and delivered by Lord Livermore, the Financial Secretary to the Treasury, in response to requests for clarification and evidence. I hope that we can replicate such co-operation as the Bill passes through this House.

The objectives of the Bill are to broaden the investment and borrowing powers of the Crown Estate and to strengthen its corporate governance, in order to help accelerate, among other things, the delivery of new renewable energy, particularly offshore wind. We are generally supportive of the Bill and would welcome further scrutiny on issues such as the cap on borrowing; accountability in the relationship with Great British Energy; managing the conflicts between competing interests and values of our seabed and coastline, as mentioned by my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael); community benefit; devolution in Wales; and our climate and nature duty. I will proceed to elucidate those issues.

In the UK, we are off track in meeting our climate targets, following previous years when the Conservatives have dithered and rowed back on pledges. We need to increase investment in renewable energy in order to strengthen our energy security and to help families keep warm and lower their energy bills, particularly during this cost of living crisis. As a result of Russia’s invasion of Ukraine, families and businesses have been left exposed to skyrocketing bills. For far too long we have been reliant on autocrats such as Putin to meet our energy needs.

The Crown Estate oversees 200,000 acres of land, 12,000 km of coastline and a seabed area larger than the combined land mass of England, Wales and Northern Ireland. As the owner and steward of the seabed, the Crown Estate leases plots to offshore wind developers and other infrastructure projects, playing a fundamental role in the sustainable development of this national asset and in the potential for securing our world-leading position on floating offshore wind development.

For many years, however, the Crown Estate has been constrained in its ability to borrow through the Treasury, forcing it—as we understand it—to resort to selling off assets in order to fund its investments for the future. The changes proposed in the Bill, in partnership with Great British Energy, hold the potential to unlock investment in vital infrastructure across supply chains, ports and green energy sectors, and to accelerate progress by unblocking the huge delays in the delivery of new green energy, which is desperately needed following the slow progress made under the previous Government.

It is reassuring to hear that during the Bill’s passage through the Lords, assurances were given that there would be a borrowing cap of 20% of the loan-to-value ratio. We look forward to seeing that reflected in the updated framework agreement as we go into Committee. On the day the Bill was introduced to the House of Lords, the Government announced the Crown Estate’s partnership with Great British Energy to bring forward new offshore wind developments. Despite the significance of that relationship between the two, the original Bill did not provide clarification on or accountability in how it would work.

Clause 4, which was introduced by my Liberal Democrat colleagues, ensures important transparency through annual reports on activities within that relationship. However, we also share Energy UK’s concerns about how that relationship will work, particularly in relation to other private sector investment. We support its calls for annual schedules for offshore wind leasing that identify locations and target capacities. Such a road map would help developers and suppliers to plan investments, including necessary port upgrades, and would align with the offshore wind industrial growth plan.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

Does my hon. Friend agree that this legislation should have set out a framework for devolving the Crown Estate in Wales, as is the case in Scotland?

[Pippa Heylings]

Indeed, I read the report of the debate in the Lords, and there was a passionate request for the Crown Estate in Wales to be devolved to the Welsh Administration and for the benefits to be felt by Welsh communities. We look forward to discussing that in Committee.

Another crucial area that has been mentioned is the mapping of the seabed around our coastline. The Crown Estate has already begun that work with award-winning geospatial techniques. That key contribution to spatial planning for our coastal and marine areas needs to balance economic development with environmental responsibility. For years, the Liberal Democrats have called for comprehensive land and sea use frameworks. Although the Government have committed to a land use framework, we remain far behind on marine spatial planning. We have heard today, in response to the concerns of my right hon. Friend the Member for Orkney and Shetland, about the conflict of interest in the Crown Estate leading on determining priorities in our coastal and marine areas. It is on that point that we seek assurances.

Statutory bodies such as the Maritime Management Organisation are responsible for prioritising and managing competing interests and values between users of our coastline, including in fishing, as has been mentioned, and in tourism, amenity use and shipping. All those things need to be managed, and that can be done through marine spatial management. We caution against the Crown Estate becoming the leader by default because it is the owner and steward of the seabed and has the capacity for mapping. We know that it is undertaking liaison work with fisheries, and that is good, but the MMO is the statutory body for managing those competing interests, and we seek assurances that that will be clarified in Committee.

Raising the issue of devolution to Wales brings me to the key point of community benefits. We need to know how communities will benefit from the investment in infrastructure and renewable projects facilitated by this Bill. Local communities must not feel that this energy transformation is being done to them, but that it is empowering them to participate and benefit from it. While the new borrowing powers will enable investment in offshore wind, they will also facilitate property development across the 185,000 acres of the Crown Estate, so the Bill must do more to ensure that those developments do not ride roughshod over community concerns regarding planning, infrastructure and environmental standards, both on land and at sea. People must have a say in the decisions that affect them and, where infrastructure is concerned, they should also receive the benefits where appropriate.

I was really pleased to see the inclusion of amendment 10, championed by Baroness Hayman. That amendment requires the commissioners to

“review the impact of their activities”

on sustainable development. As Liberal Democrats, we have long called for climate and nature duties to be a requirement of all public bodies. As Baroness Hayman wisely said,

“What matters is the endgame and the results… What matters is the impact we have and how much we have shifted the dial in terms of what the Crown Estate achieves in support of the Government’s climate and nature objectives.”—[Official Report, House of Lords, 5 November 2024; Vol. 840, c. 1425.]

During the debate in the Lords, an undertaking was given that the framework agreement would be updated to include a definition of the meaning of sustainable development as regards the Crown Estate, with explicit reference to part 1 of the Climate Change Act 2008—the targets for 2050—as well as section 56 of that Act, and to sections 1 to 3 of the Environment Act 2021 regarding nature recovery. I look forward to seeing an updated version of the framework agreement to reassure us that this definition of sustainable development has been included.

This Bill presents a trident of opportunity. It can enhance energy security, reduce household bills and bring us closer to achieving our net zero targets, but we cannot afford to lose sight of the need for financial accountability, the duty to protect nature, the need to devolve to Wales, and the need to ensure that all communities are included in the crucial journey to net zero.