Crown Estate Bill [HL]

Earl of Devon Excerpts

2nd reading
Monday 2nd September 2024 Lords Chamber

[The Earl of Devon (CB)]

My Lords, it is a pleasure to return refreshed from recess. I trust that the Government are refreshed as well, despite their rather riotous summer.

This is, as has been recognised, a slim Bill, but it offers a rare opportunity to explore important fundamentals at the outset of the Government’s ambitious legislative agenda. These include the nature and future of the Crown Estate itself, the renewable energy transition, and the tricky balancing act inherent in achieving sustainable economic growth within a five-year election cycle without damaging long-term consequences for our nation’s stock of natural capital. The Bill’s silence on biodiversity, particularly in our sensitive marine ecosystems, is regrettable. I echo the noble Baroness, Lady Bennett, on that point.

The Prime Minister, Sir Keir Starmer, has made much of his ambition to fix the foundations of our nation; you do not get much more foundational than the Crown Estate. The helpful Library briefing states that the Crown Estate dates from

“1760, when King George III handed land and property over to the government … in return for a fixed salary”—

now the sovereign grant. This is not strictly accurate in at least two regards. First, the Crown Estate dates from the Norman conquest, when William, Duke of Normandy, took England by force. By 1086’s Domesday audit, it amounted to some 18% of the country and it is therefore an unapologetically feudal landholding.

Secondly, the Crown Estate was not handed over to Parliament. The land and its associated capital still belong to the King in right of the Crown; they are simply managed by the Crown Estate commissioners and the surplus income is directed to the Treasury. I disagree with the noble Lord, Lord Teverson, on this point. The Crown Estate is therefore a hereditary feudal estate. It is far from the only hereditary feudal estate in the country—here I should note my interests—but it does have the best PR.

I noted in recent debates on leasehold reform how “feudal” is consistently adopted in parliamentary discourse as a pejorative term, used unfairly to denigrate long-established roles, rights and interests that have served our nation well over the last millennium, such as the monarchy. I also note that the current Labour Government’s own manifesto has labelled hereditary interests as “indefensible”. How then do the Government justify, as their first order of business, the modernisation of the hereditary feudal institution of the Crown Estate, particularly when a subsequent order of business is the abolition of the hereditary peerage, one of the other feudal and hereditary mainstays of our constitutional settlement? This seems a little insensitive. Is it perhaps because the Government see a golden opportunity to extract more revenue for Treasury coffers as a quid pro quo for the Crown Estate’s renewal and continued existence? We should ask ourselves what this transaction will do for the long-term health and well-being of the Crown Estate and its precarious constitutional place. I note the comments of the noble Lord, Lord Howard, in this regard.

I note the Crown Estate’s excellent public relations. The current public consensus is that it is a benign body, managing ancient rights and land for the public benefit, but do not be mistaken. Here, I take the invitation of the noble Baroness, Lady Young, to throw a little more light upon it. The Crown Estate has always been, and will continue to be, an aggressive commercial operator, skirting the edges of the law for maximum gain. Again, I note my interests, particularly as Earl of Devon, as in that capacity I can vouch for the Crown Estate’s dubious foundations. I trust that noble Lords will forgive me the trip down memory lane as I vent the frustrations of the past 800 years.

Take for example, the Isle of Wight—just as the Crown did. Until 1293, it was a largely independent kingdom, governed initially by a Norman comrade of William the Conqueror, Richard de Redvers, whose son Baldwin became Earl of Devon in 1142. The last de Redvers Earl of Devon was a woman—perhaps surprising given the reluctance of Parliament today to countenance female succession to hereditary peerages. The great Countess Isabella de Fortibus expanded Carisbrooke Castle, built the Countess Wear over the River Exe, long outlived her husband and brother and became one of Plantagenet England’s greatest landholders.

Edward I pursued her relentlessly for the Isle of Wight, of which she was titular queen, but she consistently refused him—that is, until her deathbed, to which the King dispatched two bishops to persuade her to give up the island, plus three valuable manors, in return for a cash payment of 6,000 marks. She was an elderly lady in declining health. The deed was drawn up on 9 November 1293. She never signed it, but rather—according to those bishops—waved her hand in acquiescence and died on 10 November, the very next day. Her heir Hugh de Courtenay, the first Courtenay Earl of Devon, never received the payment.

Later raids on Courtenay lands were less subtle. In 1538, Henry VIII simply beheaded his cousin, Henry Courtenay, the Earl of Devon, on baseless conspiracy charges arising from his Plantagenet bloodline. The King seized 13 manors by attainder, and they now form the core of the Duchy of Cornwall. Your Lordships may find this history lesson a little self-indulgent; it is, but in a few months your Lordships will not have many hereditaries present with memories by which to hold our sovereign to account, and our Parliament will be poorer for that.

I also note that this avaricious conduct did not cease with George III’s transfer of the management of his feudal estates to Parliament. As recently as the 1990s, my father endured a long-running battle with the Crown Estate over title to the fundus and foreshore of the River Exe estuary. Neither attainders, beheadings nor disingenuous bishops were available to the Crown Estate this time around, and after many years my father was able to reassert his ancient manorial rights. Tensions with the Crown Estate continue. Ownership of Salcombe Castle is unsettled and a harbour revision order governing the Exe estuary is yet to be resolved. The expansion of the Crown Estate’s powers will therefore have very real impacts upon arguably more traditional, and certainly more indigenous and communal, interests. This begs the important question of what safeguards will be placed upon the exercise of these new powers to ensure that local interests are not trampled upon.

In particular, I note that the Crown Estate Bill removes restrictive limitations found in Section 3(4) of the Crown Estate Act 1961, affording Crown Estate commissioners a considerable expansion of powers. The Crown Estate’s briefing note suggests that these powers will be used to “mobilise investment” and

“expand activities across our diverse portfolio to accelerate our strategy”,

with a focus on clean power, including offshore wind; infrastructure and skills; and urban regeneration. These are all worthy and very important tasks, but can the Minister clarify the manner in which this massive expansion of activities will be subject to the control of Parliament?

I note, for example, that until now the Crown Estate commissioners have been paid by Parliament to undertake their closely prescribed investment powers. However, it is now proposed that they pay themselves out of the money they generate, using a vastly broader array of investment and borrowing powers. This raises the uneasy prospect of conflicts of interests and potential cronyism, about which I know the Prime Minister is very sensitive.

It would help our understanding if the Minister could explain why, in the Crown Estate Act 1961, it was felt necessary to restrict the Crown Estate’s investment powers so much. Nowhere in the Government’s or the Crown Estate’s briefings, nor in the Explanatory Notes, is the purpose of these original Section 3(4) restrictions explained. If the noble Lord, Lord Young, is correct, I do not think Hansard will be much help either. We should not be asked to remove these powers without knowing their original role and why it is no longer applicable.

It is suggested that the current investment powers enjoyed by the Crown Estate are unduly restrictive, but what is the benchmark against which that is to be judged? A quick look at the Crown Estate’s finances reveals that its revenue profits have increased in the last decade from £256 million in 2012 to £1.1 billion in 2022. Its net assets, which still belong to the sovereign, have increased from £8.1 billion to £15.5 billion over the same period. By any measure, the Crown Estate is doing very well. I note it is doing vastly better than any of its traditional land-based feudal competitors.

I also noticed the comment in briefings that in recent years, given such financial abundance, statutory transfers have ensured that revenue profits have been added to the Crown Estate’s capital reserves. As I understand it, in layman’s terms, this is the conversion of Treasury revenue to enhance the value of the hereditary Crown Estate, as owned by the sovereign. Is that really true?

How can we be certain that these new investments and expanded activities are undertaken in a way that is regionally equitable? For example, Great British Energy, with which the Crown Estate recently announced an expansive new partnership, is based in Scotland. Will it therefore not naturally favour Scottish interests over those of other regions? I note here my membership of the All-Party Parliamentary Group for the Great South West and the importance to the south-west peninsula of the Celtic Sea floating offshore wind project, which is highly dependent upon the Crown Estate for its success. It is important to Wales too, I understand. With that in mind, what reassurance can the Minister provide that the south-west will see equal support from the investment from the Crown Estate and GBE, alongside investment in regional skills and the network and infrastructure necessary to deliver the project?

How will the Crown Estate and GBE be forced to ensure that the communities that bear the greatest infrastructure burden of offshore renewables will get their fair share of the revenue generated by such projects? Is it appropriate to delegate all this complex political decision-making to the apolitical Crown Estate commissioners and the commercial management of Great British Energy? What is Parliament’s role in all this? I am particularly sympathetic to the concerns of the Welsh Government that the profits from the exploitation of the Crown Estate in Wales should revert to the benefit of the Welsh. Likewise, the profits from the south-west should revert to the people of the peninsula, please.

Further, how have the Government satisfied themselves that the partnership between the Crown Estate and Great British Energy is free from conflicts of interest and fully compliant with the necessary procurement regulations? Both partners are emanations of the state, and I am not aware that Great British Energy sought open bids or applications from any other marine fundus owners for partnership to deliver renewable energy from their land holdings. I admit that most of those land holdings are less extensive than the Crown Estates, but that is due to nefarious historical reasons we have already noticed.

Finally, and perhaps of most fundamental foundational importance, how will these amendments to the Crown Estate Act contribute to the lasting shared prosperity of the nation, which is the Crown Estate’s stated mission? How can we in Parliament be certain that the glut of offshore energy development engendered by this legislation will not permanently damage the health and vitality of our most important and vulnerable national asset: our natural capital?

Many of your Lordships will recall the ground-breaking report of Professor Dasgupta on the economics of biodiversity, commissioned by the Treasury some years ago. Noble Lords may also remember his damning conclusion that our myopic pursuit of economic growth, without accounting for the consumption of natural capital, renders us all poorer in the long run. How can Parliament ensure that the vast economic expansion enabled by this legislation will not come at the cost of the biodiversity of our unique and most precious marine ecosystems?

In particular, can the Minister please provide us with an update on Defra’s progress on marine net gain, following the consultation of 2022? I understand that this legislation, and the vast expansion in offshore energy that will follow, should not occur until MNG is properly legislated and in force. Otherwise, we will be closing the stable door long after the horse has bolted, leaving our marine ecosystems in tatters. I will be willing to forgo my claim to the Isle of Wight if the Government can provide satisfactory assurance that our marine ecosystems will be better safeguarded pursuant to this legislation.

--- Later in debate ---

[Lord Livermore (Lab)]

My Lords, it is a pleasure to close this debate on the Bill. I am grateful to all noble Lords for their contributions and questions. As I noted in opening, the purpose of this Bill is to make a targeted and measured enhancement to the Crown Estate’s powers and governance. Without this Bill, the Crown Estate would continue to be restricted in its ability to compete and invest, and therefore to deliver returns for the public purse. This Bill therefore broadens the scope of activities that the Crown Estate can engage in, enabling it to invest further in the energy transition, and empowers it to invest in capital-intensive projects more effectively.

The noble Lord, Lord Young of Cookham, asked whether the current governance arrangements of the Crown Estate were fit for purpose. The Crown Estate is subject to the same governance as other central government bodies. As such, its accounts are laid before Parliament and audited by the NAO. In addition, it has an accounting officer who is answerable to Parliament for the stewardship of Crown Estate resources. However, ensuring that the Crown Estate has the best possible governance arrangements is central to this Bill. The Bill therefore increases the number of Crown Estate commissioners from eight to 12. This change will ensure that the Crown Estate can meet best practice standards for modern corporate governance. This will help to broaden the diversity of the board and provide more expertise and capacity to enable the commissioners to operate more effectively in the constantly evolving business environment.

The noble Lord, Lord Young of Cookham, also raised concerns about escheat, which relates to the complex process by which land that is ownerless falls to the Crown. On the specific example he raised, I will raise this with the Crown Estate and come back to the noble Lord with a more detailed response in due course.

The noble Earl, Lord Russell, asked about borrowing by the Crown Estate. The exact profile of lending would depend on a number of factors, including the timing and financing requirements of specific investments, as well as the extent to which the Crown Estate can generate funding by the disposal of non-strategic assets. The current expectations are that borrowing will not be needed until 2029 and is expected initially to be in the low hundreds of millions.

The noble Lord, Lord Bourne of Aberystwyth, also asked about the Crown Estate’s borrowing powers. To clarify, the Crown Estate will have those powers as soon as the legislation is passed, but the first impact of the borrowing powers will be to enable the Crown Estate to run down its cash assets and make more efficient use of them. It therefore does not envisage using those borrowing powers, as I said, until the end of the decade.

My noble friend Lord Liddle asked about wider borrowing to meet our net-zero objectives. These borrowing powers are essentially about enabling the Crown Estate to make better use of its existing assets and to compete in the marketplace. They are, of course, not the full extent of our ambitions for new investment in clean energy. I point my noble friend, for example, to the national wealth fund that the Chancellor has announced, amounting to some £7 billion.

To reassure the noble Lord, Lord Howard of Rising, these borrowing powers in no way politicise or compromise the independence of the Crown Estate. It is the Crown Estate that has asked for the powers to make better use of its assets and to continue to maintain its estate. All borrowing will be subject to Treasury consent and will be within the fiscal rules.

The noble Lord, Lord Holmes of Richmond, mentioned additional financial instruments in terms of borrowing. The provisions contained in the Bill do not change the Crown Estate’s existing powers to enter into joint ventures. With the benefit of the measures proposed in the Bill, though, the Crown Estate is less likely to engage in joint ventures and equity share opportunities as it will have greater flexibility to fund its capital investments.

Several noble Lords asked about the partnership with GB Energy, including my noble friend Lord Liddle, the noble Lord, Lord Bourne, and the noble Earls, Lord Courtown and Lord Russell. As important as the strategic partnership with GB Energy is, the Bill is not about that strategic partnership between the Crown Estate and GB Energy, nor about setting up GB Energy. The Government obviously share many of the ambitions set out by noble Lords ahead of the introduction of the GB Energy Bill; the Great British Energy Bill led by DESNZ has been introduced in the other place and its Second Reading is due to take place on Thursday. Throughout the next few months, DESNZ will take the important steps to put Great British Energy on a delivery footing, including announcing the location in Scotland of its headquarters and starting to recruit key roles into the organisation.

In answer to the noble Earl, Lord Courtown, the initial investment criteria for the Crown Estate will remain unchanged. The partnership will facilitate strategic alignment through a co-ordinated approach to deliver clean power. The Crown Estate will continue to be independent of the Government and the King; the partnership with Great British Energy will not affect its independence, which is set out in the Crown Estate Act 1961.

The noble Lord, Lord Turnbull, and my noble friend Lord Berkeley asked about the sovereign grant. The reforms contained in the Bill are separate to funding provided to the King; the King is not involved in the management of the Crown Estate. Since 1760, each monarch has surrendered the Crown Estate’s revenue to the Exchequer in return for government support. Government support for the King is provided by the sovereign grant, which is currently set by a reference to 12% of Crown Estate profits.

However, the Sovereign Grant Act includes a statutory requirement to review the percentage rate used in the calculation every five years to determine whether it remains appropriate. Under the Sovereign Grant Act, the grant will next be reviewed in 2026. The review is conducted by the three royal trustees: the Prime Minister, the Chancellor of the Exchequer and the Keeper of the Privy Purse. Where necessary, the Government lay a statutory instrument to amend the percentage used. For example, following the royal trustees’ review last year, the rate was cut from 25% to the current 12%.

My noble friend Lord Berkeley also asked about the Duchy of Cornwall. As he knows, it is a long-established principle that income from the Duchy is independent of any government control.

My noble friend Lady Young of Old Scone asked specific questions on housing, nature recovery and biodiversity, supply chains, grid and environmental performance. On her question on the Crown Estate and housing, I agree wholeheartedly with the objectives she set out for the affordability and quality of housing. Housing is primarily a matter for the Ministry of Housing, Communities and Local Government. I hope that its forthcoming legislation will achieve many of the objectives she set out. However, while the Crown Estate is not a housebuilder at scale, it recently committed to supporting the country’s need for better-quality housing. With the support of the measures proposed in the Bill, the Crown Estate can leverage its pipeline of 20,000 homes over the next 20 years and further its commitment to quality, sustainability and innovation.

On her question on nature recovery and biodiversity—which the noble Lords, Lord Teverson and Lord Holmes of Richmond, and the noble Baroness, Lady Bennett of Manor Castle, also touched on—stewarding the natural environment and biodiversity is core to the Crown Estate’s strategy. These powers will accelerate the Crown Estate’s leadership of nature recovery across land and sea through investment into the latest remote sensing and geospatial tools to map natural assets, developing its rural portfolio into an exemplar of large-scale, sustainable agriculture and environmental best practice.

On my noble friend’s third question on supply chains, the Crown Estate prioritises the ethics of its suppliers, focusing on ethical and inclusive practices, health, safety and well-being, sustainability, privacy and information security and innovative business practices. Its suppliers must also commit to diversity, equity and inclusion, pay the living wage and comply with legal and industry standards.

Several noble Lords also touched on questions of the grid—which my noble friend originally raised—including the noble Lords, Lord Bourne, Lord Teverson and Lord Holmes of Richmond, and my noble friend Lord Liddle. The Government are committed to speeding up connections to the grid. Ofgem and government published a joint Connections Action Plan at the end of 2023 to improve the connections process and reduce connections timescales, which this Government are taking on.

The Crown Estate is already using its experience, data and expertise as managers of the seabed to feed into the new strategic spatial energy plan. The Crown Estate is also already working in partnership with National Grid to ensure that its current pipeline of projects, including its round 5 floating offshore wind opportunity in the Celtic Sea, can benefit from a more co-ordinated approach to grid connectivity up front.

On the question of environmental performance, the Crown Estate is committed to net zero within its own operations and developing net-zero targets and pathways to reduce emissions within its wider value chain, in line with a 1.5 degrees centigrade trajectory. To meet this ambition, its commitments include removing fossil fuels from its activity, reducing operational emissions for all assets and producing decarbonisation road maps for all assets and sectors.

The noble Lords, Lord Howard of Rising and Lord Teverson, asked about transparency. Ensuring the Crown Estate has the best possible governance arrangements is central to this Bill. The Crown Estate is subject to the same governance as other central government bodies. As such, its accounts are laid before Parliament and audited by the NAO. In addition, the Crown Estate has an accounting officer who is answerable to Parliament for the stewardship of Crown Estate resources.

The noble Lords, Lord Bourne, Lord Wigley and Lord Holmes of Richmond, and the noble Baroness, Lady Smith, touched on the question of devolution to Wales. The Government believe there is greater benefit—for both the people of Wales and the wider UK—in retaining the Crown Estate’s current form. I know that the noble Lords who raised these points will not agree with me, but the Government’s view remains that devolving the Crown Estate to Wales at this time would significantly risk fragmenting the energy market, undermining international investor confidence and delaying the progress towards net zero by an estimated 10 to 20 years, to the detriment of the whole nation. I know that we will discuss these issues further in the noble Lord’s Private Member’s Bill.

The noble Lord, Lord Wigley, and the noble Baroness, Lady Smith, also asked about the communities of Wales benefiting from wealth generated by offshore activity in the Celtic Sea. The Crown Estate pays all its net revenue surplus into the Consolidated Fund—a combined total of more than £4 billion in the last decade—which is used to fund vital public services. Local communities already benefit from wider decisions on public spending as well as the investment by the Crown Estate.

Over the last 20 years, the Crown Estate has enabled successful delivery of a number of renewable energy projects in Wales, investing to position it at the vanguard of clean energy technology and growth. The Crown Estate has looked to ensure that the benefits of these projects are felt through communities and supply chains across Wales, including through the design of its most recent leasing round 5 and the launch of a pilot £10 million supply chain accelerator fund in 2024. Furthermore, while the scale of investment in Wales remains under development, it is anticipated that it could take up to 10 to 15 years to see a return on that investment. The breadth and diversity of the Crown Estate’s broad asset base means that it is well placed to support these longer-term investments.

The noble Lord, Lord Wigley, also asked about the Bill applying to Scotland. The 1961 Act applies to Scotland and, under that Act, the commissioners can exercise their functions in relation to Scotland—so extending the Bill to Scotland is consistent with that position. The Crown Estate retains powers in relation to its ability to operate in Scotland. The Bill does not affect the management of property, which was devolved in 2016.

The noble Baroness, Lady Hayman, raised the possibility of introducing an objective for the Crown Estate to ensure that it has due regard for the environment and climate. The Bill does not propose a statutory objective, given the importance of preserving the independence of the Crown Estate and enabling it to compete on an equal footing with other private sector operators. However, the Crown Estate has existing governance structures in place to ensure that environmental impacts are a central consideration of its investment decisions. This includes a value creation framework, to ensure that decisions about its strategy, investments and other decisions are all reviewed through an environmental and social filter.

The noble Baroness also rightly raised the need to balance different priorities, particularly the need to ensure that there are adequate environmental protections in place for the development of offshore wind—a point also raised by the noble Lord, Lord Teverson, the noble Baroness, Lady Bennett of Manor Castle, and the noble Earl, Lord Devon. As with any developer, the Crown Estate’s proposals go through standard planning approval processes, which include relevant environmental assessments. Under the Crown Estate’s strategy, it has an objective to take a leading role in stewarding the natural environment and biodiversity. Key to delivering on this aim is managing the seabed in a way that reduces pressure on, and accelerates the recovery of, our marine environment.

The noble Lord, Lord Teverson, asked about the discussions that the Government have had with the Scottish Government on this Bill. Government officials have met with Scottish Government officials to discuss the nature and content of the Bill.

The noble Lord also asked about the responsibility for bottom trawling across the UK seabed, as did the noble Lord, Lord Holmes of Richmond, and the noble Baroness, Lady Bennett of Manor Castle. The scope of the Crown Estate’s authority does not include the regulation of commercial fishing, which includes trawling. The regulation of fishing, including trawling, falls under the jurisdiction of the fisheries management regime, which is managed by the relevant marine environment management organisation of each devolved Government. A new by-law protecting an area of almost 4,000 square kilometres of our seas from damaging fishing activity, such as bottom trawling, came into force on Friday 26 March 2024. It prohibits the use of bottom-towed gear in specific areas in 13 English offshore marine protected areas that contain valuable reef and rocky habitats.

The noble Lord, Lord Holmes of Richmond, asked about how the Crown Estate will bring forward the development of the seabed and speed up offshore wind. The borrowing powers for the Crown Estate proposed by the Bill will act to accelerate and de-risk the sustainable delivery of offshore wind and other technologies, such as carbon capture and storage, wave, tidal and hydrogen. That activity may include but is not limited to: finding the best locations for energy projects, while considering nature and other seabed users, delivered via a new marine delivery route map; conducting technical and environmental surveys early to speed up development and approval processes; facilitating earlier co-ordinated grid connections by working with NESO, developers and stakeholders aligned with other strategic planning processes for the energy sector; and supporting the growth of the UK’s energy supply chain with targeted investment.

The noble Baroness, Lady Bennett of Manor Castle, asked about the skills needs of the energy transition in relation to the North Sea. I completely agree with her that that must be key factor in, and a key part of, our skills agenda. The Government recognise that our offshore workers have vital skills that will unlock the clean industries of the future. We will continue to recognise the ongoing role of the oil and gas industry and workforce in our current energy mix, while ensuring that the sector contributes more to our clean energy transition.

My noble friend Lady Ritchie raised some concerns about the development of offshore wind and the fishing industry. The Crown Estate is committed to the sustainable management of the seabed and, where appropriate, collaborates with industry stakeholders, marine licensing bodies and environmental NGOs to ensure that activities on the seabed are conducted responsibly. I will seek more information on the specifics of the consultation she asked about and will gladly write to her about them. I add that the Crown Estate will be happy to offer a further meeting with the relevant fishing representatives.

My noble friend also asked about how the partnership between the Crown Estate and Great British Energy would work for Northern Ireland. The Crown Estate has a diverse portfolio that includes the management of the seabed and half the foreshore around England, Wales and Northern Ireland. It plays a fundamental role in the sustainable development of those assets, including the UK’s world-leading offshore wind, renewables and greenhouse gas reduction technologies. Together, Great British Energy and the Crown Estate will accelerate the development of the seabed in supporting infrastructure along the coasts of England, Wales and Northern Ireland, creating a pipeline of sites for private developers to invest in. That means more clean power happening faster than would otherwise be the case.

My noble friend also asked about the extent of the engagement between the Crown Estate and the Northern Ireland Executive. As custodians of the seabed, the Crown Estate has a role to play in supporting Northern Ireland’s energy strategy, which includes the goal of delivering 1 gigawatt of electricity from offshore wind from 2030. As such, the Crown Estate works closely with stakeholders and officials in Northern Ireland across the Department for the Economy and the Department of Agriculture, Environment and Rural Affairs. The Crown Estate also collaborates with Northern Ireland in relation to the offshore renewable energy action plan, as it sits on its steering group. In the last 12 months, the Crown Estate has had more than 30 meetings with stakeholders in Northern Ireland on offshore wind and coastal and rural matters.

My noble friend Lord Rooker rightly drew attention to the nature of this Government’s economic and wider inheritance—points I hope that he will have heard the Chancellor and other Treasury Ministers make repeatedly.

The noble Earl, Lord Russell, and the noble Baroness, Lady Kramer, raised concerns about the framework agreement underpinning any borrowing. The noble Baroness also asked about the business case. The business case was agreed by the previous Government in February 2023. I am happy now to commit to publish a version of that which removes any commercially sensitive information.

The specific information setting out the detail underpinning the borrowing powers will comprise two elements: a framework agreement and a memorandum of understanding. The framework agreement, which will be incorporated into the Crown Estate’s existing framework document, will set out broad principles, such as limits on overall loan-to-value ratios and the requirement for borrowing to be at market rates. The memorandum of understanding will be in place between the Treasury and the Crown Estate and will govern how the borrowing powers will be exercised. The relevant work on the document has, until now, been on a slower timeframe than the legislation we are debating today. The Crown Estate does not expect to borrow until towards the end of the decade. I add that the changing investment landscape, with the creation of the national wealth fund and Great British Energy, may also make it sensible to complete this work to a slightly different timescale.

It is important to be clear that any such detailed borrowing contained in the memorandum of understanding is, by necessity, likely to include commercially sensitive information, and there has never been any intention that the MoU will be published. However, I can tell the noble Baroness that the memorandum of understanding will make clear that any borrowing by the Crown Estate will be at commercial rates, for subsidy control reasons, and be subject to Treasury consent. Values will be based on the total gross audited asset value of the enterprise, as reported in the annual report and accounts.

The noble Baroness is right to push us on a timeframe for the publication of the framework agreement, and I commit to write to her, before Committee stage, setting out the expected contents of the framework. I further commit that the framework will be published in draft by November.

The noble Earl, Lord Courtown, asked me a number of very specific questions. In the interests of time, if he does not mind, I will write to him with specific answers on each.

This Bill broadens the scope of activities that the Crown Estate can engage in, enabling it to further invest in the energy transition. It empowers the Crown Estate to invest in capital-intensive projects more effectively. Critically, these measures will unlock more long-term investment, increasing the contribution of the Crown Estate to creating high-quality jobs and driving growth across the UK.

[The Earl of Devon (CB)]

Before the Minister sits down, I remind him that I asked a number of specific questions, as well as making some general points. I also emailed him in advance with those questions. I note that none was addressed in his summing up. Will he please undertake to write to me?

[Lord Livermore (Lab)]

Of course, I am happy to write to the noble Earl. I beg to move.