Crown Estate Bill [Lords]

Henry Tufnell Excerpts

2nd reading
Tuesday 7th January 2025 Commons Chamber

[Henry Tufnell (Mid and South Pembrokeshire) (Lab)]

I am grateful for the opportunity to speak in this debate. The Crown Estate sits as one of the more peculiar features of our society—King George III’s surrender to Parliament in 1760 has now morphed into a corporate body that submits 88% of its profits to the Treasury, with 12% remaining with His Majesty. It does not stop there: up to £60 billion of borrowing powers will be granted by this legislation. Given that Great British Energy’s investment stands at £8 billion, that demonstrates the scale of this organisation, as well as its power, reach and influence. The key question is whether it serves the people of this great country or whether, like any other commercial outfit, it is seeking to feather its own nest in the name of corporate greed.

In our United Kingdom, one of our biggest and most powerful natural resources is wind. To cut bills, deliver energy security and achieve net zero, we have to become to wind what Saudi Arabia is to crude oil. Off the coast of my wonderful, coastal, diverse and rural constituency of Pembrokeshire, we have an abundance of wind, but thankfully not much hot air. However, 12 miles offshore—where that glorious wind blows with such regularity, majesty and force that it would make Aeolus proud—the seabed is owned by none other than the Crown Estate.

In the past few years, creativity in international industrial policy has moved on, leaving the UK in danger of trailing behind. The United States and the European Union are actively incentivising investment in domestic supply chains, justified by their need for national energy security and urgent acceleration to net zero. To keep pace internationally, we must grasp the nettle and do it fast. The Crown Estate must utilise its own financial resources to make enabling investments that crowd in private investment into UK supply chains, such as ports and other coastal facilities for floating wind.

Over the last year I have been doing everything I can to engage constructively with the Crown Estate, but, unfortunately, I have yet to secure any assurances that it will utilise its financial resources for the benefit of our energy security, our jobs of the future and our acceleration to net zero. We cannot sit by and let the conflict between raising national income via annual option fees and incentivising early investment to develop regional supply chains ruin the chances of bringing children out of poverty and giving young people in areas such as mine back home in Pembrokeshire good, secure, long-term and well-paid jobs.

The Bill should give full rein to the Crown Estate to explore all such options to maximise domestic supply chains, particularly for floating offshore wind. The population of south Wales and the south-west will never forgive us if we do not seize this once-in-a-lifetime opportunity to redevelop their regional economies. The Crown Estate has an absolutely pivotal role to play here, and one that speaks to all the King has done across much of his career to address climate change and align business interests with the rejuvenation of economically deprived regions.

Yes, the Crown Estate has set out its strategy in respect of integration, ports, and apprenticeships and skills, but this has to be optimal vis-à-vis the clean energy strategy and the focus of this new Labour Government. When carrying out its leasing rounds, it should set out the options considered, with an assessment of and the reasons for the rejection of recent international precedents. These include, but are not limited to, the ScotWind lease auction of 25 GW of mixed fixed and floating offshore wind, which included commitments to project expenditure in Scotland via supply chain development statements, and did so without triggering a legal challenge by the European Union; and the US Bureau of Ocean Energy Management lease auctions for offshore wind, which included a 20% bid credit for investments in domestic US supply chains—for example, the recent lease sale auction for offshore wind in California.

There should also be consideration of non-price factors in lease auctions, especially weightings allocated to the sustainability of supply chains, which would give a lifeline to communities in Port Talbot, and the resilience of supply chains, also known as energy security, which are likely to favour geographical port-to-offshore project sites such as my own in Milford Haven in Pembrokeshire. There have been examples of and precedents for this, as in the recent EU Net-Zero Industry Act.

We need this Bill to equip the Crown Estate with powers to introduce non-price factors more directly into the seabed rights auction process—for example, by offering a fee discount, as is done in the United States, for supply chain investments that reduce the risk of offshore wind projects being delayed due to international supply bottlenecks, which in turn would accelerate our progress to a net zero power sector and protect UK energy security.

Finally, geographical ringfencing is a critical element in ensuring that we as a Government tackle regional inequality head-on and with real urgency. We must end the historical injustice of the politics of extraction, where the resources of a community such as mine are used to build ever more lavish buildings while young children struggle to get three square meals a day. This Bill can make a real difference. I urge the Minister to be bold and ambitious, and I assure him of my full support as he does just that.