Crown Estate Bill [Lords]

James Murray Excerpts

2nd reading
Tuesday 7th January 2025 Commons Chamber

[The Exchequer Secretary to the Treasury (James Murray)]

It is a pleasure to close this debate on the Crown Estate. May I wish you, Madam Deputy Speaker, a happy new year?

I am grateful to the shadow Minister for his comments today, as well as for the contributions of all my hon. Friends. I am particularly grateful for the Opposition’s support for the Bill in general, which they display by their absence this afternoon. I welcome the questions set out by the shadow Minister and I will go through some of those in my remarks.

As the Chief Secretary to the Treasury noted in his opening speech, the purpose of the Bill is to bring the legislation governing the Crown Estate into the 21st century by making a targeted and measured enhancement to its powers and governance. Without the Bill, the Crown Estate would continue to be restricted in its ability to compete and invest and would therefore be limited in its ability to deliver returns to the public purse. The Bill therefore broadens the scope of the activities that the Crown Estate can engage in, enabling it to further invest in the energy transition that we know is so crucial. It empowers the Crown Estate to invest in capital-intensive projects more effectively and, critically, the measures will unlock more long-term investment, increasing the contribution that the Crown Estate can make to creating high-quality jobs and driving growth across the UK.

I turn to some of the points raised in the debate. I appreciate the shadow Minister’s broad support for the Bill’s aim. On his specific question about the Crown Estate’s borrowing powers, the Bill is clear that any borrowing undertaken by the Crown Estate can only be from the Treasury or otherwise with Treasury consent. The Treasury will, of course, ensure that any borrowing is consistent with our fiscal rules. There will, as has been noted, be a memorandum of understanding in place between the Treasury and the Crown Estate, and that will govern how borrowing powers will be exercised. As with any public sector borrowing, the Treasury will ensure that that is consistent with managing public money principles to ensure value for money for the taxpayer.

The shadow Minister also asked specific questions about commissioners’ pre-appointment scrutiny. I want to set out for him how the appointment of other commissioners is likely to work. The Crown Estate commissioners who manage the Crown Estate are appointed by His Majesty on the recommendation of Ministers. The appointment process is governed by the code for public appointments. The reforms in the Bill will not alter the fundamental statutory basis of the Crown Estate, which is as a commercial business that is independent of government, operates for profit, competes in the marketplace and needs to recruit the highest quality talent to its board of commissioners. Within that context, it would not be appropriate for either the Government or Parliament to place further requirements on the recruitment process.

The shadow Minister also asked about chief executive pay. The details of a chief executive’s remuneration are a matter for the Crown Estate board, which is operationally independent of government, as I set out. As the Crown Estate is statutorily an independent, commercial organisation, which returns hundreds of millions of pounds in profit to the Exchequer every year, continuing the success is crucial and it requires the organisation to have the freedom to compete for the top talent in the commercial world.

We know that cheap executive remuneration in this context is set at the lower end of the private sector peer group, which is agreed with the Treasury. The majority of the package is in fact conditional on performance, which ensures that the chief executive rewards are heavily dependent on delivering long-term value to the Exchequer. The shadow Minister also asked about governance when it comes to the Crown Estate and Great British Energy. I can set out to him the operational matters in regard to the partnership, but they will be determined in their final detail by the passing of the great British Energy Bill, which is currently going through Parliament. Once it completes all its legislative stages, the partnership will be subject to an agreement between the Crown Estate and Great British Energy. Although the partnership agreement itself will not be published, given that it will be commercially sensitive, the Crown Estate has committed to publish information relating to the partnership as part of its existing annual report. This will include a report on the activities of the commissioners under that partnership and any effects or benefits resulting from the activities of the commissioners that entails.

The shadow Minister asked a specific question about the amendment on the seabed, which was debated in the other place by Lord Livermore. As hon. Members may know, on Report of the Crown Estate Bill in the Lords, the Financial Secretary to the Treasury committed to bring forward an amendment, if it were needed, to restrict the ability of the Crown Estate to sell the seabed. That was in response to concerns from peers that the seabed, which is owned by the Crown Estate, is a unique asset and therefore special protections may be warranted. As the Financial Secretary noted at the time, the law on the ownership of the seabed is complex, so officials are working with the Crown Estate to establish the extent to which the Crown Estate can currently sell the seabed. If it is established that further legislation is required to restrict the ability of the Crown Estate to sell the seabed, we will look to bring forward an amendment at Committee stage.

Finally, the shadow Minister mentioned the measures on salmon that were inserted in the Bill in the other place. There is a fundamental question about whether the Bill is an appropriate vehicle for a debate about the rights of salmon and protecting animal rights in that context. In England, Wales and Northern England, to which the Bill applies, there is on Crown Estate-owned land only one relevant area—one relevant salmon farm. The issue really relates more widely to Scotland, which is governed by Crown Estate Scotland and not by the provisions in this Bill. We know that fisheries policy is the responsibility of devolved Government in Scotland. All fish farming in England is regulated with the intention to ensure that it is carried out in a responsible manner. Given that virtually all salmon aquaculture in the UK takes place in Scotland, the matter is really one for a different debate.

As well as the comments from the shadow Minister, we also heard from the Liberal Democrat spokesperson, the hon. Member for South Cambridgeshire (Pippa Heylings). Many points that she raised have been covered in what I have said so far, although she raised an additional point that aligned with comments by the right hon. Member for Orkney and Shetland (Mr Carmichael) about how the Crown Estate will balance the expansion of offshore renewables with the needs of the fishing industry, marine wildlife and so on. I wish to set out briefly the Government’s position on that matter. We know that the Crown Estate is committed to sustainable management of the seabed and, where appropriate, it collaborates with industry stakeholders, marine licence bodies and environmental non-governmental organisations to ensure that activities on the seabed are conducted responsibly.

As with any developer, the proposals of the Crown Estate go through a standard planning application process, which includes the relevant environmental assessments. Under the Crown Estate strategy, it has an objective to take a leading role in stewarding the natural environment and biodiversity. Key to delivering that aim is managing the seabed in a way that reduces pressure on, and accelerates the recovery of, our marine environment. The Bill will not directly impact on how much commercial fishing takes place in areas managed by the Crown Estate.

My hon. Friend the Member for Reading Central (Matt Rodda) raised an important point around grid connections and grid connectivity, which are vital to ensuring that our plans to move towards clean energy are effective. His points were important as part of the connection between the Crown Estate and Great British Energy, which we have been talking about during the debate. One benefit of the Crown Estate working with Great British Energy is that they can work together to speed up the process of developing clean energy projects, including co-ordinating planning requirements and grid connections, as well as leasing land to de-risk and speed up projects so that private developers can get on and build them. That will be crucial to unlocking the private investment and speeding up the deployment of clean energy infrastructure. As well as de-risking private sector investments, GB Energy and the Crown Estate will directly co-invest in clean energy infrastructure. That will include floating offshore wind and carbon capture projects.

Several of my hon. Friends made important points around local community benefits and supply chains. I thank in particular my hon. Friends the Members for Mid and South Pembrokeshire (Henry Tufnell), for Truro and Falmouth (Jayne Kirkham) and for Camborne and Redruth (Perran Moon) and the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald). They all focused on the importance of community benefits, local supply chains and investment in jobs and skills. My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) made a helpful set of points around the importance of long-term community benefit—that is, people who are not just building infrastructure, making a one-off payment and then leaving, but actually making a long-term investment in the area and the people who live there. She referred to Projekt Renewable in her constituency, and it would be interesting to discuss that with her after the debate.

Looking more broadly at what the Crown Estate has been doing and intends to do on investing in local community benefit, it is committed to working with local communities and partners to enable employment and skills opportunities. For example, it has allocated £50 million through the supply chain accelerator to stimulate green jobs. It is also developing a green skills pipeline from a GCSE in engineering skills for offshore wind, seed-funded by the Crown Estate and developed with Cornwall college, to a post-16 destination renewables course with Pembrokeshire college. The Crown Estate is partnering with the employment charity Workwhile to create green construction apprenticeships.

On offshore wind specifically, the Crown Estate has worked on upskilling frontline Department for Work and Pensions work coaches to be well equipped to support job seekers in the offshore wind industry through the offshore wind learning programme and specifically in relation to offshore leasing round 5, which hon. Members have mentioned. The Crown Estate has designed the leasing process in such a way that developers have to make commitments to deliver social and environmental value as part of the development of new wind farms, including a requirement to provide an apprenticeships plan and a skills development plan.

The Crown Estate is also committed to working with communities to ensure that future generations can make the most of the opportunities that marine energy will bring. It is working closely with local educational institutions, such as Falmouth marine school, where it helped develop a pre-16 engineering programme to build skilled local workforces, alongside other initiatives, including the marine internship programme and a recent partnership with the Sea Ranger Service, which is based in Port Talbot.

We heard from the hon. Member for Ynys Môn (Llinos Medi), who asked questions about the devolution of the Crown Estate and its functions to Wales. Some of the points she raised were addressed by my hon. Friends, but it is important to recognise that the proposed powers in the Bill will be of huge benefit to Wales. Combined with its existing scale, expertise and track record, the Crown Estate is uniquely placed to help drive the activities required, such as de-risking and developing offshore renewable energy and other emerging offshore technologies to realise the potential of the Celtic sea. I would be concerned that further devolution of the Crown Estate in the manner suggested could fragment the renewable energy market and undermine the strong international investor confidence in the UK to the detriment of both Wales and the wider UK. It would risk creating further complexity and delay our drive for energy security and net zero at a time when simplicity and accelerated deployment are essential. That is why the Government believe that the existing provisions are the best way to ensure that the assets of the Crown Estate are managed most effectively to benefit people across Wales, England and Northern Ireland.

The hon. and learned Member for North Antrim (Jim Allister) spoke of his concern about environmental impacts. Offshore wind is essential to meeting our net zero and energy security objectives, which I hope he supports, but to get the wider balance right, the habitat regulations assessment process ensures that we can deliver our offshore wind requirements while maintaining environmental protections. The Government are also consulting on revisions to the national planning policy framework to increase support for renewable energy schemes in order to tackle climate change while safeguarding environmental resources.

I thank my hon. Friends the Member for Lichfield (Dave Robertson) and for York Outer (Mr Charters) for their particularly impassioned support for the principles behind the Bill and what it sets out to achieve. As my hon. Friend the Member for Lichfield said, it is crucial for investment, growth and modernising the Crown Estate for the 21st century. My hon. Friend the Member for York Outer focused on the power of the Bill’s measured reforms to modernise the Crown Estate and support growth in a fiscally responsible way while generating revenue that will benefit our constituents across the country.

I hope that I have managed to address hon. Members’ points. As my right hon. Friend the Chief Secretary to the Treasury and I have set out, the Bill delivers a targeted and measured enhancement to the Crown Estate’s powers and governance, thereby modernising it for the 21st century. It broadens the scope of activities that the Crown Estate can engage in, enables it to further invest in the energy transition, and empowers it to invest more effectively in capital-intensive projects. Critically, the measures in it will unlock more long-term investment and increase the contribution of the Crown Estate to generating high-quality jobs and driving growth across the UK. Growth is at the heart of our Government’s mission. I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

CROWN ESTATE BILL [LORDS] (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the following provisions shall apply to the Crown Estate Bill [Lords]:

Committal

(1) The Bill shall be committed to a Public Bill Committee.

Proceedings in Public Bill Committee

(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 11 February.

(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.

Proceedings on Consideration and Third Reading

(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.

(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading.

Other proceedings

(7) Any other proceedings on the Bill may be programmed.—(Christian Wakeford.)

Question agreed to.

CROWN ESTATE BILL [LORDS] (MONEY)

King’s recommendation signified.

Resolved,

That, for the purposes of any Act resulting from the Crown Estate Bill [Lords], it is expedient to authorise

(1) the payment out of money provided by Parliament of any expenditure incurred by the Treasury under any other Act that is attributable to the Act;

(2) the payment out of the National Loans Fund of any sums payable out of the fund under any other Act that is attributable to the Act.—(Christian Wakeford.)